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6/8/2011

UNIVERSITY
OF THE PUJNAB

ZARAI TARAQIATI BANK LTD

Project of NBFC

Zarai Taraqiati Bank Ltd Project of NBFC
Submitted to:
Instructor Ahtasham

Submitted by
Shahzad Yamin Ali sufyan Sajid Ali Naveed Ahmed MC09129 MC09130 MC09144 MC09152

Punjab University Gujranwala Campus | Project of NBFC

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Zarai Taraqiati Bank Ltd
Project of NBFC........................................................................................................................... 2
Submitted to: ................................................................................................................................................... 2 Submitted by .................................................................................................................................................... 2

Dedication .................................................................................................................................. 6 Acknowledgment ....................................................................................................................... 7 Executive Summary .................................................................................................................... 8 Need & importance of assignment ............................................................................................. 9 Selections of financial institution with strong reason ................................................................ 9 Over view of the organization .................................................................................................. 10
Vision.............................................................................................................................................................. 10 Mission ........................................................................................................................................................... 10 Objectives ....................................................................................................................................................... 10 History............................................................................................................................................................ 12

Developmental or Commercial role ................................................ Error! Bookmark not defined.
Easy loan access to the farmer ...................................................................................................................... 15 Provide technology ........................................................................................................................................ 15 Disbursement of loans................................................................................................................................... 15 Farm mechanization and water resource development .............................................................................. 15 One Window Operation................................................................................................................................. 16 Credit to Women Program ............................................................................................................................ 16 Micro Credit Scheme ..................................................................................................................................... 16 Revolving Finance Scheme ........................................................................................................................... 16

Products ................................................................................................................................... 17
Crop maximization project ii......................................................................................................................17 Canola Re-Financing Scheme ................................................................................................................... 18 Crop Loan Insurance Scheme ................................................................................................................... 19 Green Revolution Scheme ......................................................................................................................... 19

Punjab University Gujranwala Campus | Project of NBFC

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Zarai Taraqiati Bank Ltd
One Window Operation/ Zarkhaiz Scheme .............................................................................................20 White Revolution- ZTBL & PDDC ............................................................................................................ 21 White Revolution- ZTBL & Nestlé ............................................................................................................ 22 Sada Bahar Scheme (SBS) ......................................................................................................................... 23 Awami Zarai Scheme (AZS)- Farm Credit ................................................................................................ 24 Rural Devlopment Scheme........................................................................................................................ 25 Red Meat Financing Package for Sheep/ Goat Rearers ........................................................................... 26

Repayment Periods .................................................................................................................. 27
Recovery Procedure ....................................................................................................................................... 27 Recovery Schedule ..................................................................................................................................... 27 Issuance of Notices .................................................................................................................................... 27 Legal Action................................................................................................................................................ 28 Rescheduling of Loan Repayment Facility ............................................................................................... 28 d) Down Payment for Rescheduling of Loans .......................................................................................... 28

KSS............................................................................................................................................ 29
KSS Aim ......................................................................................................................................................... 29 KSS Operation................................................................................................................................................ 29 Objectives ....................................................................................................................................................... 29 Services/Activities so far undertaken by KSS ..............................................................................................30

Quick View of ZTBL s Performance till 2009 ............................................................................. 31
Credit Rating .................................................................................................................................................. 31 Disbursments ................................................................................................................................................. 32 Recovery ......................................................................................................................................................... 33 Deposits.......................................................................................................................................................... 34 Gross profit .................................................................................................................................................... 35 NPL ................................................................................................................................................................. 36

Non financial role of ZTBL ........................................................................................................ 37
Production guide line .................................................................................................................................... 37

Punjab University Gujranwala Campus | Project of NBFC

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.... 38 Successful product ................... 37 Locker facility.................................................................................................. 38 Reasons......................................................... 38 Under Awami zarai scheme..................................................... 37 Product success & failure .......................................................................................................................................................................................................................... 37 Transfer of Technology..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................Zarai Taraqiati Bank Ltd Hajj aplication facility ...................................................................................................................... 39 Future outlook ............................................................................................................................................................................. 40 Conclusion .................................................. 42 Punjab University Gujranwala Campus | Project of NBFC 5 ............................................. 39 Reasons of Failure................................................................................................................................................................. 41 Recommendations..................................... 38 Sada bahar scheme .......................................................... 39 Red meat revolution .................................................................................................................................................................................................................. 38 Failure products............................................................................................ 39 White revolution ...........................................................................

Zarai Taraqiati Bank Ltd Dedication Our group dedicates this project to our parents who encourage us & help us in every field of life & of course our teacher without whom we could not able to make this project. May they live long. (Aamin) Punjab University Gujranwala Campus | 6 .

