ISLAMABAD: The flawed loan policy of the Zarai Taraqiati Bank Limited (ZTBL) is the main reason for food deficit in the country which led to forced import of agricultural products, the National Assembly Standing Committee on Finance opined.
The ZTBL claims to be dedicated to serve the need of forming community, by delivering financial products and technical services on competitive and sustainable basis, in a convenient, efficient and professional manner, leading to success of the Bank and the farmer. However, the National Assembly Standing Committee on Finance is of the viewpoint that the ZTBL has been following flawed loan policy; has been lending loans in urban areas rather than rural areas which has resulted in demoralization of farmers and growers.
“Resultantly, Pakistan is forced to import food items, vegetables, fruits and others at costlier prices from other countries,” told Daniyal Aziz, convener National Assembly Sub-Committee on Finance while talking to Customs Today here on Friday. He was of the view that the ZTBL had distributed 40% loan money in two major cities; Lahore and Karachi while 80% loan money among eight major cities of the country.
“Such a state of affairs is quite amazing and unfortunate because ZTBL is not designed to lend loans to industrial sector, therefore, government is needed to take a careful view of ZTBL’s affairs,” he added, saying that bank’s deposits had been stagnant at the level of Rs 1 billion whereas volume of lent money was around Rs 115 billion which presented a bleak picture about performance of the bank. “It means that ZTBL has taken Rs 114 billion loan from the State Bank of Pakistan (SBP). Consequently, assets of ZTBL worth 60 billion have been transferred to the SBP,” Aziz said, adding that the Bank claimed that volume of loan was about Rs 500 billion which was quite wrong as actual amount was Rs 390 billion.
Therefore, he said that he asked the SBP to run ZTBL on the pattern of commercial banks to make it a profitable as well as beneficial for farmers and agricultural sector. “We have recommended recruitment of new Mobile Credit Officers (MCOs) along with mass awareness campaign to grant maximum amount of loans to agricultural sector,” he added.
It is pertinent to mention here that ZTBL provides development loans for purchase of items like farm machinery, tractors, irrigation, land development, orchard/ green houses, on-farm godowns/ storages, dairy, poultry, fishery, livestock farming as well production loans for seed, fertilizer, pesticides, labour charges to grow crops and vegetables including working capital for poultry, dairy and fishery.
However, over the years, Aziz said that ZTBL could not perform as per expectations of the government, consequently, last month, government converted Rs100 billion overdue of Zarai Taraqiati Bank Limited (ZTBL) and House Building Finance Corporation Limited (HBFCL) into the Group’s equity which comprised State Bank, its subsidiaries, SBP Banking Services Corporation and National Institute of Banking and Finance Limited. He mentioned that in March last year, in defence of accusation regarding failure in demonstrating up to the mark performance, ZTBL spokesman bothered to clear that affairs of the bank were being run strictly in accordance with the statutes and regulations laid down by the State Bank of Pakistan. In a press handout spokesperson said that periodic inspections were made and the bank’s management followed and adhered to observations made by the central bank, which was its regulatory authority.