The Rajshahi Krishi Unnayan Bank (Rakub) has suspended providing agricultural loans to its employees.
The state-owned specialised bank has come up with the decision in line with the Bangladesh Bank's instruction to increase farmers' opportunities to avail more loans from the bank.
Rakub issued a circular in this regard on December 10, mentioning that the bank's employees are no longer entitled to get fresh agricultural loans. They cannot renew their existing loans either, read the circular.
Rakub sources said the bank adapted the loan programme following the loan manual introduced by the Bangladesh Krishi Bank (BKB).
Bangladesh Krishi Bank introduced the manual on January 7, 1987. And Rakub started its operation on March 15, 1987.
However, Managing Director of the Bangladesh Krishi Bank, Ali Hossain Prodhania told The Business Standard that they never provided such loan facilities to its employees.
Finally, after 32 years, Rakub adapted an updated 'Lending Policy and Operational Manual' – which was approved at the 494th meeting of its board of directors held on March 28, 2019. The new manual came into effect on April 18.
After the introduction of the new manual, Rakub faced some problems to disburse agricultural loans among its employees at the field level. Therefore, the central bank had to intervene, suggesting that the bank should stop providing agricultural loans to its employees.
Rakub Chairman Muhammad Nazrul Islam told The Business Standard, "Agricultural loans are required for farmers, not for my bank's employees."
Asked why the bank had been doing so for a long time, he said, "It (providing agro-loans to own employees) was not a viable project though; and the number of beneficiaries of the project was also very few."
"It can be said that the facility was only on paper," he said, adding that Rakub had finally suspended the facility following the central bank's instruction.
Rakub chairman further said, "The decision is good for us. Our employees are not farmers. If they avail this loan facility, they may use it for another purpose – which is one kind of corruption."
Rakub was established by the President's Ordinance No. 58 of 1986 (later replaced by 'Rajshahi Krishi Unnayan Bank Act, 2014').
It took over the operations of 253 branches of the Bangladesh Krishi Bank of the then Rajshahi administrative division (presently Rajshahi and Rangpur divisions) and started functioning on March 15, 1987.
There are 381 branches of the bank including LPO and Dhaka branch among which 194 are in Rajshahi and 185 in Rangpur division.