Bangladesh Bank yesterday asked six state banks not to file "certificate cases" against farmers who have defaulted on agro-loans.

The central bank also directed the banks to reschedule the loans and withdraw all cases filed against farmers. A certificate case is filed by local magistrate courts against defaulter farmers.

“Moral persuasion could work to recover the loans,” SK Sur Chowdhury, deputy governor of the central bank, told reporters after a meeting with managing directors of the six state banks at the BB headquarters.

The finance ministry recently issued a letter to the central bank, asking it to take initiatives to release the farmers from certificate cases. Six state banks -- Sonali, Janata, Agrani, Rupali, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank -- filed certificate cases against more than two lakh farmers, according to BB data. Of them, arrest warrants were issued against 10,000.

Default loans involving the certificate cases stood at Tk 570 crore as of November 30, 2014, up by Tk 18 crore from January the same year. “It is not acceptable that the farmers will have to face cases. It is also unfortunate that farmers are on the run due to the arrest warrants,” Chowdhury said.

The deputy governor also directed the banks to take awareness programmes so that farmers do not become defaulters wilfully.

BB data showed that these six state banks filed 2,504 certificate cases against farmers in November last year while the courts settled only 1,710 cases in that month. In January 2014, the banks had filed 3,785 certificate cases while the courts settled 2,499.

The courts issued arrest warrants against 10,224 farmers between 1991 and 2014, as they failed to repay their loans, BB data showed.

Another BB official said the six state banks filed certificate cases with the executive magistrate's courts to recover default loans worth up to Tk 50,000 from each farmer.