CASE STUDY OF ZARAI TARAQIATI BANK LIMITED---ITS ROLE IN DEVELOPMENT OF FOOD AND FIBRE PRODUCTION---ITS FUTURE.

Agricultural production has long been a mainstay of the Nations economy, successfully feeding and clothing the domestic population as well as exporting agricultural goods. Although the ZTBL has played a vital role in agricultural development in the past, it can, however, be only as much effective as the effort put into it in a planned, organized and coordinated way. Unfortunately, the importance of proper planning for development of agriculture had never been realized by the Bank management after mid-nineties to the extent this sector demanded. Being ex-officer of the Bank I intend to share my experiences during my service in making a general analysis of the basic factors that have limited the capacity of the Bank and resultantly the agricultural production, and to identify the role which an institutional credit agency like ZTBL was required to play for effective acceleration of the efforts to achieve the goal of maximum agricultural production. HISTORY OF ADBP (NOW ZARAI TARQIATI BANK LIMITED) Banking is traditionally an industry that calls for utmost prudence and eternal vigilance in securing the safety of public funds and retaining public confidence. Stability of a bank is always based on continued public trust and solvency. Prior to mid-eighties, the Bank employees looked to the character, capacity and capital of the borrowers, while considering their loan applications. There was no corruption in the Bank on a significant or debating level. Consequently one never heard of charge sheets or employee-dismissals for acts of misconduct or corruption. A charge sheet was considered a serious weapon and was rarely used. Banking skill and knowledge consisted more of business content and less of needing a professional qualification as far as credit delivery techniques were concerned. If one were to learn the primary thumb rules of safety, security, liquidity and profitability, and basics of negotiable instruments act, he successfully managed the Branch of the Bank. Undergraduates and matriculates could control not only Bank branches, but hold responsible position even at the Head Office. Failure was an exception, and when an individual case occurred, it was felt as a dooms-day by the bank management. It was not professionalism, but pragmatism, sound commonsense, personal integrity and cleanliness that ruled the day. Today the Bank officials are not perturbed if bad advance even to an extent of rupees 5/10 lacs emerges. No one has time or concern to ponder and correct the rut that is now found commonly everywhere. The situation qualitatively changed after mid eighties. Old dedicated and experienced field staff was replaced by agricultural Graduate MCOs. During nineties top management also withered away due to natural process of superannuation and retirement. The new leadership that inherited the top layers was ill prepared to shoulder the added new burden. It lacked the traditional banking culture of trustworthiness and prudence. Selfish opportunism and adhoc adventuresome characterized the new management. They lacked vision. Personal greed replaced prudent goals for securing the Institution's interests. Why all this happened? Why wrongdoings emerged on a vast dimension in the new era, while things were smooth and fair earlier? Why the bank became inefficient and corrupt when qualified agricultural graduates and postgraduates were inducted in the system, while it remained more care taking and competent earlier with high-school passed and under graduates managed the show? The employees were then vigilant to protect and safeguard their assets, but today it is an irony that bank executives are increasingly coming under the preview of vigilance scrutiny. The custodians of public

trust and confidence are increasingly becoming untrustworthy. There is today an urgent need for strictly guarding the guardians of the Bank. The feeling of false security, wrong business objectives, and the effect of political influence exerted on the Bank in its day-to-day administration adversely affected the management of the Bank. Remote directions for routine business operations of the Bank acted to the detriment of the innate initiative, self reliance and efficiency of the senior and middle level management within the Bank. They became dumb rubber stamps to blindly ditto whatever instructions were received from the external controllers. Lack of professional training, quick promotions (vertical ascendancy without horizontal movement and without gaining experience in multiple disciplines) of the top and middle management, and cross-country transfer of staff, without planning a regular career path for them resulted in unplanned deployment of the unprepared human resources leading to imperfect operations. The Bank faced no major crisis before mid-nineties, when the personnel of the old top management were continuing and steering the course of management. But after the mid-nineties when the new generation of those in the junior cadre succeeded to top executive posts and took control of the Bank, things started drifting. The new generation of top management setup came to occupy positions exclusively on the strength of quick promotions, after putting in few years of service in the middle posts in the hierarchy. A quickly erected structure lacked stability and durability and similarly these instantly developed top executives lacked the vision and foresight that their job demanded. They lacked expertise in management needed for administering a huge corporate organization like ZTBL and motivating and activating several thousands of staff members in a goal oriented direction. The new top management inherited status and ego, but lacked personality and image to motivate, vision to foresee and commitment to supply a long-term culture and growth path. Human resource development could not keep pace with the rapid Business growth. Business remained appreciating but human resources development kept on depreciating. The executives regularly hold meetings, but no serious and sincere concern or discussion about the affairs of the Bank takes place in those meetings. The top most executives intended to provide collective wisdom and inter disciplinary expertise acts as a mere rubber stamp, leaving the field exclusively to the whims and arbitrary fancies of the Regional Managers. This absolute power with no in-built checks and controls on the Regional Managers served as the main crippling effect for the decay and downfall of the Bank. This atmosphere became a fertile ground for breeding widespread corruption at different centers, starting from the Head Office, and extending to the Regional office and finally the Branches. Chairmen of the Bank occupied arbitrary powers in a brief period of contract tenure, sure to be terminated at the near future. They lacked vision, foresight or motivation for long-term building of an edifice or culture for the Bank, but were looking only towards short-term objectives. The Bank had its own terms and ruled its own territory without competition. On the one hand debt liability of the borrowers continued inflating due to high rate of corruption prevailing amongst the Bank employees and on the other hand the Bank imposed exorbitant interest rates and exploited the farmers community with impunity. To show the better achievement in recovery of loans, the borrowers were advanced frequent loans for adjustment of their previous debts which naturally resulted into over-financing, beyond the repaying capacity of the borrowers. Unfortunately, Bank management was unable to see far enough in the future the implications of this window dressing.

Business growth continued, as it is persisting even today, but emergence of NPLs in the balance sheet of the Bank crippled its profitability and reduced its capital adequacy. The Bank started to be categorized as loss showing bank. The concept of the Debt Restructuring Plan was the logical means of resolving the deadlock between borrowers and the Bank. But it was a far-fetched idea not in co