Zarai Taraqiati Bank Ltd Acknowledgment First of all we thank our Almighty ALLAH who has blessed us the courage. energy to complete our final project. Punjab University Gujranwala Campus | Acknowledgment 7 . This course work project which is the assignment of our M. We are also thankful to all those who helped us to collect the data without which my report would not have been completed. What we have learnt from this program is not the gift of our course books but is the relentless hard work and skill of our instructor.com program is dedicated unanimously to our Sir. Whatever benefit we will get by this course in our personal life is one thing but the quality of the knowledge that has been delivered to us will remain with us.

its play its vital role in the economy specially for bossing the agriculture sector by providing easy and sufficient loans to the farmers . It also establish its subsidiary known as kissan support scheme which privies technical and production related guidelines to farmers .But management of Ztbl is trying to cop up with these failures I future with better planning and correct resource allocation Punjab University Gujranwala Campus | Executive Summary 8 . But in recent many of its projects stared with different well established organization in Pakistan met with failure due to lack of confidence between them Like Nestle and ztbl .By introducing different schemes and products or farmers and providing them fertilizers and all those inputs used in cultivation at their Door step. Financial position of ZTBL is stable because it is backed by the government .Zarai Taraqiati Bank Ltd Executive Summary In this project we covers the specialized institution ZTBl established in 1961 by the government of Pakistan for the development of agriculture sector of Pakistan having much more potential of generating food and foreign reserves or the country. Its play its Development role by introducing different loans for women of rural areas and by starting its all operations under one window.And now it¶s going to be a separate organization solely for this purpose.And worked for the welfare of farmers. During recent years however its rate of advancing decreases but it has overall good profitability and recovery ratio.ZTBl also outsources from KSS.

pursuing the old rural finance paradigm and the narrowing fiscal space have also promoted a shift in Government strategy that now seeks viable intermediaries for enhancing outreach. Lack of access to affordable rural finance services will also prevent the clients from switching to non-farm activities. So keeping in view the above importance we make thorough study about the agriculture sector the result of which we find the institutions which work for the development of agriculture sector which is major portion of our economy. and stimulate products and capital flows in the rural sector. For the majority. access to affordable rural finance services is also important to enable them to compete in the post-World Trade Organization scenario. rural finance must be seen as an integral part of equitable development within a framework of macroeconomic stability. So in this assignment we are going to show financial. Punjab University Gujranwala Campus | Need & importance of assignment 9 .Zarai Taraqiati Bank Ltd Need & importance of assignment Pakistan is an agricultural country and more than 60% of its population is working related to agriculture. particularly the small and subsistence clients. As we know the major part of our economy relay on agriculture so we have to take considerable steps to improve the agriculture sector so that we can improve the economy. The realization of these objectives depends on the simultaneity of developments in rural finance and non-financial markets to foster the creation of diverse sources of rural finance to build sustainable financial institutions. Selections of financial institution with strong reason Healthy and well-functioning rural finance markets are directly related to achieving the two key national policy objectives of accelerating rural/agriculture growth and reducing poverty. Through study we found that that the ZTBL is leading from front end for the development of agriculture sector. The recurring financial drain. A development in the agricultural sector will no doubt result in the development of the whole country. Inability to compete because of high financial costs could reduce income of the majority of farmers and rural clients. For this. The ongoing corporatize restructuring lays the basis for fundamental reforms for rural finance market development. non financial and development role of ZTBL for the growth of agriculture sector and poor former which leads towards the country¶s development.

and other products & services. in raising their productivity and income levels through timely delivery of credit. particularly the small farmers.retail partnership to deepen outreach and reduce operating cost. leading to success of the Bank and the farmers.F. by delivering financial products and technical services on a competitive and sustainable basis. in a convenient .  Assist rural community. and to promote career development opportunities for increasing professionalism and technical proficiencies of employees.  Establish and provide backward and forward linkages to strengthen agri.I of the country.  Build ZTBL's image as a proactive.Zarai Taraqiati Bank Ltd Over view of the organization Vision Dedicated to serve the needs of the farming community. efficient and professional manner. technical assistance.private and wholesale . advisory and ancillary services. Mission To play effective role in the promotion of economic growth. special lending programs.  Engage in public . client friendly. by enhancing the availability of credit to the agriculture sector. Punjab University Gujranwala Campus | Over view of the organization 10 .  Provide a wide range of risk insurance products to its clients.  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. financially & operationally sustainable with indigenous product deployment. value added commodity chains. through reliable access to sustainable financing. Objectives  Develop and operate as a financially and operationally sustainable R.

B. Pakistan Punjab Islamabad 13 Branches Multan 8 Branches D. Nazirabad 14 Branches Abbottabad 7 Branches Mingora 15 Branches Peshawar 20 Branches Total Zones Total Audit Zones Total Branches 27 9 352 Vehari 11 Branches Muzafargarh 11 Branches R.I.Y. Khan 7 Branches Muzafar.Zarai Taraqiati Bank Ltd Head Office Islamabad.Abad 10 Branches Punjab University Gujranwala Campus | Over view of the organization 11 .G.M. Khan 14 Branches Turbat 6 Branches Quetta 18 Branches D.Khan 6 Branches Sahiwal 15 Branches Lahore 20 Branches Gujranwala 18 Branches Bahawalpur 13 Branches Faisalabad 20 Branches Sargodha 16 Branches Sindh Balochistan D. Jamali 7 Branches Khaber Pakhtunkhaw Gilgit Balitistan Gilgit 7 Branches Karachi 15 Branches Hyderabad 14 Branches Mirpur Khas 14 Branches Sukkur 15 Branches Larkana 18 Branches S.

