Krishi Bank plans citizen's audit for farm loans

Bangladesh Krishi Bank will introduce 'citizen's auditing system' in its branches to ensure transparency and accountability in farm loan disbursement, its Chairman Khondkar Ibrahim Khaled said recently.

In line with the plan, a list of borrowers will be made available in each of its branches to allow citizens in every area to examine whether real farmers are getting loans.

An official order is expected to be issued by the bank in this regard within this week, said Khaled.

“It's a 'citizen's audit' under which everybody will be able to check if loans are going to the real farmers,” said the chief of the state-run agriculture bank, operating across the country through 822 rural and 130 urban branches.

Banking sector people expect that such an auditing practice will help reduce corruption in farm loan disbursement process.

Khaled unveiled the plan as he, accompanied by Bangladesh Bank Governor Atiur Rahman, extended Tk 1.91 crore in loans on Thursday to more than 600 farmers, including sharecroppers.

The amount was disbursed in three areas -- Langarpara, Pakuria and Tetul Tala of Sherpur district.

“We will also give farm loans through open camps,” the Krishi bank chief said.

The central bank governor said it was difficult in the past for others to know whether right persons were getting farm loans.

“Now you will take loans openly and the practice of disbursing loans in front of all will enable more farmers to get loans,” he said. “It will also bar fake farmers from getting loans.”

Rahman expects that a transparent loan disbursement practice will also help the bank recover its loans easily.

Citing the initiative of ensuring loans for the sharecroppers, he said they did not get loans in the past.

“But they are the real farmers. We have started giving loans to the sharecroppers without any collateral,” he said, adding that these marginal farmers did not get loans due to their failure to show any collateral such as land.

With a focus on extending Tk 500 crore as collateral-free loans to the sharecroppers, the central bank had earlier set a target of ensuring disbursement of Tk 11,500 crore to the farmers in fiscal 2009-10. The amount is nearly 25 percent higher than the actual disbursement in the previous fiscal year.