Post on 12-Mar-2015
UNIVERSITY OF THE PUJNAB
Zarai Taraqiati Bank Ltd
Zarai Taraqiati Bank Ltd
Project of NBFC
Submitted to:
Instructor Ahtasham
Submitted by
Shahzad Yamin
MC09129
Ali sufyan MC09130
Sajid Ali
MC09144
NaveedAhmed MC09152
Project of NBFC........................................................................................................................2
Submitted to:.......................................................................................................................2
Submitted by.......................................................................................................................2
Dedication...............................................................................................................................6
Acknowledgment....................................................................................................................7
Executive Summary.................................................................................................................8
Need & importance of assignment...........................................................................................9
Selections of financial institution with strong reason...............................................................9
Over view of the organization................................................................................................10
Vision.................................................................................................................................10
Mission..............................................................................................................................10
Objectives..........................................................................................................................10
| Recommendations 2
Zarai Taraqiati Bank Ltd
History...............................................................................................................................12
Developmental or Commercial role........................................................................................13
Easy loan access to the farmer..........................................................................................13
Provide technology............................................................................................................13
Disbursement of loans.......................................................................................................13
Farm mechanization and water resource development.....................................................13
One Window Operation.....................................................................................................13
Credit to Women Program.................................................................................................14
Micro Credit Scheme.........................................................................................................14
Revolving Finance Scheme................................................................................................14
Products................................................................................................................................15
Crop maximization project ii..........................................................................................15
Canola Re-Financing Scheme.........................................................................................16
Crop Loan Insurance Scheme........................................................................................17
Green Revolution Scheme..............................................................................................18
One Window Operation/ Zarkhaiz Scheme.....................................................................19
White Revolution- ZTBL & PDDC...................................................................................20
White Revolution- ZTBL & Nestlé..................................................................................21
Sada Bahar Scheme (SBS).............................................................................................22
Awami Zarai Scheme (AZS)- Farm Credit......................................................................23
Rural Devlopment Scheme.............................................................................................24
Red Meat Financing Package for Sheep/ Goat Rearers.................................................25
Repayment Periods................................................................................................................28
Recovery Procedure..........................................................................................................28
Recovery Schedule.........................................................................................................28
Issuance of Notices........................................................................................................28
Legal Action...................................................................................................................29
Rescheduling of Loan Repayment Facility.....................................................................29
| Recommendations 3
Zarai Taraqiati Bank Ltd
d) Down Payment for Rescheduling of Loans.................................................................29
KSS........................................................................................................................................30
KSS Aim.............................................................................................................................30
KSS Operation...................................................................................................................30
Objectives..........................................................................................................................30
Services/Activities so far undertaken by KSS....................................................................31
Quick View of ZTBL’s Performance till 2009............................................................................32
Credit Rating.....................................................................................................................32
Disbursments.....................................................................................................................33
Recovery............................................................................................................................34
Deposits.............................................................................................................................35
Gross profit........................................................................................................................36
NPL.................................................................................................................................... 37
Non financial role of ZTBL......................................................................................................38
Production guide line........................................................................................................38
Hajj aplication facility........................................................................................................38
Locker facility....................................................................................................................38
Transfer of Technology......................................................................................................38
Product success & failure.......................................................................................................39
Successful product............................................................................................................39
Under Awami zarai scheme............................................................................................39
Sada bahar scheme........................................................................................................39
Reasons..........................................................................................................................39
Failure products................................................................................................................40
Red meat revolution.......................................................................................................40
White revolution.............................................................................................................40
Reasons of Failure..........................................................................................................40
Future outlook.......................................................................................................................41
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Zarai Taraqiati Bank Ltd
Conclusion.............................................................................................................................42
Recommendations.................................................................................................................43
Dedication
Our group dedicates this project to our parents who encourage us & help us in every field
of life & of course our teacher without whom we could not able to make this project. May
they live long.
(Aamin)
| Recommendations 5
Zarai Taraqiati Bank Ltd
Acknowledgment
First of all we thank our Almighty ALLAH who has blessed us the courage, energy to
complete our final project.
This course work project which is the assignment of our M.com program is dedicated
unanimously to our Sir. What we have learnt from this program is not the gift of our course
books but is the relentless hard work and skill of our instructor. Whatever benefit we will
get by this course in our personal life is one thing but the quality of the knowledge that has
been delivered to us will remain with us.
We are also thankful to all those who helped us to collect the data without which my report
would not have been completed.
| Recommendations 6
Zarai Taraqiati Bank Ltd
Executive Summary
In this project we covers the specialized institution ZTBl established in 1961 by the
government of Pakistan for the development of agriculture sector of Pakistan having much
more potential of generating food and foreign reserves or the country. its play its vital role
in the economy specially for bossing the agriculture sector by providing easy and sufficient
loans to the farmers .By introducing different schemes and products or farmers and
providing them fertilizers and all those inputs used in cultivation at their Door step. It also
establish its subsidiary known as kissan support scheme which privies technical and
production related guidelines to farmers .And now it’s going to be a separate organization
solely for this purpose.ZTBl also outsources from KSS.
