THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.

HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

Profile of the Bank

Establishment:

 Cooperation is an International Movement of enriched history spread over decades.

It has proved as an effective system for socio-economic growth and community
development of the rural masses. This movement is very strong in many countries
like India, China, Malaysia, Europe, Japan, Philippines etc.
 Initially, Cooperative Banking was organized in the Indo-Pak Subcontinent in three
tiers: Primary Societies were at the base, Central Bank / Banking Union were at the
secondary level; and Provincial Bank / Apex Society was at the top.
 The Central Cooperative Banks (CCB) were established at each District / Tehsil and
Punjab Provincial Cooperative Bank Ltd. in 1924 as an Apex Bank to meet funding
requirements of cooperative societies and Central Cooperative Banks, respectively.
Punjab Provincial Cooperative Bank Ltd / Central Cooperative Banks were engaged
in all types of banking & credit business with societies and individuals who were their
members.
 The PPCBL gained the status of Scheduled Bank in 1955.
 PPCBL was organized and being managed on the principal of voluntary and open
membership, democratic member control, member economic participation,
autonomy, independence, self-help and mutual cooperation.

Major Objectives

 Promote growth of the Cooperative movement.

 Carry on banking and credit business to facilitate working of the member
Cooperative Societies.
 Inspect, supervise and assess credit requirements of member societies.

Governing Body:

 The supreme authority of the Bank is General Body represented by all the
shareholders through 660 delegates, elected at the rate of 1 per 50 shareholders.
The general management of the Bank is subject to the control of elected Board of
Directors.

Ownership:

 PPCBL has a unique status being a ‘peoples’ bank and is owned by around 33,000
cooperative societies, mostly the agricultural thrift and credit cooperative societies
(Shareholding pattern: GoPb 3% and Cooperative Societies 97%).

Banking Functions:

 It is performing all the main banking functions of deposit mobilization, supply of credit
and provision of remittance facilities with limited banking products and functionally
specialists in agriculture related products. PPCBL, as a principle, does not pursue
the goal of profit maximization.
 It has strong linkages with rural agricultural economy. There exists strong nexus
between Bank and Cooperative Movement / Department. Thus PPCBL has been the
main pillar of Cooperative Movement having a history of over 80 years playing a
pivotal role with its service oriented approach.

Source of Funding:

 In 1976, Federal Bank for Cooperatives (FBC) was established through a central
enactment whereby all the Central Cooperative Banks dissolved and merged into
PPCBL. Thereafter, the FBC provided funding to meet the crop loan requirements of
 THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.
HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

the small farmers on service charge basis ranging between 2-3% only.
 In the year 2002, Federal Bank for Cooperatives was placed under liquidation. After
that the State Bank of Pakistan (SBP) started providing funding support to PPCBL
through its Agricultural Credit Portfolio. The funding remunerated at GOP T. Bills
Rate ranging between 8-9%. However, the funding support was withdrawn by the
SBP w.e.f. 01.07.2007 due to change in its monetary policy. Thereafter, the Bank is
managing its business operations through refinancing of recoveries from own
sources.

Branch Network:

 The Bank has an extensive network of 159 branches servicing the small farmers. It is
the only surviving Cooperative Bank in the four Provinces being a Specialized
Scheduled Cooperative Bank.

Regulation & Control:

 Being Scheduled Bank, PPCBL falls under the regulatory control of SBP and bound
to follow SBP Prudential Regulations to the extent applicable. Being Cooperative
Bank, it functions under the supervision of Registrar Cooperative, Societies,
Punjab.

Current Challenges:

 Liquidity problems due to withdrawal of credit line by SBP

 Rightsizing of Board of Directors
 Weak system and procedures
 Lack of I.T. infrastructure
 Recovery of overdue loans
 Sustaining operating losses mainly due to high cost debt servicing to SBP
 HR Development issues

Restructuring:

 Currently, an extensive restructuring exercise has been undertaken to make the

PPCBL a viable and self sustained Bank for rural masses. For this purpose, a 5-
Years Restructuring Plan was prepared and submitted to State Bank of Pakistan
(copy attached). Reform initiatives taken so far as under:
• Organizational Structure revamped
• A full time Managing Director / COO appointed
• Board of Directors right-sized (now consists of 7 members instead of 40)
• Credit, Audit, Operations and Risk Management Manuals prepared
• Audit & Inspection Cells at Zonal Offices Shifted to Head Office and
reorganized in 4 Teams
• Automation of systems & procedures initiated
• Surplus staff lay off and induction of qualified professionals – process
initiated.

