internship report ztbl

7/30/2019 Internship Report ZTBL

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INTERNSHIP REPORT

ZARAI TARAQIATI BANK LTD.

Submited to:

Sir, Fida Hussain Bukhari

Submitted by:

Adnan Ijaz

M08MBA071

Specialization in Finance

MBA Banking & Finance 2008-2010

Hailey College of Banking &

Finance


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Internship Report on ZaraiTaraqiati Bank Ltd.

2010

University of Punjab

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Internship Report on Zarai Taraqiati Bank Ltd. 2010

In the name of ALLAH the

most benificent, the most

merciful

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2010

ACKNOWLEDGEMENT

I have great sense of gratitude for the most Beneficent andMerciful Allah who has always helped me in all matters of life .Itried but He rewarded me more than the tried.

I have deep feelings for whole of my family, in general, and formy Father, my Mother and my elder brother, in particular .Theyhave always soothed me, elevated me and their words and duahas floated me in the deep seas of troubles. All of my successesare due to the prayers of my family.

I am thankful to all of my teachers and my class fellows andfriends whom cheerfulness and guidance is an asset for me .I amespecially thankful to the bank staff who has given meopportunity to get precious practical knowledge and also for theirguidance during my internship. Without the help of all these I wasnot able to complete this report.

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Preface

This Internship report is the compulsion put in by Hailey College ofBanking and Finance for the award of master degree in businessadministration.

In order to accomplish the task of completion of the degree, I choosethe renowned and reputed organization that is the Zari Taraqiati BankLtd. I went through 6 weeks internship training in the bank in order toperceive the true art and the practical picture of banks working and togo through the process by which the organization is making very good

out of its limited resources. The report is based on the introduction ofthe bank, products offered, financial analysis and assignments Ihandled during my internship.

The report is divided into two main parts; the first part includes theintroduction of bank, its products and financial analysis while thesecond part is based on the assignments I handled during myinternship.

I am positive that the college will oblige me by giving itsrecommendation and consent for the approval of the degree and thepurpose for which I have gone through training and report writingprocedure will be served positively.

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Table of Contents

..................................................................................................8

Part One......................................................................................8

Ch. 1: Introduction of Zarai Tarqiati Bank Ltd.................................8

Chapter 1.....................................................................................9

History ..............................................................................................9Credit Rating................................................................................................................. 11Corporate Vision............................................................................................................12Corporate Mission......................................................................................................... 12

Corporate Objectives.........................................................................13

Transformation of ZTBL to R.F.I of the country and road to excellence.........................14

Branch Network................................................................................16

Management Hierarchy......................................................................17

Board of Directors.............................................................................20A Brief Resume of President..........................................................................................21

........................................................................................................24

Kissan Support Services Ltd...............................................................24KSS Aim.........................................................................................................................24KSS Operation............................................................................................................... 24Objectives..................................................................................................................... 24

Services/Activities so far undertaken by KSS................................................................25

Chapter 2...................................................................................27

Products and Services.......................................................................27ZTBL Locker Facility ..................................................................................................... 27

Products offered to Meet Finance Need of Farmers.............................28Types of Loans Advanced..............................................................................................28

Loan Schemes...................................................................................29Supervised agriculture scheme:....................................................................................29Zarkhaiz (one window operation)..................................................................................29Sada Bahar Scheme......................................................................................................30

Tea financing scheme................................................................................................... 30Crop maximization project............................................................................................31

PER ACRE CREDIT LIMITS...................................................................32Major Crops...................................................................................................................32Minor Crops...................................................................................................................32Growing Agro Forest Trees............................................................................................33Growing Orchards.........................................................................................................33Mature Orchard/Fruits crops..........................................................................................33

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Types of Security...............................................................................34Immovable Property......................................................................................................34Moveable Property and Guarantees..............................................................................34Personal Surety............................................................................................................. 35

Debt Equity Ratio..............................................................................36

Repayment Periods...........................................................................37

Recovery Procedure...........................................................................37A) Recovery Schedule................................................................................................... 37b) Issuance of Notices ..................................................................................................37c) Legal Action .............................................................................................................38d) Rescheduling of Loan Repayment Facility.................................................................38d) Down Payment for Rescheduling of Loans ...............................................................39

Part Two....................................................................................67

Ch. 5: Assignments I handled during my Internship......................67

Chapter 5...................................................................................68

Organogram of Mian Channu Branch..................................................68

Redemption of loan...........................................................................69

Opening of Current Account...............................................................731: Acquiring Original CNIC.............................................................................................732: Filling Current Account Form.....................................................................................743: Filling of Know Your Customer Form..........................................................................754: Current Account Specimen Card...............................................................................765: Registering name in the Current Account Register (Issuance of A/C No.)..................766: Filling of Deposit Slip of starting amount...................................................................777: Signing by AMO and Manager...................................................................................788: Issuance of Cheque book..........................................................................................78

9: Opening account in the ledger of bank.....................................................................78ZTBL Flood Relief Fund 2010.........................................................................................82

Writing of Vouchers...........................................................................841. Debit Voucher...........................................................................................................842. Credit Voucher..........................................................................................................843. Transfer Voucher.......................................................................................................84

Sample of Debit/Credit Voucher.........................................................86

Sample of Transfer Voucher...............................................................92

Daily Transaction Scroll.....................................................................93

Making Entries in the Ledgers............................................................95

Disbursement and Recovery Entries...................................................95

Revolving SBS Loan...........................................................................97

Opening and Closing Cash................................................................101Safe Register:..............................................................................................................101

Dispatch and Diary..........................................................................102

......................................................................................................102

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Learning as an internee...................................................................102

Duties.............................................................................................102

Part OneCh. 1:Introduction of Zarai Tarqiati

Bank Ltd.Ch. 2:Products OfferedCh. 3:Financial Analysis

Ch. 4:SWOT Analysis

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Chapter 1

The Zarai Taraqiati BankLimited (ZTBL) (formerly knownas Agricultural DevelopmentBank of Pakistan) is the largestpublic sector financialdevelopment institution with a

wide network of 27 Zonal Offices,9 Audit Zones and 352 branchesin Pakistan. The bank servesaround half a million clientsannually and has over one millionaccumulated account holders.

HistoryPakistan 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. To

keep With a view to meet this basic need the Agricultural Development

Finance Corporation was set-up in 1951, and was entrusted with the

task of providing financial facilities for the development and

modernization of agriculture, including: Forestry, Fishery, Animal

Husbandry, Poultry, Dairy Farming.

Later on the Agricultural Development Bank of Pakistan was also

established in September 1957, under the Agricultural Development

Bank Act. The Bank is to provide credit in cash or in kind, warehousing

and storage facilities to agriculturists, cooperative societies and other

bodies, of which the majority of members are agriculturists.

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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 withimmediate 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 becamethe assets and liabilities of ZTBL. This restructure was carried out withthe aim to improve the working and role of bank in the agriculturaldevelopment.

The bank is completely owned by the government and it has headoffice in Islamabad.

Ownership Government

Type of Institution Specialized BankEstablished 1961

President & CEO Muhammad Zaka Ashraf

Equity 18.7 Billion (2009)

Headquarters Islamabad, Pakistan

Total Deposits PKR 8.8 billion (as Dec.31st, 2009)

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Total Disbursement PKR 77.7 billion (as Dec.31st, 2009)

Homepage www.ztbl.com.pk

ZTBL is providing affordable, rural and agriculture financial services tothe rural Pakistan, comprising 68 % of the total population. The Bankthrough a country-wide network of 352 branches is serving around halfa million clients annually and over one million accumulated accountholders with the average loan size of around Rs.89,000.

