Zarai Taraqiati Bank Limited

Zarai Taraqiati Bank Limited (ZTBL) Introduction:Zarai Taraqiati Bank of Pakistan is the largest agriculture bank in the country. It has many branches in all over the country. The bank has multi services and investment plans to development of agriculture in country.

Corporate Vision: Dedicated to serve the needs of the farming community, by delivering financial products and technical services on a competitive and sustainable basis, in a convenient, efficient and professional manner, leading to success of the Bank and the farmers.

Corporate Mission: To play effective role in the promotion of economic growth, by enhancing the availability of credit to the agriculture sector, through reliable access to sustainable financing, special lending programs, technical assistance, and other products & services, and to promote career development opportunities for increasing professionalism and technical proficiencies of employees.

Corporate Objectives:  Develop and operate as a financially and operationally sustainable R.F.I of the country.  Assist rural community, particularly the small farmers, in raising their productivity and income levels through timely delivery of credit, advisory and ancillary services. 

Build ZTBL's image as a proactive, client friendly, financially & operationally sustainable with indigenous product deployment.

 Establish and provide backward and forward linkages to strengthen agri. value added commodity chains.  Engage in public - private and wholesale - retail partnership to deepen outreach and reduce operating cost  To function as a rural commercial bank to mobilize rural capital formation and to commercialize the agriculture sector by delivering the true value of credit to the client.  Provide a wide range of risk insurance products to its clients.

 Open up it venues of operation to Domestic & International Banking Industry to avail comparative advantages.

History: Pakistan is basically an agricultural country, and finance has been needed for its rapid development. With a view to meet this basic need the Agricultural Development Finance Corporation was set-up in 1951, and was entrusted with the task of providing financial facilities for the development and modernization of agriculture, including: •

Forestry,

•

Fishery,

•

Animal Husbandry,

•

Poultry,

•

Dairy Farming.

Later on the Agricultural Development Bank of Pakistan was also established in September 1957, under the Agricultural Development Bank Act. The Bank is to provide credit in cash or in kind, warehousing and storage facilities to agriculturists, cooperative societies and other bodies, of which the majority of members are agriculturists. As the functions of the Agricultural Development Finance Corporation and Agricultural Development Bank were similar and since both were working with capital provided by the Government, they were merged into one organization known as Agricultural Development Bank of Pakistan on February 18. 1961. The Agricultural Development Bank of Pakistan is a banking company for the purpose of the Banking Companies Ordinance and the State Bank of Pakistan Act. Zarai Taraqiati Bank Limited (ZTBL) erstwhile Agricultural Development Bank of Pakistan (ADBP) is the premier financial institution geared towards the development of agriculture sector through provision of financial services and technical know how. The restructuring of former ADBP is being carried out with the aim: ♦ To uplift the agriculture and rural sector by raising farm productivity. ♦ Streamlining the institutional credit. ♦ Increasing income generating capacity of the farming community. ZTBL was incorporated as a Public Limited Company on 14th December, 2002 through repeal of. ADB Ordinance of 1961.

The new corporate structure redefines the bank's status as a Public Limited Company registered under Companies Ordinance'1984 with an independent Board of Directors which aims at ensuring good: ♦ Governance, ♦ Autonomy, ♦ Delivering high quality

Reason to Change ADBP to ZTBL:The restructuring of the former ADBP is being carried out with the aim to uplift the agriculture and rural sector by raising farm productivity, streamlining the institutional credit and increasing the income generating capacity of the farming community.

Credit Rating: Credit rating of ZTBL is very excellent from last year. Their credit rating is “AAA” medium to long term.

Current Scenario: ZTBL are going to commercialized in future. The reforms shall establish ZTBL as a key R.F.I of the country, aiming to outreach annual rural clientele to 600,000 by the end of year 2008. By expanding its private sector role, the bank aims to establish network of high tech rural and agricultural financial services through Intermediations under public private participation and whole-sale -retail lending mechanism.

