Industrial Development Bank of

Pakistan

GROUP MEMBERS
IJAZ UPAAL
SAUD JAVED
ASIM
HAMMAD
HASEEB AHMED

INTRODUCTION TO IDBP
The Industrial Development Bank of Pakistan is one
of the leading financial institutions of Pakistan. It
was established in 1961. Prior to nationalization of
banks in January 1974.

IDBP had a paid up capital of Rs. One billion

51% was held by the Federal Government and rest by
provincial governments, commercial banks, insurance
companies and other Pakistan private investors.

INTRODUCTION TO IDBP
A unique feature of IDBP now is that it is also
scheduled bank and an authorized dealer of foreign
exchange. The IDBP thus operates as a full fledged
commercial bank in addition to its role as a
developmental financial institution.

In 1989 the IDP began to provide universal

banking facilities to its clients.

A unique feature of IDBP

Besides Development Financing Institution it is also
a scheduled bank and
Authorised dealer of foreign exchange.

Thus IDBP extends all kinds of merchant, investment

commercial banking services to its clients which include

provision of short term advances, trade financing, lease
financing

Thus IDBP operates a full-fledged Bank in addition to its

role as a development financing institution.

BOARD OF DIRECTORS

Objectives of IDBP

As a universal bank IDBP is committed to

diversification of its banking business. It is
providing combination of commercial banking
and investment banking services to its clients.

It is maintaining close links and having extensive

consultations with its customers in private
sector.

Objectives of IDBP

The IDBP operates in frame work of the

development program for the private sector.

Its prime objective is wide flow of credit and

broad based ownership for creating middle
class of industrial entrepreneurs.

Functions of IDBP
Emergence as a Universal Bank
Broad-basing Industry

Rural Industrialization
Socio-Economic Objectives
Development Banking Business

Functions of IDBP
Merchant Banking Business
Collections of Utility Bills
Acts as refinancing agency in respect of the world

Bank and Asian Development Bank, Credit to small

scale industrial units.

Extends consultancy and technical assistance service

to clients in the execution and management of
projects.

Emergence as a Universal Bank

The Bank enjoyed a dual character as development
financing institution and as a scheduled bank.

However, in its later capacity, it provided working capital at

a limited scale to its own clients since mid-eighties.

In later part of 1980's, a notable change occurred in the

financial environment which engendered considerable
competition among financial institution providing term loan to
industrial concerns

Broad-basing Industry
IDBP operational strategy is formulated within the
priorities set forth in Governments Industrial
Policy. During the 32 years of its existence, IDBP
has approved term assistance to the tune of Rs.
23.8 billion in favour of more than 6000 private
industrial enterprises.

As food, textiles made-ups, engineering, chemicals,

electronics, furniture, metal products, paper and board and

service industries like cold storage, hotels etc.

Rural Industrialization
The process of dispersal of industries has been
speeded up in the wake of increased emphasis being
given by the government on rural industrialization.

In Last 20 years, Rs. 900.8 million or 59.7 per cent

is destined for projects to be located in rural areas.

This fact has been recognized even by Asian Development

Bank. With the increase in the number of activities being
undertaken by the Bank to meet all types of financial
needs of its clients

Socio-Economic Objectives
One of the basic criteria for sanctioning Bank's
assistance has been that the project would
contribute to foreign exchange earnings/savings.

Much of the Bank's assistance has gone into exportoriented sectors including cotton textiles etc.

which are earning considerable amount of foreign

exchange for the country.

Development Banking Business

Provides medium and long term finances
Provides guarantee, loans

Acts as refinancing agency in respect of the world

and Asian Development Bank, Credit to small scale

industrial units.