Credit Rating

In August 2010, ZTBL continued to achieve AAA credit rating by JCR-

VIS.

Year

EntityStand

AloneOutl

ook

2010

AAA/A-1+

B+/ BStable

2009

AAA/A-1+

B+/ BStable

The credit rating of the bank is due to the reason that bank enjoys

sovereign guarantee of the federal government that covers its debtobligations to State Bank of Pakistan (SBP) and ensures safety ofdeposits under the Banks (Nationalization) Act 1974. The bankslending book is largely funded through SBPs credit lines whilecontribution from deposits remains nominal. ZTBL is actively exploringdifferent options for resource mobilization includingbilateral/multilateral arrangements with financial institutions. In casethese efforts materialize; it would diversify the existing funding sourceof the bank, thereby reducing reliance on the SBP.

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Corporate Vision

Dedicated to serve the needs of the farming community, bydelivering financial products and technical services on acompetitive and sustainable basis, in a convenient, efficient andprofessional manner, leading to success of the Bank and the

farmers.

Corporate Mission

To play effective role in the promotion of economic growth, by

enhancing the availability of credit to the agriculture sector,

through reliable access to sustainable financing, special lending

programs, technical assistance, and other products & services,

and to promote career development opportunities for increasing

professionalism and technical proficiencies of employees.

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Corporate Objectives

1. Develop and operate as a financially and operationally sustainable R.F.I of the country.

2. Assist rural community, particularly the small farmers, in raising their productivity and

income levels through timely delivery of credit, advisory and ancillary services.

3. Build ZTBL's image as a proactive, client friendly, financially & operationally

sustainable with indigenous product deployment.

4. Establish and provide backward and forward linkages to strengthen agri. value added

commodity chains.

5. Engage in public - private and wholesale - retail partnership to deepen outreach and

reduce operating cost.

6. 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.

7. Provide a wide range of risk insurance products to its clients.

8. Open up its venues of operation to Domestic & International Banking Industry to avail

comparative advantages.

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Transformation of ZTBL to R.F.I of the

country and road to excellence.The conversion of ADBP into ZTBL had a conditionality of the AsianDevelopment Bank (ADB) loan framework as per which a restructuringexercise was initiated. The restructuring process entailed ADBs RuralFinance Sector Development Program (RFSDP) with the objective totransform ZTBL into a sustainable Rural Finance Institution. It alsoincluded the up-gradation of Information technology (IT) infrastructurefor which funds from ADBs loan were to be utilized.

Healthy and well-functioning rural finance markets are directly relatedto achieving the two key national policy objectives of acceleratingrural/agriculture growth and reducing poverty. The realization of theseobjectives depends on the simultaneity of developments in ruralfinance and non-financial markets to foster the creation of diversesources of rural finance to build sustainable financial institutions, andstimulate products and capital flows in the rural sector. For this, ruralfinance must be seen as an integral part of equitable developmentwithin a framework of macroeconomic stability.

For the majority, access to affordable rural finance services is alsoimportant to enable them to compete in the post-World TradeOrganization scenario. Inability to compete because of high financialcosts could reduce income of the majority of farmers and rural clients,particularly the small and subsistence clients. Lack of access toaffordable rural finance services will also prevent the clients fromswitching to non-farm activities.

The ZTBL restructuring plan covering the following;

Governance: establish an environment that facilitates goodgovernance and accountability;

Systems: modernize operations through use of technology,networking, and communication tools;

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Business processes: streamline products and delivery systemsso as to reduce transaction costs, simplify operations, andincrease outreach;

Products and services: introduce products and services thatare financially economically viable;

Human resource development: improve standards and skillsof management and staff and strengthen training capacity; and

Information Technology: establish new hardware and softwareplatform to support MIS, accounting system including forensicaccounting, and risk management functions.

The reforms shall establish ZTBL as a key R.F.I of the country. Byexpanding its private sector role, the bank aims to establish network ofhigh tech rural and agri. financial services through intermediationsunder public private participation and whole-sale -retail lendingmechanism.

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Branch Network

Details of Regional Offices

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Head OfficeIslamabad, Pakistan

Total Zones 27

Total Audit Zones 9

Total Branches 352


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Management Hierarchy

The general direction and superintendence of the affairs of the bank

are entrusted to a 12 members Board of Directors consisting of achairman appointed by the Federal Government, the FederalGovernment officers from the Ministries of Finance and Food andAgriculture, four officers of the four Provincial Governments and onenon official nominated by each province. One member on this boardrepresents the State Bank of Pakistan also. However, at present thebank has 7 directors including chairman. The bank also has a presidentappointed by the federal government and a company secretary.

In ZTBL, the president supervises and directs the Chief ExecutiveOfficer who supervises and directs the Head of Department, who thensupervise and direct the officers under them. The managementhierarchy of bank is as follows;

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Earlier the bank was functioning like a pure government institution andpermission has to be sought on every step for moving forward. Nowthe bank management board will be fully empowered to run the affairsof the ZTBL.

More than 2,000 employees of the bank have opted for VoluntaryGolden Hand Shake Scheme, offered by the bank to its employees.Bank has established a task force for improving the operationalperformance of the staff and it was monitoring the disbursement,recovery operations and performance of field functionaries. The taskforce comprised 10-15 officers and each officer will head a desk

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exclusively to monitor 3-4 regions. This task force will be responsible toevaluate performance of each MCO, Manager and Regional Manager onthe achievement of banks policies regarding credit and recoveryperiodically.

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Board of Directors

Syed Qamar-Uz-ZamanShahChairman Board

Mr. MuhammadZaka AshrafPresident/ CEO

Mrs. Nazrat BashirDirector

Mr. ShafqatHussain Naghmi

Director

Mr. Muhammad IftikharKhan MohmandDirector

Mr. Tauqir AhmadFaiqDirector

Dr. Khalid Ahmad KhokharDirector

Mr. Imam BuxSheikhDirector

Mr. Muazam AliCompany Secretary

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A Brief Resume of President

Mr. Muhammad Zaka Ashraf

Present Portfolios

President/Chief Executive Officer, Zarai Taraqiati Bank Ltd.

Chairman & Chief Executive, Ashraf Group of Industries

Chairman, Pakistan Sugar Mills Association (Punjab Zone) from

October, 2006 (Second Tenure)

Chairman, Sugarcane Research & Development Company, Agriculture

Department, Government of Punjab

President, Petarian Association, Lahore

Patron-in-Chief Sindh Abadgar Welfare Association (Sindh)

Posts Held

Advisor to Chief Minister Sindh from 1989 to 1990

Member Executive Committee, Lahore Chamber of Commerce &Industry from October 2002 to September 2004

Central Chairman All Pakistan Sugar Mills Association from October

2004 to October 2006

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Vice Chairman of The Federation of Pakistan Chambers of Commerce &

Industrys Standing Committee on Food & Agriculture from January

2007 to December 2007

Academic Institutions Member Board of Governors of Sadiq Public School, Bahawalpur, from

1stJanuary 1989 to 2008

Ms. Nazrat BashirDirector

Ms. Nazrat Bashir belongs to District Management Group of Civil

Services of Pakistan. She is Masters in Economics from New YorkUniversity, New York, USA and Master in Psychology from PeshawarUniversity, Peshawar.

She has extensively traveled abroad and has attended variousinternational Seminars and Conferences such as on Micro Finance, AntiMoney Laundering, and Instruments of Financial Markets etc.Domestically too she has attended various programmes in some ofvery prestigious institutions of Pakistan.

