Agricultural Banking of Pakistan

Acknowledgement
All praise and gratitude due to ALLAH ALMIGHTY who created man in His own image and enjoyed upon him to travel on the earth and enter into a profound and analytical study of Universe for spiritual appreciation of ALLAHS unity and His attribute as well as for harnessing the material manifestation of the world to the mankinds profitable utilization. In the first place, therefore we express our utmost thanks to ALLAH. At the next stage I offer our gratitude to our Apostle and prospector Prophet Muhammad (P.B.U.H) for his golden saying Gain knowledge is in China. We would like to express my gratitude and appreciation to all those who gave me the possibility to complete this report. A special thanks to our Course instructor Mr Ahmad Imran whose help, stimulating suggestions and encouragement, helped me to coordinate my project especially in writing this report. We take this opportunity to express my profound gratitude and deep regards to my guide Mr Ahmad Imran for his exemplary guidance, monitoring and constant encouragement throughout the course of this thesis. The blessing, help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark. We also take this opportunity to express a deep sense of gratitude to Syed Amjad Ali Gillani, Manager, ZTBL, for his cordial support, valuable information and guidance, which helped me in completing this task through various stages. A special thanks goes to my team mate, Mr Muhammad AwaisIqbal, Mr Kamran Saqib,WajeehaShafqat , who help me to assemble the different aspects of the report. I am obliged to staff members of ZTBL, for the valuable information provided by them in their respective fields. I am grateful for their cooperation during the period of my assignment.

DECLARATION
We hereby declare that the project work entitled Agricultural Development Banks of Pakistan Submitted to the Institute of Management Sciences , is a record of anoriginal work done by us under the guidance of Mr Ahmad Imran, Course Instructor Money & Banking , and this project work is submitted in the partial fulfilment of the requirements for the completion of the course Money and Banking.

Executive Summary
Banks play an important and active role in the economic development of country. If the banking system in a country is effective, efficient and disciplined, it brings about a rapid growth in the various sectors of the economy such as agriculture, industrial, and the SME sectors. If the banking system is unorganized and inefficient, it creates maladjustments and impediments in the process of development. In Pakistan, the banking system is very well organized. The SBP established on July 1st, 1948 stands at the apex and is responsible for the operation of the banking system in Pakistan. The other banks such as commercial, specialized or unspecialized banks which form the banking structure in the Pakistan are playing an active role in the ZTBL has provided many products and services for their customers. The product and services of the ZTBL can raise the living standard of rural areas and develop the agriculture sectors of a country as well. The Pakistan is an agriculture country and the products and services of the ZTBL plays very important role in increasing the GDP and accelerates economic growth. For this purpose, the ZTBL provides many facilities for their customers, such as provides schemes and loans, obviously help the customers to invest money in their businesses, to get maximum profit from it and to pay low interest rates. Banking is one of the most sensitive businesses all over the world. Banks play very important role in the economy of every country all over the world and Pakistan is no exemption. This report is about one of the leading Agriculture Bank of the Pakistan known as ZaraiTaraqiatiBank Limited. ZTBL is playing its one of the most important role in the development of the Agriculture Sector of the Pakistan. On 14thDecember 2002, under the ordinance of the Agricultural Development of the Pakistan 1961, ZTBL was incorporated as Public Limited Company. This Bank severs its venerated customers in the form of different customized products. It is providing both type of severs financial and non-financials mostly to its clients of the rural areas of the Pakistan, which comprises of 68% of the Pakistans total population. The bank has country-wide network in the form of 349 branches and is severing round about half of the million clients annually and over accumulated account holders with the average loan size of around Rs.89, 000 serving 65%, 31% & 4% of subsistence, economic and large growers respectively.

Agricultural Banking
The agricultural banks (specialized banks) are set up to provide financial assistance to the agriculturists. The agriculture banks provide short-term credit to the farmers for the purchase of seeds, fertilizers, pesticides, fuel.etc. They also make medium term advances for buying tractors and introducing modern techniques in farming. The role of agriculture in Pakistan economy is of pivotal nature. Due to diverse geographical and climatic conditions, the country has tremendous potential for agricultural growth and development Agriculture and Rural Business Division (ARBD) has gained further strength with improved and efficient delivery and control mechanism for meeting increased demand for credit by the farmers in easy, accessible and affordable manner. With an innovative product range, being best rated in the market, many banks are continues to surpass its allocated targets for agriculture financing. While focusing on business development, this unit also achieved further refinement in back office processing including credit initiation, operations, risk management, in line with the business dynamics and regulatory framework. ARBD has extended to 89 branches across the country and remains proactively engaged with its stakeholders for aggregation of services and improving life standard of farmers through its distribution network. Pakistan is basically an agricultural country, and finance has been needed 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 task of providing financial facilities for the development and modernization of agriculture, including: Forestry Fishery Animal Husbandry Poultry Dairy Farming

Later on the Agricultural Development Bank of Pakistan was also established in September 1957, under the Agricultural Development Bank Act. The Bank is to provide credit in cash or in kind, warehousing and storage facilities to agriculturists, cooperative societies and other bodies, of which the majority of members are agriculturists. 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, they were merged into one organization known as Agricultural Development Bank of Pakistan on February 18. 1961. The Agricultural Development Bank of Pakistan is a banking company for the purpose of the Banking Companies Ordinance and the State Bank of Pakistan Act.

