Download - Ztbl Project
CONTENT
Page noCHAPTER ONE 3ZTBL INTRODUCTION 3
1.1 BACKGROUND OF THE BANK 3
1.2 AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN (ADBP) 31.3 CONVERSION OF ADBP INTO ZTBL 41.4 NATIONAL OPERATION 51.5 ORGANIZATION 51.6 MANAGEMENT 51.7 CORPORATE VISION 61.8 AIM 61.8.1 Aim of the Bank 61.9 MISSION STATEMENT 61.10 NATURE OF BUSINESS 71.11 IMPORTANCE OF AGRICULTURE IN THE ECONOMY 71.12 ZTBL ROLE IN POVERTY ALLEVIATION PROGRAM 71.12.1 Credit Program for Women 81.12.2 Micro Credit Scheme 81.13 CONTEMPORARY BUSINESS CONDITIONS 81.14 BOARD OF DIRECTOR 9
CHAPTER TWO 10DEPARTMENTS 102.1 PERSONAL POLICY DEPARTMEN 102.1.1 AIM 102.1.2 OBJECTIVES 102.1.3 STATEMENT OF FUNCTIONS 102.1.4 TRAINING POLICIES 112.1.5 TRAINING IN STAFF COLLEGES 122.1.6 RECRUITMENT POLICY 122.1.7 PROMOTIONAL POLICY 13POLICY 2.1.8 PLACEMENT 132.1.9 HEALTH POLICY 132.2 CENTRAL INFORMATION DEPARTMENT 142.2.1 AIM 142.2.2 OBJECTIVES 142.2.3 FUNCTIONS 142.3 CREDIT OPERATIONS DEPARTMENT 152.3.1 AIM 15 152.3.2 OPERATIONAL OBJECTIVES 152.3.3 FUNCTIONS 162.3.4 TERMS OF LOAN (AS PER ADBP RULES 1961 162.3.5 GENERAL CREDIT DISBURSEMENT 172.3.6 LOAN TO SMALL FARMERS 172.4 CORPORATE FINANCE DEPARTMENT 172.4.1 THE AIM OF CFD 182.4.2 OBJECTIVE 182.4.3 FUNCTIONS 182.4.4 WING WISE FUNCTION 192.5 CENTRAL ACCOUNT DEPARTMENT 202.5.1 AIM 202.5.2 OPERATIONAL OBJECTIVES 202.5.3 STATEMENT OF FUNCTIONS 212.5.4 WING WISE FUNCTION OF THE DEPARTMENT 21
1
CHAPTER THREE 243.1PERFORMANCE OF ZTBL 243.2RESTRUCTURING OF ZARAI TARAQIATI BANK LIMITED 283.2.1 HUMAN RESOURCE DEVELOPMENT 29
CHAPTER FOUR 31SWOT ANALYSIS OF THE ZTBL 314.1 STRENGTHS 314.2 WEAKNESSES 32
4.3 OPERATUNITIES 334.4 THREATS 33
CHAPTER FIVE 34RECOMMENDAITON & CONCLUSION 34
2
EXECUTIVE SUMMARY
ZTBL is one of the largest financial institutions which provide credit
facilities to the farmer for the agriculture purpose throughout the Pakistan.
The ZTBL is a single largest institution in the country catering to be viable
credit needs of the agriculturist and disbursing over Rs. 5000 million per
annum for the development and modernization of agriculture.
The new status of Zarai Taraqiati Bank as a limited company will go a long
way in exploring the new dimensions in agriculture and rural financing for
poverty alleviation and development of agriculture sector through good
governance delivering high quality, viable and timely financial services to
greater number of clients. The operation of the Zarai Taraqiati bank
Limited are external to whole Pakistan and also apply to the business of
the bank transacted outside. The bank has 49 regional offices and 343
branches throughout Pakistan including (FATA) and (FANA) and Azad
Jammu and Kashmir.
This project report mainly consists on five chapter in which the brief
introduction of ZTBL, back ground of the bank. The performance and the
restructuring of ZTBL, personal analysis and observation, SWOT Analysis
and Recommendation. In the first chapter of there is brief introduction of
ZTBL in which the background of the bank, the conversion of ADBP into
ZTBL which have been made to improve the performance of the bank.
ZTBL has 49 regions and 343 branches which spread through out the
Pakistan. The head office of the bank is in Islamabad in which 9 division
and 33 department are working. Mr. Istaqbal Mehdi is a president of the
bank. The role of ZTBL in the poverty alleviation, as well as the
importance of agriculture and contemporary business conditions have
briefly described.
1
In the second chapter there is a brief explanation of the departments, their
aims objects and function in which I have worked these are personnel
policy department, central information department, credit operation
department, corporate finance department and central account
department.
The third chapter consists on the performance of ZTBL, in which the
disbursement and recovery from 1995 to 2002 have been mentioned, the
budget of 2002-2003, the import and export of agriculture items, data of
institutional agricultural credit 2001-2002. The restructuring of ZTBL,
which aimed at uplifting the agriculture and rural sector by raising from
productivity, streaming the institutional credit and performance of the
bank, and the steps are taken in the restructuring process are given.
