By Eslam Fadl

Cairo – Mubasher: Egypt's Principal Bank for Development and Agricultural Credit (PBDAC) is forecast to serve better after being placed under the central bank's supervision, according to PBDAC former and present officials.

Earlier, the parliament approved the law affiliating the PBDAC with the Central Bank of Egypt (CBE), changing its name to the Egyptian Agricultural Bank.

"Over the past financial periods, the PBDAC incurred massive losses amounting to EGP 5 billion", said El-Sayed El-Qosayer, the present chairman, expecting the bank's performance to be enhanced after falling under the auspices of CBE.

The bank will be keen on backing up farmers during the upcoming periods, lending them loans at a 5% interest rate changeable according the government's subsidy to the bank, El-Qosayer told Mubasher in a phone call.

"The maintenance of the present interest rate requires unchanging the level of state subsidy to the bank, otherwise interest rate will rise", the chairperson concluded.

The former chairman Attya Salem believes the bank's identity will not be changed into a commercial bank, emphasizing the importance of appointing external private auditors like other banks.

Moreover, the bank should hike its capital from EGP 1.5 billion to EGP 5 billion, along with seeking a EGP 4 billion subordinated loan during the coming period, Attya added.

Regarding the bank's operation and interest rate, he said "no significant changes will be carried out on both levels and re-negotiation with the World Bank for a $500 million loan could be still on the table".

Meanwhile, chief farmers and agricultural producers Farid Wasel saw the law enforcing the bank's affiliation to the CBE inappropriate.  

"By this law, PBDAC service role will be weakened. This will negatively reflect on the famer, along with the likelihood of higher interest rate. Therefore, I plea President El-Sisi for declining this law," Wasel said. 

The Principal Bank for Development and Agricultural Credit has 1,200 branches all over Egypt.