INTRODUCTION
History of the Bank Pakistan is one of the agricultural country, about 75% of its population is directly or indirectly associated with agriculture. Due to its widespread and extensive canal system, its land is very fertile. The Agricultural Development Finance Corporation was steeped in 1951, keeping in view the need of finance to rapid development of agriculture sectored. It also provides financial facilities for the development and modernization of agriculture, including forestry, fisher, animal husbandry, poultry and dairy farming. Under the Agricultural Development Bank Act, the Agriculture Development Bank of Pakistan came in being in September 1957. Under this Bank, the agriculturists, co-operation societies and others were provided the facilities of credit in cash, warehousing and storage. Agricultural Development Finance Corporation and the Agricultural Development Bank were similar in function and government provides capital to both of them. Later On February 18, 1961, due to their similar functions these both came under the single banner of Agricultural Development Bank of Pakistan. Agricultural Development Bank of Pakistan (ADBP) Under the ADB Ordinance 1961, the Agricultural Development Bank of Pakistan (ADBP) was established originally. Then, ADBP was reorganized into a public limited company, with the purpose of ensuring better governance and the provision of high quality financial services to its rural clientele. Then all assets, business, contracts and liabilities of ADBP were taken by theZaraiTaraqiati Bank Limited (ZTBL and on December 14, 2002 and started its countrywide operations as a public limited banking company. 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 PRs. 5000 million per annum for the development and modernization of agriculture.

Evolution and Conversion of ADBP into ZTBL

Agriculture Development Bank of Pakistan (ADBP) was converted into ZaraiTaraqiati Bank Ltd (ZTBL) by the Federal Government and it started its operations with profound effect. It was restructured accompanied with new board of directors and was titled as public limited company. Its aim under the presidential ordinance was to ensure good governance, autonomy, delivering high quality, viable and timely financial services to a greater number of clientele in the agricultural and rural segment of the country with adequate return to the stake holder. In 1984Zarai Taraqiati Bank (ZTBL) under the companys ordinance was registered with SECP as a public limited and by virtue of finance order, all assets, liabilities proceeding undertaking of theADBP stands transferred to and vested in ZaraiTaraqiati Bank with effect from December 14, 2002.The conversion of ADBP into ZTBL had a conditionality of the Asian Development Bank (ADB) loan framework as per which a restructuring exercise was initiated. The restructuring process entailed ADBs Rural Finance Sector Development Program (RFSDP) with the objective to transform ZTBL into a sustainable Rural Finance Institution. It also included the up-gradation of Information technology (IT) infrastructure for

which funds from ADBs loan were to be utilized. As part of the overall organizational revamping strategy, the bank has taken several initiatives to enhance its lending activities while adopting a prudent approach with regards to credit quality. Kisaan Support Services (Pvt.) Limited (KSSL), a subsidiary of ZTBL, has been engaged to sell fertilizer to farmers at subsidized rates, while a Memorandum of Understanding (MoU) is signed between KSSL and Pak Arab Fertilizer to ensure timely availability of agricultural inputs. The main aim behind the restructuring of ADBP and its conversion into ZTBLis extend swore credit to the needy segment of highly productive and yielding Agri and non-farm activities. It was done keeping in the mind that this step shall greatly add to the credit distribution mechanism. National Operation The ZaraiTaraqiati Bank Limited runs its operation in whole Pakistan and also outside Pakistan and the persons conducting such business. The banks total manpower is 7665 having 4515officers and 3150 staff. It has 49 regional offices and 342 branches throughout the Pakistan including the Federally Administered Tribal Area (FATA), Federally Administered Northern Area (FANA) and Azad Jammu and Kashmir. ZTBL while completing its period of 42 yearsoperational activities tried to serve the forming community through the country for their medium and long-term development credit needs organizationfirst the head office of the ZTBL was located in Karachi and was shifted to Islamabad later during 1973. Presently there are 9 division and 33 departments in the head office. It has 49regional offices and 343 branch offices apart from 8 audit directorates in the field, two staff colleges at Islamabad and Karachi. To cater for loan requirement of the forming community at their door steps over 1408 Mobile Credit Officers have been deployed in the field, each covering25 villages in an average.

ROLE OF ZTBL IN THE ECONOMIC DEVELOPMENT OFTHE PAKISTAN

Banks play an important and active role in the economic development of country. If the banking system in a country is effective, efficient and disciplined, it brings about a rapid growth in the various sectors of the economy such as agriculture, industrial, and the SME sectors. If the banking system is unorganized and inefficient, it creates maladjustments and impediments in the process of development. In Pakistan, the banking system is very well organized. The SBP established on July 1st, 1948 stands at the apex and is responsible for the operation of the banking system in Pakistan. The other banks such as commercial, specialized or unspecialized banks which form the banking structure in the Pakistan are playing an active role in the economic development of the country. The role of the ZTBL in order to achieve economic growth and development of the Pakistan is briefly explained as under: 1. Development of Agriculture & Industrial Sector. The ZTBL particularly in rural areas of Pakistan are now providing credit for the development of agriculture & industrial sector. The provision of credit to agriculture &industrial sector has greatly helped in raising agricultural productivity and income of the farmers. This has led to increased demand for industrial goods and expansion of trade

&industry. The use of bank drafts, cheque, bills of exchange, credit cards.etc., has revolutionized both national and international trade. 2. Banks Promote Capital Formation. The ZTBL plays an important role in rising of the financial resources. They encourage savings by giving various types of incentives to the savers. They expand branches of the banks in the rural and urban areas and mobilize savings even at far of places. These savings are then made available to the businesses which make use of for productive purposes in the country. 3. Investment in new Enterprises. Businessmen normally hesitate to invest their money in risky enterprises. The ZTBL generally provide short, medium& long term loans to farmers to invest in new enterprises and adopt new methods of production. The provision of timely credit increases the productive capacity of the country. The organized banking system helps in directing physical resources into productive channels. It also keeps a balance between the availability and requirements of the capital in the country. 4. Balanced Development of different regions. The ZTBL plays an important role in achieving balanced development in different regions of the country. They help in transferring surplus capital from developed regions to the less developing regions. The trade industries etc. of less developed regions are ableto get adequate capital for meeting their business needs. This in turn, increases investment, trade and production in the country. 5. Monetization of the Economy. The commercial banks by opening branches in the rural and backward areas are reducing the exchange of goods through barter. The use of money has now greatly increased the volume of production of goods. The non-monetized sector (barter economy) is now being converted into monetized sector with the help of commercial banks. 6. Implementation of Monetary Policy. The central bank of the country controls and regulates volume of credit through the active cooperation of the banking system in the country. It helps in bringing price stability and promotes economic growth within shortest possible period of time. The ZTBLunder the supervision and guidance of the SBP help in implementing and achieving the objectives of the monetary policy which vary from time to time. 7. Financing Development Projects. The ZTBL provide short, medium & long-term loans for financing of development projects both in private and public sectors. The ZTBL starts projects with the Ministry of Food, Agriculture &Livestock (MINFAL) launched an integrated development program entitled

