Final Nbfc

UNIVERSITY OF THE PUJNAB

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


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


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

| Recommendations 4


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


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


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

| Recommendations 7


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


| Recommendations 9


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


27


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


Total Zones

Total Audit Zones 9

Total Branches 352



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.



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



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



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



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



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.



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



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



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



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



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



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.



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



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



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



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



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



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.



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



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



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



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



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)



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)



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)



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)



NPL


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


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/-



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.



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



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.



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

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.



Introduction of DMS to overall branches


Final Nbfc

Documents

Transcript of Final Nbfc