Market Positioning:

 Strong clientele base earned over 85-years.

 Deep rooted penetration / bearing in agriculture community.
 Extensive Branch Network at grass root level.
 THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.
HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

 Catering to financial requirements of around 0.3 million small farmers of members

societies and individual borrowers in a year.
 Lending products launched without large scale publicity–immediately responded by
the target group.
 Allocated funds often fall short in meeting demands of the borrowers.

Loaning Products:

 Major portion of PPCBL’s credit portfolio is agro-based. Small farmers are its main
beneficiaries who are provided loans on soft terms mostly without any material
security through various cooperative societies. It looks after the financial needs of
small clients who cannot get credit from normal banking channel against collateral. In
addition to members of affiliated cooperative societies, the Bank started lending to
small farmers in individual capacity since 2001.
 Most of the lending products of the Bank are micro-finance, designed to alleviate
poverty of rural masses. Loaning facilities are provided at door steps of the small
farmers at grass root level on easy terms and conditions and at affordable prices.
The average loan size of crop production loans is upto Rs.24,000 per borrower.
Almost 50% of our total lending is for this product.
 Features of each loaning products are as under:

Lending through Cooperative Societies

i) Agriculture Crop Production Finance

• Maximum amount of finance upto approved MCL.

• Purpose: for purchase of Agriculture Inputs (seeds, fertilizer and pesticides
etc).
• Rate of mark up 15% p.a. in case of default 16%.
• Period of finance 8 to 10 months.
• Mandatory insurance of crops as per SBP instructions.
• Sanction of loan by Branch Manager concerned on the recommendation of
Cooperative Field Staff.
• 100% finance in cash.
• Finance upto Rs.200,000/- clean, above this amount, secured through
agriculture land of double the amount of finance.
• Responsibility: jointly and severally of the society and its members.
ii) Revolving Crop Finance

• Maximum amount of finance up to approved MCL.

• Purpose: for purchase of Agriculture Inputs (seeds, fertilizer and pesticides
etc).
• Rate of mark up 15% p.a. in case of default 16% p.a.
• Period of finance 3 years with one time documentation and multiple operation
facility as per needs of the borrower.
• Annual clean up of total Principal Amount plus Mark up accrued thereon once
a year.
• Sanction of loan by Branch Manager concerned on the recommendation of
Cooperative Field Staff.
• 100% finance in cash.
THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.
HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

• Security: agriculture land of double the amount of finance.

• Responsibility: jointly and severally of the society and its members.
iii) Livestock Revolving Finance

• Maximum amount of finance Rs.800,000/- per society @ Rs.100,000/- per

member of the society with responsibility jointly & severely.
• Eight members eligible to obtain the finance.
• Rate of mark up 13% p.a.
• Period of finance 3 years with one time documentation and multiple operation
facility as per needs of the borrower.
• Annual clean up of total Principal Amount plus Mark up accrued thereon once
a year.
• Minimum security: one acre of agriculture land per borrower.

iv) Livestock Project Finance

• Maximum amount of finance Rupees Rs.4,000,000/- per society @

Rs.500,000/- per member of the society with responsibility jointly & severely.
• Eight members eligible to obtain this finance.
• Purpose: for purchase of Cattles.
• Rate of mark up 13% p.a.
• Period of finance 5 years.
• Borrower’s equity participation 20% of loan applied for.
• Recovery through 10 equal half yearly installments.
• Processing fee Rs.500/- per case.
• Tangible security of double the amount of finance along with two good
personal sureties acceptable to Bank.
• Eligibility of borrower having minimum 40 Kanals land.
• Sanction of loan by Credit Committee comprising of ACRO & Branch
Manager concerned.

v) Medium Term Finance for Tractor / Implements

• Three cases upto approved / Fixed MCL (By fixation of MCL).

• Four cases (Under general permission of MCL).
• Purpose: for purchase of Tractor / Implements.
• Rate of mark up 18% p.a. in case of default 20%.
• Period of finance 5 years with Ten Half Yearly installments.
• Security: agriculture land of double the amount of finance.
• Minimum Eligibility: 40 Kanals of Agricultural land.
• Borrower’s own equity contribution 20%.
• Insurance of Tractor for 5 years at the time of disbursement of loan.

vi) Micro Finance for Women Cooperative Societies:

• Finance upto Rs.200,000/- @ Rs.20,000/- per member.

THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.
HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

• Purpose: for setting up Beauty Parlor, Tuition Centre, Knitting Centre,

Canteen, General Store, Cosmetics, Bakery etc.
• Rate of mark up 11% p.a.
• Repayment Period: 3 years through monthly, quarterly or half yearly
installments with 6 months grace period.
• Security: Agriculture Land / Urban Property of double the amount of finance
to be mortgaged in favour of Bank.

Individual Borrowers

i) Livestock Goat & Sheep Finance

• Maximum amount of finance Rs.100,000/- per borrower having one acre of

land, Rs.200,000/- having two Acres or above.
• Purpose: for purchase of Goat, Sheep & Cattle.
• Rate of mark up 15.60% p.a.
• Period of finance 1 year. Recovery through monthly or quarterly installments.
• Borrower’s equity participation 10% of loan applied for.
• Processing fee Rs.500/- per case.
• Sanction of loan by Credit Committee comprising of Branch Manager and
ACRO concerned.
• Sanction of case within 7 days under one window operation.
• Eligibility of borrower having minimum 1-2 Acres agriculture land.
• Minimum Required Security: Tangible security valuing double the amount of
finance assessed in accordance with average sale rate of 3 years.
• Borrower is responsible for proper vaccination of his cattle.
• Insurance compulsory, premium to be paid by the borrower.

ii) Livestock Project Finance:

• Maximum amount of finance Rs.200,000/- per borrower.

• Purpose: for purchase of Cattle.
• Rate of mark up 13% p.a.
• Period of finance 5 years.
• Borrower’s equity participation 20% of loan applied for.
• Recovery through 10 equal half yearly installments.
• Processing fee Rs.500/- per case.
• Two good personal sureties acceptable to Bank.
• Sanction of loan by Credit Committee of ACRO & Branch Manager
concerned.
• Minimum Required Security: Tangible security valuing double the amount of
finance assessed in accordance with average sale rate of 3 years.
• Eligible of borrower having minimum 5 Acres agriculture land, depending on
the fertility of the land.
• Feasibility report of Livestock & Dairy Development Department for
assessment of demand of the borrowers.
 THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.
HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

• Borrower responsible for proper vaccination of his cattle.

• Insurance compulsory, premium to be paid by the borrower.

iii) Medium Term Finance for Tractor / Implements:

• Finance upto actual price of Tractor after adjustment of @ 20% equity

participation.
• Purpose: for purchase of Tractor / Implements.
• Rate of mark up 18% p.a.
• Repayable in 5 years through monthly, quarterly or half yearly installments,
as per choice of borrower.
• Security: double the amount of finance.
• Minimum Security: 40 Kanals of agricultural land.

iv) Agriculture Finance against Gold / Gold Ornaments:

• Maximum amount of finance upto Rs.300,000/-.

• Rate of mark up 16% p.a.
• Finance upto 60% of the market value of gold.
• Period of Finance 6 months.
• Purpose: for purchase of agriculture inputs.
• Insurance compulsory, premium to be paid by the borrower.

v) Finance against DSCs / SSCs for Agriculture purposes:

• Extent of finance 70% of face value of DSCs / SSCs upto maximum rupees
Rs.100,000/-.
• Security: lien on DSCs / SSCs
• Sanction of loan by Credit Committee of ACRO & Branch Manager
concerned.
• Insurance compulsory, premium to be paid by the borrower.

 Standard Eligibility Criteria of Borrowers:

• A Citizen of Pakistan.
• Resides of the Province Punjab and cultivating land in the operational area of
his respective branch.
• CNIC is required.
• An agriculturist having agricultural land.
• A genuine and good Borrower/interested in agriculture sector.
• Having good repaying capacity.
• eCIB Report should be clear.
• Prospective Borrower has to open his Account with the Bank.
 THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.
HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

 5 years position of borrowers / beneficiaries covered, amount advanced and

recovery thereof is as under:

L
F
Kind of Loan
20
20
20
Crop Loans
20
20
THE PUNJAB PROVINCIAL COOPERATIVE BANK LTD.
HEAD OFFICE, SHAHRAH­E­QUAID­E­AZAM, LAHORE.

F
Kind of Loan
20
20
MTF for
20
Tractors,
20
Implements
20
(7-