Crop Maximization Project in 15 districts. The MINFAL will provide funds to the tune of Rs.299.833 million to the ZTBL and thus help in accelerating the rate of economic development in the country. 8. Booting the Exports: In order to boosts the exports of the agriculture and industrial goods of the Pakistan, the banks have established export promotion cell for the information and guidance of the exporters. 9. Less Reliance on Foreign Capital: A planed banking system by launching vigorous campaign of mobilizing idle saving in the country can meet the capital development requirements from within the country. The country will thus have to rely less on foreign capital for financing in the development projects.

Investment Policy of Agricultural Banks

The organization of the Department is spread over the following Divisions: 1 2 3 Agricultural Credit Estimation & Target Monitoring Division Agriculture & Rural Finance Policy Division PSCAC Secretariat/ Coordination & Services Division

Brief functions of each Division are as under:

I. Agricultural Credit Estimation & Target Monitoring Division

Agricultural credit estimation/ assessment in consultation with stakeholders. Allocation of indicative agricultural credit targets to banks. Periodical monitoring of agricultural credit targets. Undertaking all functions relating to ACAC. Follow-up for implementation of ACAC decisions. Monitoring Credit lines to PPCBL &ZaraiTaraqiati Bank Ltd. Managing the claims of bonafide losses of five big commercial banks. Collection of periodical agri. finance data from banks and its dissemination. Responding to Senate/ National / Provincial Assembly questions. Preparation of reviews/ write-ups on agri. credit for various publications.

II. Agriculture & Rural Finance Policy Division

Reviewing agri/ rural finance in terms of issues/ challenges faced, developments taking place in agriculture/ rural finance both in the country and elsewhere, developing an adequate knowledge and information base for policy formulation, etc. Introducing new products, schemes, guidelines in agri/ rural finance in consultation with banks and stakeholders to catalyse growth and activity in the sector. Providing guidance to banks in understanding agri/ rural finance policies/ issues/ PRs of SBP, etc. Formulation of agriculture & rural finance policies in consultation with stakeholders. Coordination with Federal and Provincial Government departments on agriculture finance policies and issues. Reviewing/ amending existing agri/ rural finance policies, instructions and Prudential Regulations, etc. based on new developments and feedback from stakeholders. Organizing periodical meetings with agri. heads to discuss their performance and issues being faced in agriculture finance. Acting as an executing agency for SBP component of Agribusiness Finance Development Project of ADB. Managing developmental projects of the department in collaboration with other divisions/ units/ departments.

III. PSCAC Secretariat/ Coordination & Services Division Coordination with stakeholders and formulation of working groups/ committees for making recommendations to increase the flow of credit to various sectors of the economy. Preparing working papers for the PSCAC meetings. Conducting the meetings. Preparation of minutes and follow-up action plans. Implementation of follow-up actions in collaboration with all concerned. Administration, logistics, dispatch and support services for smooth running of the Department. Preparation of Business Plan & Budget for the Department. Initiating and undertaking information dissemination and awareness building programs for farmers and special training programs for commercial banks.

ZTBL
Vision Statement
Emerge as a Leader in provision of agriculture credit by promoting and sustaining productivity through a market/agribusiness focus. To bridge yield gaps of all agriculture commodities and tonsure that the welfare of farming population is radically improved and the environment is protected from harmful human interventions.

Mission Statement
To become a leader in guiding entrepreneurs & farmers implement an agribusiness and marketing led approach that brings strong commercial orientation in production catering domestic and international markets. As a specialized agriculture development bank, deliver pragmatic technology and optimal solutions to farm communities and rural areas across all agro-ecological zones with sensitivity to economic growth and equity. Develop close partnership and linkages with all its clients to dramatically transform, restructure and revamp the agriculture scene and enhance its outreach by investing wisely and judiciously in new approaches, ideas and means of mass communication.

Corporate Objectives
The prime objective of ZTBL incorporated under the companies ordinance 1984 is to provide rural and agriculture sector and mitigates poverty. The credit facilities in rural areas shall be provided in cash or kind at a market based a mark-up rate that ensures operational and financial sustainability of the bank. The ZTBL is to Develop and operate as a financially and operationally sustainable R.F.I of the country. To assist rural community, particularly the small farmers, in raising their productivity and income levels through timely delivery of credit, advisory and ancillary services. BuildZTBL's image as a proactive, client friendly, financially & operationally sustainable with indigenous product deployment. Establish and provide backward and forward linkages to strengthen agri. value added commodity chains. Engage in public - private and wholesale - retail partnership to deepen outreach and reduce operating cost. It functions as a rural commercial bank to mobilize rural capital formationand to commercialize the agri. sector by delivering the true value of credit to the client. Provide aide range of risk insurance products to its clients. Open up its venues of operation to Domestic& International Banking Industry to avail comparative advantages.

Nature of Business
ZaraiTarqiati Bank is to provide credit facilities to the farmers, including hiring and renting of anything 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 and provide sustainable rural financing services, particularly to small farmers.