cooperative societies and other bodies. 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. The bank is completely owned by the government and it has head office in Islamabad. rural and agriculture financial services to the rural Pakistan. they were merged into one organization known as Agricultural Development Bank of Pakistan on February 18. 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. 000. warehousing and storage facilities to agriculturists. Later on the Agricultural Development Bank of Pakistan was also established in September 1957. This restructure was carried out with the aim to improve the working and role of bank in the agricultural development. Punjab University Gujranwala Campus | Over view of the organization 12 . autonomy. and was entrusted with the task of providing financial facilities for the development and modernization of agriculture.89. 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.Zarai Taraqiati Bank Ltd History The Agricultural Development Finance Corporation was set-up in 1951. Poultry. of which the majority of members are agriculturists. The Bank is to provide credit in cash or in kind. The Bank through a country-wide network of 352 branches is serving around half a million clients annually and over one million accumulated account holders with the average loan size of around Rs. aims at ensuring good governance. 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. ZTBL is providing affordable. Fishery. On 14 December 2002 the Federal Government has converted the Agricultural Development Bank of Pakistan (ADBP) into Zarai Taraqiati Bank Ltd (ZTBL) and the new venture has started its operation with immediate effect. comprising 68 % of the total population. delivering high quality. including: Forestry. Dairy Farming. Animal Husbandry. After this incorporation all the assets and liabilities of ADBP became the assets and liabilities of ZTBL. under the Agricultural Development Bank Act.

359 5.Zarai Taraqiati Bank Ltd Share Capital The authorized capital of the bank is 25.000 million rupees and the paid up capital Is 11869.612 million rupees by December 31.190 0.680 0.612 2.771 1.2005. Particulars of Shareholding Federal Govt Govt of Punjab Govt of Sindh Govt of Khyber PK Govt of Baluchistan Govt of EastWhile East Pakistan 11859.000 Management Punjab University Gujranwala Campus | Share Capital 13 .

Zarai Taraqiati Bank Ltd Swot Analysis Strengths ZTBL has brand name in agricultural loaning. Because the most effected people are farmers so the bank has a chance to increase its reputation by utilizing its full resources to help them Punjab University Gujranwala Campus | Swot Analysis 14 . The bank enjoys sovereign guaranty of Federal Government that covers its debt obligation to State Bank of Pakistan The bank has ability to launch successful products for agricultural The Bank has the most experienced and the least experienced staff. so ZTBL can make it possible the fast delivery of funds to rural areas. It is first and large financial institution established in Pakistan to promote agricultural financing The bank has more than 350 branches throughout Pakistan and has presence in all the provinces of the country which enables it to capture and facilitate a large number of customers. which is a good combination of experienced heads Weaknesses ZTBL have not introduced any Islamic product in financing In spite of the presence of technology many jobs are done manually. They have wide area network in all over the Pakistan. Like other Government institutes the red tap dilemma also exists in ZTBL. Almost all other bank¶s operations have been computerized but ZTBL is still working on manually written ledgers etc. The computerized system helps bank in reducing fraud. The staff is not motivated because the promotion mechanism is based on experience rather than on the performance of the employees Opportunities The bank started computerizing its operation which if completed will result in increase of the bank performance. The flood of 2010 is challenge for the whole country.

therefore.mun1t for the purchase of primary inputs. The share of ZTBL in the supply of total agricultural credit by the institution is 34. Their credit need is assessed at the farms and the credit is provided to them after necessary documentation in their own villages.1% in the same period. tube well & many other technology used in agriculture. The Scheme is. Technology include harvesters. As most of the farmers were not able to get benefit from the loans advanced by Zarai Taraqiati Bank Limited. Under this Scheme.Zarai Taraqiati Bank Ltd Threats Corruption is the big threat for the bank Many commercial banks also started agriculture loaning scheme so it is expected that in the future the farmers will have more choices to have finance from which will definitely affect the customer base of the bank. the potential farmers are contacted in their fields. tractor. Provide technology ZTBL provide technology to the farmer to increase the productivity and contribute towards the country¶s need of food and other agriculture needs. tractors. it introduced Supervised Credit Scheme in 1979. Farm mechanization and water resource development Punjab University Gujranwala Campus | Developmental or Commercial role 15 . Political unrest is also a threat for the bank because it is a government Natural Calamities is also a problem. village based rather than the branch base. The Supervised Credit Scheme is a farmer oriented scheme. the bigger part of the bank customers relies on the environmental condition Developmental or Commercial role Easy loan access to the farmer The Zarai Taraqiati Bank Limited initially started branch based credit scheme to the farmers. 93 billion were disbursed to the farming com. poultry and live stock sector (July to May 2004-05). Disbursement of loans Total agricultural Loans amounting to Rs.

a maximum of Rs.and achieving: self-sufficiency in food production. Under this scheme the loan is provided to the creditworthy farmers for meeting the seasonal agricultural requirements. Credit to Women Program The main objective of this program of ZTBL is to make credit available to rural women through female Mobile. the Bank has played a key route in providing finance for the purchase of tractors. For achieving this objective. The small farmers holding 25 acres irrigated land or 50 acres un-irrigated lands are getting benefit under this scheme. Revolving Finance Scheme This scheme is also in operation since 1999. One Window Operation The provision of loans to the farmers at one place is the most successful scheme of ZTBL. installation of tube-wells. Micro Credit Scheme The ZTBL has launched Micro Credit Scheme since 2000 to engage rural poor in increasing income through engagement in cottage industries. Fishery. Under it. forestry etc.49 million to 10 rural women for farming and nonfarming activities such as poultry.Zarai Taraqiati Bank Ltd The ZTBL is helping the Government for increasing farm productivity . combine harvesters and other farm implements which help in increasing farm yield. Punjab University Gujranwala Campus | Developmental or Commercial role 16 . orchard. 25 thousand can be advanced against both surety and security. threshers. The Bank under this Scheme has disbursed Rs.

