Bangladesh Krishi Bank

Bangladesh Krishi Bank (BKB) is the largest specialized national bank for promoting agricultural credit. Established in 1973 under the Bangladesh Krishi Bank Order (P.O No. 27 of 1973), the Bangladesh Krishi Bank is the successor to the former Agricultural Development Bank of Pakistan, which was established in 1961 through merging the Agricultural Development Finance Corporation and the Agricultural Bank of Pakistan into one institution. Initially, the authorized capital of the bank was Tk. 500 million and its paid up capital was Tk 370 million, subscribed fully by the government. Later, in view of the increased volume of banking activities and business, the authorized and paid up capital of the bank were raised to Tk 2 billion and Tk 1 billion respectively. In 2008 both the authorized and paid up capital has been raised to 3.5 billion.

Aiming at the economic development in the rural area, Bangladesh Krishi Bank was created for helping overall development of the agricultural sector to attain food sufficiency. Though Bangladesh Krishi Bank is a specialized bank for the agricultural sectors it operates normal banking like other commercial banks. In conjunction with its prime function of disbursing agriculture credit BKB is also involved in foreign exchange business, trade and investment finance, agro-based project financing, providing running capital to retail, wholesale and SMEs, micro-credit and poverty alleviation activities. BKB played a vital role in the rehabilitation schemes operated after cyclone Sidor in 2007. For foreign exchange business Bangladesh Krishi Bank has 15 authorized dealing branches and correspondents arrangement with 225 overseas financial institutions. Through these branches Bangladesh Krishi Bank is able to reach the remittances to the beneficiaries within 3 days. 82 branches of Bangladesh Krishi Bank have been brought under one stop service provision scheme.

Soon after liberation, the government appointed an administrator to look after the affairs of Bangladesh Krishi Bank. In accordance with the provisions of the Bangladesh Krishi Bank Order, a managing director took overall charge of the bank in April 1973. In March 1975, the government constituted a board of directors for the bank and until March 1981, the managing director served as the ex-officio chairman of the board. In April 1981, two separate offices of the chairman and managing director were set up and the government appointed a non-official director as chairman of the board. The managing director continued to be the bank's chief executive. At present, the board of directors of the bank consists of 11 directors, including the chairman. The bank's head office in Dhaka has 7 departments viz., administration, credit, finance, operation, planning and recovery, audit and inspection and the international departments. Each department is headed by a general manager.

Bangladesh Krishi Bank provides credit facilities to individual and corporate bodies engaged in crop production, horticulture, forestry and fisheries. It also offers financial and technical assistance to agro-based and cottage industries. Its charter requires the bank to act on commercial considerations but with due regard to the development of agriculture, and agro-based and other related industries in rural and urban areas. Under the provisions of its charter, Bangladesh Krishi Bank is supposed to give preference to the credit needs of small farmers and other disadvantaged groups. Bangladesh Krishi Bank, therefore, has to fulfill both social and economic objectives.

The bank offers short, medium, and long-term financing for production, processing, warehousing and marketing of agriculture and agro-based industrial products. Loan terms are determined by the purpose for which it is given, the gestation period, and income generating capacity. The bank provides short-term loans generally for seasonal agricultural production activities. The medium-term loans are sanctioned for acquisition of farm machinery, low lift pumps, hand pumps, agricultural implements, bullocks, carts, goats, dairy, poultry, and draft animals, transportation facilities for agricultural produces, and related development activities. Long-term loans are advanced for capital expenditures including purchase of tractors, power tillers and shallow tube wells, construction of ice plants, establishment of agro-based industries, extension of tea gardens or investment in horticulture, forestry and fisheries. Amortisation period for short-term loan is 18 months, for medium-term loans up to 5 years and for long-term loans over 5 years.

Apart from the above areas, Bangladesh Krishi Bank provides about Tk 14 billion annually in financing numerous projects and special programmes such as the Special Agricultural Credit Programme, and in helping contract growers of BADC, funding schemes of potato cultivation and preservation, tea plantation, and installation of hand pumps, shallow and deep tube wells, the Rural Finance Experiment Project, projects in dairy farming, poultry, fisheries, aquaculture and livestock, loans for production and marketing of tobacco, banana and cotton, the Betagi Community Forest Project, Swanirvar Bangladesh, and financing self-employment schemes of educated unemployed youths

Bangladesh Krishi Bank prepares annual work plan with a mission and vision to attain self-sufficiency in food through development of agriculture, producing import substitute agro products, meeting the growing demands for agricultural credit, and identifying appropriate areas for agricultural development projects to attain sustainable growth in the sector.

Bangladesh Krishi Bank has introduced some Small Savings Schemes for those marginal groups in addition to their normal deposit programs. Bangladesh Krishi Bank has launched a seven-year tenure 'Bangladesh Krishi Bank Sanchoya Scheme' in 2008. Under its social and poverty reduction strategy initiatives Bangladesh Krishi Bank is providing loans and banking facilities to share croppers on easy terms.
[Muhammad Abdul Mazid - Banglapedia]