Management Hierarchy
The general direction and superintendence of the affairs of the bank are entrusted to a 12 members Board of Directors consisting of chairman appointed by the Federal Government, the Federal Government officers from the Ministries of Finance and Food and Agriculture, four officers of the four Provincial Governments and onion official nominated by each province. One member on this board represents the State Bank of Pakistan also. However, at present the bank has 7 directors including chairman. The bank also has a president appointed by the federal government and a company secretary. In ZTBL, the president supervises and directs the Chief Executive Officer who supervises and directs the Head of Department, who then supervise and direct the officers under them. The management hierarchy of bank is as follows; Earlier the bank was functioning like a pure government institution and permission has to be sought on every step for moving forward. Now the bank management board will be fully empowered to run the affairs of the ZTBL.More than 2,000 employees of the bank have opted for Voluntary Golden Hand Shake Scheme, offered by the bank to its employees. Bank has established a task force for improving the operational performance of the staff and it was monitoring the disbursement, recovery operations and performance of field functionaries. The taskforce comprised 10-15 officers and each officer will head a desk exclusively to monitor 3-4 regions. This task force will be responsible to evaluate performance of each MCO, Manager and Regional Manager on the achievement of banks policies regarding credit and recovery periodically.

Board of Directors:
Syed Qamar-Uz-Zaman Shah Chairman Board Mr. Muhammad Zaka Ashraf President/ CEO Mr.Yawar Zia Director Mr.QamarZamanChaudhry Director Mr.MuhammadIftikhar Khan Mohmand Director

Mr.Tauqir Ahmad Faiq Director Dr. Khalid Ahmad Khokhar Director Mr. Imam Bux Sheikh Director Mr.Muazam Ali Company Secretary

PRODUCTS & SERVICES OF ZTBL

The ZTBL has provided many products and services for their customers. The product and services of the ZTBL can raise the living standard of rural areas and develop the agriculture sectors of a country as well. The Pakistan is an agriculture country and the products and services of the ZTBL plays very important role in increasing the GDP and accelerates economic growth. For this purpose, the ZTBL provides many facilities for their customers, such as provides schemes and loans, obviously help the customers to invest money in their businesses, to get maximum profit from it and to pay low interest rates.

Products offered to Meet Finance Need of Farmers

ZaraiTaraqiati Bank Limited (ZTBL) is a specialized bank providing agricultural credit in rural areas of the country. Pakistan is an agricultural country and near about 60% of its population is working directly or indirectly related to agriculture industry. But instead of being an agricultural country Pakistan is still not gaining benefits from this sector which it can gain. Some time we even does not able to fulfil your food requirement and sometime we have bumper crop but does not have facilities to store them properly, in this way we are wasting our resources. To gain benefit from agriculture sector it is required tube modernized to increase the per acre production and also to build warehouses to store. The main hindrance in the modernization of agriculture is the unavailability of finance. The other financial institutions feel reluctant in giving finance to farmers due to high level of risk in the production of this field. To facilitate farmers and to help in modernization of agriculture sector the government has established this bank which is contributing its part in achieving government objective from many decades. ZTBL is offering a blend of products tofu fill the need of different types of customers

SCHEMES OF ZTBL The ZTBL provides various schemes for customers, in order to strengthen the rural and agricultural sector of economy, mitigate poverty and accelerate growth. The Schemes of the ZTBL is which is briefly explains as under; Sairab Pakistan Scheme: The ZTBL can raise the irrigated area for the purpose to accelerate rate economic growth and to facilitate the farmers. The ZTBLhas assigned the collaboration agreement with the KSB Pumps Company Limited under the Sairab Pakistani Scheme. The ZTBL will provide loans to the farmers for installation of tube wells and turbines whereas KSB Pumps Company Limited will provide quality pumps, turbines, equipments to borrowers for efficient pumping of waters. The water can plays vital role to improve per acre yield. Out of total 31million hectors area of the Pakistan, 22 million hectors is cultivated while 9 millionhectors is not cultivated & waste mainly due to non-availability of water. More over increase in water supply being a key input is required to raise cropping intensity and hence the income of the farmer. Since inception the ZTBL financed over 143000 tube wells amounting to Rs.15 billion. The KSB Pumps Company will provide quality machinery and equipment for efficient pumping of water. The company shall also provide after sale service including replacement of parts and availability of spares through its network of dealers despite technological advancements and rapid growth of industrial sector, agriculture is still the back bone of the Pakistan's economy. It contributes 22% towards the GDP and employs nearly 45% of country's labour force. It provides raw material for preparation of industrial products. So it has both pulled & pushes effect on the economy. Supervised Agriculture Credit Scheme: Under this scheme agriculture loans are given for short, medium and long term loans up to Rs.1 million per borrower. The loans are sanctioned for fats, livestock, orchard, tractor, agricultural machinery, tube well and irrigation facilities. Under the scheme besides provision of credit, information is to the farmers for planning the farm, production, guidance for implementation of the scheme, marketing and repayment of loans.