250/.per acre per annum for the first five years Share Money Member farmer All member farmers will open Saving Account in same branch of the Bank where VOs account is maintain lend money to its members) VO will lend money to its members for purchase of input for production of crop at 10% handling charges per annum on daily product basis. Secretary of VO and Credit Officer of the Project for approval. In case of late repayment by the beneficiary.Zarai Taraqiati Bank Ltd Products Crop maximization project ii Operational Jurisdiction Profit MINFA paidon special All over Pakistan in 28 Districts & 842 Villages ZTBL will pay profit at minimum rate of 7. 12% per annum handling charges will be recovered saving account Disbursement Approval of loan proposal Loan proposal of VO level will be prepared by VOs Accountant with the assistance of the concerned Agriculture Officer/Field Assistant/Stock Assistant and presented the same before committee comprising of President. MRFDA or MSSDA and said profit will be paid on 6 monthly bases in such respective accounts. On approval check/loan ceiling will be issued alongwith approval letter for Revolving Fund Special Saving Account maintained by VO at the nearest Bank Branch Punjab University Gujranwala Campus | Products 17 .5% per annum to be calculated on daily product basis on such balances lying in VOs. 25 acres in Sind & Baluchistan. 15 acres in KPK & FATA & 25 acres in AJK & Gilgist-Baltistan Each VO member will contribute the share money on the basis of size of his land holding @ Rs. saving account Membership VOs will raise membership by motivating small farmers having holding upto 20 acres in Punjab .

The surety loans would be advanced up to Rs. Repayment of Loans to SBP: Principal amount of loans under the scheme shall have to be repaid on the agreed date between bank and the borrower Utilization MCO would check the utilization in each and every case within 30 days of disbursement.per borrower against two sureties as per standing instructions of the Bank. In case the amount of loan to be sanctioned including amount of loan(s) outstanding exceeds Rs.Zarai Taraqiati Bank Ltd Canola Re-Financing Scheme Security The loan would be secured against the acceptable forms of security as per policy of the Bank.0.500 million would be sanctioned by the Managers.25.2011 till its repayment/closure of loan case. In case the loan case is declared as misutilized this would be recalled in lump sum as per Bank's instructions.000/. Sanction of Loans Production loans up to Rs. Rate of Mark-up Mark up rate to be charged from the borrower at 8% per annum and in case of default 9% per annum would be charged from 08. Credit Operations Department ZTBL HO Islamabad will be responsible for overall monitoring of the scheme so as to ensure the achievement of given targets and compliance of all the terms & conditions of the SBP scheme Punjab University Gujranwala Campus | Products 18 . Zonal Chiefs and SVP. Random rechecking of utilization would be done as per standing instructions Monitoring All concerned Branch Managers.500 million the loan would be sanctioned by the respective Zonal Chief Legal Documentation Legal documentation would be executed as per type of security and system to be followed according to standing instructions of the Bank Disbursement The sanctioned loan would be disbursed in cash through current deposit account of the borrower.06. 0.

500. and Department of Agriculture. Locust attack and Insect attack Crops covered Period of Insurance From the date of sowing/transplantation to completion of harvesting of the insured cro Compensation Full compensation will be paid if the insured standing crop is damaged by the perils covered in calamity notified areas by the Government Green Revolution Scheme In order to achieve the aim of providing farm machinery and implements to encourage the mechanized farming for the enhancement of agriculture productivity as compared with traditional tillage system a Memorandum of Understanding between Zarai Taraqiati Bank Ltd. Sugarcane. Frost. Operational Jurisdiction Premium All branches of the Bank throughout the country Premium will be charged @ 1. Rice & Maize Perils covered: Excessive rain.Zarai Taraqiati Bank Ltd Crop Loan Insurance Scheme ZTBL has launched Crop Loan Insurance scheme (CLIS) as per instructions of Government/ SBP. Sum insured: Production loan for agreed crops of each season (Rabi & Kharif) for which premium is paid Wheat. The main features of this scheme are listed hereunder. Bank will pay the premium for subsistence farmers and will get reimbursement from the Government on half yearly basis Maximum Insured loan limit Rs.3% (inclusive of all taxes and levies) of loan sanctioned for Rabi and Kharif crops separately. Flood. Drought. Cotton.000 in an individual case. AJ&K has been signed under title of Green Tractor Scheme. The main features of this scheme are listed hereunder Punjab University Gujranwala Campus | Products 19 . Hailstorm.

Agri.  Simplified documentation. Loan Case File.Zarai Taraqiati Bank Ltd Operational Jurisdiction Selectionof Borrowers Bank MCO Selects the Borrowers on the recommendation of Department of Agriculture. Pass Book & 2 Photographs of borrower Collateral Tangible Properties Maximum Credit Limit: Rs.000 million per borrower/party Incentive: AJ&K Government would reimburse the amount of mark up charged by the Bank provided the borrowers repay the loans on due date Repayment The loan will be recoverable within 5 years in 10 equal installments commencing after six month of issuance of DD Throughout AJ&K Area One Window Operation/ Zarkhaiz Scheme Silent feature of product  An easy way to get Agri.Pass Books. AJ&K Delivery Channel Branch/Department of Agriculture.  All formalities from the issuance of Agro.1. AJ&K Mark up Rate: 9% p.  Timely disbursement.  Transparent services.  Credit needs of the farmers at the ir doorsteps. IB-7 Agreement.Pass Book to processing of loan are completed on the spot.  Efficient and cheaper lending procedure.  Focus on small farmers.a with 1% rebate on timely repayment Document Required CNIC Photocopy. Punjab University Gujranwala Campus | Products 20 .