Management Hierarchy: The general direction and superintendence of the affairs of the bank are entrusted to a 12 members Board of Directors consisting of a chairman appointed by the Federal Government, the Federal Government officers from the Ministries of Finance and Food and Agriculture. Four officers of the four Provincial Governments and one non official nominated by each province. One member on this board represents the State Bank of Pakistan also. In ZTBL, the president supervises and directs the senior executive who supervises and directs the senior voice president, and senior voice president control voice president, who control Assistant voice president, who finally supervise officers. The management hierarchy of bank is as follows;

President Senior executive Senior vice President Vice President Assistant vice Officers Earlier the bank was functioning like a pure government institution and permission has to be sought on every step for moving forward. “Now the bank management board will be fully empowered to run the affairs of the ZTBL” More than 2,000 employees of the bank have opted for Voluntary Golden Hand Shake Scheme, offered by the bank to its employees. Bank has established a task force for improving the operational performance of the staff and it was monitoring the disbursement, recovery operations and performance of field functionaries. The task force comprised 10-15 officers and each officer will head a desk exclusively to monitor 3-4 regions. This task force will be responsible to evaluate

performance of each MCO, Manager and Regional Manager on the achievement of bank’s policies regarding credit and recovery periodically.

Capital Structure of Zarai Taraqiati Bank Limited (ZTBL):ZTBL was incorporated as a Public Limited Company on 14th December, 2002 through repeal of ADB Ordinance of 1961. Thereby transforming the bank as a corporate entity to serve as a R. F.I The new corporate structure redefines the bank's status as a public limited company registered under companies Ordinance'1984 with an independent Board of Directors which aims at ensuring good governance, autonomy, delivering high quality. ZTBL is a key R.F.I of Pakistan providing affordable, rural and agriculture financial/non-financial services to the rural Pakistan, comprising 68 % of the total population. The Bank through a country-wide network of 341 branches is serving around half a million clients annually and over one million accumulated account holders with the average loan size of around Rs.89,000 serving 65%, 31% & 4 % of subsistence, economic and large growers respectively. The total assets of the Bank stand at Rs.84 billion with a nation-wide working strength comprises 5500 employees. The share of ZTBL in total national institutional agricultural credit remains around 35%. Authorized capital of Zarai Bank is Rs 25 billion, comprising 2,500 million ordinary shares of Rs 10 each. As on December 31, 2005 the paid up capital was Rs 11.870 billion, almost all of which is owned by the Federal Government, leaving token ownership to all the Provincial Governments. In its report of June 22, 2005 JCR-VIS has re-affirmed the medium to long term entity rating of "AAA" (Triple A) with a "Stable" outlook and short term rating of "A-1+" (A-One Plus) assigned to Zarai Bank. It has also re-affirmed the rating assigned to it on a stand-alone basis i.e. the medium to long term rating of "BB+" (Double B Plus) with a "Stable" outlook and the short term rating at "A-3" (A-Three). Zarai Bank alone serves around 0.5 million farmers annually and reportedly shares over 50% of the institutional credit. The bank provides loans, for a wide range of investment activities encompassing tractors, implements, irrigation, horticulture, livestock, fisheries and for production category (seed, fertilizers, pesticides). The bank is trying to recover its stuck up loans so that these can be recycled to the agriculture sector. Summary of data for 2004 and 2005 is presented below:

Operations

(Rs in million) 2005

2004

39,356

33,715

a- Production Loans:

85%

84%

b- Development Loans:

15%

16%

2- Share of Small Farmers:

85%

86%

1- Disbursements:

(Under 25 acres) 3- No of Borrowers:

441,536

462,785

42,144

38,945

5,884

5,824

b- Current Dues:

36,260

33,120

c- Recovery Rate:

57%

54%

4- Amount Recovered: a- Past dues:

Total assets of Zarai Bank were at Rs. 84 billion on December 31, 2005 (2004: Rs 84 billion). On December 31, 2005 Investments increased 350% to Rs 12.8 billion (15% of Total Assets) compared to Rs 2.8 billion (3% of TA) as on December 31, 2004. Increase in investments was due largely to reduction in cash balances. Of the total, Zarai Bank has 97% investments in Held to Maturity Securities (2004: 92%). Zarai Bank's Advances as on December 31, 2005 were Rs 52.9 billion (63% of Total Assets), registering 3% decline from 2004 Advances at Rs 54.3 billion (65% of TA). On December 31, 2005, 100% Advances (2004: 100%) are in local currency, while 62% (2004: 39%) of the total Advances are for short term. The Advances and Investments as on December 31, 2005 have been largely financed through borrowings from the SBP (Rs 51.257 billion) and Deposits (Rs 2.645 billion). Zarai Bank's equity including Surplus on Revaluation of Assets on December 31, 2005 stood at Rs 13.062 billion (16% of Total Assets) whereas gross NPLs on this date are Rs 23.424 billion (2004: Rs 40.465 billion). In percentage terms gross NPLs for 2005 are 36% of gross Advances (2004: 51% of GA). Zarai Bank has made full provision against NPLs according to the SBP criteria.

