Rajshahi Krishi Unnayan Bank (RAKUB) a government owned specialised financial institution for financing development of agriculture and its backward and forward linkage industries in the Rajshahi division of the country. The bank was established on 15 March 1987 by taking over of all offices, branches, and other establishments of bangladesh krishi bank (BKB) in Rajshahi division, including their assets and liabilities. In addition to development financing, RAKUB conducts traditional commercial banking activities. RAKUB started its operations with an authorised and paid up capital of Tk 500 million and Tk 60 million respectively. The paid up capital was enhanced to Tk 980 million in 1999-2000.

The management of RAKUB is vested in a 9-member board of directors including the chairman and the managing director appointed by the government. In 2001, the bank had 302 branches and a total of 3,737 employees 1,675 executive officers.

In June 2000, the total deposits of the bank amounted to Tk 5,611.8 million comprising savings deposits Tk 1,221.2 million, fixed deposits Tk 1,920 million and current deposits Tk 2,470.6 million. Total loans and advances of the bank were Tk 12,574.8 million. Interest rate offered by the bank on its deposits varied between 8% and 9.75% and the lending rates between 14% and 18%. The bank provides short, medium and long-tern loans for activities in almost every area of agriculture and the agriculture-linkage local industries. Loans are also given for buying heavy and light plough and other related equipment, fertiliser, seeds, pesticides, seedlings, etc.

During 1998-99, the bank financed 2 medium scale and 1,101 small and Cottage industries projects with an aggregate amount of Tk 85 million. Up to 30 June 2000, the total lending in microcredit schemes stood at Tk 5.89 million. Up to that date, the bank disbursed Tk 326.14 million as interest-free loans and Tk 439.44 million as staff loans. The bank has a huge amount of non-performing loans and its classified loans stood at Tk 7,760.5 million (61.22% of total) on 30 June 2000. To solve/reduce the extent of the problem, it undertook a reform programme of the name MIRACLE (Maximum Incentive for Recovery of a Classified Loan Entirely).

In addition to its investments in loans and advances, RAKUB has a total amount of Tk 3,679.86 million in investments comprising these in government treasury bills and other long-term bonds (Tk 3,677.84 million) and prize bonds (Tk 2.02 million) during the period between 1995  and 30 June 2000. RAKUB does not participate in foreign exchange business and off-balance sheet activities.

Sources of funds for the bank's lending are its deposit holdings, funds receives from government and loans and refinance facility from the bangladesh bank. RAKUB's borrowings stood at Tk 1,1471.4 million on 30 June 2000. Initially, the bank accepted a liability of Tk 2,054.73 million from the Bangladesh Krishi Bank. RAKUB also receives fund supports from various development partner agencies against agricultural development projects and prominent among these agencies are the Asian Development Bank (ADB), International Development Association (IDA) and IFAD.

On 30 June 2000, total assets of RAKUB were valued at Tk 9,868.52 million. The aggregate assets-mix comprised cash balances and deposits with other banks inside Bangladesh, investments, loans and advances, fixed assets, bills purchased and discounted and other assets. Gross earning assets of the bank were valued at Tk 13,763.9 million in June 2000. The bank carries accumulated losses and the balance of its profit and loss account on 30 June 2000 stood at (-) Tk 1780.57 million, which had a negative impact on shareholders equity amounting to (-) Tk 592.10 million on the given date. [S M Mahfuzur Rahman]