fodder machines/mixtures. Existing good dairy farmers duly selected/recommended by PDDC. Blank Agri.Pass Books. Collateral: Agri.Pass Books are supplied by the postal authorities. geezers. Delivery Channel: PDDC/ZTBL Branch/ Supplier Punjab University Gujranwala Campus | Products 21 . Under the Scheme M/s PDDC recommends good dairy farmers to ZTBL for provision of finances for the purpose. & installation the reof on competitive market rates to the farmers. a Strategic Partnership between ZTBL & PDDC has been made. Salient features of the scheme are as under Coverage Eligible Farmers Throughout the country.e. Provision of assured quality dairy equipments i.Land mentioned in Agri. Loan able Items: Inputs-Seed-fertilizer. Pass Book Eligibility Ctiteria Farmers having irrigated land up to 25 acres and barani land up to 50 acres Repayment Rabi loans are recoverable on 7 th July & Kharif loans on 7 th January. Patwari/Revenue officials enter land record in Agri. Revenue. pesticides/insecticides/POL/labor charges etc White Revolution.ZTBL & PDDC To modernize the existing dairy farming and in order to increase milk supply in the country. Turbat Zone in Balochistan Province and FANA being un-settled/hilly areas ZTBL MCOs. Farmers after obtaining pass books from revenue officials meet ZTBL MCOs for loans. milk chilling tanks.Zarai Taraqiati Bank Ltd Operational Jurisdiction Selection of Farmers/ Borrowers Throughout Pakistan (except Mingora Zone in NWFP. water pumps/diesel engines etc.100/-) o the rwise is supplied to the intending borrowers free of cost Delivery Channel ZTBL. Postal authorities and Supplier through selected focal points. Revenue and postal staff meet at selected focal points once a week on each Monday. Loan Case File (costing Rs.

500/.1 million per borrower/party.a.per year Mark Up Rate Incentives 9% p.Rs.ZTBL & Nestlé In order to increase milk supply. have been worked out and an agreement to this effect has been executed. Insurance of Animals Equity Contribution Bank arranges insurance of animals through M/s Adamjee Insurance Company Ltd 10% of the cost of the Project Punjab University Gujranwala Campus | Products 22 . as a first step.100/-. IB-7 Agreement. Postal Charges Rs. Nestlé Pakistan Ltd.100/-.a with 1% rebate for timely repayment Borrowers are required to pay only 50% of principal amount on due dates whereas mark-up as well as 50% of principal amount shall be paid by PDDC Recovery Period: 5 years in monthly installments with grace period of 3 months White Revolution. mitigate poverty in the country and improve the living standard of the rural populace.Zarai Taraqiati Bank Ltd Equity Contribution 10% of the Project cost Cost of Credit: Loan Case File Rs. Cost of Credit: Loan Case File.per year.500/. Postal Charges Rs. Mark-Up Rate is 9% p. modalities of Strategic Partnership of Bank with M/s. Appraisal Fee @1% of loan amount. with 1% rebate for timely repayment. Appraisal Fee @1% of loan amount. Operational Jurisdiction Selection of Borrowers Delivery Channel Branch Collateral Loan able Items Throughout Punjab Province M/s Nestlé identifies the borrowers (existing as well as new dairy farmers) to recommend concerned ZTBL Branch through Model Branch Lahore Nestlé/ ZTBL Tangible Properties Dairy sheds/structure Local Buffalo/Cow Imported Cow with calf Working Capital Maximum Loan Limit Rs.

Besides. pesticides. POL and labor charges etc) for crops loan under Sada Bahar Scheme(SBS) is provided. Collateral Tangible Securities Rate of Mark up: 9% p. Monitoring of Loan: M/s Nestlé will carry out monitoring of loan to update the branch periodically. Recovery Period: 5 years in monthly/weekly installments with grace period of 1-3 months for local and imported animals respectively Sada Bahar Scheme (SBS) In order to facilitate the farmers and provide the m timely inputs (seed.Zarai Taraqiati Bank Ltd Disbursement of Loan Loans for sheds and working capital will be disbursed in cash in suitable installments. The salient features of the scheme are as under Selection of Borrowers Under the scheme the Bank MCO selects the Borrowers for crop production keeping in view of the criteria fixed for Sada Bahar Scheme(SBS).000 animals each year.a with 1% rebate for timely repayment Documents Required CNIC Photocopy. Local Cow/Buffaloes through pay order/DD in the name of seller Allocation of Funds For the five years 2007-2011 Rs. Agri. dairy and fishery are also provided to the interested borrowers under the scheme. insecticides. working capital for dairy. IB-7 Agreement.500 million per borrower/party The revolving credit limit is fixed to cater production/working capital needs of the borrowers during one year period The borrower can draw the credit in lump sum or in piece meal according to his need/requirement Punjab University Gujranwala Campus | Products 23 . Imported cows through Nestlé. fertilizer. Loan Case File. 1-Loan for poultry. poultry and fishery are provided to the interested borrowers under the scheme. Pass Book & 2 Photographs Maximum Limit Working of revolving limit Loan Disbursement Rs.0.5 Billion have been allocated to finance 10.

