Rajshahi Krishi Unnayan Bank: Empowering Rural Bangladesh Through Financial Inclusion

Rajshahi Krishi Unnayan Bank is a game-changer for rural Bangladesh, providing financial inclusion to those who need it most.

The bank's primary focus is on agricultural development, with the goal of increasing crop yields and improving the livelihoods of farmers.

By offering microfinance services, the bank empowers rural communities to take control of their economic futures.

Rajshahi Krishi Unnayan Bank has a strong presence in the region, with a network of branches and services that cater to the needs of local farmers and entrepreneurs.

The bank's success is a testament to the power of financial inclusion in driving economic growth and poverty reduction.

Rajshahi Krishi Unnayan Bank was established on 15 March 1987 through the Presidential Ordinance No 58.

The bank's headquarters are located in Rajshahi, and it was made specifically for farmers of Rangpur and Rajshahi divisions.

It received 253 branches of Bangladesh Krishi Bank in Rangpur and Rajshahi Division.

The bank worked with the Asian Development Bank to implement the Northwest Crop Diversification Project in 2003 to diversify crops grown in the Northern region of Bangladesh.

In 2004, the Ministry of Finance ordered the bank to reschedule loans to farmers in flood-affected areas.

The bank provided special loans to Monga affected farmers and offered 6.77 billion taka in agriculture loans below its target of 7 billion taka.

Ashraf Ali was appointed managing director of Rajshahi Krishi Unnayan Bank on 26 July 2005.

The bank raised its interest rate from 8 to 12 per cent in 2007.

Former director Lutfar Rahman was sued for taking bribes for approving loan applications in August 2007.

From 2000 to 2008, the bank waived 180 million taka in interests.

In 2010, M Shah Nawaz Ali was appointed chairman, and Pradip Kumar Dutta was appointed managing director of the bank.

Bangladesh Bank set six conditions for the bank to open new branches in January 2014, including 80 per cent of existing branches must be profitable.

Muhammad Awal Khan was appointed managing director of Rajshahi Krishi Unnayan Bank on 23 November 2016.

The bank received 550 million taka from the government due to capital deficit at the bank.

Muhammad Nazrul Islam was appointed chairman of Rajshahi Krishi Unnayan Bank in January 2017.

The bank had a 7.43 billion taka cash shortfall and was sued by the Anti-Corruption Commission for embezzlement.

Rajshahi Krishi Unnayan Bank had a 8.29 billion taka deficit in 2018.

RAKUB has made significant strides in reducing loss-making branches, with the number declining to 12 from 60 in the previous fiscal year.

The bank has also seen a notable increase in deposit balances, reaching Taka 7,180 crore, and debit balances, reaching Taka 7,837 crore.

Through its effective work plan, RAKUB aims to make credit programs easier for its customers, particularly in the agricultural sector.

Rakub has finally broken the curse of continuous losses after 37 years, achieving a neat profit of Tk 2.98 crore in the 2023-2024 financial year.

The bank's Managing Director, Niranjan Chandra Debnath, says they've also achieved success in all financial indicators.

The number of loss-making branches has decreased to 12, down from 60 in the previous year.

Deposit and debit balances have increased to Tk 7,180 crore and Tk 7,837 crore respectively, up from Tk 6,777 crore and Tk 7,587 crore in the previous year.

The balance of classified loans has been reduced to Tk 1,242 crore from Tk 1,430 crore, bringing the classified loan ratio down to 16 percent from 19 percent.

Through its 383 branches, Rakub operates in all 16 northwest districts of Rajshahi and Rangpur divisions, targeting the agricultural sector and its sub-sectors.

The bank has adopted an effective work plan to make credit programs easier, which is being implemented at the grassroots level.

RAKUB's microfinance services are designed to empower rural women by providing them with the capital needed to start or expand agricultural enterprises.

These microfinance programs are especially beneficial for small and marginal farmers, particularly women, who often lack access to traditional banking services.

Women who participated in RAKUB's microfinance programs experienced a 30% increase in their household income, according to Hossain and Yasmin (2021).

By providing access to financial services, RAKUB's microfinance initiatives have played a crucial role in enhancing the economic status of rural women in the Rajshahi region.

RAKUB's microfinance services are a key component of the bank's mission to promote sustainable agriculture and reduce poverty in rural areas.

Deposit schemes are a type of banking service that allow customers to save money over a fixed period of time.

RAKUB offers the RAKUB Millionaire Deposit Scheme-2 (RMDS-2), which is a popular option for those looking to save big.

This scheme allows customers to save a fixed amount regularly, with the option to withdraw their money at a later date.

The RAKUB Monthly Savings Scheme-2 (RMSS-2) is another deposit scheme offered by RAKUB, designed for those who want to save a fixed amount every month.

A range of government and private organizations are involved in planning and implementing deposit schemes, including the Cabinet Division, A2I, BCC, DoICT, and BASIS.