White Revolution Scheme: In order to modernize the dairy farming for increasing milk supply, mitigate poverty in Pakistan, and improving the living standards of the rural areas in Pakistan for the purpose to achieve growth and development in agriculture sector of Pakistan, the ZTBL may start the Strategic Partnership Agreement with the Pakistan Development DiaryCompany (PDDC) and the Nestle Pakistan Limited (NPL) under the white revolution scheme. Under this participatory approach, the diary sector would be modernized with a view to increase milk supply, mitigate poverty and improve the living standard of the rural population. The ZTBL has earmarked funds to the tune of Rs.5000 million for financing of 50,000 animals (buffaloes and imported cows) during the five years period 2007 to 2011. ThePDDC will also

help the ZTBL in the selection of clients and processing of loan cases. Initially the schemes will be for modernization of 5000 farmers during 5 years period involving Rs.700 million. Under the scheme 1000 farms would be covered on yearly basis. The modernization of dairy farm will be carried out through financing milk cooling tank, generator, voltage stabilizer, hot water geezer, water pump, cooling pad and other dairy equipment. There would be maximum limit of loan of Rs.1 million per borrower party. ThePDDC would bear the entire amount of mark-up charged in the loan cases & provided the 50% of principal part of loan is repaid in time by the borrower. The remaining 50% amount of principal along with the amount of mark-up would be paid by the PDDC.The Nestle Pakistan Limited would help to select and identify good clients for the ZTBL to improve quality breed of foreign and local dairy animals. The NPL can provide technical guidance to the farmers through nestle veterinary doctors. The NPLwould purchase milk through its network and make weekly payments of milk sale to the ZTBL for the adjustment of loan. Micro Credit Scheme: This Scheme has been launched since 15th July, 2000for the uplift of rural poor. The landless poor such as; tillers, harries and small landowners having land not exceeding 2 acres may avail loan under Micro Credit Scheme. It is operational in all branches of the ZTBL through all the Mobile Credit Officers. Both, men and women may obtain loans under the scheme as an individual or as a member of group of 5-10 members. The minimum credit limit is Rs. 5,000while maximum credit limit is Rs.25, 000. One hundred and thirty six income generating activities or cottage industry items have been identified for lending under the scheme. The loan may be advanced against one surety with 50% solvency of the assessed value of property owned by the guarantor or security of tangible property. Being small loans involving high cost 18% per annum mark-up is charged, whereas2% rebate is given on timely repayment. All loans under these Schemes are recoverable within 18 months after disbursement of loan. Zarkhaiz Scheme (One Window Operation): For timely and conveniently provision of credit to purchase inputs, loans is provided to the borrowers under this scheme being conducted twice a week during Rabi &Kharif seasons. All the related departments such as revenue, agriculture, post office.etc. attend the focal points which are established at convenient places. The farmers get their pass books prepared and loan applications processed on the same day whereas sanction payments are made within three days at branch. For Rabi crops, one window operation from October to January and for Kharif crops from April to September each year which is extendable as per requirement of particular area. SadaBahar Scheme: For providing timely input loans for crops and working capital for poultry and fishery etc., the ZTBL has launched a SadaBahar Scheme. This scheme is also known as Revolving Finance Scheme. The assessment for inputs requirements for the whole year is made at the time of first application. The amount so assessed is treated as revolving limit provided it is

within the security limit. The managers are authorized to sanction such loan limits up to Rs.5 Lake. The salient features of the scheme are given as under: 1. Revolving Credit Limit is fixed to cater production credit and ancillary requirements of the farmers during one year period. 2. The borrowers can draw the credit in lump sum or in instalments according this requirement. 3. The borrowers can repay in lump sum or in instalments during the year when his cash position allows him. 4. The Pass Book containing transactions in his account is supplied to every borrower free of cost.

Tea Financing Scheme: In order to increase the tea cultivation in Mansehra,Swat, Mutta and Dir in Malakand Division, the tea financing scheme has been introduced which would not only save the hard earned foreign exchange.

Kissan SupportServices Ltd.

Subsidiary of ZTBL
Kissan Support Services Ltd. 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? KSS Aim To provide support staff to ZTBL &under takes its non-core activities. KSS Operation Kissan support services operate under its Memorandum & Articles of Association.

Objectives
The main objective of KSS is following: To provide to the Bank all kinds of support staff and ancillary services To plan, organize and establish training facilities to impart training to the banks 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, vocational training, sports and recreation facilities To invest any surplus money of the company not immediately required To carry on any business, which may seem to the company capable of being conveniently carried on To liaison & establish contracts with agricultural research organizations for development of efficient, effective and appropriate technologies To carry on business of providing consultancy, advisory and other agency services and support services to ZaraiTaraqiati Bank Limited To provide to the Banks clients quality products and services for efficient and improved farming. Services/Activities so far undertaken by KSS Security Services to ZTBL Recruitment/provision of staff Janitorial Services provided to:a.ZTBL Head office buildingsZTBL Farms.Staff College.Printing stationery office .AV Unit.Old record office. Sports club.Warehouse Management of Sports Activities Management of Sports Activities Photocopy Services Day to day minor repair and maintenance of ZTBL HQ Buildings

Types of loans
Banks provides loans through various products/schemes for short, medium and long term depending on the cash flow of the borrowers. The bank gives special focus and importance to fulfil the genuine and real needs of the small farmers in terms of production loans (seed, fertilizers, pesticides, POL, labour charges etc.) as well as for working capital purpose. These loans are provided to the needy farmers in cash and kind under various schemes like SadaBahar, AwamiZarai, General Credit and One Window Operations Zarakhazi Schemes. The bank also provides Development loans to farming community like tractors, allied agriequipment /implements, besides loans for poultry and livestock, fisheries, orchards, plantation, and irrigation schemes etc. Types of Loans Advanced 1. Short Term Loans Short term loans are loans for shorter period of less than a year. It includes, crop production working capital loans recoverable in lump sum commencing after the harvest/marketing of respective crops and within maximum period of 12 months. 2. Medium Term Loans

Medium term loans are for a period of more than a year but less than 5 years. In includes, dairy farming and livestock etc. The instalments of these loans are usually paid able in quarterly or half yearly basis. 3. Long Term Loans Long term loans are for a period of more than 5 years. These are development loans which require large amount and also need some time to show its result in the shape of better production. It includes loans for tractor, agricultural machinery, poultry farming,god owns and orchard in yearly/half yearly instalments within maximum period of 8years.