The fourth chapter consists of SWOT analysis of the overall organizational
setup. The fifth and last chapter consist of recommendation and
conclusion on the basis of above study.
The whole information given in this report based on throughly study during
the internship at ZTBL head office.
2
CHAPTER # ONE
ZTBL INTRODUCTION
1.1 BACKGROUND OF THE BANK
Pakistan is basically an agricultural country and finance was need for its
rapid development. With a view to meet this basic need the Agricultural
Development Finance Corporation was set up in 1951, and was entrusted
with the last of providing financial facilities for the development and
modernization of agriculture, including forestry, fisher, animal husbandry,
poultry and dairy farming.
Later on the Agriculture Development Bank of Pakistan was also
established in September 1957 under the Agricultural Development Bank
Act. The bank was to provide credit in cash or in kind, warehousing and
storage facilities to agriculturists, co-operation societies and other bodies,
of which the majority of members were agriculturists. As the function of the
Agricultural Development Finance Corporation and the Agricultural
Development Bank were similar and since both were working with the
capital provided by the government, they were merged into one
organization known as Agricultural Development Bank of Pakistan on
February 18, 1961.
1.2 AGRICULTURAL DEVELOPMENT BANK OF
PAKISTAN (ADBP)
Agricultural Development Bank of Pakistan was established through the
ordinance in February 1961 by merger of Agricultural Bank of Pakistan
(BP) 1957, and the Agricultural Development Finance Corporation (DFC)
1952. The ordinance and its subsequent amendments define in
corporation, functions, share capital and management of the organization.
3
The ordinance is supplemented by board operational rules framed by the
federal government. These rules spell out the conditions for the supply of
loans, security of lending and recovery of dues. The rules further
supplemented by sets of regulations drawn by the board of directors of the
bank.
The ADBP had than become the single largest institution in the country
catering to be viable credit need of the agriculturists and in disbursing over
Rs. 5000 million per annum for the development and modernization of
agriculture.
1.3 CONVERSION OF ADBP INTO ZTBL
The Federal Government has converted the Agriculture 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 the 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 client in the agricultural and rural segment of the
country with adequate return to the stake holder. Zarai Taraqiati Bank
(ZTBL) has been registered with SECP as a public limited under the
companies ordinance, 1984 and by virtue of finance order, all assets,
liabilities proceeding undertaking of the ADBP stands transferred to and
vested in Zarai Taraqiati Bank with effect from December 14, 2002.
The restructuring of ADBP and is conversion into ZTBL basically aims at
extending swore credit to the needy segment of productive and yielding
agri and non-farm activities. It is hoped that this step shall greatly enhance
the credit distribution mechanism. The quintessence of the initiative is
basically aimed at increased functional autonomy, improved services,
4
enhanced farm productivity, streamling institutional credit & increase
outreach in term of small farmers and women folk.
1.4 NATIONAL OPERATION
The operations of the Zarai Taraqiati Bank Limited are external to whole of
Pakistan and also apply to the business of the bank transacted out side
Pakistan and the persons conducting such business. The bank has 49
regional offices and 343 branches through out the Pakistan including the
Federally Administered Tribal Area (FATA), Federally Administered
Northern Area (FANA) and Azad Jammu and Kashmir.
The total manpower is 7665 having 4515 officers and 3150 staff. ZTBL
has completed its 42 years operational activities. During this period the
bank has tried to serve the forming community through the country for
their medium and long-term development credit needs.
1.5 ORGANIZATION
The head office of the bank was located in Karachi and was shifted to
Islamabad during 1973. Presently there are 9 division and 33 departments
in the head office. The field organization is spread over 49 regional offices
and 343 branch offices apart from 8 audit directorates in the field, two staff
colleges at Islamabad and Karachi. Number of MCOs (Mobile Credit
Officers) are 1496, total officers are 4515 and total staff is 3150. Account
department at Karachi and legal cell at Lahore.
1.6 MANAGEMENT
5
During the last 42 years, the bank has been managed by 23 chairman’s as
the chief executive.
1.7 CORPORATE VISION
Develop and operate ZTBL as a commercially viable bank with focus on
Rural and Agricultural Finance.
1.8 AIM
1.8.1 Aim of the Bank
“Technology for Agriculture”
Objectives of ZTBL: The main objective ZTBL are as follows:
Sound loaning
Substantial increase in loaning
Emphasis on small farmers
Broad technology spread
Substantial increase in recovery.
1.9 MISSION STATEMENT
Being the largest financial institution for giving credit to the farming
community in Pakistan, the ZTBL is to achieve self sufficiency in food
through increase agriculture productivity. This is to be achieved by
improving the quality of credit throughout Pakistan under supervised credit
scheme. Poverty reduction is to be achieved through identifying poor living
below poverty lien and giving them micro credit loans to generate
household income without collateral.