Zarai Taraqiati Bank Ltd Repayment For repayment of both production as well as loan working capital for poultry.a subsidiary of ZTBL under kind system. Rabi crop loans are repayable on 7 th July and Kharif on 7 th January each year with grace period of one month.Farm Credit Mandatory for all new borrowers and optional for existing borrowers of crop production loan under Sada Bahar Scheme to avail revolving limit under Awami Zarai Scheme to get inputs through M/s Kissan Support Services Limited (KSSL) . 1 st on 7 th January and 2 nd on 7 th April each year with grace period of one month. fertilizer and pesticides etc Punjab University Gujranwala Campus | Products 24 . seed.e. receipt of bill & acknowledgement receipt duly signed by the borrower in the branch Repayment This scheme is meant for 3 years with yearly renewal/clean up. In case of sugarcane two installments would be fixed. seed. fertilizer and pesticides etc. The prime features of this scheme are hereunder Selection of Borrowers Bank MCO Selects the Borrowers keeping in view the criteria fixed for Sada Bahar Scheme Supplier Collateral Rate of Mark up Working of Revolving limit Loan Disbursement Tangible Securities 9% p. Dairy and Fishery Awami Zarai Scheme (AZS). dairy and fishery the borrowers are required to clear the outstanding liabilities under the scheme once in a year by the due date and get renewed credit limit for next year up to 3 years Loan able Items Inputs i. Loanable Items: Inputs i. Disbursement is made after supply of inputs on the basis of supply order issued in the name of KSSL.e. Working capital for Poultry.a with 1% rebate for timely repayment It will be worked out as per crop wise ceilings fixed and revised from time to time.

Poultry.000 Million per borrower/party Repayment/Recovery Period Poultry Farming ± Within 5 years in half yearly installments commencing one year after 1st disbursement of loan.1. Sheep & Goat Farming in the rural areas of the State of Azad Jammu & Kashmir. The loan to the selected borrowers shall be provided by ZTBL as per prescribed procedure Equity Contribution 10% of the Project Cost Mark up Rate Mark up rate is 9% p. For Dairy/Livestock Farming ± Within 5 years in half yearly installments commencing six months after 1st disbursement of loan Punjab University Gujranwala Campus | Products 25 . Collateral: Tangible Properties Maximum Credit Limit Rs. a Memorandum of Understanding between Zarai Taraqiati Bank Limited and Azad Kashmir Small Industries Corporation has been signed.a with 1 % rebate on timely repayment All the applicable mark up on the loan installments under the scheme will be Incentives paid to ZTBL by AJ&K Small Industries Corporation. The following are the salient features of the scheme Operational Jurisdiction The scheme shall be implemented in the entire area of Azad Jammu & Kashmir through network of ZTBL branches & Azad Kashmir Small Industries Corporation Selection of Borrowers The borrowers will be selected by AJ&K Small Industries Corporation.Zarai Taraqiati Bank Ltd Rural Development Scheme In order to provide Credit Assistance for Dairy.

1. Nawabshah. Lasbella. Livestock being largest sub sector of the agriculture accounts for 50% of value addition. Sukkur. D. 5. Loralai.Per Kid Rs.200/Borrower Equity: 10% of the project cost Recovery Period Breeding 5 year Fattering 6-15 months Punjab University Gujranwala Campus | Products 26 .Per Teddy/ Goat Rs.500/. D. Peshawar . Thus this scheme has been launched to promote this sector AREA of Operation Initially the financing package is implemented in Multan .I. Bhakkar.000/. 3. 35 million rural population depends directly on this sector. The agriculture sector contributes 21% to the GDP. The scheme will be scaled-up in a phased manner Size of Farm New/Fresh enterprise 10-20 heads Existing/Medium Farmer with 3 years experience 20-50 heads Escalators/expanding with above 5 years experience 80-100 heads Maximum Loan Limit Per sheep/ Goat Rs. Khuzdar Districts branches having good potential and repayment culture. Faisalabad .Zarai Taraqiati Bank Ltd Red Meat Financing Package for Sheep/ Goat Rearers Pakistan 's economy is predominantly agrarian.Khan. Dadu.Khan.G.

above Long Term Loans Recovery Procedure Recovery Schedule Recovery schedule in each loan case as per terms of sanction of loan is fixed and communicated to the borrowers after disbursement of loan. Tractor. 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. Punjab University Gujranwala Campus | Repayment Periods 27 . In yearly/half yearly/monthly installments and within maximum period of 5 years. poultry farming. agricultural machinery. 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. godowns and orchard iIn yearly/half yearly installments within maximum period of 8 years and. further legal action will be taken to recover the dues.Zarai Taraqiati Bank Ltd Repayment Periods Types of Loans Short Term Loans Recovery Period Crop production working capital loans recoverable in lump sum commencing after the harvest/marketing of respective crops and within maximum period of 12 months. Medium Loans Term Dairy farming and livestock etc.

account is to be settled by recovery of amount from the auction of the mortgaged property. The relaxation in recovery period shall not be allowed beyond one year in any case. Where the court in bank's favour has decreed a case.Zarai Taraqiati Bank Ltd Legal Action Legal action can be initiated against the defaulter if loan is not repaid even after expiry of legal Notice period. The borrowers shall have to execute a supplementary loan agreement on Non Judicial Stamp Paper of appropriate value to give legal cover to extended period.Rescheduling of Loan Repayment Facility . The borrowers shall have to pay the return for the extended period. d) Down Payment for Rescheduling of Loans Rescheduling Number 1st 2nd Rate 10% 20% of down payment as against due installments to be rescheduled Punjab University Gujranwala Campus | Repayment Periods 28 . 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. 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. Rescheduling of Loan Repayment Facility ZTBL allows rescheduling of repayment of installments to its borrowers in order to maintain credit discipline and to mitigate their genuine problems in real hardship cases and in areas declared as calamity hit by the respective Provincial Governments The Rescheduling facility is to be considered by bank on case to-case basis and is to be allowed on borrower's request only.