Its play its Development role by introducing different loans for women of rural areas and by
starting its all operations under one window. Financial position of ZTBL is stable because it
is backed by the government .And worked for the welfare of farmers. During recent years
however its rate of advancing decreases but it has overall good profitability and recovery
ratio. But in recent many of its projects stared with different well established organization
in Pakistan met with failure due to lack of confidence between them Like Nestle and
ztbl .But management of Ztbl is trying to cop up with these failures I future with better
planning and correct resource allocation
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Zarai Taraqiati Bank Ltd
Need & importance of assignment
Pakistan is an agricultural country and more than 60% of its population is working related
to agriculture. A development in the agricultural sector will no doubt result in the
development of the whole country. As we know the major part of our economy relay on
agriculture so we have to take considerable steps to improve the agriculture sector so that
we can improve the economy. So keeping in view the above importance we make thorough
study about the agriculture sector the result of which we find the institutions which work
for the development of agriculture sector which is major portion of our economy.
Selections of financial institution with strong reason
Healthy and well-functioning rural finance markets are directly related to achieving the two
key national policy objectives of accelerating rural/agriculture growth and reducing
poverty. The realization of these objectives depends on the simultaneity of developments in
rural finance and non-financial markets to foster the creation of diverse sources of rural
finance to build sustainable financial institutions, and stimulate products and capital flows
in the rural sector. For this, rural finance must be seen as an integral part of equitable
development within a framework of macroeconomic stability. The ongoing corporatize
restructuring lays the basis for fundamental reforms for rural finance market development.
The recurring financial drain, pursuing the old rural finance paradigm and the narrowing
fiscal space have also promoted a shift in Government strategy that now seeks viable
intermediaries for enhancing outreach.
For the majority, access to affordable rural finance services is also important to enable
them to compete in the post-World Trade Organization scenario. Inability to compete
because of high financial costs could reduce income of the majority of farmers and rural
clients, particularly the small and subsistence clients. Lack of access to affordable rural
finance services will also prevent the clients from switching to non-farm activities.
Through study we found that that the ZTBL is leading from front end for the development
of agriculture sector. So in this assignment we are going to show financial, non financial
and development role of ZTBL for the growth of agriculture sector and poor former which
leads towards the country’s development.
| Recommendations 8
Zarai Taraqiati Bank Ltd
| Recommendations 9
Zarai Taraqiati Bank Ltd
Over view of the organization
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.
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.
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.
| Recommendations 10
Zarai Taraqiati Bank Ltd
27
| Recommendations 11
Head Office
Islamabad, Pakistan
Punjab Sindh Balochista
n
Khaber
Pakhtunkhaw
Gilgit
Balitistan
Islamabad
13
Branches
Karachi
15 Branches
D.I. Khan
14 Branches
Abbottabad
7 Branches
Gilgit
7 Branches
Multan
8 Branches
Hyderabad
14 Branches
Turbat
6 Branches
Mingora
15 Branches
D.G.Khan
6 Branches
Mirpur Khas
14 Branches
Quetta
18 Branches
Peshawar
20 Branches
Sahiwal
15
Branches
Sukkur
15 Branches
D.M. Jamali
7 Branches
Lahore
20
Branches
Larkana
18 Branches
Gujranwala
18
Branches
S.B.
Nazirabad
14 Branches
Bahawalpur
13
Branches
Faisalabad
20
Branches
Sargodha
16
Branches
Vehari
11
Branches
Muzafargar
h
11
Branches
R.Y. Khan
7 Branches
Muzafar.Abad
10 Branches
Zarai Taraqiati Bank Ltd
Total Zones
Total Audit Zones 9
Total Branches 352
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Zarai Taraqiati Bank Ltd
History
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
was a banking company for the purpose of the Banking Companies Ordinance and the State
Bank of Pakistan Act.
On 14 December 2002 the Federal Government has converted the Agricultural
Development Bank of Pakistan (ADBP) into Zarai Taraqiati Bank Ltd (ZTBL) and the new
venture has started its operation with immediate effect. The new corporate structure
redefines the banks statue as a public limited company with an independent Board of
Directors promulgated under the presidential ordinance which, aims at ensuring good
governance, autonomy, delivering high quality, viable and timely financial services to a
greater number of clientele in the agricultural and rural segment of the country with
adequate returns to the stakeholder.
After this incorporation all the assets and liabilities of ADBP became the assets and
liabilities of ZTBL. This restructure was carried out with the aim to improve the working
and role of bank in the agricultural development.
The bank is completely owned by the government and it has head office in Islamabad.
ZTBL is providing affordable, rural and agriculture financial services to the rural Pakistan,
comprising 68 % of the total population. The Bank through a country-wide network of 352
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.
| Recommendations 13
Zarai Taraqiati Bank Ltd
Share Capital
The authorized capital of the bank is 25,000 million rupees and the paid up capital Is
11869.612 million rupees by December 31,2005.