On re-organization and conversion (of ADBP) into a public limited company, the SBP got carried out a portfolio audit through Chartered Accountants who recommended a provision of Rs 10 billion against its NPLs to meet the requirements of the SBP Prudential Regulations. On the basis of provisional portfolio audit Report, Zarai Bank incorporated a provision of Rs 3 billion for year ended June 30, 2002. The GOP approved a cash support of Rs 7 billion which will be provided to Zarai Bank over a period of three years. The final amount of total provision is being worked out. Total revenues of Zarai Bank for 2005 decreased by 16% to Rs 6.823 billion compared to Rs 8.105 billion for the previous year. Net interest income (after provisions) for 2005 experienced 37% decrease to Rs 1.687 billion (2004: Rs 2.658 billion). The origin of the significant fluctuations in the overall income, expenses and profits of the bank lies in the Presidential Relief Package 2004 announced on June 10, 2004, the proposed revision in the pricing of the SBP loans to the bank under the financial restructuring process and higher provisioning for 2005 at Rs 4.744 billion (2004: Rs 2.311 billion). The Relief Package extended up to December 31, 2005 was meant for borrowers of agricultural loans up to Rs 0.5 million and involved benefits such as settlement at 50% of outstanding amount, special package for the borrowers of Balochistan, and reduction of mark up rate from 14% to 9% with further rebate of 1% on regular loans. The GOP has not yet finally settled the claim from Zarai Bank for the reduction of income/assets on account of the Relief Package. Also, the matter of re-pricing of the SBP loans (main source of bank funding) is still under consideration. Non-mark up income of the bank for 2005 was lower at Rs 0.838 billion as against Rs 0.955 billion for 2004. Zarai Bank's non-funded to funded income ratio improved to 33% in 2005 from 26% in 2004. The year 2005 was closed with After-tax Loss of Rs 129 million (2004: After-tax Profit, Rs 664 million). ROE for the year is negative 1% (2004: 5.1%). The matters under consideration with the GOP as well as the SBP, mentioned earlier, are expected to be resolved during 2006. The bank appears to be gearing up for achieving better results in the coming years. Performance statistics are given below.

Performance Statistics Balance Sheet

(Audited) (Rs million)

As on Dec. 31,

2005

2004

Total Assets:

83,848

83,930

9,399

16,385

0

0

Investments-Net:

12,821

2,850

Advances-Net:

52,925

54,335

Borrowing from fin. Institutions:

51,257

51,257

Deposits, other accounts:

2,645

3,122

Total Liabilities

70,786

70,846

Net Assets:

13,062

13,084

Share Capital:

11,870

Cash, balances with banks: Lending to financial institutions:

Reserves, Un-app. Profit:

11,870

947

1,077

12,817

12,947

245

137

13,062

13,084

3,204

3,204

Equity and Sub. Loans:

16,266

16,288

Advances-Gross:

64,744

79,902

Gross NPLs:

23,424

40,465

Total Provision:

11,819

25,567

Conting. & Commitments:

12,806

11,954

Total Equity: Surplus on Revalue, Assets: Equity incl. Revalue Surplus: Subordinated Loan:

Ratios: Cash & bank/Total Assets:

11%

20%

Investments/Total Assets:

15%

3%

Advance-Net/Total Assets:

63%

65%

NPLs/Advances-Gross:

36%

51%

NPLs Net/Advances Net:

22%

27%

183%

313%

NPLs/Total Equity:

NPLs Prov./Advances-Gross: Deposits/Total Assets: Total Liabilities/Total Assets:

18% 3%

32% 4%

84%

84%

Total Equity/Total Assets:

15.6%

15.6%

Equity & S. Loans/Total Assets:

19.4%

19.4%

0.2

0.2

2001%

1740%

Investments/Deposits:

485%

91%

Contin.& Comm./Equity-Times:

1.00

0.92

Book Value Per Share:

10.80

10.91

Income Statement

2005

2004

Markup-interest earned:

6,823

8,105

392

3,135

Net Markup-interest income:

6,431

4,970

Provisions and write offs:

4,744

2,312

Net mark up after provisions:

1,687

2,658

838

955

Income before Admn. Exp.:

2,525

3,613

Admin Expenses, etc:

2,616

2,446

Profit before Taxation:

-91

1,167

Current & deferred tax:

38

503

-129

664

Deposits/Equity-Times: Advances/Deposits:

Markup-interest expensed:

Total non-markup income:

Profit/(Loss) after taxation: Ratios: (Annual Basis) Markup earned/Total Assets:

8.1%

9.7%

Net Markup Income/T. Assets:

7.7%

5.9%

Net markup (aft. Prov.)/TA:

2.0%

3.2%

Non-Markup Income/TA:

1.0%

1.1%

Income before AE/TA:

3.0%

4.3%

Admin Expenses/TA:

3.1%

2.9%

Profit before Taxation/TA:

-0.1%

1.4%

Profit after taxation/TA:

-0.2%

0.8%

Profit/(Loss) aft. Tax/Total Equity:

-1.0%

5.1%

EPS-(year-end paid up) - Rs:

-0.11

0.56

Cash flow Summary

2005

2004

Net Cash flow, Operations:

2,881

4,331

Net Cash flow, Investing:

-9,867

-90

Net Cash flow, financing:

0

0

Change in Net Liquidity:

-6,986

4,241

Net Liquidity at beginning:

16,385

12,144

Net Liquidity at end:

9,399

16,385

Branches of Zarai Taraqiati Bank Limited (ZTBL):Head Office: 1 Faisal Avenue P.O. Box No. 1400. Islamabad, Pakistan Phone No. +92-51-9252805 Email Address: [email protected]

Total Branches in Punjab = 159  Islamabad o Total Branches = 18  Lahore o Total Branches = 19  Sargodha o Total Branches = 15  Faisalabad o Total Branches = 21

 Gujranwala o Total Branches = 18  Sahiwal o Total Branches = 15  Vehari o Total Branches = 11  Multan o Total Branches = 07  Muzaffargarh o Total Branches = 11  D.G. Khan o Total Branches = 06  Bahawalpur o Total Branches = 12  R.Y. Khan o Total Branches = 06 Total Branches in N.W.F.P = 62  Peshawar o Total Branches = 20

 D.I. Khan o Total Branches = 14

 Mingora o Total Branches = 15

 Abottabad o Total Branches = 13

Total Branches in Sindh = 89  Karachi o Total Branches = 15

 Hyderabad o Total Branches = 14  Nawabshah o Total Branches = 13

 Sukkur o Total Branches = 15

 Larkana o Total Branches = 18

 Mirpur Khas o Total Branches = 14

Total Branches in Balochistan = 32  Quetta o Total Branches = 18

 D. M. Jamali o Total Branches = 07

 Turbat o Total Branches = 07

Development loans: Those types of loans which are advanced for the purchase of items like farm machinery/tractors, irrigation, land development, orchard/green houses, on-farm godowns/storages, dairy, poultry, fishery, livestock farming and are recoverable period exceeding 18 months.

Development Loans: Installation of tube wells (including cost of power lines upto 8 poles and transformer/Ancillary structure. Pumping sets/lift irrigation pumps (including peter engines) Open Wells Purchase of improved farm machinery (including tractors,, power tillers, implements, cutter binders (reaper wind rover), threshers, trolley, spraying equipment, cane crusher and miscellaneous agricultural equipment, tractor pulled harvesters, self propelled combines. Production Loan: Those types of loans which are advanced for seed, fertilizer, pesticides, labour charges and POL etc. to grow crops and vegetables including working capital for poultry, dairy, orchard, fishery and are recoverable within 18 months.