She possesses 29 years of administrative experience in governmentservice in economic & financial policy and its implementation. Atpresent, she is working as Additional Finance Secretary, InternalFinance, Finance Division, GoP, Islamabad. She is a certified Directoron the Panel of Pakistan Institute of Corporate Governance (PICG).Besides Zarai Taraqiati Bank Limited, she is on the Board of Directorsof National Investment Trust (NIT) and NBP.

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Mr. Shafqat Hussain NagmiDirector

Mr. Shafqat Hussain Naghmi is a civil servant from DMG Group andcurrently posted as an Additional Secretary I in Federal Ministry of

Commerce, Islamabad. Previously he was posted as Chief OperatingOfficer (COO) in Pakistan Cricket Board.

Tauqir Ahmad FaiqDirector

Tauqir Ahmad Faiq represents the Ministry of Food and Agriculture,Government of Pakistan on ASFs Board of Directors. An expert inDistrict Management, Secretariat Affairs, Development ProjectManagement and International Cooperation with combined experience

of 34 years having held the office of Secretary at Government ofPunjabs Zakat and Usher, and Social Welfare Departments; he iscurrently Additional Secretary at the Ministry of Food and Agriculture,Government of Pakistan. Tauqir Ahmad Faiq has served as DirectorGeneral Lahore Development Authority Government of Punjab and hasalso been member the Board of Revenue and Population WelfareDepartment of Government of Punjab.

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Kissan SupportServices Ltd.

Subsidiary of ZTBL

Kissan Support Services Ltd. Is a subsidiary of ZTBL which isestablished with a capital investment of 100 Million to help ZTBL in theachievement of its objective and also to make availability of trainedhuman capital to the bank.

KSS AimTo provide support staff to ZTBL & under take its non core activities.

KSS OperationKissan support services operates under its Memorandum & Articles ofAssociation.

ObjectivesThe main objective of KSS are following:

To provide to the Bank all kinds of support staff and ancillary

services

To plan, organize and establish training facilities to impart

training to the banks 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

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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 immediatelyrequired

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 otheragency services and support services to Zarai Taraqiati Bank

Limited

To provide to the Banks clients quality products and services for

efficient and improved farming

Etc.

Services/Activities so far undertaken by KSS

Security Services to ZTBL

Recruitment/provision of staff

janitorial Services provided to:

a. ZTBL Head office buildings

b. Ztbl Farms

c. Staff college

d. Printing stationery office

e. AV Unit

f. Old record office

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g. Sports club

h. Warehouse

Management of Sports Activities

Management of Sports Activities

Photocopy Services

Day to day minor repair and maintenance of ZTBL HQ Buildings

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Chapter 2

Products and Services

ZTBL Locker FacilityZarai Taraqiati Bank Ltd. apart from its core functional activity markedwith country based agri-business, has started to serve its valuedcustomers by offering lockers facility. Initially, this facility is beingoffered at following 11 branches:-

S.No Name of Branch1 Islamabad Branch

2 Main Branch Lahore3 Peshawar Branch4 Gujranwala Branch5 Faisalabad Branch6 Multan Branch7 Sahiwal Branch8 Sargodha Branch9 Khan Pur Branch10 Shafi Court Branch11 Main Branch Gulshan-e-Johar

Following are the approved rates for rent of lockers and key depositsagainst which lockers will be allocated:

TypeSpecification

Rent PerAnnum

Rent after graceperiod

KeyDeposit

Small 6-1/2"x4-1/2"x23"

Rs.1,200/- Rs.1,500/- Rs. 5,000/-

Medium

13-1/2"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/-Life Time Locker Facility

On lump-sum payment of locker rent for ten years entitle the lessee toavail the locker facility for life time, without key deposit.

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Products offered to Meet Finance Needof Farmers

Zarai Taraqiati Bank Limited (ZTBL) is a specialized bank providingagricultural credit in rural areas of the country. Pakistan is anagricultural country and near about 60% of its population is workingdirectly or indirectly related to agriculture industry. But instead ofbeing an agricultural country Pakistan is still not gaining benefits fromthis sector which it can gain. Some time we even does not able to fulfillour food requirement and sometime we have bumper crop but doesnot have facilities to store them properly, in this way we are wastingour resources. To gain benefit from agriculture sector it is required tobe modernized to increase the per acre production and also to buildwarehouses to store. The main hindrance in the modernization ofagriculture is the unavailability of finance. The other financialinstitutions feel reluctant in giving finance to farmers due to high levelof risk in the production of this field. To facilitate farmers and to help inmodernization of agriculture sector the government has establishedthis bank which is contributing its part in achieving governmentobjective from many decades. ZTBL is offering a blend of products tofulfill the need of different types of customers.

Types of Loans Advanced1. Short Term Loans

Short term loans are loans for shorter period of less than a year. It includes, crop

production working capital loans recoverable in lump sum commencing after the

harvest/marketing of respective crops and within maximum period of 12 months.

2. Medium Term Loans

Medium term loans are for a period of more than a year but less than 5 years. In includes,

dairy farming and livestock etc. The installments of these loans are usually paid able in

quarterly or half yearly basis.

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3. Long Term Loans

Long term loans are for a period of more than 5 years. These are development loans

which require large amount and also need some time to show its result in the shape of

better production. It includes loans for tractor, agricultural machinery, poultry farming,godowns and orchard in yearly/half yearly installments within maximum period of 8

years.

Loan Schemes

ZTBL is offering the following loan schemes to the farmers.

Supervised agriculture scheme:

Under this scheme agriculture loans are given for short, medium andlong term loans up to Rs. 1.00 million per borrower/per case. The loans

are sanctioned for In Fats, livestock, orchard, tractor, agricultural

machinery, tube well and irrigation facilities etc. under the scheme

besides provision of credit, information are provided to the farmers for

planning the farm, production, guidance for implementation of the

scheme, marketing and repayment of loans.

Zarkhaiz (one window operation)

For timely and conveniently provision of credit to purchase inputs,

loans are provided to the borrowers under One Window Operation

being conducted twice a week during Rabi and Kharif seasons.

Applications processed on the same day whereas sanction payments

are made within three days at Branch. For Rabi Crops one window

operation from October to January and for Kharif Crops from April to

September each year which is extendable as per requirement ofparticular area.

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Sada Bahar Scheme

For providing timely input loans for crops and working capital for

poultry and fishery etc, the Bank has launched a Sada Bahar Scheme.

Assessment for inputs requirements for the whole year is made at the

time of first application. The amount so assessed is treated as

Revolving Limit provided it is within the security limit. The Managers

are authorized to sanction such loan limits up to Rs.O.500 million.

Schemes main features are as under:

Revolving Credit Limit is fixed to cater production credit and

ancillary requirements of the farmers during one year period.

The documentation once completed remains applicable for three

years with yearly cleanup/renewal without any further

documents.

The borrowers can draw the credit in lump sum or in installments

according to his requirement.

Like-wise he can repay in lump sum or in installments during the

year when his cash position allows him.

Pass Book containing transactions in his SBS Account is supplied

to every borrower free of cost.

Tea financing scheme

In order to increase the tea cultivation in District Mansehra, Swat,

Mutta, Shangla par and Dir in Malakand Division, tea financing schemehas been introduced which would not only save the hard earned

foreign exchange but would also help improve the socio-economic

condition of the inhabitants of the area. The salient futures of the

scheme are given as under:

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Maximum Credit Ceiling of Rs.60, 000/- per acre has been

fixed.