Particulars of Shareholding Federal Govt 11859.612
Govt of Punjab 2.771
Govt of Sindh 1.190
Govt of Khyber PK 0.680
Govt of Baluchistan 0.359
Govt of EastWhile East Pakistan 5.000
| Recommendations 14
Zarai Taraqiati Bank Ltd
Management
Swot Analysis
Strengths ZTBL has brand name in agricultural loaning.
It is first and large financial institution established in Pakistan to promote
agricultural financing
The bank has more than 350 branches throughout Pakistan and has presence in all
the provinces of the country which enables it to capture and facilitate a large
number of customers.
The bank enjoys sovereign guaranty of Federal Government that covers its debt
obligation to State Bank of Pakistan
The bank has ability to launch successful products for agricultural
| Recommendations 15
Zarai Taraqiati Bank Ltd
The Bank has the most experienced and the least experienced staff, which is a good
combination of experienced heads
Weaknesses ZTBL have not introduced any Islamic product in financing
In spite of the presence of technology many jobs are done manually. Almost all other
bank’s operations have been computerized but ZTBL is still working on manually
written ledgers etc.
Like other Government institutes the red tap dilemma also exists in ZTBL.
The staff is not motivated because the promotion mechanism is based on experience
rather than on the performance of the employees
Opportunities The bank started computerizing its operation which if completed will result in
increase of the bank performance. The computerized system helps bank in reducing
fraud.
They have wide area network in all over the Pakistan, so ZTBL can make it possible
the fast delivery of funds to rural areas.
The flood of 2010 is challenge for the whole country. Because the most effected
people are farmers so the bank has a chance to increase its reputation by utilizing
its full resources to help them
Threats Corruption is the big threat for the bank
Many commercial banks also started agriculture loaning scheme so it is expected
that in the future the farmers will have more choices to have finance from which will
definitely affect the customer base of the bank.
Political unrest is also a threat for the bank because it is a government
Natural Calamities is also a problem, the bigger part of the bank customers relies on
the environmental condition
| Recommendations 16
Zarai Taraqiati Bank Ltd
Developmental or Commercial role
Easy loan access to the farmer
The Zarai Taraqiati Bank Limited initially started branch based credit scheme to the
farmers. As most of the farmers were not able to get benefit from the loans advanced by
Zarai Taraqiati Bank Limited, it introduced Supervised Credit Scheme in 1979. The
Supervised Credit Scheme is a farmer oriented scheme. Under this Scheme, the potential
farmers are contacted in their fields. Their credit need is assessed at the farms and the
credit is provided to them after necessary documentation in their own villages. The Scheme
is, therefore, village based rather than the branch base.
Provide technology
ZTBL provide technology to the farmer to increase the productivity and contribute towards
the country’s need of food and other agriculture needs. Technology include harvesters,
tractor, tube well & many other technology used in agriculture.
Disbursement of loans
Total agricultural Loans amounting to Rs. 93 billion were disbursed to the farming
com.mun1t for the purchase of primary inputs, tractors, poultry and live stock sector (July
to May 2004-05). The share of ZTBL in the supply of total agricultural credit by the
institution is 34.1% in the same period.
Farm mechanization and water resource development
The ZTBL is helping the Government for increasing farm productivity .and achieving: self-
sufficiency in food production. For achieving this objective, the Bank has played a key route
in providing finance for the purchase of tractors, installation of tube-wells, threshers,
combine harvesters and other farm implements which help in increasing farm yield.
One Window Operation
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Zarai Taraqiati Bank Ltd
The provision of loans to the farmers at one place is the most successful scheme of ZTBL.
The small farmers holding 25 acres irrigated land or 50 acres un-irrigated lands are getting
benefit under this scheme.
Credit to Women Program
The main objective of this program of ZTBL is to make credit available to rural women
through female Mobile. The Bank under this Scheme has disbursed Rs.49 million to 10
rural women for farming and non-farming activities such as poultry, Fishery, orchard,
forestry etc.
Micro Credit Scheme
The ZTBL has launched Micro Credit Scheme since 2000 to engage rural poor in increasing
income through engagement in cottage industries. Under it, a maximum of Rs. 25 thousand
can be advanced against both surety and security.
Revolving Finance Scheme
This scheme is also in operation since 1999. Under this scheme the loan is provided to the
creditworthy farmers for meeting the seasonal agricultural requirements.
| Recommendations 18
Zarai Taraqiati Bank Ltd
Products
Crop maximization project ii
Operational
Jurisdiction
All over Pakistan in 28 Districts & 842 Villages
Profit paidon
MINFA special
saving account
ZTBL will pay profit at minimum rate of 7.5% per annum to be calculated
on daily product basis on such balances lying in VOs, MRFDA or MSSDA
and said profit will be paid on 6 monthly bases in such respective
accounts.