Production/Seasonal Loans Items: Seeds Fertilizers Pesticides/Insecticides, Herbicides (Feticides) Manual Sprayers Sairab Scheme: Despite technological advancements and rapid growth of industrial sector, agriculture is still the back bone of Pakistan’s economy. It contributes towards GDP and employs nearly 45% of country’s labor force. It provides raw material for industrial products. So it has both pull & push effect economy. Water plays vital role to improve per acre yield. Out of total million hectors area of Pakistan, 22 million hectors is cultivated while million hectors is cultivable waste mainly due to non-availability of water. More over increase in water supply being a key input is required to raise cropping intensity and hence the income of the farmer. Since inception ZTBL financed over 143000 Tube wells amounting to Rs. 15 billion. For raising irrigated area to accelerate the economic growth

and to facilitate. Farmers ZTBL has signed collaboration agreement with M/s KSB Pumps Company Limited (Company) on 28 May, 2007 ZTBL will disburse Rs.6 billion to the farmers for installation of 30,000Tubewells/Turbines during the next five years. KSB Pumps Company will provide quality machinery/equipment for efficient pumping of water. The company shall also provide after sale service including replacement of parts/availability of spares etc. through its network of dealers. The company agreed to allow warranty period of one year.

Eligibility: Farmers of at least 3 acres land holding will be eligible to avail financing under the scheme provided loan proposal is feasible Terms & condition for loan under “SAIRAB PAKISTAN SCHEME” Type of Security

Agri. Land/ Other Tangible Security

Equity

25%

Contribution Cost of Credit: LA Form Postal RS.

Rs. 20/50/- P.A.

Charges Appraisal Fee

1%

Mark-up 9% PA with 1% rebate on timely Repayment

Recovery Period 5 years in half yearly installments with one year grace period Maximum Loan Rs. 1 Million per case Limit

White Revolution:

In order to modernize the dairy farming for increasing milk supply and mitigate poverty in the country and improving the living standards of the rural inhabitants, a strategic partnership between ZTBL and MIs. Pakistan Dairy Development Company has been agreed upon and an agreement in this regard has been signed on 6th June, 2007. The salient features of this strategic partnership is given here as under: i.

The company shall recommend good dairy farmer to ZTBL and send the loan request to the bank along with necessary documents.

ii.

The concerned branch of the bank will process the case as per prescribed procedure of the bank.

iii. The modernization of dairy farm will be carried out through financing milk cooling tank, generator, voltage stabilizer, hot water gezer, water pump, cooling pad and other dairy equipment. The loan will be considered against securities acceptable to the bank excluding surety, hypothecation of animal and assets created out of bank’s loan. iv. There would be maximum limit of loan of Rs. 1 million per borrower/party • Initially the scheme will be for modernization of 5,000 farm during 5 years period which involved Rs.700 million, 1000 farm would be covered under the scheme on yearly basis. The project shall be started on pilot basis in potential area namely Lahore, Hyderabad, Quetta and Pèshawar zones and its expansion would be made gradually. • PDDC would bear the entire amount of mark-up charged in the loan cases. Provided the 50% of principal part of loan is repaid in time by the borrower. The remaining 50% amount of principal along with the amount of mark-up would be paid by PDDC. Repayment Periods S.No.

Types of Loans

Recovery Period Crop production working capital loans

1

Short Term Loans

recoverable in lump sum commencing after the harvest/marketing of respective crops and within Maximum period of 12 months.

2

Medium Loans

Dairy farming and livestock etc. In yearly/half Term yearly/monthly installments and within Maximum period of 5 years. Long Tractors, agricultural machinery, poultry farming,

godowns 3

Term Loans

and orchard UN yearly/half yearly installments within maximum period of 8 years and. above.

Supervised agriculture scheme: Under this scheme agriculture loans are given for short, medium and long term loans upto Rs. 1.00 million per borrower/per case. The loans are sanctioned for In Fats, livestock, orchard, tractor, agricultural machinery, tube well and irrigation facilities etc. under the scheme besides provision of credit, information are to the farmers for planning the farm, production, guidance for implementation of the scheme, marketing and repayment of loans.

Zarkhaiz (one window operation): For timely and conveniently provision of credit to purchase inputs, loans are provided to the borrowers under One Window Operation being conducted twice a week during Rabi and Kharif seasons. Applications processed on the same day whereas sanction payments are made within three days at Branch. For Rabi Crops one window operation from October to January and for Kharif Crops from April to September each year which is extendable as per requirement of particular area.

