ZARAI TARAQIATI BANK LIMITED HEAD OFFICE, ISLAMABAD CREDIT DIVISION (CREDIT POLICY DEPARTMENT) Circular No.CD/08/2023/ 62 Dated: 30.01.2023 ‘The Zonal Chiefs/Branch Managers, Zarai Taragiati Bank Limited, SUBJECT: PRIME MINISTER’S YOUTH BUSINESS & AGRICULTURE LOAN SCHEME (PMYB&ALS) 1, INTRODUCTION: The Government of Pakistan in collaboration with SBP vide IH&SMEFD Circular No. 12 of 2022 dated 12.12.2022 has launched a scheme named as Prime Minister's Youth Business & Agriculture Loan Scheme (PMYB&ALS) for populace of country aged between 21-45 years to cater their term loan and working capital financing requirements in agriculture sector. ZTBL, being participating Bank in the scheme, has developed its product, the key features of which are as under; 2. OBJECTIVE: Extension of credit facilities to youth for setting-up their agriculture business on low markup rates to be subsidized by the Government of Pakistan. 3. SECTORS & PRODUCTS: All crop and non-crop sectors (including crop production, livestock, poultry, fishery, dairy ete.) through Short Term Production and Medium/Long Term Development loans. 4. ELIGIBILITY CRITER! i, All citizens of Pakistan, aged between 21 and 45 years with entrepreneurial potentiaV/engaged in agricultural/cottage activities are eligible. ii, Customers may avail 2 loans (one short term & one long term) within his MCL. iii. No Govt. employee can avail financing under this scheme. iv. Defaulter of ZTBL or any other Financial Institution is not eligible for financing under the scheme. .Only regular genuine borrowers will be provided the facility of enhancement of loan tir vi. Valid copy of CNIC vii, Clear e-CIB report from SBP. viii.Obligors Risk Rating (ORR) upto 4 5. OPERATIONAL JURISDICTION: The scheme will be applicable in all ZTBL branches located across the country. & 16, DOCUME 1) Loan Application on PM Youth Online Portal. 2) Mechanism of application: i, PM House is the controlling agency under which National Information Technology Board (NITB) with the collaboration of NADRA has developed an online portal for applications under this scheme. ii, Borrower will lodge application for Bank of his own choice. iii, Afterwards, application will be assigned to the relevant Bank for processing. iv. PM House has already assigned Admin and User rights to the relevant Bank personals who will be responsible for scrutiny of applications and forward the same to Branch for further processing, v. Field functionaries will be responsible to guide people about the scheme and filling of application forms on online portal. 3) ass Book/Fard Jamabandi/Alienabi 4) Recent Photographs (2) Certificate 7. DETAIL OF CREDIT CHARGES: Following credit charges would be applicable under the scheme: - 1) | Documentation charges | Rs.200/- ii) [Loan Appraisal fee | Rs. 100/- per loan case will be charged inclusive of | NADRA online verification charges. | Ti) | Postal charges Rs,500/-Short Term Production Loan Rs. 1000/- Medium Term Loans Rs. 2000/- Long Term Loans iv) | CWR charges Rs. 50/- per borrower 8. MAXIMUM LOAN LIMIT: ‘+ The per borrower/party loan limit for Production Loans under the scheme would be ranging from Rs. 1.500 million to Rs. 2.500 million, "The per borrower/party loan million to Rs. $.000 million. for Development Loans under the scheme would be Rs. 1.500 9. DEBT: EQUITY RATIO: = 80:20 + 20% of the loan amount will be deposited by the borrower or will be invested towards the project. 10. TENURE OF LOAN: = For short term production/working capital loans ~ $ years. = For development loans — 8 years,1, MARK: RATE: ‘+ Markup rate for this scheme has been fixed by the GOP as KIBOR + 3% pa. * 7% markup on loans will be paid by the borrowers * Government of Pakistan will bear the differential markup @ KIBOR + 3% - 7%, payable to the Bank upon lodging of claim with State Bank of Pakistan on quarterly basis. 12, SECURITY/COLLATERAL: The loan would be secured against all types of tangible properties/securities acceptable to the Bank including; Agri. Land * Land & Building in urban areas. 13. RISK MITIGATION: Government will bear credit losses (principal potion only) on the disbursed portfolio of the Bank Upto 10% on first loss basis. 