Is a subsidiary of ZTBL which is established with a capital investment of 100 Million to help ZTBL in the achievement of its objective and also to make availability of trained human capital to the bank. advisory and other agency services and support services to Zarai Taraqiati Bank Limited  At govt price pesticides seeds and fertilzer provide by the KSS at the door step. which may seem to the company capable of being conveniently carried on  To liaison & establish contracts with agricultural research organizations for development of efficient. vocational training. KSS Aim To provide support staff to ZTBL & under take its non core activities. Punjab University Gujranwala Campus | KSS 29 . sports and recreation facilities  To invest any surplus money of the company not immediately required  To carry on any business.Zarai Taraqiati Bank Ltd 3rd 30% KSS Kissan Support Services Ltd.  To provide to the Bank¶s clients quality products and services for efficient and improved farming Etc. organize and establish training facilities to impart training to the bank¶s staff  Drip Irrigation System to assist the bank clients in marketing of their product and provide storage facilities  To assist the bank clients in marketing of their product and provide storage facilities  To provide welfare services to the employees of the Bank including education. effective and appropriate technologies  To carry on business of providing consultancy. KSS Operation Kissan support services operates under its Memorandum & Articles of Association. Objectives  T0 provide to the Bank all kinds of support staff and ancillary services  To plan.

Zarai Taraqiati Bank Ltd Services/Activities so far undertaken by KSS o o o Security Services to ZTBL Recruitment/provision of staff janitorial Services provided to:        ZTBL Head office buildings Ztbl Farms Staff college Printing stationery office AV Unit Old record office Sports club o o o Warehouse Management of Sports Activities Management of Sports Activities Day to day minor repair and maintenance of ZTBL HQ Buildings Punjab University Gujranwala Campus | KSS 30 .

it would diversify the existing funding source of the bank. ZTBL continued to achieve AAA credit rating by JCR-VIS. ZTBL is actively exploring different options for resource mobilization including bilateral/multilateral arrangements with financial institutions. The bank¶s lending book is largely funded through SBP¶s credit lines while contribution from deposits remains nominal. In case these efforts materialize. thereby reducing reliance on the SBP Punjab University Gujranwala Campus | Quick View of ZTBL¶s Performance till 2009 31 .Zarai Taraqiati Bank Ltd Quick View of ZTBL¶s Performance till 2009 Credit Rating In August 2010. Year 2010 2009 Entity AAA/ A-1+ AAA/ A-1+ Stand Alone B+/ B B+/ B Outlook Stable Stable The credit rating of the bank is due to the reason that bank enjoys sovereign guarantee of the federal government that covers its debt obligations to State Bank of Pakistan (SBP) and ensures safety of deposits under the Banks¶ (Nationalization) Act 1974.

2 30 20 11.9 52.7 Punjab University Gujranwala Campus | Quick View of ZTBL¶s Performance till 2009 32 .7 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 22.5 77.4 40 30.Zarai Taraqiati Bank Ltd Disbursments 90 80 70 60 50 39.6 29.7 55.7 Disbursement (Billion) 70.1 29.7 33.4 24.4 27.

1 40 30.9 33.8 32.Zarai Taraqiati Bank Ltd Recovery 80 70.8 Recovery (Billion) 63.1 25.1 30 18.7 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 15.2 2009 Punjab University Gujranwala Campus | Quick View of ZTBL¶s Performance till 2009 33 .8 70 60 52 50 42.9 73.1 36.5 38.

1 3 2.4 1.8 1.1 2 1 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1.5 1.3 5.5 8.6 2.6 2.3 2.8 Deposit (Billion) Punjab University Gujranwala Campus | Quick View of ZTBL¶s Performance till 2009 34 .6 1.9 4.Zarai Taraqiati Bank Ltd Deposits 10 9 8 7 6 5 4 3.

8 2 0.2 1.3 0.8 -6 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0.2 0.8 0.8 Gross Profit (Billion) 5 Punjab University Gujranwala Campus | Quick View of ZTBL¶s Performance till 2009 35 .4 8 6 4 4 1.6 0.1 1.Zarai Taraqiati Bank Ltd Gross profit 10 8.2 0 1997 -2 -4 -3.

0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 NPL's As a Percentage of Total Outstanding Punjab University Gujranwala Campus | Quick View of ZTBL¶s Performance till 2009 36 .0% 52.0% 27.Zarai Taraqiati Bank Ltd NPL 80.0% 19.6% 70.5% 50.9% 53.7% 49.1% 40.1% 15.8% 60.0% 33.7% 20.0% 69.0% 52.8% 49.0% 48.0% 0.6% 60.6% 10.0% 61.3% 30.

