Banks extend record Rs1.78 trillion to agriculture sector
During the previous fiscal year, financial institutions
disbursed a total of Rs1.776 trillion in agriculture financing, marking a 25
percent increase year-on-year. This amount accounted for about 97.6 percent of
the agriculture credit target set by the State Bank of Pakistan (SBP).
According to State Bank of Pakistan, the outstanding portfolio
of agriculture credit also witnessed a growth of 10 percent, reaching Rs760
billion by the end of June, compared to Rs691 billion recorded by the end of
June 2022.
Among the major banks with total assets exceeding Rs1.5
trillion, the National Bank of Pakistan emerged as the leading performer with a
score of 77.4. It was followed by Meezan Bank (52.4), Habib Bank Ltd (48.1),
Bank AL Habib (39.8), and United Bank Ltd (38.3).
In the category of mid-size banks, which have assets ranging
between Rs500 billion and Rs1.5 trillion, the top position was secured by the
Bank of Punjab with a score of 60.5. JS Bank (38.4), Faysal Bank (35.8), Askari
Bank (35.5), and Standard Chartered (26.9) followed suit.
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Furthermore, BankIslami led among the small banks with assets
less than Rs500 billion, achieving a score of 46.1. In the microfinance bank
category, U Bank took the lead with a score of 80.6.
The SBP attributed the remarkable performance in the fiscal year
2023 to the combined efforts of financial institutions and various initiatives
undertaken amidst challenges such as the devastating floods of 2022, rising
input costs, and recent monetary tightening.
The SBP highlighted the role of initiatives like the Champion
Bank Model and Agriculture Credit Scoring Model in supporting financial
institutions to expand agriculture financing, particularly in underserved areas
that experienced significant growth in 2022-23.
Additionally, the strategic guidance from the Agricultural
Credit Advisory Committee (ACAC) and stringent monitoring of financing by the
State Bank played a significant role in accelerating agriculture finance.
The SBP also noted that the last ACAC meeting in December 2022
emphasized the potential of Islamic banking to cater to farmers' needs, leading
to a substantial growth in Islamic agriculture financing during the year.
Source: Dawn