ZTBL has five mission statement which are as follow:
6
a. To develop agriculture sector of the country so that it plays its
role in the turn round of the economy.
b. To develop water resources so as to bring more land under
cultivation.
c. To increase yield per area of cotton, wheat and rice.
d. To develop orchards, livestock fisheries and poultry to bring a
correlation between protein food and the population growth.
e. To grow tea, canola, sunflower and the palm oil seeds for
substitution of high value imports.
1.10 NATURE OF BUSINESS
The nature of bank is to provide credit facilities, including hiring and
renting of any thing which it may advance way of loan and the provision
for ware hosing facilities of such terms and subject to such conditions as
may be prescribed by its rule to agriculturists for the purpose of agriculture
and to persons engaged in cottage industries in rural areas.
1.11 IMPORTANCE OF AGRICULTURE IN THE
ECONOMY
Agriculture is the main stay of our economy. It accounts for 26% of the
GDP and employ about 44% of the country’s labor force. This sector is the
largest source of foreign exchange earning over 75% besides providing
input for textiles, sugar, and vegetable ghee industries of the country.
More than 67.5% of the population is directly or indirectly dependent for
their livelihood on agriculture. Average size of land holding is 3.8 hectors
and 93% the total farms upto 25 acres.
7
1.12 ZTBL ROLE IN POVERTY ALLEVIATION
PROGRAM
ZTBL is extensively contributing in the poverty alleviation program. In
order to support the governments program for poverty alleviation, ZTBL is
contributing its huge efforts by providing loans to rural poor under the
following credit programs.
1.12.1 Credit Program for Women
The bank started lending to women since 1987 under IFAB assisted
Gujranwala Agriculture Development Project.
The aim of the program is to access of credit to women at their doorstep
enabling them to under take income as well as loan under micro credit
scheme.
1.12.2 Micro Credit Scheme
Under the micro credit scheme, credit facilities are provided to the
neglected sectors of the society. Minimum credit limit under the program is
Rs. 5000 while the maximum limit is 25000. The scheme is operative
through all 343 branches of the bank, assisted by 1353 mobile credit
officers.
The Zarai Taraqiati Bank Limited (ZTBL) which provides most formal loans
in Pakistanis rural areas, lends to large holders for more than small
holders, although the impact of credit scheme more cost effective.
1.13 CONTEMPORARY BUSINESS CONDITIONS
8
Zarai Taraqiati Bank Limited (ZTBL) disbursed around Rs. 29.27 billion
among the country’s farming community during the fiscal year 2002-03, as
against over Rs. 29.10 billion disburse in 2001-02 sharing one percent
growth, whole on the recovery side the bank collected a recovered Rs.
34.282 billion during the fiscal year ended on June 30, 2003 showing 3%
growth when compared with around Rs. 33.38 billion recovered during the
previous fiscal.
The performance show that ZTBL’s restructuring plan, started last year in
a bid to revap its operations, has started showing visible change in the
bank’s institutional capacity and efficiency. Realizing the bank’s pivotal
role as the largest source of agricultural credit, a credit allocation of over
Rs. 34 billion for the year 2003-2004 has been made for the sectoral
growth and uplift of organization.
1.14 BOARD OF DIRECTOR
Chairman
Sultan ail chaudhry
President
Muhammad zaka ashraf
Secretary EAD
Dr. Waqar Masood
Additional Finance Secretary
M. Tahseen Khan Iqbal
Joint Secretary Finance (Member)
Rana Wajid Ali
9
President HBC (Member)
Zaker Mehmood
Khushaly Bank Member
Ghalib Nistar
Private (Nestle)
Syed Yawar Ali Bukhari
Company Secretary
Vacant
10
CHAPTER # 2
DEPARTMENTS
This section which consists of the over view of the department, their aims
and objects their functions and working environment. There are 9 division
and 33 departments at ZTBL Head Office, from them I have practically
worked at 5 departments which are explained below.
i. Personnel policy department.
ii. Credit operation department
iii. Central information department
iv. Corporate finance department
v. Central account department.
2.1 PERSONAL POLICY DEPARTMENT
2.1.1 AIM
The aim of this department is to utilize efficiently the human resource
ability to reach the organizational objective.
2.1.2 OBJECTIVES
The objective of the personnel policy department is to select right
employee for the right job, compensation, performance evaluation,
promotion, separation, training, retirement policy and services regulation
etc.
2.1.3 STATEMENT OF FUNCTIONS
i. To frame personnel policies for the employee of the bank.
11
ii. To update personal manual.
iii. To arrange delegation of administrative and financial power of
various executive of the bank and preparation of hand book of
these powers.
iv. To declare bonus and arrange formation of various committee.
v. To issue necessary instruction regarding observance of office
house, holiday and office procedure.
vi. To implement pay package and direction of federal government
or SBP relating to bank.
vii. To implement decision taken in various meeting with unions or
association and their follow up.
viii. To analyze the operation of the bank for identifying the problem
and locate weak areas.
ix. To conduct operation and management studies.
x. To circulate consolidate monthly/quarterly position of
arculars/circulars letter issue by various division of head office.
xi. To deal with the services matter cases in federal services
tribunal/high court/supreme court.
xii. To frame/update and interpret services regulation.
xiii. To conduct study of various laws having bearing on personnel
policy.