Bank

DEPOSIT SCHEMES
IDBP SPECIAL DEPOSIT CERTIFICATES\IDBP
MAHANA AMADNI SCHEME

Mahana Munafa Certificate

Term Deposit Receipt

Business Deposit Account
Profit & Loss Saving Bank Account
Current Account

DEPOSIT SCHEMES
IDBP MAHANA AMADNI SCHEME (MAS):
The minimum deposit limit is Rs.50,000/ There is no higher limit on purchase of certificates under
this scheme.

Maximum term of scheme is five years.

Zakat and W.H.Tax are applicable according to law.
Profit will be payable on the first of every month. In case

the first is a holiday, profit will be paid on the next-working

day.

DEPOSIT SCHEMES
IDBP SPECIAL DEPOSIT CERTIFICATES
(SDC):
The Minimum Deposit Limit is Rs. 50,000/

T here is no higher limit on purchase of certificates

under this scheme.

Maximum term of scheme is five years.

Zakat and W.H.Tax are applicable according to law.

Profit will payable on monthly basis.

DEPOSIT SCHEMES
MAHANA MUNAFA CERTIFICATE
(MMC) :
The minimum deposit limit is Rs.100,000/There is no higher limit on purchase of certificates under this

scheme.
Zakat and W.H.Tax are applicable according to law.
Individuals, singly or jointly and the corporate bodies or
firms and trusts may invest their funds under this scheme.
Profit will be payable on the first of every month. In case the
first is a holiday, profit will be paid on the next-working day.

DEPOSIT SCHEMES
TERM DEPOSIT RECEIPT (TDR):

Under this scheme the investors may place funds

for a fixed period ranging from a minimum of one
year to a maximum of three years.

The Minimum Deposit Limit is Rs. 100,000/-.

(For Muzaffarabad, Mirpur and Gilgit Min. Limit is

Rs. 50,000)

DEPOSIT SCHEMES
BUSINES DEPOSIT ACCOUNT
(BD A/c):
This is an attractive scheme best suited to organizations
desiring liquidity with high returns.
The Minimum Deposit Limit is Rs.100,000/Multiple deposits and withdrawal are allowed.
Profit is calculated on daily deposit.
Profit is distributed on six monthly basis.
Zakat and W.H.Tax are applicable according to law.

DEPOSIT SCHEMES
PROFIT AND LOSS SAVING BANK ACCOUNT
(PLS A/c):
Our profit on PLS saving bank account is comparable to
the highest profit given by other NCBs.

CURRENT ACCOUNT:
The Bank also offers facility for current account.

Present picture
The financial health of the IDBP is not satisfactory at
present. It is facing serious problems of non-payment
of loans. This has adversely affected the profitability
and liquidity of the Bank. The major factors
contributing to its low performance are:

inadequate legal and judicial system

general slow down of the economy
adverse impact of sanctions, etc.

Present picture
further explained that the current negative net worth of
the bank was Rs28.17 billion (up to June 30, 2009-10)
while total deposits were Rs3.836 billion. Outstanding
liabilities in respect of the government and the SBP
amounted to Rs24.921 billion.

The new focus of Bank is to shift the operational

emphasis to commercial banking operations.

Recent News About IDBP

A meeting on corporatization and restructuring of

IDBP, with Finance Minister Shaukat Tarin in the

chair, authorized the expert committee to conduct a
thorough examination of the lending process,
disbursements and write-offs.

This committee is consist of Law,state Bank and

Banker,s and Auditors.

Present picture
The meeting also agreed that the State Bank would

manage the direction of the bank after its conversion to

Industrial Development Bank Ltd (IDBL).

Shaukat Tarin asked the Banks managing director about

the negative net worth of the bank, expected recovery of

non-performing loans.

Present picture
With all these outstanding liabilities and deposits, the

meeting was told that a cash injection of Rs3.249 billion

was required to bring its equity to the level of zero.

Present picture
After the issuance of vesting order and formation of

IDBL, the SBP would take further measures while the

possibility of converting IDBL into a development
financial institution (DFI)/infrastructure bank through
public-private partnership would also be explored, the
minutes showed.

THANK YOU