The Presidents / Chief Executive Officers
All Banks

Dear Sir / Madam,

Streamlining of Agricultural Lending Procedures and Documentation

Please refer to ACD circular No. 5 dated, August 11, 2003 regarding standardization and simplification of agricultural credit documents.

In order to ensure timely disbursement of Agri Credit to the farming community, SBP in consultation with banks has revised the list of documents to be obtained against various kinds of agri. loans and streamlined the turnaround time for Agri Loan processing (Annexure I, II & III).

Further, to strengthen the existing agri. lending structure and remove lapses in agri. loan management, banks are advised to take following measures by 31st December, 2010:-

• Develop a comprehensive Agriculture Finance policy in line with PRs duly approved by their Board of Directors.
• Set up and maintain a fully dedicated Agri. Finance Department/Division/Unit equipped with qualified agri. financing experts and officers with specified job responsibilities and career progression opportunities.
• Develop an overall annual regional agricultural portfolio plan and assign targets for disbursement, growth in outstanding portfolio, and number of borrowers to respective agri. designated branches. The concerned Regional Business Chiefs or Area Heads should be made responsible for the achievement of the targets.
• Increase the number of agri. designated branches and Agricultural Credit Officers significantly in a phased manner, in proportion to the overall credit portfolio of the area and potential of agricultural activities.
• Delegate adequate powers to each agri. designated branch or its nearest Zonal or Area office for sanctioning small agri. loans with requisite internal control functions in place.
• Launch financial literacy programs to create awareness among the farming community about agri. lending products and schemes of the bank.
• Provide field functionaries with the necessary logistics, communication, and other facilities to ensure timely delivery of services, including spot verification, processing, disbursements, follow-up, and recovery.

Banks are advised to strictly comply with the above instructions and maintain proper record for inspection purposes. SBP and its field offices (SBP-BSC) will also monitor the compliance on regular basis.

Please acknowledge receipt.