Membership VOs will raise membership by motivating small farmers having holding
upto 20 acres in Punjab , 25 acres in Sind & Baluchistan, 15 acres in KPK
& FATA & 25 acres in AJK & Gilgist-Baltistan
Share Money Each VO member will contribute the share money on the basis of size of
his land holding @ Rs. 250/- per acre per annum for the first five years
Member
farmer saving
account
All member farmers will open Saving Account in same branch of the Bank
where VOs account is maintain
Disbursement lend money to its members) VO will lend money to its members for
purchase of input for production of crop at 10% handling charges per
annum on daily product basis. In case of late repayment by the
beneficiary, 12% per annum handling charges will be recovered
Approval of
loan proposal
Loan proposal of VO level will be prepared by VOs Accountant with the
assistance of the concerned Agriculture Officer/Field Assistant/Stock
Assistant and presented the same before committee comprising of
President, Secretary of VO and Credit Officer of the Project for approval.
On approval check/loan ceiling will be issued alongwith approval letter
for Revolving Fund Special Saving Account maintained by VO at the
| Recommendations 19
Zarai Taraqiati Bank Ltd
nearest Bank Branch
Canola Re-Financing Scheme
Security The loan would be secured against the acceptable forms of security as
per policy of the Bank. The surety loans would be advanced up to
Rs.25,000/- per borrower against two sureties as per standing
instructions of the Bank.
Sanction of Loans Production loans up to Rs. 0.500 million would be sanctioned by the
Managers. In case the amount of loan to be sanctioned including
amount of loan(s) outstanding exceeds Rs.0.500 million the loan
would be sanctioned by the respective Zonal Chief
Legal
Documentation
Legal documentation would be executed as per type of security and
system to be followed according to standing instructions of the Bank
Disbursement The sanctioned loan would be disbursed in cash through current
deposit account of the borrower. Rate of Mark-up Mark up rate to be
charged from the borrower at 8% per annum and in case of default
9% per annum would be charged from 08.06.2011 till its
repayment/closure of loan case. Repayment of Loans to SBP: Principal
amount of loans under the scheme shall have to be repaid on the
agreed date between bank and the borrower
Utilization MCO would check the utilization in each and every case within 30
days of disbursement. In case the loan case is declared as misutilized
this would be recalled in lump sum as per Bank's instructions.
Random rechecking of utilization would be done as per standing
instructions
| Recommendations 20
Zarai Taraqiati Bank Ltd
Monitoring All concerned Branch Managers, Zonal Chiefs and SVP, Credit
Operations Department ZTBL HO Islamabad will be responsible for
overall monitoring of the scheme so as to ensure the achievement of
given targets and compliance of all the terms & conditions of the SBP
scheme
Crop Loan Insurance Scheme
ZTBL has launched Crop Loan Insurance scheme (CLIS) as per instructions of Government/
SBP. The main features of this scheme are listed hereunder.
Operational
Jurisdiction
All branches of the Bank throughout the country
Premium Premium will be charged @ 1.3% (inclusive of all taxes and levies)
of loan sanctioned for Rabi and Kharif crops separately. Bank will
pay the premium for subsistence farmers and will get
reimbursement from the Government on half yearly basis
Maximum loan limit
Insured
Rs. 500,000 in an individual case. Sum insured: Production loan for
agreed crops of each season (Rabi & Kharif) for which premium is
paid
Crops covered Wheat, Cotton, Sugarcane, Rice & Maize Perils covered: Excessive
rain, Flood, Drought, Hailstorm, Frost, Locust attack and Insect
attack
Period of Insurance From the date of sowing/transplantation to completion of harvesting
of the insured cro
| Recommendations 21
Zarai Taraqiati Bank Ltd
Compensation Full compensation will be paid if the insured standing crop is
damaged by the perils covered in calamity notified areas by the
Government
Green Revolution Scheme
In order to achieve the aim of providing farm machinery and implements to encourage the
mechanized farming for the enhancement of agriculture productivity as compared with
traditional tillage system a Memorandum of Understanding between Zarai Taraqiati Bank
Ltd. and Department of Agriculture. AJ&K has been signed under title of Green Tractor
Scheme. The main features of this scheme are listed hereunder
Operational
Jurisdiction
Throughout AJ&K Area
Selectionof
Borrowers
Bank MCO Selects the Borrowers on the recommendation of
Department of Agriculture, AJ&K
Delivery Channel Branch/Department of Agriculture, AJ&K Mark up Rate: 9% p.a with
1% rebate on timely repayment
Document
Required
CNIC Photocopy, Loan Case File, IB-7 Agreement, Agri. Pass Book &
2 Photographs of borrower
Collateral Tangible Properties Maximum Credit Limit: Rs.1.000 million per
borrower/party Incentive: AJ&K Government would reimburse the
amount of mark up charged by the Bank provided the borrowers
repay the loans on due date
Repayment The loan will be recoverable within 5 years in 10 equal installments
commencing after six month of issuance of DD
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Zarai Taraqiati Bank Ltd
One Window Operation/ Zarkhaiz Scheme
Silent feature of product
An easy way to get Agri.Pass Books.