Farmers owing land up to five acres are eligible to avail

loans.

Credit will be given in 3 installments: first year Rs.30, 000/-,

2nd year Rs.15,000/- 3rd year Rs.15,000/- provided the

disbursed loan is used properly.

The credit would be repayable within 1 year with 6 years

grace period with prescribed markup of 9% per annum.

Rebate of 1 % will be allowed in mark-up on timely

repayment and proper utilization of the loan.

Crop maximization project

Ministry of Food, Agriculture and Livestock (MINF AL), Government of

Pakistan has launched Crop Maximization Project in 109 villages in

various districts throughout the country to increase the

productivity/yield of crops. Under the project MINFAL has to provide

funds of Rs, 299.893 million to ZTBL for disbursing loans to the projectfarmers for purchase of inputs. Till the time funds of Rs.468 Million

have since been received by the Bank for the purpose. These funds are

to be revolved for meeting input credit needs in the project villages till

30th June, 2014 after which Bank will return the principal amount to

MINFAL. Accordingly Credit needs of the project farmers are being met

by respective ZTBL branches through Village Organizations formed for

the purpose. Duly the currency of the project Bank is authorized to

charge 4% per annum mark-up on loans to project growers to meet its

operational cost, however in case of default Banks normal rate of

return i.e. 9% p will be applicable.

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PER ACRE CREDIT LIMITSMajor CropsWheat 16,000

Paddy (Rice) 19,000

Sugarcane 30,000

Cotton 21,000

Maize 20,000

Minor CropsOverall Credit Limit Per Borrower Rs.1.000 Million

Sada Bahar Scheme under one window operation orotherwise

Rs.0.500 Million

Potato 36000 Bajra 11000

Tobacco 29000 Jawar 11000Mustard Mung 11000 Gram 12000

Tomato 19000 Guara 3000

Mash 3000 Caster Oil 6000

Lentil 11000 Barlay 9000

Groundnut 14000 Berceme 4900

Sunflower 15000 Janter 4000

Soyabean 12000 Garloc 26000

Canola 13000 Turmeric 25000

Rape Seed 11000 Ginger 30000

Til(Sesame) 12500 Lacern & Shaftal 4500

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Suger beet 12000

Growing Agro Forest Trees

SNo. Trees 1st Year 2nd Year 3rd Year

1 Bamboo 34,000 8,000 3,000

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Growing Orchards

S.No.

Trees 1st Year 2ndYear

3rdYear

4th Year 5th Year

1 Mango 24,000 13,000 13,000 13,000 14,000

2 Citrus 21,000 12,000 11,000 13,000 13,000

3 Apple 23,000 12,000 12,000 12,,000 14,000

4 Banana 29,000 20,000 23,000 30,000 26,000

5 Jujuba 19,000 9,000 10,000 10,000 10,000

6 Guava 21,000 12,000 11,000 13,000 13,000

7 Coconut 29,000 6,000 6,000 7,000 8,000

8 Palm Oil 18,000 6,000 7,000 7,000 7,000

9 Dated 33,000 12,000 11,000 12,000 13,000

Mature Orchard/Fruitscrops

Pear 24000 Dates 31000Loquat 24000 Strawberry 25000Plum 33000 Tea 60000Apple 37000 Guava 24000Papaya 22600 Pomegrante 33000Almond 32000 Palm 22000Coconut 21000 Olive Oil 13000Lichi 32000 Walnut 23000Cherry 33000 Persimen 15000

Mango 37000 Zizi Phus(Bher) 25000Apricot 31000 Melon 16000Banana 37000 Water Melon 16000Peach 32000 Musk Melon 16000Citrus 34000


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Types of Security

Immovable Property

Agricultural Land Under Pass Book System 80%

Outside Pass Book System 70%

Under Alienability Certificate 66%

Commercial/Industrial Land under Pass Book 80%

Outside Passbook System

Urban Residential/Commercial Plots in all localities outside Pass

Book 75%

Alienability Certificate 66%

Residential/Commercial Buildings 70%

Lease hold rights of a leased land of CDA/KDA with 99 years lease

70%

Moveable Property and Guarantees

1. Unconditional Bank guarantee from scheduled Banks

Up to maximum amount of an un-conditional Bank guarantee

after keeping sufficient margin for un-paid mark-up, cost, charges

and expenses.

2. Guarantee issued by Central or Provincial Government

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Full amount of loan plus return and other charges.

3. Government securities

85% of face value or market value whichever is less.

4. Defense Savings & FEB Certificates

75% of value of certificates presented as security.

5. Fix Term Deposits Receipts

85% of face value of deposits receipts.

6. NIT Units

80% of the face value or market value whichever is less.

7. Life Insurance policies

85% of surrender value

8. Pledge of Potatoes/Seed Potatoes price or market

value which ever is less Up to 75% of Govt. support.

Personal SuretyAgainst a bond with two sureties under General Credit and one suretyin Special Schemes up to Rs.25,000/- or Up to 50% of appraised valueof properties of sureties.

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Debt Equity Ratio

ForTubewell/Tractors/Implements/Attachments/Equipments

All kinds ofTubewells/Turbines

25% Within 5 years in annual/bi-annual installments commencingone year after first disbursement

New Tractor No equitybut 10% ofthe loan is to

be needed inPLS Account

Within 8 years inmonthly/quarterly or half yearlyinstallments to be decided by

Manager in consultation withborrower.

Used Tractor,Equipments/attachments/implementsand usedtractor

-do- Within 5 years inmonthly/quarterly or half yearlyinstallments to be decided by theManager in consultation withborrower.

Except Tubewell/Tractors/Implements/Attachments/EquipmentsProduction Loan upto Rs.0.100 Million NILLand holding upto 25 acres/loan amount upto Rs.0.2Million

15%

Land holding beyond 25 acres to 50 acres/loan amountbeyond Rs.0.2 Million upto Rs.0.5 Million

25%

Land holding beyond 50 acres/loan amount beyond Rs.0.5Million upto Rs.1 Million.

30%

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Repayment Periods

S.No.

Types ofLoans

Recovery Period

1 Short TermLoans

Crop production working capital loansrecoverable in lump sum commencing after theharvest/marketing of respective crops andwithin maximum period of 12 months.

2 MediumTerm Loans

Dairy farming and livestock etc. In yearly/halfyearly/monthly installments and withinmaximum period of 5 years.

3 Long TermLoans

Tractor, agricultural machinery, poultry farming,godowns and orchard iIn yearly/half yearlyinstallments within maximum period of 8 yearsand. above.

Recovery Procedure

A) 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.

b) 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.

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c) 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 .

d) 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 areasdeclared 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 loanagreement on Non Judicial

Stamp Paper of appropriate value to give legal cover to extended

period.

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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 asagainst due installments to berescheduled

1st 10%2nd 20%3rd 30%

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SWOT analysis ZTBLStrengths:

The total assets of the Bank stand at Rs.84 billion with authorized capital of

Rs.25 billion as of 31.12.2005, with a nation-wide working strength comprises5500 employees.

The share of ZTBL in total national institutional agricultural credit remains around

35%.

ZTBL has a recovery ratio of 85%.

ZTBL has a social network of MCOs that work in every remote corner of country,

where any other commercial bank cant dare to work.

Utility bills, hajj schemes applications are being collected by ZTBL.

It has introduced locker facility in some limited branches.

They have good cooperation with farmers; they meet them at least one time

in a week, which produces good cooperation among them.

Weaknesses:

ZTBL has a less number of people who have technical skill of computer and

information technology.