Sada Bahar Scheme: For providing timely input loans for crops and working capital for poultry and fishery etc, the Bank has launched a Sada Bahar Scheme. Assessment for inputs requirements for the whole year is made at the time of first application. The amount so assessed is treated as Revolving Limit provided it is within the security limit. The Managers are authorized to sanction such loan limits upto Rs.O.500 million. Scheme’s main features are as under: Revolving Credit Limit is fixed to cater production credit and ancillary requirements of the farmers during one year period. The documentation once completed remains applicable for three years with yearly cleanup/renewal without any further documents. The borrowers can draw the credit in lump sum or in installments according to his requirement. Like-wise he can repay in lump sum or in installments during the year when his cash position allows him.Pass Book containing transactions in his SBS Account is supplied to every borrower free of cost.

Tea financing scheme:

In order to increase the tea cultivation in District Mansehra, Swat, Mutta, Shangla par and Dir in Malakand Division, tea financing scheme has been introduced which would not only save the hard earned foreign exchange but would also help improve the socioeconomic condition of the inhabitants of the area. The salient futures of the scheme are given as under: Maximum Credit Ceiling of Rs.60, 000/- per acre has been fixed. Farmers owing land upto five acres are eligible to avail loans. Credit will be given in 3 installments: first year Rs.30, 000/-, 2nd year Rs.15,000/- 3rd year Rs.15,000/- provided the disbursed loan is used properly. The credit would be repayable within 1 year with 6 years grace period with prescribed markup of 9% per annum. Rebate of 1 % will be allowed in mark-up on timely repayment and proper utilization of the loan.

Crop maximization project: Ministry of Food, Agriculture and Livestock (MINF AL), Government of Pakistan has launched Crop Maximization Project in 109 villages in various districts through out the country to increase the productivity/yield of crops. Under the project MINFAL has to provide funds of Rs, 299.893 million to ZTBL for disbursing loans to the project farmers for purchase of inputs. Till the time funds of Rs.468 Million have since been received by the Bank for the purpose. These funds are to be revolved for meeting input credit needs in the project villages till 30th June, 2014 after which Bank will return the principal amount to MINFAL. Accordingly Credit needs of the project farmers are being met by respective ZTBL branches through Village Organizations formed for the purpose. Duly the currency of the project Bank is authorized to charge 4% per annum mark-up on loans to project growers to meet its operational cost, however in case of default Bank’s normal rate of return i.e. 9% p will be applicable. Recovery Schedule: Recovery schedule in each loan case as per terms of sanction of loan is fixed and communicated to the borrowers after disbursement of loan. In case of default or failure in repayment of any installment on due date the markup shall continue to be charged and last installment due to this may differ from the amount of installments fixed at the time of disbursement. Issuance of Notices: Demand notice is issued before the due date of every installment.

A Legal Notice is issued one month after the due date informing the borrower that if the amount is not repaid within next one month, further legal action will be taken to recover the dues. Legal action: Legal action can be initiated against the defaulter if loan is not repaid even after expiry of legal Notice period. Where the court in bank vs. favor has decreed a case, account is to be settled by recovery of amount from the auction of the mortgaged property. The bank may purchase the mortgaged property if considered feasible to dispose it off later on through auction or in any manner deemed fit for getting the best price.

The bank may dispose off the mortgaged properties of defaulters for satisfaction of its dues with out intervention of courts under Financial Institutions (Recovery of Finances) Ordinance 2001 .Rescheduling of Loan Repayment Facility Rescheduling of Loan Repayment Facility ZTBL allows rescheduling of repayment of installments to its borrowers in order to maintain credit discipline and to mitigate their genuine problems in real hardship cases and in areas declared as calamity hit by the respective Provincial Governments The Rescheduling facility is to be considered by bank on case basis and is to be allowed on borrowers request only. The relaxation in recovery period shall not be allowed beyond one year in any case.The borrowers shall have to execute a supplementary loan agreement on Non Judicial Stamp Paper of appropriate value to give legal cover to extended period.