Credit needs of the farmers at the ir doorsteps.
All formalities from the issuance of Agro.Pass Book to processing of loan are
completed on the spot.
Efficient and cheaper lending procedure.
Simplified documentation.
Timely disbursement.
Transparent services.
Focus on small farmers.
Operational
Jurisdiction
Throughout Pakistan (except Mingora Zone in NWFP, Turbat Zone in
Balochistan Province and FANA being un-settled/hilly areas
Selection of
Farmers/
Borrowers
ZTBL MCOs, Revenue and postal staff meet at selected focal points
once a week on each Monday. Blank Agri.Pass Books are supplied by
the postal authorities. Patwari/Revenue officials enter land record in
Agri.Pass Books. Farmers after obtaining pass books from revenue
officials meet ZTBL MCOs for loans. Loan Case File (costing Rs.100/-)
o the rwise is supplied to the intending borrowers free of cost
Delivery Channel ZTBL, Revenue, Postal authorities and Supplier through selected focal
points. Collateral: Agri.Land mentioned in Agri. Pass Book
Eligibility Ctiteria Farmers having irrigated land up to 25 acres and barani land up to 50
acres
Repayment Rabi loans are recoverable on 7 th July & Kharif loans on 7 th January.
Loan able Items: Inputs-Seed-fertilizer,
pesticides/insecticides/POL/labor charges etc
| Recommendations 23
Zarai Taraqiati Bank Ltd
White Revolution- ZTBL & PDDC
To modernize the existing dairy farming and in order to increase milk supply in the
country, a Strategic Partnership between ZTBL & PDDC has been made. Under the Scheme
M/s PDDC recommends good dairy farmers to ZTBL for provision of finances for the
purpose. Provision of assured quality dairy equipments i.e. milk chilling tanks, geezers,
fodder machines/mixtures, water pumps/diesel engines etc. & installation the reof on
competitive market rates to the farmers. Salient features of the scheme are as under
Coverage Throughout the country.
Eligible Farmers Existing good dairy farmers duly selected/recommended by PDDC.
Delivery Channel: PDDC/ZTBL Branch/ Supplier
Equity Contribution 10% of the Project cost Cost of Credit: Loan Case File Rs.100/-, IB-7
Agreement, Appraisal Fee @1% of loan amount, Postal Charges
Rs.500/- per year
Mark Up Rate 9% p.a with 1% rebate for timely repayment
Incentives Borrowers are required to pay only 50% of principal amount on due
dates whereas mark-up as well as 50% of principal amount shall be
paid by PDDC Recovery Period: 5 years in monthly installments with
grace period of 3 months
White Revolution- ZTBL & Nestlé
In order to increase milk supply, mitigate poverty in the country and improve the living
standard of the rural populace, as a first step, modalities of Strategic Partnership of Bank
with M/s. Nestlé Pakistan Ltd. have been worked out and an agreement to this effect has
been executed.
| Recommendations 24
Zarai Taraqiati Bank Ltd
Operational
Jurisdiction
Throughout Punjab Province
Selection of
Borrowers
M/s Nestlé identifies the borrowers (existing as well as new dairy
farmers) to recommend concerned ZTBL Branch through Model
Branch Lahore
Delivery Channel Nestlé/ ZTBL
Branch Collateral Tangible Properties
Loan able Items Dairy sheds/structure
Local Buffalo/Cow
Imported Cow with calf
Working Capital
Maximum Loan
Limit
Rs.1 million per borrower/party. Cost of Credit: Loan Case File-
Rs.100/-, Appraisal Fee @1% of loan amount, Postal Charges Rs.500/-
per year, Mark-Up Rate is 9% p.a. with 1% rebate for timely
repayment.
Insurance of
Animals
Bank arranges insurance of animals through M/s Adamjee Insurance
Company Ltd
Equity Contribution 10% of the cost of the Project
Disbursement of
Loan
Loans for sheds and working capital will be disbursed in cash in
suitable installments.
Imported cows through Nestlé.
Local Cow/Buffaloes through pay order/DD in the name of seller
Allocation of Funds For the five years 2007-2011 Rs.5 Billion have been allocated to
finance 10,000 animals each year. Monitoring of Loan: M/s Nestlé
will carry out monitoring of loan to update the branch periodically.
Recovery Period: 5 years in monthly/weekly installments with grace
period of 1-3 months for local and imported animals respectively
Sada Bahar Scheme (SBS)
In order to facilitate the farmers and provide the m timely inputs (seed, fertilizer,
pesticides, insecticides, POL and labor charges etc) for crops loan under Sada Bahar
| Recommendations 25
Zarai Taraqiati Bank Ltd
Scheme(SBS) is provided. Besides, working capital for dairy, poultry and fishery are
provided to the interested borrowers under the scheme. The salient features of the scheme
are as under
Selection of
Borrowers
Under the scheme the Bank MCO selects the Borrowers for crop
production keeping in view of the criteria fixed for Sada Bahar
Scheme(SBS).