Maximum Credit limit Maximum limit of loan is Rs.1.00 million per borrower/party.

Lending Criteria The bank advances preferably to small farmers and following criteria is observed in overall distribution. Subsistence farmers 70%Economic farmers 20%Big farmers 10%Production loans 77.5%Development loans 22.5%The management adopts lending recovering linkage criteria to ensure smooth operations of the bank and honour its obligations. Security The bank provides loans under Agri-Pass Book System as well as other collateral acceptable to the bank. Simplification of loan documents is in order to facilitate the farmers; the Bank has simplified the loan documentation to be applicable for three years of the loan period. The main loan documents which are presently being used in the branches of the bank are as under loan application form IB-7 Revised loan Agreement-cum-Guarantee Charge Creation Certificate/Sanction Mutation entered in bank favour sanction latter for loan. Major Lending scheme SadaBaharScheme One Window Operation/ZarkhaizScheme Crop Maximization Project-I White Resolution Scheme Red Meat Financing Package Scheme Green Revolution SchemeSairab Pakistan Scheme Crop loan Insurance SchemeBanazir Tractor SchemeAwamiZaraiScheme Establishment of Model Village Performance and Progress of Projects Loan Disbursement During the year 2009 loans amounting to Rs.77.680 billion were disbursed to 567.415 borrowers as compared to Rs.70.698 billion availed by 571,946 borrowers during the year 2008. Thus growth in amount was 10%.

RECOVERY PROCEDURE OF LOAN

The recovery procedure of the ZTBL loan is to carried and taken by three steps such as recovery schedule, issuance of notice and legal action which is briefly explains under;

Recovery Schedule:

The recovery schedule in each loan case as per terms of sanction of loan is fixed and communicated to the borrowers after disbursement of loan. In case of default or failure in repayment of any instalment due date the mark-up shall continue to be charged and lastinstalment due to this may differ from the amount of instalments fixed at the time of disbursement. Issuance of Notice: The ZTBL can issue notice for recovery of loan which is known as Demand Notice. It is issued before the due date of every instalment. 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, further legal action will be taken to recover the dues. Legal Action: The legal action can be initiated against the defaulter if loan is not repaid even after expiry of legal notice period. Where the court in bank's favour has decreed case, account is to be settled by recovery of amount from the auction of the mortgaged property. 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. The bank may dispose of the mortgaged properties of defaulters for satisfaction of its dues without intervention of courts under Financial Institutions Ordinance 2001

Types of Security
Immovable Property Agricultural Land Under Pass Book System 80% Outside Pass Book System 70% Under Alienability Certificate 66% Commercial/Industrial Land under Pass Book 80% Outside Passbook System Urban Residential/Commercial Plots in all localities outside Passbook 75% Alienability Certificate 66%

Residential/Commercial Buildings 70% Lease hold rights of a leased land of CDA/KDA with 99 years lease70% Moveable Property and Guarantees 1.Unconditional Bank guarantee from scheduled Banks Up to maximum amount of an un-conditional Bank guaranteeafter keeping sufficient margin for un-paid mark-up, cost, chargesand expenses. 2.Guarantee issued by Central or Provincial Government Full amount of loan plus return and other charges. 3.Government securities 85% of face value or market value whichever is less. 4.Defense Savings & FEB Certificates 75% of value of certificates presented as security. 5.Fix Term Deposits Receipts 85% of face value of deposits receipts. 6. NIT Units 80% of the face value or market values whichever is less. 7.Life Insurance policies 85% of surrender value 8.Pledge of Potatoes/Seed Potatoes price or market value whichever is less Up to 75% of Govt. support.

Personal Surety
Against a bond with two sureties under General Credit and one surety in Special Schemes up to Rs.25,000/- or Up to 50% of appraised value of properties of sureties.

Repayment Periods
Short Term Loans 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 Term Loans Dairy

Farmingand livestock etc.In yearly/half yearly/monthly instalments and within maximum period of 5 years. Long Term Loans Tractor, agricultural machinery, poultry farming, gowns and orchard in yearly/half yearlyinstalments within maximum period of 8 years and. above

VARIOUS ANALYSES
INTRODUCTION The analysis is a tool, which is used for checking the overall performance of any organization. It is not only used on national level but also on international level for the purpose to check internal and external factors that influence the organization, positively or negatively and leads the organization towards failure to success. There are various analyses, such as the SWOT analysis, human resource analysis and marketing analysis, which is briefly explain as under;

SWOT ANALYSIS
The word SWOT is abbreviated to strengths, weakness, opportunities and threats while analysis is a tool, which is used for checking the overall performance of any organization. The SWOT analysis is a strategic planning tool used to evaluate the overall organizations strengths, weakness, opportunities & threats and involves specifying the objective of the organization and identifying the internal and external factors that are favourable and unfavourable to achieve that objective. The SWOT analysis is designed to help an organization from failure to success. Finally, we do the strength & opportunities because it is helpful while we avoid the weaknesses and threats which is harmful for organization, which is shown in below figure

Strengths:
The attributes of the organization which are helpful in achieving the objective.In other words, strengths means, the activities that an organization does well favourable chances or positive factors in the internal environment due to which organization achieve the objective. The strengths of the ZTBL are given as under;

1. Strong Supervision and Management: The supervision and management of the ZTBL is very strong such as step by step, effective and efficient that leads the bank toward failure to success 2. Provide many Facilities for Employees: For maintaining the employees, the ZTBL provides the facility of health, safety and employee relations &training. 3. Employees Traits: All staff members are well mannered in attitude, communications & following the ethics. 4. Credit Rating: The report of Jun 22, 200, the credit rating of the ZTBL was reaffirmed the medium to longterm entity rating of AAA (Triple A) with a stable outlook and short term rating of A-1+ (A-One Plus) assigned to the ZTBL. 5. Risk Management: The risk management of the ZTBL is still in the process of restructuring and efforts have been put in place to adequately equip the risk management function with credit review, credit risk rating and value at risk models. Pakistan is an agriculture country with major portion of its economy dependent on agricultural sector. ZTBL recognizes this responsibility and thus also caters to agriculture sector which promises high returns.