The borrowers shall have to pay the return for the extended period. Down Payment for Rescheduling of Loans Rescheduling Rate of down payment as against due Number 1st

10%

2nd

20%

3rd

30%

installments to be rescheduled

Types of Security: 1 Immovable Property 2 Movable Property 3 Personal Sureties

Problems Area/location: The location of ZTBL is not easily founded by every person because it is situated in residential area, not in commercial area.

Loan facility: Loan facility is not based on merit system; it is rather base on favoritism.

Corruption of revenue department: There is problem in ZTBL that corruption of revenue department cause the great influence in its performance. They have to find pitwari for advances the loan.

Political influence: Govt. influence also effect the performance of ZTBL, as govt. influences the bank to provide loan to those who has govt. favor. This may cause some bad effect as they are not eligible for loan.

Current Scenario: The ZTBL restructuring plan covering the following;

Governance: establish an environment that facilitates good governance and accountability; Systems: modernize operations through use of technology, networking, and communication tools; Business processes: streamline products and delivery systems so as to reduce transaction costs, simplify operations, and increase outreach; Products and services: introduce products and services that are financially economically viable; Human resource development: improve standards and skills of management and staff and strengthen training capacity; IT: establish new hardware and software platform to support MIS, accounting system including forensic accounting, and risk management functions.

Conclusion Part A We were given a project on Zarai Taraqiati Bank of Pakistan. At very first step we make plan how do we get their and what will we ask. Then we arrived at the Head office based in Lahore at 9 am as per appointment to the regional manager. We were totally 6 students we start interview with the one of the operational manager to whom we were referred by the regional manager. We ask questions about the Zarai Taraqiati Bank’s history, introduction, capital, criteria of loan, criteria of eligibility and defaulter, we had also asked question about the future of Zarai Taraqiati Bank and the Opportunities, and threats. They give us all of the answers what we had ask from accept the branches and capital history because they said that this information is easily available at Zarai Taraqiati Bank Limited’s Web Site. After collecting all information that was needed to make our project we gather data individually by dividing parts then we compile it together

Part B Zarai Taraqiati Bank Limited (ZTBL) is the country’s largest agriculture bank that was established in September 1957 with the named Agricultural Development Bank of Pakistan (ADBP) is the premier financial institution geared towards the development of agriculture sector through provision of financial services and technical know how. The restructuring of former ADBP is being carried out with the aim; To uplift the agriculture and rural sector by raising farm productivity, Streamlining the institutional credit, Increasing income generating capacity of the farming community. ZTBL was incorporated as a Public Limited Company on 14th December, 2002 through repeal of. ADB Ordinance of 1961. Authorized capital of Zarai Taraqiati Bank is Rs 25 billion, comprising 2,500 million ordinary shares of Rs 10 each. As on December 31, 2005 the paid up capital was Rs 11.870 billion, almost all of which is owned by the Federal Government, leaving token ownership to all the Provincial Governments. The Zarai Taraqiati Bank Limited (ZTBL) provides development loans, production/seasonal loans items, and have runed many schemes like supervised agriculture scheme, zarkhaiz (one window operation), sada bahar scheme, tea financing scheme, crop maximization project etc. The Zarai Taraqiati Bank Limited has also some problems that is needed to be solved some are; The location of ZTBL is not easily founded by every person because it is situated in residential area, not in commercial area. Loan facility is not based on merit

system; it is rather base on favoritism. There is problem in ZTBL that corruption of revenue department cause the great influence in its performance. They have to find pitwari for advances the loan. Govt. influence also effect the performance of ZTBL, as govt. influences the bank to provide loan to those who has govt. favor. This may cause some bad effect as they are not eligible for loan. The Asian Development Bank has block aid for ZTBL now they hasn’t enough source to provide much loans. Due to market values of agriculture farmers are willing to leave this field because they don’t get enough revenues. Employees and managers are very co-operative ZTBL act as a financial source for small group of farmers and tenants. They invest in different fields like input, tractors, fishery and dairy farms according to area. They provide services at a very low markup. Overall ZTBL is a good Financial Institution but its main problem is corruption in Revenue Department. ZTBL has a aim to facilitate the farmer. It is a Government Financial Institution which is nonprofit organization. They are going to commercialized to extend their facility.