1-Loan for poultry, dairy and fishery are also provided to the
interested borrowers under the scheme.
Collateral Tangible Securities Rate of Mark up: 9% p.a with 1% rebate for
timely repayment
Documents
Required
CNIC Photocopy, Loan Case File, IB-7 Agreement, Agri. Pass Book &
2 Photographs
Maximum Limit Rs.0.500 million per borrower/party
Working of
revolving limit
The revolving credit limit is fixed to cater production/working capital
needs of the borrowers during one year period
Loan Disbursement The borrower can draw the credit in lump sum or in piece meal
according to his need/requirement
Repayment For repayment of both production as well as loan working capital for
poultry, dairy and fishery the borrowers are required to clear the
outstanding liabilities under the scheme once in a year by the due
date and get renewed credit limit for next year up to 3 years
Loan able Items Inputs i.e. seed, fertilizer and pesticides etc.
Working capital for Poultry, Dairy and Fishery
Awami Zarai Scheme (AZS)- Farm Credit
| Recommendations 26
Zarai Taraqiati Bank Ltd
Mandatory for all new borrowers and optional for existing borrowers of crop production
loan under Sada Bahar Scheme to avail revolving limit under Awami Zarai Scheme to get
inputs through M/s Kissan Support Services Limited (KSSL) - a subsidiary of ZTBL under
kind system. The prime features of this scheme are hereunder
Selection of
Borrowers
Bank MCO Selects the Borrowers keeping in view the criteria fixed
for Sada Bahar Scheme
Supplier Collateral Tangible Securities
Rate of Mark up 9% p.a with 1% rebate for timely repayment
Working of
Revolving limit
It will be worked out as per crop wise ceilings fixed and revised from
time to time.
Loan Disbursement Disbursement is made after supply of inputs on the basis of supply
order issued in the name of KSSL, receipt of bill & acknowledgement
receipt duly signed by the borrower in the branch
Repayment This scheme is meant for 3 years with yearly renewal/clean up. Rabi
crop loans are repayable on 7 th July and Kharif on 7 th January each
year with grace period of one month. In case of sugarcane two
installments would be fixed, 1 st on 7 th January and 2 nd on 7 th
April each year with grace period of one month. Loanable Items:
Inputs i.e. seed, fertilizer and pesticides etc
Rural Development Scheme
In order to provide Credit Assistance for Dairy, Poultry, Sheep & Goat Farming in the rural
areas of the State of Azad Jammu & Kashmir, a Memorandum of Understanding between
Zarai Taraqiati Bank Limited and Azad Kashmir Small Industries Corporation has been
signed. The following are the salient features of the scheme
| Recommendations 27
Zarai Taraqiati Bank Ltd
Operational
Jurisdiction
The scheme shall be implemented in the entire area of Azad Jammu
& Kashmir through network of ZTBL branches & Azad Kashmir Small
Industries Corporation
Selection of
Borrowers
The borrowers will be selected by AJ&K Small Industries
Corporation. The loan to the selected borrowers shall be provided by
ZTBL as per prescribed procedure
Equity Contribution 10% of the Project Cost
Mark up Rate Mark up rate is 9% p.a with 1 % rebate on timely repayment
Incentives
All the applicable mark up on the loan installments under the scheme
will be paid to ZTBL by AJ&K Small Industries Corporation.
Collateral: Tangible Properties
Maximum Credit
Limit
Rs.1.000 Million per borrower/party
Repayment/
Recovery Period
Poultry Farming – Within 5 years in half yearly installments
commencing one year after 1st disbursement of loan.
For Dairy/Livestock Farming – Within 5 years in half yearly
installments commencing six months after 1st disbursement of loan
| Recommendations 28
Zarai Taraqiati Bank Ltd
Red Meat Financing Package for Sheep/ Goat Rearers
Pakistan 's economy is predominantly agrarian. The agriculture sector contributes 21% to
the GDP. Livestock being largest sub sector of the agriculture accounts for 50% of value
addition. 35 million rural population depends directly on this sector. Thus this scheme has
been launched to promote this sector
AREA of Operation Initially the financing package is implemented in Multan , Faisalabad
, D.G.Khan, D.I.Khan, Bhakkar, Nawabshah, Dadu, Sukkur, Peshawar
, Lasbella, Loralai, Khuzdar Districts branches having good potential
and repayment culture. The scheme will be scaled-up in a phased
manner
Size of Farm New/Fresh enterprise 10-20 heads Existing/Medium Farmer with 3
years experience 20-50 heads Escalators/expanding with above 5
years experience 80-100 heads
Maximum Loan
Limit
Per sheep/ Goat Rs. 5,000/- Per Teddy/ Goat Rs. 3,500/- Per Kid Rs.
1,200/- Borrower Equity: 10% of the project cost
Recovery Period Breeding 5 year
Fattering 6-15 months
| Recommendations 29
Zarai Taraqiati Bank Ltd
Repayment Periods
Types of Loans Recovery Period
Short Term
Loans
Crop production working capital loans recoverable in lump
sum commencing after the harvest/marketing of respective
crops and within maximum period of 12 months.