There are mainly four policies made by personnel policy department at
ZTBL, head office which are as under:
i. Training policy.
ii. Recruitment policy
iii. Promotion policy.
iv. Placement policy.
2.1.4 TRAINING POLICIES
12
The aim of the training is to provide new technical now how to the staff or
various level of employee. The bank has establish two staff college one at
Islamabad and other at Karachi, training of employees arranged in various
institution both within the country and abroad.
2.1.5 TRAINING IN STAFF COLLEGES
i. Top management (Chairman and ED).
ii. Senior management (Director & Regional Manager).
iii. Middle Management (Joint Director & Deputy Director)
iv. Operational Management (Staff Officers and Staff)
v. Clerical Staff
vi. Subordinate Staff.
2.1.6 RECRUITMENT POLICY
There are no any recruitment at ZTBL since 1996 because of over staffing
in the bank. The procedure of the recruitment is as under:
The recruitment of grade 16 or above is made through the
Pakistan Banking and Finance Service Commission.
Recruitment shall be made in the month of February and August
of the vacancies are available.
Rarely appointed in grade 17 and above.
In case of employee die during the services his widow or one of
this eligible children should provide employment in the bank at
appropriate level.
Provincial quotas shall be strictly followed in making
appointment.
Oversea Pakistan & Jammu and Kashmir are eligible.
There is quota for orphan & disable.
The medical examination is necessary.
13
2.1.7 PROMOTIONAL POLICY
Annual promotion policy was approved by BOD. Then with the passage of
time, the promotion are given on the basis of seniority, qualification and
competness.
Objective
The promotion policy aims to ensuring the advancement of the employee
in carrer on the basis of achievement and experience. The policy will
ensure that all employees are motivated to perform to the optimum and
are treated justly and equitably.
Eligibility
Promotion are made on the basis of seniority 95%.
Promotion are made in January each year against budgeted
and clear cut vacancies.
Promotion against 5% vacancies shall be made on accelerated
basis with the approval of BOD.
2.1.8 PLACEMENT POLICY
If any one who full fill the criteria for promotion shall be promoted in the
higher scale, of there is no vacancy then he will work on the lower post
with higher scale.
2.1.9 HEALTH POLICY
The bank has its health policy which bank is responsible for the health of
its employee and their families. There is a separate medical department at
the head office, which treat their employee free of cost.
14
2.2 CENTRAL INFORMATION DEPARTMENT
The Zarai Taraqiati Bank Limited is the country's premier development
financial institution providing financial and technological services to
agriculturists at their door step.
As ZTBL is a huge organization in Pakistan availability of adequate and
timely information and ability to use it productively are essential ingredients
for planning and decision making. Informations is the Key to success of any
modern institution.
2.2.1 AIM
To provide essential statistical data comes from the branches or region to
the management for the decision making relating to any department.
2.2.2 OBJECTIVES
1. To get the necessary statistical data through the modern techniques
efficiently.
2. To provide new or modern data need of the bank along with
improvement in concept, design and requirement.
3. To enhance and strength the external and internal capabilities of the
central information department.
2.2.3 FUNCTIONS
15
1. To keep or maintain the past or present statistical data on
disbursement or recovery of the bank at branch, region, province and
country level.
2. To provide or prepare management information for weekly review
meetings.
3. To provide all the necessary information needed by all the divisions of
the bank.
4. To collect, Stronger and more certain and spread data on lending and
recovery operations under the special schemes of the bank.
5. To provide all needed information to outside agencies regarding to
bank operation including federal ministries. State Bank of Pakistan,
World Bank, Federal Bureau of Statistics, Provincial Bureau of
Statistics, Provincial Government etc.
6. To provide essential data to the government or various committees
made by government on Bankers performance for presentation.
7. To make and spread out regional performance indicators on monthly
basis.
8. To collect the data books/general/reports from other institutions within
Pakistan and outside for discuss macro economic factors.
9. Together, maintain time series data on prices of major item of
agricultural inputs and out puts and its publication.
10. Collect and spread out inter-country data on various dimension of
agricultural development.
2.3 CREDIT OPERATIONS DEPARTMENT
2.3.1 AIM
The aim of credit operation department is to sanction and exercise control
over processing of general loans consistent with leading policy and credit
plan.
16
2.3.2 OPERATIONAL OBJECTIVES
Appraise and sanction loan cases beyond the sanctioning power or regional
manager.
1. Guidance to Regional Manager for proper and expeditions sanction
of loans under the general credit.
2. Exercise control over sanctioned by Regional managers.
3. Watch over the supply position of the tractors with manufacturers
suppliers.
2.3.3 FUNCTIONS
1. Condemnation for delayed repayments beyond the powers of
regional managers.
2. Deal with hypothecation already sanctioned to the registered growers
for sugarcane, oil seed and cotton crops under guarantee of the
processors of the crops.