14. FOCUS ON LENDING TO WOMEN: 25% of the loans will go to women borrowers. The designated women champions along with other female field staff will be responsible for dissemination of maximum information about the scheme to female borrowers. They will also help them in filling in the application forms, 15. SANCTION OF LOAN: Loan will be sanctioned by the Central Loan Sanctioning Department (CLSD), at Head Office upto Rs. 5.000 million 16. DISBURSEMENT OF LOAN: = Loan will be disbursed through deposit account of the borrower. "Disbursement is allowed to be made in tranches, * No reversal of disbursement will be allowed after day end. 17, REPAYMENT OF LOA\ * Short term production/working capital loans will be recovered within 5 years wherein only markup will be payable during first 2 years and thereafter both principal along with the markup will be paid in next 3 years making it total repayment period of upto 5 years. + Development loans will be recovered within 8 years in half yearly installments, 18, SCHEME CODE & G.L. HEADS: ‘The branches are advised to book the loan under Scheme Code 237 in following GL Heads; + For Production loans: 9256 * For Development loans: 9428 &19, CHECKS & BALANCES: * 40% loans out of total allocation of funds in the scheme would be disbursed to new borrowers (NTBs) & 60% to existing borrowers upon repayment/closure of previous loan * _ Noloan would be extended to any intending borrower beyond his/her repayment capacity/DBR. * CNIC of the applicants would be verified through NADRA on discounted charges of Rs. 10/- through a special agreement between ZTBL & NADRA. * Online applications will be received on PM Youth Portal (PMYP) hosted and controlled by National Information Technology Board (NITB) and will be forwarded to Banks for processing/disposal * Disbursement of loan in the scheme will be made within approved allocation of SBP to ZTBL upto Rs. 7.00 billion for 2023. * In case of default, after loan classified into NPL category, normal markup/tetumn will be charged. 20. MONITORING Close monitoring of the scheme would be carried out by the respective Bank authorities, PMYP. SBP and other stakeholders. 21. ACCOUNTING PROCEDURE: Accounting Procedure for the scheme is annexed as Annexure-I Enel: (As above) ee (ARSHAD HAS ‘AN) EVP (Credit Division) Copy to: - 1) PS to President, ZTBL Head Office, Islamabad. 2) All Group Heads/CFO/CIA/CCO/Company Secretary, ZTBL Head Office, Islamabad, 3) All Divisional/Departmental Heads, ZTBL Head Office, Islamabad, 4) Treasurer, Treasury Division, ZTBL, Karachi 5) Provincial Chief (Punjab), ZTBL, Lahore. 6) All Regional General Managers/Area Chiefs in the field. 7) All Incharges, ZTBL Audit Zones/LLUs in the field, 8) Training & Development Division, ZTBL Staff College, Islamabad 9) Web Management Unit, DCED, DBD, ZTBL HO, Islamabad for uploading the same on ENB, 10) File No, CP-1(158/2023/ 11) File No. HRPD/50(5Y2020 » {\ all Mage? (MEHBOOB UR REHMAN) Head (HR Policy Department)<= ACCOUNTING pRocenURE EDURE FOR PRIME muvtsTER's GRICULTURAL LO, .N SCHEME (PMYB&, ria 01. At the time of openin Bass the entry es telomere OF Cees! Account of the borrower, the bronch will [sae pene eee icharger {inclusive of all faxes & levies). the following entries will be Cr. 7010, Loan opplication fee ee 03, __At the time of loan disbursement under the Scheme, the folio Ysbursement ur 7 wing entry will be Passed by the branch: Dr, 9256 Prime Atnister's Youth Busnese & Agriculture Loan Scheme (PMYBEALS) OF. 9428 Prime Minister's Youh Business & Agricutore Loan Scheme (PUYB&ALS) Cr. 2101 Curent Account of the borrower concemed 04. Mark Up wil be occrued on the basis of outstanding principal belonce under the scheme as per standing instructions of the Bank and the following entries wil be Passed through system: - AMOUNT OF MARKUP TO BE RECOVERED FROM L (A) Dr. 6362 Accrued Mark-up on loons Cr. 7103 Markup DIFFERENTIAL MARKUP AMOUNT RECEIVABLE FROM SBP (8) Dr. 6644 Differential morkup receivable rom SBP uncer PMYB & ALS Cr. 7171 Income Account from PMYB & ALS. 05. On receipt of recovery of Loan [erincipol + markup) trom borrawer under the ‘Scheme, the following entries wil be posses by the branch: - Dr. = Cash Account/Deposi! Account of the Loanee Cr. 9258 Prime tinier’ Youth Business & Agriculture Loon Scheme (PAIYBSALS) Cr. 9428 Prime Miners Youn Basins & Agrculire Loan Scheme (PAYBRALS) Er. 6362 Accrued Mark-up on loans 06, Treasury, ZTBL, Karachi on receipt of cifferential markup amount from $8 and wil send the same to Budget & Funds Mcnagement Depariment, 2781, HO, Iskomabed by passing the following entry: Or - Deposit Account with saP Cr. 6969 Miscellaneous ~ ZTBL Central Account 07. The Budget & Funds Management Deparlment, Z1BL, HO, Islamabad on receipt of crecif advice form Treasury, ZTBL, Karachi and will send the some to conceined ‘branches ater responding of Treasury advice by passing the folowing entries - IA) Dr. 6969 Miscellaneous - ZBL Central Account Cr. 6644 —_Diferentio! morkup receivable from SBP under PMY & ALS The advices are to be auto orlginaled of Head Olfee for concerned branches (8) Br, 6844 Different! morkup receivable trom SB° under PMY8 & ALS, Cr. 6969 Miscellaneous ~ ZTBL Central Account 08. The following entry wil be auio responded through system in the conceinea. ‘branch's books:- Dr. 6969 Miscellaneous ~Z78L Central Account Cr. 6644 —_illerentiol markup receivable from SBP uncer PMYB & ALS ‘NOTE FED/PST and Withholding Toxes will be decucted at prevoling prescribed rote & Procedure, where applicable and transferred fo HO as practice already in vogue. Annexure-| 4