Up till now many branches could not be brought to online system.

As the ZTBL has to deal with the illiterate farmers that is why it has to keep itself

as simple as the farmers mentality. The employees are promoted after a very long time that causes a distress among

employees.

Many branches still practice their daily transaction by book, which makes banking

laborious and time consuming.

Branches of ZTBL are ill equipped, less and poor quality furniture is provided.

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Record keeping is poorly practiced.

Opportunities:

ZTBL has a great potential to serve general banking. Deposit system introduction can generate funds for the bank.

By making investment in new areas.

Senior employees compliance with coordinators can enhance their

working abilities.

By developing technical education, the bank can increase its progress.

Threats:

Book keeping is proven to be a greater threat for ZTBL as there is dangerof record loss.

There is no availability of online record which can produces confusions

among loonies.

Although the recovery ratio is round about 85% but it is only window

dressing and not the actual one.

There is no maintenance of duties by the staff.

Their interest ratio is round about 9% per annum, which is very low from

other commercial banks.

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ORGANIZATIONAL CHART OFOPERATIONS DIVISION

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AIM OF OPERATIONS DIVISIONS

To ensure efficient and sound operations of the field organization of the bank,dissemination of agricultural technologies, make better provision for affordingefficient banking facilities, develop liability products.

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OBJECTIVES OF OPERATIONSDIVISION

1. Develop viable business products / services and achieve businesstargets.

2. Develop the business plans for the bank.3. Enable farmers to enhance the agricultural productivity by

mechanization.4. Improve field operations and control system.

5. Control and monitor field activities.

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FUNCTIONS OF OPERATIONSDIVISION

1 .Develop and market new products / services, evaluate current product /services to maintain and enhance competitive edge on Bank products.2. Allocate deposit targets to zonal offices and its monitoring.3. Support business development.4. Analyzing and identification of weak areas.5. Development of field expansion program.6. Evaluation of the performance of branches and zones.7. Carry out test and trial, of new viable agricultural technologies.8. Dissemination of technical agriculture knowledge.

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ZONAL OFFICE SETUP

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LARGE BRANCH SETUP

LOAN PORTFOLIO: ABOVE 700MILLION RUPEES

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MEDIUM BRANCH SETUP

LOAN PORTFOLIO: 3OO TO 700

MILLION RUPEES

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SMALL BRANCH SET UP

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2010

MARKETING STRATEGY OF

ZTBL:

ZTBL LAUNCHES CARBON CREDIT SCHEME:

IslamabadThe Zarai Taraqiati Bank Limited (ZTBL) has launched a pro-active strategy to adopt all the economically viable technologies feasible forPakistan to mitigate the effects of climate change. According to ZTBL press

release, the proactive strategy has been formulated to capitalize the greatbusiness opportunity in trading carbon credit and solution to the problems ofclimate change, habitat loss rural poverty.

The bank has made an agreement with CDBPAK, as consultants to quantify andcapitalize carbon credits for ZTBL Carbon Credit, it added. It said that in view ofchanging climate patterns the agriculture sector was undergoing phenomenalchanges including water scarcity, temperature variations, low soil fertility,increasing population, decreasing farm sizes and require a paradigm shift in theapproach towards the agriculture

The target clients of the ZTBL are farmers, who need to be apprised about usingcheap and renewable sources of energy as well as water conservationtechniques to reduce carbon emission and at the same time enhancing theagriculture productivity at their end, it added. Realizing the challenges of theglobal climate changes in the 21st century ZTBL has emerged as a pioneer in the

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sector, the press release said adding that it has assumed the role of a greenbank by adopting an environment friendly approach Agencies.

GIVING LOANS ON EASY TERMS:

Bahawalpur: On the special directives of President Asif Ali Zardari, ZariTaraqiati Bank Limited (ZTBL) is giving loans to farmers on easy terms andconditions so that enhanced production of agricultural crops could be achieved.

This was stated by President ZTBL Ch. Zaka Ashraf while talking to APP here.He said under a special package, ZTBL provides 90% investment to the growers

And all out efforts are being made to make them self-reliant and bring prosperityto the country. Ch. Zaka Ashraf told that 10,000 tractors have been provided tothe farmers while 20,000 more tractors will be given to growers under BenazirTractor scheme, adding loans will also be given to the growers under thescheme.

President ZTBL said that loans worth Rs. 72 billion will be given to the farmerswhile solid steps are also being taken for the recovery of Rs. 75 billion from thedefaulters. He said, the government wanted to bring green revolution in thecountry. Latest methods are being introduced and utilized to achieve the target,he added.

CAREER FOR MANAGEMEN TTRAINEE OFFICERS:

ZTBL has the pride of being the largest Financial Institution in the rural sector ofthe country. The Bank continues to operate as premier Financial Institutioncatering to the credit needs of agriculturists for the development andmodernization of agriculture as well as promoting Cottage Industries in rural

areas. So we are looking for committed & enthusiastic individuals to fill thepositions of MTOs for operations of the Bank in Finance and Accounts. FreshMBAs or maximum one years experience may also apply.

ZTBL AND FLOW OF RURAL CREDIT:

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One of the marketing strategies of Zarai Taraqiati Bank Limited is the increasingflow of rural credit. As we know that the agriculture is the crucial contributor to thenational economy:

Contributes a quarter to GDP.

Employs 47% labor force.

Over 50% of industrial production comes from agro business.

Earns (directly or indirectly) 70% of export revenue.

Provides livelihood to 67% rural households.

Vast Majority of poor live in rural areas (nearly 80% of all poor live in rural

areas).

Poor are mainly dependent on agriculture for their food and livelihood

security Livestock is an important of livelihood for the poor.

Agricultural growth contributes most to poverty reduction. Through forward and backward linkages, agriculture. Contributes to rural

economy (farm and non farm) and creates livelihood for poor in the non-

farm sector.

The main source of agricultural growth includes:

Dates, Mangoes, Citrus and Potatoes are high value potential horticultural

crops.

Floriculture is fast growing sub sector, influencing domestic as well as

export markets.

Remunerative opportunities exist for entrepreneurs in agri-business

identified high return agri-businesses include:

Livestock fattening.

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Milk collection and chilling.

Cut flowers.

Fruit processing.

Accelerated growth of agriculture, especially of high valueagricultural activities, will continue to be cornerstone of Government overallstrategy to reduce poverty. ZTBL and micro-finance institutions; need toincrease flow of rural credit.

During 2005-06 ZTBL disbursed Rs48 billion credits and total credit 137

billion, meeting less than one third of the total demand for Credit.

Cumbersome legal process and lack of political will creates problem for

loan recovery.

Access to credit remains limited and restrictive by lengthy processes

and smallholders are generally left out. But in ZTBL the process is too

shortened and easily accessible that all the smallholders are

entertained.

MARKETING STRATEGIES OF ZTBL:

There are a number of marketing strategies of Zarai Taraqiati Bank Limitedsome of these strategies are listed below;

Crop Insurance:

The Benazir Credit Card Schemes and Crop Loan Insurance Schemeshave also been introduced for the benefit of cotton, rice and other cropsgrowers. Crop insurance Schemes have been considered an impracticaldream by the insurance sector for quite long, but innovative solutionsdesigned by National Insurance have made it a practical option. NICL andNational Bank of Pakistan have prepared an Agri Loan Insurance Policyproperly supported and backed by the re-insurance arrangements at areasonable competitive cost. Through this collaboration, agri loans of more

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than Rs.30 billion have been provided insurance cover. Similarly, ZTBLhas also been provided the facility of Agri Insurance Cover.