3. Enlistments of principle manufacture /supplier if tractors.
4. Pursue the claim of the borrowers with manufacture or suppliers of
tractors for compensation of late delivery and delivery of defective
tractors.
5. Circulation of tractors prices of various makers for the information of
the branches.
6. Formulate and review the procedure for booking and disbursement of
tractors loan.
7. Prepare agenda paper on all matters related to credit operation
department for board of directors.
8. Compile data / information supplied by the branch regarding
Automated Performance Applied System (APAS) and submit
consolidate statement to the credit policy department for onward
submission to state bank of Pakistan.
17
2.3.4 TERMS OF LOAN (AS PER ADBP RULES 1961)
A loan may be short term, medium term or long term according to the period
in which it is required to be full repaid.
a. A short term loan is a loan in which is to be fully repaid within
eighteen (18) months of payments by the bank of the amount of loan
or its first installment to the borrower.
b. A medium term loan is a loan which is not a short term and is to be
fully repaid within five (5) years of payment by the bank of the amount
of loan or its first installment to the borrower.
c. A long term is a loan which is to be fully repaid in any period
exceeding than five years from the date of payment by the bank of
the amount of loan or its first installment to the borrowers.
2.3.5 GENERAL CREDIT DISBURSEMENT
General credit disbursement to farmers is taken place for various purposes.
Like, seed, fertilizer, pesticides/insecticides, poultry/animal feed, chicks. All
the loans operations are being managed under well established credit,
dispensing mechanism of supervised credit system of the bank.
2.3.6 LOAN TO SMALL FARMERS
Small farmers constitute the vast majority 90% of the farming population of
the country. They are operating 64% of the total cultivated farms area. The
bank continued its efforts to pursue its policy of increased financial
assistance to small farmers to enable them to exploit the potential of their
land to the optimal level.
The latest technology suited to small farmers were financed with the main
objective to increase productivity of farms and income of small farmers. The
18
credit needs of small farmers fro mechanization of small farm were given
due preference.
2.4 CORPORATE FINANCE DEPARTMENT
The corporate finance department is a main department of Zarai Taraqiati
bank limited. Because it keep the records or maintain the financial position of
the bank and all the branches or regions are firstly concerned to this
department send the information to the management for the decision
making.
2.4.1 THE AIM OF CFD
The aim of corporate finance department is to check the application given to
them from branches or regions about credit and availability of funds to them
and planning for the banks credit limit.
2.4.2 OBJECTIVE
The main object of the corporate finance department is arrangement of
resources for the bank's operation.
2.4.3 FUNCTIONS
1. To arrange government guarantee for loans sanctioned by the State
Bank of Pakistan.
2. To arrange adequate resources for bankers operations i.e. credit
disbursement, capital and operational expenditure.
3. To ensure maintenance of adequate liquidity in all the units of the
organization in accordance with the requirement.
19
4. To reconcile bank account with the State bank of Pakistan and other
commercial bank.
5. To provide funds to needy branches and receive cash back from the
branches have surplus them through telephonic transfers.
6. To make / prepare withdrawal applications watch reimbursement
position and account of receipt to pursue settlements of withdraw in
respect of foreign loan.
7. To prepare monthly progress of utilization of foreign loans.
8. To plan, design and launch deposit mobilization.
9. To prepare circulars to region-wise and branch wise deposit target.
10. Other miscellaneous assignment of senior management of the bank,
ministry of finance and state bank of Pakistan.
2.4.4 WING WISE FUNCTION
There are three wings in corporate finance department which are:
* Internet Resource wing
* External Resource wing
* Remittances and cash management wing
The daily operations of these three wings are controlled by Joint Director or
Deputy Director who are the incharge of the wings. To help the J.D or D.D
there are assistant of them as (EAD) extra Assistant Director and (A.D)
Assistant Director.
Internal Resource Wing
The duties and responsibilities of this wing is to manage all the resources
given to them from the government or customer. The other main
responsibility of this wing is to maintain or kept the day to day record of
these funds in order to meet the customer need in coming day. The other
duty is the collection and policy related to the resources collected from the
internal sources.
20
External Resources Wing
The duties and responsibility of this department is the collection, allocation,
and also properly organize and monitoring of these funds. The external
resources are collected from foreign donor agencies. These are:
1. World Bank
2. Oversea Economic Corporation Fund (OECF)
3. International fund for Agricultural Development
4. International Bank for Restructuring and Development (IBRD)
5. Asian Development Bank (ADB)
6. International Monitoring Funds (IMF)
The funds are provided by these foreign agencies for the different types of
projects and the external resource wing is responsible for proper allocation
of these funds to the different task.
Remittances and Cash Management Wing
The duties and responsibilities of this department is the cash collection from
the branches all over the Pakistan. The branches have to report in this
department and this wing is to prepare the reports from given information
and provided to the management.
The branches have to report to this department with regards of daily
operation and in response of these information this department forecast the
situation about how much fund is need to the particular branch for the
operation.
2.5 CENTRAL ACCOUNT DEPARTMENT
21
Central Account department deal with the accounting practices at Head
Office. It mostly deal with the income statement, balance sheet, cash flow
statement and other accounting practices.