6. Expansion of ZTBL: The ZTBL is expanding day by day because customer accepts it. Its network expanded to 342 branches and 25 zonally offices in the Pakistan, which will attract large number of customers.

Weakness:
The attributes of the organization which are harmful in achieving the objective. In other words, weakness means, the activities that an organization lakes or unfavourable chances or negative factors in the internal environment due to which organization do not achieve the objective. The weakness of the ZTBL is given as under 1. Understaffing: The total number of employees is 5,326 in the ZTBL Head Office. In age of technology and globalization, the understaffing may cause unnecessary work burden on employees decreasing their efficiency. 2. Lack of Refreshment Courses:

Although the ZTBL has its own Training and Development Canter but it needs to give refreshment courses to its employees more frequently so that they came explore new dimensions and conquer worlds. 3. Seniority Based Promotion: Promotion in the ZTBL is purely on seniority basis rather than on performance. This really de-motivates the employees because they know that it doesnt matter whether they perform well or bad. 4. Lack of Job Rotation: Most of the employees work in a particular department and they specialize only in one department. In case of absence of one employee, any other employee cannot perform this work. In this way bank not only loses the business but also results in dissatisfaction of the customer. 5. Shortage of skilful Labour: The shortage of skilful labour or manpower that will lead the organization from success to failure. Because in the ZTBL, there are many contract and temporary based employees that has lake of managerial& financial skills. 6. Lack of Qualification: The employees working on the same position may have different degrees like B.Sc., B.A. etc. which devaluate the students of MBA, BBA, and other well qualified staff. So there is a lack of professional staff in different departments and lack of theoretical knowledge of the employees as well. 7. The Rate of Absenteeism and Turnover: The absenteeism &turnover rate is too high thats results the conflicts in the organization.

Opportunities:
The attributes of the organization which are helpful in achieving the objective. In other words, opportunities means, the activities that an organization does well or favourable chances or positive factors in the external environment due to which organization achieve the objective. The opportunities of the ZTBL are given as under; 1. Proper Utilization of Recourses: The Organization is made up three types of recourses, such as human, physical & financial resources which come from external environment. However, in the age of globalization for

achieving growth, the competent, skilful and the English speaking employees are of the requirement of the organization. 2. Increasing Extensive Advertisements: The ZTBL can increase the extensive advertisements of new products, services, vacancies, in order to increase customers & heir competent employees from external environment. 3. Mobile Credit: The ZTBL can start mobile credit which is the best way to effectively utilize its present resources to gain a competitive edge. 4. Increasing the Amount of Loans and Capital: The ZTBL increases the amount of loan for their customers, which is five lacks, in order to attract the large number of customers. The ZTBL issue a large amount of capital to agriculture sector, in order to, utilize its resources more efficiently and to earn more profit. 5. Creating Public Relations: The ZTBL also, involves in creating public relations that will increase the image and profitability of the bank. Often, public relations are conducted through the media that is, newspapers, television, magazines, and internet.etc. thats attract a large number of customers.

Threats:
The attributes of the organization which are harmful in achieving the objective. In other words, threats means, the activities that an organization lacks or negative factors in the external environment due to which organization do not achieve the objective. The threats of the ZTBL is given as under 1. Avoid Discrimination: The ZTBL can avoid discrimination because it is harmful for the bank in achieving its objective. The bank can hire the employees from external environment. The right person is for right for job will leads the organization towards failure to success. 2. Avoid Illegal Activities: The employees of the ZTBL can avoid the illegal activities in external environment that will reduce the reputation and image of the ZTBL.

3. Internet Banking: It is the main problem that was found to be a lack of trust in the new banking channel by customer. However, effective complaint management can increase customers loyalty and trust in Internet Banking. However, the Crises Management Plan has been developed which is under review by the senior management. The objective of this plan is to have clear guidelines and communication in the event of any crises occurrence, which may threaten the safety of its staff, the security of its assets, the continuity of its operation and the reputation of the ZTBL

Human Resource Analysis

The organization is made up by three types of resources such as human, physical and financial resources. Recently, the ZTBL can properly utilize their resources more efficiently in order to strengthen the rural and agricultural sector, mitigate poverty and investment activities. But the most important is the human resource and which the key ingredient for successes of any organization. Hiring and retaining productive people is critical to the success of every organization which is permanent, temporary or contract basis. The Human Resource Division mainly involve in hiring of employees, training and development of employees, employees motivation.etc. Activities necessary for staffing the organization and sustaining high employee performance The achievements of the ZTBL and the implementation plans for future can never be possible without skilled and motivated employee, for this purpose the HRD makes continuous effort to attract highly educated, skilled and trained manpower in different fields especially in the field of IT, HR and Finance. Trainings, workshop, seminars, support for higher education are the few activities being carried out to upgrade the skills of professionals working. The ZTBL can motivate their employees by providing compensation packages, house rent, medical allowanceetc. The Human resource analysis is briefly explained as under; 1. Hiring of Employees: The ZTBL can hire the employees by submitting the CV in the Human Resource Department. If the person is eligible for the post, then the Head of HRD will call to inform the person for the interview. Recruitment staff including job description, preparation, preparing advertisement, checking application forms, short listing, interviewing and selecting candidates through the selection procedure is done by HRD. 2. Training & Development of Employees: Once the employees are recruited by the Human Resource Department, it is very important to develop their skills. There are two ways to develop their skills and to give trainings in the ZTBL Staff collage such as theoretical and practical training. However, initial training or preservice training is given to the employees at initial stages of fresh candidates. This training covers the theory related topics such as banking rules, regulations and operations. After completing the theoretical training, they are placed on different branches for getting practical training.