Medium Term
Loans
Dairy farming and livestock etc. In yearly/half yearly/monthly
installments and within maximum period of 5 years.
Long Term
Loans
Tractor, agricultural machinery, poultry farming, godowns
and orchard iIn yearly/half yearly installments within
maximum period of 8 years and. above
Recovery Procedure
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 mark-up 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.
| Recommendations 30
Zarai Taraqiati Bank Ltd
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's favour 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 to-case basis and is to be
allowed on borrower's 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.
d) Down Payment for Rescheduling of Loans
Rescheduling Number Rate of down payment as against due
| Recommendations 31
Zarai Taraqiati Bank Ltd
installments to be rescheduled
1st 10%
2nd 20%
3rd 30%
KSS
Kissan Support Services Ltd. Is a subsidiary of ZTBL which is established with a capital
investment of 100 Million to help ZTBL in the achievement of its objective and also to make
availability of trained human capital to the bank.
KSS Aim
To provide support staff to ZTBL & under take its non core activities.
KSS Operation
Kissan support services operates under its Memorandum & Articles of Association.
Objectives
T0 provide to the Bank all kinds of support staff and ancillary services
To plan, organize and establish training facilities to impart training to the
bank’s staff
Drip Irrigation System to assist the bank clients in marketing of their product
and provide storage facilities
To assist the bank clients in marketing of their product and provide storage
facilities
To provide welfare services to the employees of the Bank including
education, vocational training, sports and recreation facilities
To invest any surplus money of the company not immediately required
To carry on any business, which may seem to the company capable of being
conveniently carried on
| Recommendations 32
Zarai Taraqiati Bank Ltd
To liaison & establish contracts with agricultural research organizations for
development of efficient, effective and appropriate technologies
To carry on business of providing consultancy, advisory and other agency
services and support services to Zarai Taraqiati Bank Limited
At govt price pesticides seeds and fertilzer provide by the KSS at the door
step.
To provide to the Bank’s clients quality products and services for efficient
and improved farming Etc.
Services/Activities so far undertaken by KSS
o Security Services to ZTBL
o Recruitment/provision of staff
o janitorial Services provided to:
ZTBL Head office buildings
Ztbl Farms
Staff college
Printing stationery office
AV Unit
Old record office
Sports club
o Warehouse
o Management of Sports Activities
o Management of Sports Activities
Day to day minor repair and maintenance of ZTBL HQ Buildings
| Recommendations 33
Zarai Taraqiati Bank Ltd
Quick View of ZTBL’s Performance till 2009
Credit Rating
In August 2010, ZTBL continued to achieve AAA credit rating by JCR-VIS.
Year Entity Stand
Alone
Outloo
k
2010 AAA/ A-
1+ B+/ B Stable
2009 AAA/ A-
1+ B+/ B Stable
The credit rating of the bank is due to the reason that bank enjoys sovereign guarantee of
the federal government that covers its debt obligations to State Bank of Pakistan (SBP) and
ensures safety of deposits under the Banks’ (Nationalization) Act 1974. The bank’s lending
book is largely funded through SBP’s credit lines while contribution from deposits remains
nominal. ZTBL is actively exploring different options for resource mobilization including
bilateral/multilateral arrangements with financial institutions. In case these efforts
materialize; it would diversify the existing funding source of the bank, thereby reducing
reliance on the SBP
| Recommendations 34
Zarai Taraqiati Bank Ltd
Disbursments
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090
10
20
30
40
50
60
70
80
90
11.7
22.4
30.224.4
27.6 29.1 29.733.7
39.4
52.555.9
70.7
77.7Disbursement (Billion)
| Recommendations 35
Zarai Taraqiati Bank Ltd
Recovery
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090
10
20
30
40
50
60
70
80
15.118.7
25.830.1 32.1 33.5
36.9 38.942.1
52
63.2
70.873.8
Recovery (Billion)
| Recommendations 36
Zarai Taraqiati Bank Ltd
Deposits
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090
1
2
3
4
5
6
7
8
9
10
1.52.1
1.8 1.6 1.4 1.6
2.3
3.12.6
2.9
4.3
5.5
8.8
Deposit (Billion)
| Recommendations 37
Zarai Taraqiati Bank Ltd
Gross profit
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-6
-4
-2
0
2
4
6
8
10
0.2
-3.8
1.8
0.3 0.2
8.4
0.81.2
0.10.600000000000001
1.8
4
5
Gross Profit (Billion)
| Recommendations 38
Zarai Taraqiati Bank Ltd
NPL
| Recommendations 39
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
48.8% 49.7% 49.1%
52.9% 53.0% 52.5%
61.6% 60.8%
69.6%
33.3%
27.7%
19.1%15.6%
NPL's As a Percentage of Total Outstanding
Zarai Taraqiati Bank Ltd
Non financial role of ZTBL
Production guide line
Special agrigarian appointed by the ZTBL to production guide line to the farmer. They
guide farmer in which season to sow , rate of seeds, distance of rows, in which quantity to
b use and other production related goodness.