2.5.1 AIM
The aim of this department is to prepare or formulate the accounting policies
and procedure in order to show the true financial position of the bank.
2.5.2 OPERATIONAL OBJECTIVES
The main object of central account department is proper accounting of the
assets and liabilities of the bank as well as timely preparation of financial
accounts and submission of statutory return to the State bank of Pakistan.
2.5.3 STATEMENT OF FUNCTIONS
The central account department performs the following functions.
- Issuances of instructions relating to accounting policies and
procedures.
- Reconciliation of inter branch transactions / suspense account.
- Preparation of balance sheet and profit and loss account of the bank.
- Compilation of the returns / Statement for submission to the State
bank of Pakistan.
- Preparation of weekly statement of position for management
information and reporting to the State Bank of Pakistan.
- Preparation of the payroll and salary slips for head office.
2.5.4 WING WISE FUNCTION OF THE DEPARTMENT
22
Central accounts department has one wings which perform their own
function and coordinate with each other to achieve the overall objectives of
the department. These wings and their function are below.
Returns and Review Wing
- Compilation of weekly operational activities of the bank.
- Compilation Statement of affairs of head office and branches
preparation of balance sheet and profit and loss accounts.
- Preparation of data for computer, clearance of credits and checking
of outputs procedures by computer.
Finance Computer Cell
- Ensure timely production of reports or statement.
- Develop and implement software system of the IBM system 36.
- Identification of jobs of finance division to be computerized.
23
Central Account and Reconciliation Wing
- Control the operation of inter-branch transaction.
- Checking of inter-branch transaction statement.
- Reconciliation of central accounts.
Policy and Coordination Wing
- Issuances of procedural instruction relevant to accounts and financial
accounts.
- To deal with all policy matters pertaining to account system of interest
based and Islamic Banking.
- Top act as coordination wing for accounting policy and procedures
relating to department of finance division.
- Permission to release the amount of decrease account holder to the
legal heirs.
- Maintenance of loan balancing record and persuasion thereof.
- Up-dating of specimen signature booklet.
- Circulation and adoption of safety measure in respect of loss security
documents.
- To deal with excise / Taxation matters related to bank.
Prudential Regulation Wing
- Supply of monthly and quarterly position of recovery of classified
loans to SBP, after receipt from MIS division.
- Issuances of instruction to branches for revisal of income / provision
in budget under prudential regulation.
- To prepare balance sheet and profit and loss account of the bank. On
Tuesday the data is collected from the regional offices in the form of
soft copy and the compile it in two days and the profit and loss
account. the balance sheet is prepared and send it to the SBP on
Wednesday.
24
- Supply of monthly and quarterly position of recovery of classified loan
to SBP after receipt from MIS division
- Receive of progress made by the bank regarding recovery of
classified and suggest ways and means of improve banks
performance.
Tax Wing
- To issue necessary instruction to the branches to keep the record of
with holding case dedicated from the bank and submission thereof to
head office. For claiming adjustment against the final liability of the
bank.
- Collection of tax payment documentary evidence from the branches
for submission, to tax department along with the income tax return.
- Issuance of instruction regarding tax deduction at the time of
issuance demand drafts, cheque and pay order etc.
- To coordinate with tax consultant and income tax authorities.
- To issue necessary instruction regarding sales tax, excise duty etc.
25
CHAPTER THREE
3.1 PERFORMANCE OF ZTBL
The table-1 shows disbursement and recovery position of ZTBL during the
past seven years.
According to the source the year 1995-96 the disbursement of ADBP loan
was Rs. 10.34 billion which increase to 11.69 billion in 1996-97, in 1997-
98 the disbursement jumped to Rs. 22.36 billion is almost double the
amount advanced during the preceding year.
In year 1998-99 disbursement further rose to unprecedented level of Rs.
30.18 billion rupees but suddenly dropped to Rs. 24.42 billion during 1999-
2000 and target has been fixed at Rs. 35 billion for the fiscal 2002-2003.
Deposit higher disbursement of agriculture loans the off-lake of fertilizers
and production of tractors and other agricultural implements have not
shown any reasonable improvement to prove the real disbursement of
loans. According to the State Bank of Pakistan latest report the off-take of
fertilizer increased by 9.7 percent in fiscal 1999-2000 compared to the
previous year and 4.7 percent during 2000-2001 while during the year
2001-2002 it showed a negative growth of minus –9.1 percent. The report
suggests that the production and sale of tractors remains stagnant during
fiscal 2000-2001 and 2001-2002.