Tractor Scheme:

The Tractor Scheme was launched to provide tractors to the farmers at asubsidized price. A large number of tractors are to be distributed amongstthe farmers on very low interest rates. The ZTBL is supplying highefficiency irrigation system to farmers to improve agricultural activity inareas of scarce water. ZTBL provides tractor to farmers that have 10 acresagricultural land. The recovery of loan is on easy terms. The farmers haveto pay back the loan in 8 years. The installment is semiannually

Which is round about 50,000 rupees? In this way the farmers can easilypay back the amount.

Availability of Quality Seeds:

ZTBL decided to ensure the supply of quality seed, one of the mostimportant inputs in crop production, to have maximum yields in all crops.

As a result, production of almost all major crops, including wheat, rice,maize, gram, moong and pearl millet, rose significantly. A special project ofimproving vegetables seeds at local level has also been initiated.

Agricultural Loans:

During 2008-2009, the Government earmarked Rs.250 billion, higher by20% over the preceding year, for banks to finance the farming community.This amount for the current fiscal is Rs.260 billion for major and minorcrops, orchards and forestry. Credit limit was increased because of rising

prices of all inputs including electricity. Crop loan insurance scheme wasalso introduced to enhance the access of farmers to agricultural loans.Provision of agricultural credit to farmers facilitated them to procure thecostly inputs in order to ensure the target planting and production ofvarious crops. A new Agriculture Mode Village Program has been initiatedin 26 villages under the auspices of Zarai Taraqiati Bank Limited

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(ZTBL). The objective is to organize the farming community at thevillage level ensuring farmers easy access to agri credit.

ZTBL and Field Work:

One of the main marketing strategies of Zarai Taraqiati Bank Limited is thefield work. Through which the ZTBL officers visit the agricultural land andmeet the people, in this way they are able to know about the forming landand also about the people. And the people too became conversant with theofficers and in this way they are able to know about the lending schemes.ZTBL is also promoting hajj and umrah schemes.

BUSINESS PROCESS ANALYSIS:

ZTBL AND ENHANCEMENT OF CROP PRODUCTIVITY:

The economy of Pakistan is predominately agrarian in character. Despiteprogress in other sectors the agriculture sector is contributing about 25% towardsthe GDP. About 67.5% of the total population lives in rural areas and theagriculture is main source for their livelihood. About 44% of the labor force isengaged in agriculture sector and about 70% of the direct and indirect income isgenerated from this sector.The agriculture sector is multi-segmental. Majority of our farm communitycomprised of subsistence farmers who are not in a position to use high qualityseeds, sufficient fertilizers and improved farm implements due To the lack offinances available to them. Lack of finance is one of the main reasons for low per

acre productivity in our agriculture. The matter of enhancing agriculturalproductivity therefore largely depends on the availability of finance and creditfacility available to the farmers in their respective areas (ADBL, 1996). Everymodern business is operated on capital or borrowed capital. Similarly, farmingalso requires capital. The need for farm credit in increasing production andeffective utilization of farm resources is quite clear. Farming not only requirecredit in the form of improved seeds, fertilizer and modern implements but also

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requires liquid capital for financing harvesting, haulage of produce and othersimilar farm operation (ADBP, 1996).In Pakistan there are two major sources of agricultural credit, non-institutional

and institutional sources. The non-institutional credit suppliers include friends;neighbors and professional moneylenders are the main source of credit in thecountry. Institutional sources comprise of cooperative banks, Zarai TaraqiatiBank Ltd. (ZTBL), nationalized and privatized commercial banks and Taccavicredits (ADBP, 1996). Zarai Taraqiati Bank Ltd. (ZTBL) consolidated andintensified its operation to play an effective role in financing of farm investmentsto modernize agriculture, increase farm production and raise farm income. Thebank continued to push forward the on-going programmes and projects relatingto provision of credit and technology to targets groups covering landless,subsistence, small farmers and rural women through its credit programmed(Government of Pakistan, 2001).

The objectives of the study were as under:

Analyze the utilization of credit by small farmers in the study area,

Compare the effects of utilization of credit on crop production and income

of beneficiaries without credit and with credit.

Suggest measures as to how the present credit scheme can further be

improved.

The present study was conducted to examine the utilization and effects ofshort-term credit from Zarai Taraqiati Bank Ltd. (ZTBL) at Tehsil Kabul area ofdistrict Swat in August 2003. Eighty respondents were selected in which fortywere the beneficiaries of ZTBL and the remaining forty were the non-

beneficiaries selected from the same area. Paired sample t-test was used tocompare the production and income of the beneficiaries without credit andwith credit. Independent sample t-test was used to compare the productionand income of beneficiaries with non-beneficiaries. On overall basisbeneficiaries farmer utilized 78.84% of the amount of credit for the purpose itwas received. While the remaining amount i.e. 21.15% was mis-utilized. Peracre production of beneficiaries with credit for tomato, wheat, maize and onion

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were 170.4 maunds (1 maund equal to 50kg), 24.6 maunds, 39.4 maunds and152.4 maunds, respectively. In case of beneficiaries without credit it was139.6 maunds, 18.93 maunds, 30.3 maunds and 130.7 maunds, respectivelyon per acre basis. While in case of non-beneficiaries it was 144.5 mounds,19.25 maunds, 32.2 maunds and 135.3 maunds, respectively on per acrebasis. Net return of beneficiaries with credit for tomato, wheat, maize andonion was Rs.17410.9, Rs. 3908.67, Rs. 7695.75, and Rs. 16450.5,respectively on per acre basis. While beneficiaries without credit it was Rs.11863.21, Rs. 2195.54, Rs. 5981.17, and Rs. 10968.9, respectively on peracre basis. In case of non-beneficiaries it was Rs. 13616.85, Rs. 2830.15, Rs.6600.88, and Rs. 13465, respectively on per acre basis.

ZTBL AND BUSINESS SCHEMES:

ZTBL (Zarai Taraqiati Bank Ltd) formely known as Agriculture Development Bankof Pakistan has been struggling since the last couple of decades to optimize itsoperational efficiency. There has been tremendous pressure both by the State

Bank of Pakistan and BOD to design and implement an effective EnterpriseResource Planning (ERP) system using Information Communication Technology

to enhance Regulatory Compliance, offer better KPI monitoring and improvedreal time Management Information System enabling the Bank to launch new ICTbased schemes/products for farmers and HR Performance ManagementSystem..

After a considerable lapse of time; ZTBL has experienced in the last two years amost productive growth. The executive management has managed tosuccessfully convert the highly demoralized non-productive HR workforce intoproductivity mode. Through the newly revamped productive HR workforce theBank has posted an overall 1.6 billion rupees in profits..

The Information Systems Division has been reorganized and revamped throughthe induction of highly skilled and seasoned human resource and has enabledthe bank to do on-line loan processing using the banks own newly establishedWide Area Network (WAN). The efforts of the ISD development team towards thesuccessful modification of the architecture of the legacy loan processing system

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has resulted in effectively conserving more than twenty years of continuousbusiness processes improvements of investment.

Through the successful modification in the architecture of the existing legacysystem; ISD has enabled the field offices to run real-time online processing jobscentrally running on the servers at Head Office Data center.

This improvement now offers the entire portfolio of products and services to thebranch offices. The Branch staff can now entertain loan processing application,recovery and/or release of installments under products like regular loan, SadaBahar, White revolution etc on the terminals in the branches.