Locker facility Zarai Taraqiati Bank Ltd.1.2.500/- Rs.000/- Transfer of Technology ZTBL is doing efforts in transfer of technology to the farmers of rural areas to improve overall productivity of the farmers which supports in fulfilling the country¶s needs.800/- Rs. 5. Initially.Zarai Taraqiati Bank Ltd Non financial role of ZTBL Production guide line Special agrigarian appointed by the ZTBL to production guide line to the farmer. has started to serve its valued customers by offering lockers facility. apart from its core functional activity marked with country based agri-business.500/- Key Deposit Rs. in which quantity to b use and other production related goodness. tube wells. They guide farmer in which season to sow .000/- Large 13-1/2"x8-1/2"x23" Rs.3. 15. distance of rows.125/- Rs. Technology like harvesters. 10. tractors etc Punjab University Gujranwala Campus | Non financial role of ZTBL 37 .1.2. Hajj application facility ZTBL now entertain the hajj application which has not done in the past.1.000/- Medium 13-1/2"x4-1/2"x23" Rs.250/- Rs.200/- Rent after grace period Rs. rate of seeds. this facility is being offered at following 11 branches:- Type Small Specification 6-1/2"x4-1/2"x23" Rent Per Annum Rs.

Interest collected by the bank annually.Zarai Taraqiati Bank Ltd Product success & failure Successful product Under Awami zarai scheme loan is given to the farmer at the rate of 9% p. Sada bahar scheme Under Sada bahar scheme loan is given to the farmer at the rate of 9% p.a & 1 % rebate at timely payment. The principle amount will pay back when it is easy for farmer to pay. Reasons The reason is that the farmer does not have to pay the principle amount instead he pays the interest only & enjoy the principle for the long period. Punjab University Gujranwala Campus | Product success & failure 38 . After every 3 years the loan is reschedule & charge of the loan scheduling is charged by the bank. Interest collected by the bank semi annually.a & 1 % rebate at timely payment. After every 3 years the loan is reschedule & charge of the loan scheduling is charged by the bank.

mitigate poverty in the country and improve the living standard of the rural populace. White revolution Nestle & ztbl joined hands together in this regard. have been worked out and an agreement to this effect has been executed. In order to increase milk supply.this project got flopped due to lack of confidence and having disputes like kohata case Punjab University Gujranwala Campus | Product success & failure 39 . Nestlé Pakistan Ltd. modalities of Strategic Partnership of Bank with M/s. Reasons of Failure There is a lack of confidence between ztbl and nestle . Every animal take 2 to 3 years to grow up having very less demand in market due to market is unstable in term of price fluctuation and buying power of costumers .Zarai Taraqiati Bank Ltd Failure products Red meat revolution In this cost of growing up animals is very high. as a first step.

accounting system including forensic accounting and risk management function The reforms shall establish ZTBL as a key R. and communication tools Business processes: streamline products and delivery systems so as to reduce transaction costs. the bank aims to establish network of high tech rural and agri.Zarai Taraqiati Bank Ltd Future outlook The ZTBL restructuring plan covering the following.F. IT: Establish new hardware and software platforms to support MIS. simplify operations.I of the country. aiming to outreach annual rural clientele to 600. By expanding its private sector role. and increase outreach Products and services: introduce products and services that are financially economically viable Human resource development: improve standards and skills of management and staff and strengthen training capacity.000 by the end of year 2008. Punjab University Gujranwala Campus | Future outlook 40 . financial services through intermediations under public private participation and whole-sale -retail lending mechanism. Governance: establish an environment that facilitates good governance and accountability Systems: modernize operations through use of technology. networking.

The few things on which the bank has to focus is implementation of information technology with faster pace. However the bank has improved itself a lot. improving branch infrastructure and working of its human capital to make them motivated Punjab University Gujranwala Campus | Conclusion 41 . Due to a government owned organization the politicians and other higher authorities sometime use it to give benefits to their families and friends and this also effects the growth of the bank.Zarai Taraqiati Bank Ltd Conclusion ZTBL is a specialized institute which provides financing facilities to the people of rural areas and in this way it is contributing its part for the development of the country. the profit of the year of 2008-9 and decline in Non Performing Loans are clear signs of improvements.

 ZTBL has to play vital role for introducing new energies to overcome the problems of the fuel and bio gas.  Their employees have to knowledge about their organization and about its department where they are working.  Political involvement should be eliminated so that they can take good decision and actions for the better disbursement.  They should adopt the new agriculture technology for the high level production to increase the GDP level of the country.  The bank¶s logo and its color should be changed.  Employees should be qualified and productive.  Marketing department should play vital rol for introducing new products.  Fresh and energetic graduates should be select for the recruitment on the merit base.  ZTBL Head Office has to update the annual reports and manuals annually.  They should be employee and customer oriented.  Loaning procedure should be easier and convenient to the customers and easy processing system.  Introduction of DMS to overall branches Punjab University Gujranwala Campus | Recommendations 42 .  ZTBL has to started online banking system so that their customer will get benefit from their services and number customer will increase to their organization.Zarai Taraqiati Bank Ltd Recommendations  ZTBL should improve the Management system. Because the scheme was successful before but due to the some hurdles it was closed.  Bank should also be male and female oriented for the better performance of the organization. But it really highly benefited the whole country.  They have to introduce the dress coat into the organization.  They should also play role for advertise their products and features and functions of the products.  They should hire the employee on the merit basis.  ZTBl has to introduce again for Project Financing scheme.  ZTBL has to introduce ATM card service to facilitate their customers  ZTBL has to focus on commercial banking also  Introduction of New Branches to expand their business.