26
Table-1 Disbursement and Recovery from 1995-2003
(Billion Rupees)
Year Disbursement Recovery
1995-96 10.34 12.78
1996-97 11.69 15.14
1997-98 22.36 32.74
1998-99 30.18 25.85
1999-2000 24.42 30.13
2000-2001 27.61 NA
2002-2003 (Target) 35.00 39.00
Table-2 The performance of agriculture sector from 1995-96 to 2001-2002
Year Percent growth Major corps Minor crops
1995-96 11.7 6.0 4.9
1996-97 0.1 4.3 0.9
1997-98 3.8 8.3 3.3
1998-99 2.0 -0.2 4.2
1999-2000 6.1 15.1 -9.1
2000-2001 -2.6 -9.8 0.1
2001-2002 1.4 -0.5 1.0
27
Composition of Agriculture sector FY 2002
Constant factor cost
ZTBL at a Glance 2001-2002
(Rupees Million)
Description Pakistan Punjab Sindh NWFP Balochistan AK FANA
Total outstanding
94546.242 64680.013 19012.410 4081.634 6156.514 95.209 520.902
Agri credit disbursement
29108.015 21123.3 5865 1367.4 493 128 132
Loan to substance farmers
18904.869 13623.5 3375 1234 415 128 131
Tractor financial No.Amount
12744
3501.2
12249
3369.4
108
28.7
232
63
147
39
0
0.00
8
1.9Total recovery
33545.930 25046 6075 1654 476.4 132.3 163
Cumulative recovery
90% 91% 86% 93% 85% 98% 94%
No. of MCOs 1496 795 362 196 91 30 22No. of regional offices
49 21 12 9 5 1 1
No. of branches
343 160 87 50 34 5 7
Total manpower
7665 4385 1678 888 520 105 89
Officers 4515 2579 997 544 280 61 54Staff 3150 1806 681 344 240 44 35
28
Budget 2002-2003
(Rs. Billion)
Resources 741.958 Expenditure .741.958
Internal resources 563.033 Current expenditure 607.958
External resources 198.063 Development expenditure 134.000
Bank borrowing (-)31.138
Privatization
proceeds
12.000
Foreign trade 2001-2002
(Agricultural Items)
(Rs. Billion)
Export Import
Commodity Quality (000 tones)
Value Commodity Quality (000 tones)
Value
Cotton fabrics
1957 69.411 Edible oil 1185 23.787
(million Sq. M)
Wheal 267 3.056
Cotton yarn 544 57.9 Tea 99 9.593
Rice 1645 27.1 Sugar 86 1.485
Fish & fish preparation
85 7.74 Fertilizer 1187 10.851
Fruits & vegetable
429 6.332 Insecticides 31 5.265
Wheat 602 4.158 Dry fruits 86 1.873
Raw cotton 35 1.493 Milk & cream
7 0.995
Other export
386.166 Other import
577.483
Total 560.291 Total 634.388
29
Institutional Agricultural Credit 2001-2002
(Rs. Million)
Institution Production Development Total Share(%)
Zarai Taraqiati
Bank
22010.843 7097.172 29108.015 55
Commercial Banks 15752.00 1734.00 17484.00 33.3
Domestic private
Banks
184.00 404.00 588.00 1.1
Provincial
Cooperative Banks
5080.00 194.00 5274.00 10.1
Total 43026.843 9429.172 52456.015 100
3.2 RESTRUCTURING OF ZARAI TARAQIATI
BANK LIMITED
The new status of Zarai Taraqiati Bank as Limited Company will go a long
way in exploring the new dimensions in agriculture and rural financing for
poverty alleviation and development of agriculture sector through good
governance, delivering high quality, viable and timely financial services to
greater number of clients.
The restructuring is aimed at uplifting the agriculture and rural sector by
raising farm productivity, streamling the institutional credit and increasing
income generating capacity of the farming community.
The main aspect of the restructuring plan is aimed at alleviating the poor
performance of the bank which had not aided the agricultural and rural
sector to the optimum level.
30
The restructuring exercise which started last year has turn around the
institution to assets the declining recovery to avert of any possible default
and to redesign institutional architecture for facilitating provision of more
agriculture credit boost the agriculture produce.
Zarai Taraqiati Bank (ZTBL) has announced voluntary Golden Hand
Shake Scheme for its regular employees of less than the age of 59 years
and with services of 10 years or more as on 05-09-2003. The scheme is a
part of restructuring exercise being carried out in ZTBL which
strengthening the financial health of the ZTBL and to make it a
commercially viable institution.
3.2.1 HUMAN RESOURCE DEVELOPMENT
Human Resource skill Development is vital to increase the efficiency and
effectiveness of any institution. Zarai Taraqiati Bank Limited (ZTBL) is
giving greater emphasis upon the training and improvement of the human
skill in its restructuring programmes.
They are more emphasis on training to employees already working and
give them incentives for good performance to ensure improved services.
Streaming institutional credit and increase outreach.
The training of accounts officers is even more important to bring financial
discipline in the organization, which is one of the factors indispensable for
good governance.
The restructuring of ZTBL has yield positive results with decrease in share
for non performing loans (NPLs) in total out standing and higher resources
availability disbursement and financial services to small farmers at
affordable cost.
31
The first benefits of restructuring of ZTBL has been that it has now
announced a 3% reduction as incentive to farmers who pay their two
consecutive loan installments in time. This incentive has been possible
due to enhanced financial viability of ZTBL, through the restructuring.