This radical new development in the Banks ICT infrastructure has offeredtremendous operational efficiency. For example in the past the Branch office staff

conducted business manually and then hardcopies of the transaction data wasmanually fed into the system on a weekly basis at the zonal offices.

Upon completion of the data entry of all branch offices within a zone wascompleted, the Zonal office would then dispatch the consolidated data on tapecartridges through courier services to the head office. Due to this process; at

Times considerable delays were experienced by the Bank for the compilation ofconsolidated nationwide bank position.

There had been numerous monitoring, reporting and performance managementissues just because of the fact that HO was not able to have complete digitizedrecord of business transactions. The newly revamped Centralized loanprocessing system would now enable the bank to improve the operationalefficiency tenfold with an overall reduction of operational expenses.

The Bank has selected ORACLE ERP in order to revamp the entire BackOfficeoperations. In this regard, ORACLE University is currently conducting a two andhalf months long rigorous training program for more than 120 bankers.

In order to fulfill State Bank regulatory compliance with reference to themaintenance of NADRA verified client records; ISD has successfully conceived,

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designed and developed an integrated end to end loan processing system bymapping the ZTBL loan processing system to NADRA data base with a furtherintegration to the State Bank of Pakistans eCIB database.

Also the Loan processing system, Deposit Management system, NADRA

verification and Customer Credit worthiness are all seamlessly integratedtogether. Since a few months ago, Data Cleansing in conformity to SBP andZTBL business procedure was conceived as difficult, if not impossible as theentire physical record was available in the branches and there was no interfaceeven at Zonal offices to verify physical record with computerized loan processingsystem, NADRA and SBP-CIB system.

ISD has also designed, developed and implemented Deposit ManagementSystem at Branches as an extension of loan processing system. Most moderndatabase management system is being used to digitize the existing semi manual

deposit management system.

DMS has been designed to allow the bankers to post transaction themselves byusing most modern concepts like photo and signature verification on the screen.With the deployment of the new system; all records would now be verified byNADRA, checked for credit worthiness from the State Bank.

It has been planned that by the end of June, 2008, more than 250 brancheswould be equipped with necessary hardware with preinstall DMS and NADRAverified clients from on-line processing system.

EUROPEAN UNION AND ZTBL:

ZTBL was poised to serve the technical needs of the entire community. The Banktook lead in serving over 0.5 million farmers and hoped to extend its outreach to

strengthen the agriculture sector. It was said by president ZTBL, MUHAMMAD

ZAKA ASHRAF on the meeting held at head office before European Union

delegates. He said that ZTBL was poised to play more proactive role for the

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development of agriculture sector and alleviate rural poverty. This would have

lasting impact in modernizing and boosting agriculture sector for the country. The

president said that through its countrywide network the ZTBL being the largest

financial institution has achieved the highest landmarks of performance during

the last two years as it increased its disbursements from Rs.56 Billion to Rs.77

Billion, recovered Rs.73.8, and earned Rs4.6 Billion profit before tax. This has

given financial strength and viability to the bank. He further appraised that code

of corporate governance and control system has also been implemented.

CHINESE FIRM AND ZTBL:

China would introduce alternate energy technology for agriculture development in

Pakistan that would facilitate the farmers to meet their energy needs through

alternate resources in cost effective manner. Most recently ATBL has inked an

agreement with Chinese firm Ms Xi` an Hong Yuan equipment in Islamabad.

Under the agreement, the company will bring equipments for demonstration at

their own cost and expanse. They will make demonstration of their own

Equipment to introduce new technologies and make available for the forming

sector. On successful demonstration the product will be marketed through kissan

support services. Speaking on the occasion, the president ZTBL Ch Muhammad

Zaka Ashraf expressed the hope that the agreements would a long way in

promoting the agriculture in the country besides benefiting the farmers.

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COMPETETIVE STRATEGY OF ZTBL

COMPETETIVE STRATEGY:

The strategy by which the organizations producing same or substitute productscompete with each other. The fourth specialized government-owned bank, ZaraiTaraqiati Bank Ltd. (ZTBL), needs financial and operational restructuring. Thisbank is highly strategic, as it provides about one third (31.7%) of all credit to theagriculture sector. Different public sector approaches have failed in the past to

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transform ZTBL. The most important unresolved issue is its excessive debtliabilities as well as shareholding pattern. SBP has proposed that theGovernment should pave the way for its eventual privatization, considered to becritical for augmenting its scale and efficiency.

Agricultural Credit:

Credit requirements of the farming sector have been increasing over the yearsmainly due to the rise in the use of fertilizer, pesticides and mechanization. Inorder to cope with the Agriculture increasing demand for agricultural credit,institutional credit to farmers is being provided through Zarai Taraqiati BankLimited (ZTBL), Commercial Banks, Punjab Provincial Cooperative Bank Ltd(PPCBL) and Domestic Private Banks. The Government has allocated Rs 160

billion for agriculture credit disbursements for the year 2006-07 which is 23.1percent higher than the allocation of the preceding year i.e. Rs 130 billion. Theallocations, however, are totally voluntary and indicative in nature as themandatory allocations policy has been totally phased out and the allocations forcommercial banks have also been made indicative. The elimination of mandatorycredit allocations coupled with active involvement of commercial banks inagricultural finance is major milestone achieved towards mainstreaming of

Agricultural finance in the countrys financial system. The flow of necessaryfunding to the sector will now be ensured through conducive policy andregulatory environment, policy advocacy and promotional initiatives andmonitoring of agri-disbursements and portfolio build-up plans. Out of the total

Credit target of Rs 160 billion, Rs 80 billion were allocated to commercial banks,Rs 48 billion to ZTBL, Rs 9 billion to Punjab Provincial Cooperative Bank Ltd.,and Rs 23 billion to Domestic Private Commercial Banks. The agricultural loansextended to the farming community during July-March, 2006-07 are discussedbelow:

a)Production and Development Loans:

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Agricultural loans amounting to Rs. 104.8 billion were disbursed during (July-March, 2006-07) as against Rs.91.2 billion during the corresponding period lastyear, thereby registering an increase of 15 percent. The share of ZTBL in supplyof total agricultural credit by institutions increased and was 32.9 percent during(JulyMarch, 2006-07) while it was 31.8 percent during the same period lastyear. However, the share of Commercial Banks has surpassed the share ofZTBL; it was 46.8 percent of the total agricultural credit disbursed during JulyMarch 2006-07. While the share of PPCBL has also slightly increased as it stoodat 5 percent in supply of total agricultural credit by institutions. The share ofdomestic private bank has increased; it was 15.3 percent as compared with 12percent in the corresponding period of last year. Supply of agricultural credit byvarious

b)Loan under One Window Operation:

ZTBL has launched a one-window operation to enhance credit facilitiesparticularly to small farmers. This will facilitate to cater for purchase for inputsduring peak sowing season of both Rabi and Kharif Crops with the collaborationof Provincial Governments, Revenue Officials and Postal Authorities. AgriculturePass books are issued at the spot to intending new borrowers. Their land recordis entered and loans are sanctioned at focal points whereas payments arereleased on the very next day from the concerned branch. During July-March,2006-07, an amount of Rs 9.069 billion has been disbursed under this scheme.

c) Revolving Finance Scheme/Sada BaharScheme:

For providing timely input loans for crops and working capital for dairy, poultryand fisheries, the ZTBL launched Sada Bahar Scheme (SBS). Under thisscheme credit requirements for inputs for the whole year is assessed and madeavailable to the borrower. The Managers are authorized to sanction loan up toRs. 0.5 million. During (JulyMarch, 2006-07), ZTBL has disbursed loans of Rs.30.912 billion under Revolving Finance Scheme (RFS) and Sada Bahar Scheme