3. Employees Motivation: The ZTBL can motivate their employees by providing different facilities. The employees, who are motivated, exert a greater effort to perform the assigned tasks effectively and efficiently than those who are not motivated. Various measures are used in the ZTBL for motivating the employees. The techniques are as follows; I. Compensation Package: The compensation is based on the employees knowledge, education, skills and experience. There is no fixed pay scale in the bank. Many people get different salaries even though they had been selected for the same batch under the same circumstances with same qualification but mostly depend on the grade on which the employees is ranked. II. Promotions: The ZTBL can promote the employees to higher grades on the basis of performance during each year. III. House Rent: The house rent is provided to all categories of staff. This allowance is not payable to those who are provided with accommodation by the ZTBL. The ZTBL can also provide the accommodation facility for their employees, in order to reduce the absenteeism. IV. Medical Allowance: The ZTBL will reimburse the cost of medical advice and medicines, claimed by the employees for themselves and their dependents on production of medical certificates from employees indicating disbursement made by him.

The Marketing Analysis

The marketing is a process of managing the performance of business activities designed to plan product, price and promote; in order to achieve organizational objectives. Though it sounds simple, the actual practice poses many challenges. The marketing analysis of any organization plays a vital role in directing its future direction. A good marketing analysis can give new heights, whereas a poorly designed analysis can prove to be disastrous. However, the marketing is based on the customers satisfaction through its value added products and services. The ZTBL regularly use different methods of marketing in order to aware and attract customers regarding their products and services. The marketing analysis is done by using various methods used by the ZTBL, which is briefly explained as under 1. Print Media Advertisement: The ZTBL give different advertisement regarding their products and services, in order to attract large number of customers from time to time in the newspapers. 2. The 4Ps:

The 4Ps means the product, price, place and promotion . The ZTBL can use 4Ps regularly in order to attract large numbers of customers, by proving lot of products and services. I. Product: The ZTBL strategy is offer most comprehensive portfolios of personalized financial solutions that are customer tailored to serve the requirements of customer II. Price: The ZTBL follows the strategy of low margins, high volume with its low mark up and easy repayment schedule it tends to be more attractive even for consumers with less money. III. Promotion: The ZTBL effectively advertises its services and product using the through broachers, book let magazines and low margin on loan is also the base of promotion. IV. Placement: With a wide network of ZTBL the bank operates through 25zonal offices with 342 branches under them with over 1250 agriculture graduates known as MCO. 3. Internet and Electronic Media Advertisement: The ZTBL consistently give information regarding their products and services on the internet and also give commercials on the television for awareness and attracting the large number customers.

4. Brochures: They have designed different brochures for each department and for each product; these are given to customers for information and attraction purposes. 5. Sports Sponsorship: The ZTBL can sponsor different sports promotion activities on television and radio like Cricket, Hockey.etc.

FINDINGS & RECOMENDTIONS

FINDINGS I. The employees working on the same position may have different degrees like B.Sc., B.A. etc. which devaluate the students of MBA, BBA, and other well qualified staff. So there is a lack of professional staff in different departments. II. There is no job rotation for employees which create job burning.

III. The officers of RRD face many problems during preparing different financial reports which consume lot of time. IV. The employees are not satisfied with the compensation package; they are just getting experience and want to shift to another organization that has strong position in the agriculture finance market. V. The availability of staff training makes employees aware of work and is know done by the ZTB Staff College which is provided by the KSSL VI. The absenteeism & turnover rate of the employees is too high thats results the misunderstanding and conflicts in the bank. VII. In the ZTBL, there is problem is understaffing of employees. The total number of employees is 5,326 in the ZTBL Head Office. In age of technology and globalization, the understaffing may cause unnecessary work burden on employees decreasing their efficiency.

RECOMMENDTIONS
I. Although sill, there is cooperative environment in the ZTBL, but there is a need to further boost it up. There must be cooperation among staff members, management, customer and shareholders. II. The job rotation of duties of employees should be implemented to improve the performance which will enhance their skills and confidence. III. The motivation level of the employees should be enhanced by increasing compensation and giving extra fringe benefits. IV. The advertisements of the products and the services of the ZTBL should be done in a proper way with a strategic management. V. To hire creative, skilful and young employees on the basis of their eligibility and experience but not on discrimination basis. The recruitments should be strictly on merit basis and induction should be after proper and extensive training. VI. To remove the file keeping barriers, which waist a lot of time on searching of files. There should be a proper check and balance. The documentary records of the ZTBL should be correct and complete. VII. More rewards and bonus schemes should be for management as well as for employees and promotion should be based on performance of employees and not on favouritism. VIII. ZTBL has developed a web site but still only its front home page has been developed while other banks have good attractive sites.

IX. The efforts should be made to reduce the employee turnover and absenteeism rate because it creates misunderstanding and conflicts in the ZTBL. X. In order to increase cooperation among employees, management has to arrange different parties or get together which will create love, care and cooperation among employees. XI. MIS is still not fully understood by all of the employees. To cope with this situation, the management should arrange workshops and short courses, so that the employees can benefit fully from the MIS. XII. The employees attitude and behaviour towards work and customers must be positive and polite way at time of conversation. XIII. In order to increase the motivation, job satisfaction, and organizational commitment the organization should give special incentives to all the old as well as new employees. This may be in the form of promotion or increase in pay or other facilities provided to them on performance basis. XIV. The promotions should be given to the employees of ZTBL on the basis of performance rather than seniority, time period or designation. XV. The job rotation techniques should be adopted so as to make the staff knowledgeable of the operation of various departments of the ZTBL.