The bank has reduced the mark up rate from 14% to 11% in accordance
with the governments policy to provide maximum benefits to farmers and
to inculcate timely repayment behavior.
In this regard ZTBL has to play an enhanced role to develop the
agricultural sector of the country keeping in view the challenges facing
their sector in the wake of new global developments.
32
CHAPTER FOUR
SWOT ANALYSIS OF THE ZTBL
This chapter is concerned with the Strength, Weaknesses, Opportunity
and Threats as well as the conclusion and recommendation regarding
Zarai Taraqiati Bank Limited.
4.1 STRENGTHS
1. Pakistan is basically an agricultural country, and ZTBL is one of the
large institution which provide the credit to the farmer for agriculture
purpose.
2. Professional and experienced team is available in all the
department at Head Office.
3. New technologies are introducing by ZTBL for the agriculture
purpose.
4. There is expensive machinery and technology available at Head
Office.
5. So many fringe benefits is given to the employee of the bank or all
the facilities are available for them.
6. The substantial loan is given by the bank to their employee for any
purpose.
7. The bank provide its services almost whole the Pakistan.
8. ZTBL has a proper training institute for their MCO (Mobile Credit
Officers) in order to make then updated with the changing policies
and programs of the bank.
33
9. The information is flow systematically as branches to the regions
and regions provide information to the head office.
10. Through the restructuring process the over staff have highly
decrease by Golden Hand Shake scheme.
11. All the branches and regions are interrelated with head office
through the computerized system.
12. The head office Audit Department also checks the whole payment
process. So proper system of check and balance for the payment is
there.
13. Performance of all the branches are controlled and evaluated on
the basis of monthly operations reports (MRO) received and
checked by the branches development and control department.
14. No competitor in the field of loaning to agriculture sector.
15. For the proper training and development to the staff, the staff
colleges are available at Karachi and Islamabad.
16. One window operation are announced time to time to facilitate the
farmer.
17. Data are properly maintained.
18. Government launches different scheme or packages to the farmers
like relief packages, tractor scheme etc.
19. Playing a greater role in the poverty alleviation program.
4.2 WEAKNESSES
1. The recovery system is very much low.
2. There is expensive technological machinery like in hard ware and
networking department but no is there to use properly.
3. There is still much over staff at the head office.
4. Non-payment attitude and default culture.
5. There is nothing much work to do for upper and lower staff.
6. Political base loaning.
34
7. Old staff, unqualified and un-skill persons are also working over
there.
8. No proper efforts for the promotion and advertising for the latest
agricultural technology is order to motivate farmers to use these
technologies.
9. They are not concentrating on small farmers.
10. The loan is not properly utilized for the agriculture purpose.
11. The rule and regulation are not strictly followed like late coming etc.
12. Seniority based promotion.
13. There is no any new recruitment since 1996 because of overstaff
so there is lack of new talent.
14. The accountability system is in very bad condition.
4.3 OPERATUNITIES
1. Present government is more emphasizing on the accountability. So
this is a golden change for ZTBL for Recoveries of the political
loaning.
2. Present government has also introduce micro credit scheme which
enhance the operations and profit ability of the bank.
3. This is a time to reduce the over staff and new recruitment should
be done.
4.4 THREATS
1. Interference in the posting and transferring by those personalities
whom are related with the operation of the bank.
2. Large no of un-viable branches.
3. Delay in the finalization of the cases field in the banking
tribunals/special banking courts.
35
4. Recovery of the loan depends upon the crops the farmer have
maintained, flood and drought made causes destruction of the
crops which will make the farmer defaulters.
5. Due to shortage of water the agricultural land is going to be expired
in Pakistan.
6. Also the rate of the agricultural crops are decreasing season by
season.
36
CHAPTER FIVE
RECOMMENDAITON & CONCLUSION
1. The ZTBL has to improve its recovery system in order to meet the
future credit requirements.
2. The efforts have been taken to enhance timely disbursement to
small farmers with greater outreach through efficient governance
which will alleviate poverty in the rural sector.
3. Providing cheaper and timely funds to activate the entire value
chain of agriculture.
4. Branches and Mobile Credit Officers have to direct contact with the
farmers and rural people therefore both are playing an important
and vital role for the development and uplift of agriculture sector.
5. ZTBL has to eliminate the seniority base promotion.
6. Un-viable branches of the bank should be closed. This will reduce
the expenses of the bank.
7. New energic and capable recruitment have been made in order to
meet the future challenges.
8. ZTBL is also involved in political base loaning. To reduce the bad
debts ZTBL has to close the chapter of the political base loaning,
posting and transferring.
9. ZTBL should take steps in order to motivate the farmer for using the
latest technology in order to increase the agricultural production.
There should be a proper program for this purpose keeping the
illiterate farmer in mind.
10. Concentrate on small farmers instead of large farmers.
11. A strong research and training cell should be established at country
level to overcome the hurdles conform that textile exporters as well
as agriculture export.
12. The branches, regions and the head office must connect with each
other through computer system.
37
13. To over come the losses of the bank and to properly and efficiently
utilize the assets of the bank.
38