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(SBS) as against Rs. 24.149 billion disbursed during corresponding period of lastyear, indicating an increase of 28 percent.

d)Credit to Women Program:The major objective of this programme of ZTBL is to make credit more accessibleto rural women through Female Mobile Credit Officers (FMCOs). Under Credit toWomen Program, women can meet their credit needs through both Micro Credit& General Credit Scheme. Presently, 17 FMCOs are exclusively looking aftercredit needs of women in 17 branches of the Bank, whereas female borrowersmay also obtain loan through male MCOs throughout the country. During (JulyMarch, 2006-07) loans of Rs. 99.572 million have been disbursed under thisprogramme.

e)Micro Credit Scheme:

Under the Micro Credit Scheme of the ZTBL, all the Mobile Credit Officer workingin the branches process micro credit cases both for men and women to engagerural poor in income generating activities/cottages industries. Financing underthis program is provided for 136 loanable items. All loans are recovered within 18months of their advancement.

f) Crop Maximization Project:

In order to augment the efforts of the Government to enhance productivity onsustainable basis, Ministry of Food, Agriculture and Livestock (MINFAL) andZarai Taraqiati Bank Limited (ZTBL) have launched, Crop Maximization Project.The project aims at assisting the farmers to increase agriculture production. Atotal of 109 villages are being covered under this project. In the project villages,Village Organization (VOs) have been established which organize the farmersand assist them with the collaboration of Agricultural (extension) Staff in

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achieving the maximum productivity through proper use of inputs, water savingdevices and modern agricultural technology. Farmers owning up to 25 acres landare entitled to receive loan from project credit line through Mobile Credit Officers.Under this project Rs 371.403 million has been disbursed during JulyMarch,2006-07.

ENHANCING THE COMPETETIVENESS:

To enhance the competitiveness, ZTBL is focusing on continuing to broaden anddeepen the financial system further. To prevail in the industry Zarai TaraqiatiBank is

Reviewing the actual behavior and conduct of banks related to its structure

and than taking the required actions.

Resisting contestability. Development of non-bank financial intermediaries is promoting

competitiveness

Increase demand for advances results in a need for higher deposit

mobilization which increases competition.

Interest rates in Pakistan are usually non-transparent. Ninety percent of

deposits are remunerated through profit and loss sharing arrangementsrather than at explicit interest known to the depositor in advance. But inZTBL the interest rates are known to the depositor in advance. That is agood competitive strategy and due to this strategy, the bank is on the way

to success. To improve transparency in the pricing and documentation of loans, ZTBL

has been barred from including any clause in the loan documents thatcould allow them to change lending rates unilaterally and make

Explicit all service charges so that the borrower will not incur hidden charges

during the term of the loan. Growth in agricultural credit recovered in financial year 2008, after a

relative slowdown in the preceding two years. The agricultural creditdisbursements rose to Rs. 211 billion in financial year 2008, up by 25.4percent. The domestic private banks fared well both in disbursements andin the recoveries while specialized banks could not maintain their marketshare. A strong resurge in the number of borrowers is also a welcome

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development during financial year 2008. The number of borrowersincreased to 1.28 million during financial year 2008 as against a decliningtrend in the previous three years. Despite, rise in interest rates amidmonetary tightening, a significant increase in agricultural credit andnumber of borrowers during financial year 2008 is principally attributed to5 Agricultural credit disbursement target for financial year 2009 is set atRs. 250 billion. The main thing to say is that about 25% of this agriculturalcredit is taken from ZaraiTaraqiati Bank Limited. The structural changes inagricultural credit are shown below which manifests that the major share ofagricultural credit is received from specialized banks and ZTBL is theleading one.

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Part Two

Ch. 5:Assignments I handled duringmy Internship.

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Chapter 5Organogram of Mian Channu Branch

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Redemption of loan

On the payment of all the dues by the loanee (principal + interest), hecan free his land (or any other security provided) from any chargecreated by bank for the purpose of loan. For this purpose he will haveto present the following documents:

1. Application for redemption

2. Stamp Paper of rupee 20

3. Last receipt of amount paid

4. Cheque book (if issued)

When the loanee provides these documents to assistant officer (Or anyofficer appointed for these sort of work), the assistant officer asks thepeon to bring the Loan Case File of the borrower. After the file isreceived by the assistant officer, he checks the documents thatwhether all the documents are there in the file. Then he makesrequired entries in the Passbook. These entries usually made on thepage 28 and 30. The example of entries is given below.

The following entries are made on page 28.

The entire loanincluding interest hasbeen paid by theloanee.

See page number 16and block number 3for detail.

(Here page number 16shows the numberand date of lastcharge createdagainst the land of

loanee in the favor ofbank)

The following entries are made on page 30.See page number 18and block number 8for detail.

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ZTBL Mian Channu(Page number 18 isusually the pagewhere the detail ofland mortgaged hasbeen given, it includethe area of land,khatoni number etc)

After these entries the officer then sends the file to Manager forsignature. On approval from the Manager for the RedemptionApplication the assistant officer attaches all afore said documents within the file and record in the File Movement Register that file hasbeen moved from the record room for the redemption purpose.

Than the file is send to AMO (Assistant Manager Operation) for furtherprocess. The loanee is given the date of next week to collect hisPassbook. During this period AMO checks the record of the loanee toconfirm that the entire due amount with respect to that particular loanhas been paid and then he signs to give approval to assistant officer toissue Passbook to the loanee. The AMD (Assistant Manager) andManger both also sign the notice issued in the name of Patwari and

Tehsildar that the land can be transferred to the loanee as the loan hasbeen fully paid by him.

Then file again comes to the assistant officer, he checks the signatureboth in the notice and Passbook and then stamped both. Now thePassbook is ready to issue. Before issuing Passbook the officer recordthat passbook is issued to the loanee in the Dispatched Register. Onthe issuance of Passbook to the loanee, the officer verifies that theperson receiving the documents is the original owner of the land whichis mortgaged with the bank. After getting the Passbook, the loaneegoes to Patwari and Tehsildar for the change of record back to hisname.

The one thing which is interesting here is obtaining Stamp Paper fromthe borrower. This is not a requirement but bank has made it practiceso that if in the near future, it finds that some amount is still due bythe borrower than it can write on the stamp paper whatever it wantsand then can claim the due amount from the borrower. This is

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precautionary measure adopted by bank because once the Passbookissued to the borrower and the land again transferred to his name, thebank will be in no position to recover any amount which isunexpectedly left due.

The redemption process in short can be described as thefollowing:

Submission of Application

Acceptance of application by manager

Record of file in the File Movement Register

Entries made in the passbook

File send to AMO for checking of loan status

On approval from AMO, the Manger and Assistant manger signed

the notice to issue Passbook

The passbook dispatched to loanee with notice to Tehsildar to

transfer land back to his name

After the land is transferred to the loanee name, if he wishes he

can withdraw the amount from his current account and can closehis account.

Usually the loanees do not redeem their land because they want toavoid the cost and wastage of time when in the future they againhave to gain loan from the bank. So, they usually remain the land inthe name of the bank even after they have paid the whole loanamount. During my internship I have seen people who has paid loanmore than 10 years ago but they came to bank after such long timeto redeem their land and the reason behind their redeem was thatthey want to transfer it to someone others name otherwise theymay not come for redeem.

I have also seen one of the clients who has p

internship report ztbl

Documents