Hajj application facility
ZTBL now entertain the hajj application which has not done in the past.
Locker facility
Zarai Taraqiati Bank Ltd. apart from its core functional activity marked with country based
agri-business, has started to serve its valued customers by offering lockers facility. Initially,
this facility is being offered at following 11 branches:-
Type Specification Rent Per Annum Rent after grace
period Key Deposit
Small 6-1/2"x4-1/2"x23" Rs.1,200/- Rs.1,500/- Rs. 5,000/-
Medium13-1/2"x4-
1/2"x23"
Rs.1,800/- Rs.2,250/- Rs. 10,000/-
Large 13-1/2"x8-
1/2"x23"
Rs.2,500/- Rs.3,125/- Rs. 15,000/-
| Recommendations 40
Zarai Taraqiati Bank Ltd
Transfer of Technology
ZTBL is doing efforts in transfer of technology to the farmers of rural areas to improve
overall productivity of the farmers which supports in fulfilling the country’s needs.
Technology like harvesters, tube wells, tractors etc
Product success & failure
Successful product
Under Awami zarai scheme
loan is given to the farmer at the rate of 9% p.a & 1 % rebate at timely payment. Interest
collected by the bank semi annually. After every 3 years the loan is reschedule & charge of
the loan scheduling is charged by the bank.
Sada bahar scheme
Under Sada bahar scheme loan is given to the farmer at the rate of 9% p.a & 1 % rebate at
timely payment. Interest collected by the bank annually. After every 3 years the loan is
reschedule & charge of the loan scheduling is charged by the bank.
Reasons
The reason is that the farmer does not have to pay the principle amount instead he pays the
interest only & enjoy the principle for the long period. The principle amount will pay back
when it is easy for farmer to pay.
| Recommendations 41
Zarai Taraqiati Bank Ltd
Failure products
Red meat revolution
In this cost of growing up animals is very high. Every animal take 2 to 3 years to grow up
having very less demand in market due to market is unstable in term of price fluctuation
and buying power of costumers .
White revolution
Nestle & ztbl joined hands together in this regard. In order to increase milk supply,
mitigate poverty in the country and improve the living standard of the rural populace, as a
first step, modalities of Strategic Partnership of Bank with M/s. Nestlé Pakistan Ltd. have
been worked out and an agreement to this effect has been executed.
Reasons of Failure
There is a lack of confidence between ztbl and nestle .this project got flopped due to lack of
confidence and having disputes like kohata case
| Recommendations 42
Zarai Taraqiati Bank Ltd
Future outlook
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 platforms to support MIS, accounting system
including forensic accounting and risk management function
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 agri. financial services through
intermediations under public private participation and whole-sale -retail lending
mechanism.
| Recommendations 43
Zarai Taraqiati Bank Ltd
Conclusion
ZTBL is a specialized institute which provides financing facilities to the people of rural
areas and in this way it is contributing its part for the development of the country. Due to a
government owned organization the politicians and other higher authorities sometime use
it to give benefits to their families and friends and this also effects the growth of the bank.
However the bank has improved itself a lot, the profit of the year of 2008-9 and decline in
Non Performing Loans are clear signs of improvements. The few things on which the bank
has to focus is implementation of information technology with faster pace, improving
branch infrastructure and working of its human capital to make them motivated
| Recommendations 44
Zarai Taraqiati Bank Ltd
Recommendations
ZTBL should improve the Management system.
They should be employee and customer oriented.
They have to introduce the dress coat into the organization.
Loaning procedure should be easier and convenient to the customers and
easy processing system.
They should adopt the new agriculture technology for the high level
production to increase the GDP level of the country.
ZTBL has to play vital role for introducing new energies to overcome the
problems of the fuel and bio gas.
Political involvement should be eliminated so that they can take good
decision and actions for the better disbursement.
Marketing department should play vital rol for introducing new products.
They should also play role for advertise their products and features and
functions of the products.
ZTBL Head Office has to update the annual reports and manuals annually.
They should hire the employee on the merit basis.
Their employees have to knowledge about their organization and about its
department where they are working.
Employees should be qualified and productive.
ZTBl has to introduce again for Project Financing scheme. Because the
scheme was successful before but due to the some hurdles it was closed. But
it really highly benefited the whole country.
The bank’s logo and its color should be changed.
Fresh and energetic graduates should be select for the recruitment on the
merit base.
Bank should also be male and female oriented for the better performance of
the organization.
ZTBL has to started online banking system so that their customer will get
benefit from their services and number customer will increase to their
organization.
ZTBL has to introduce ATM card service to facilitate their customers
ZTBL has to focus on commercial banking also
Introduction of New Branches to expand their business.
| Recommendations 45
Zarai Taraqiati Bank Ltd
Introduction of DMS to overall branches
| Recommendations 46