NA panel calls for early formation of ZTBL board

ZTBL president urges govt to announce a bailout package in order to help the bank avert prevalent crisis

0
287

ISLAMABAD: National Assembly’s Standing Committee on Finance and Revenue has directed the Ministry of Finance to form the board of directors for Zarai Taraqiati Bank Limited (ZTBL) with immediate effect to ensure smooth functioning of the bank.

The committee also directed the ZTBL management to come up with a comprehensive revival plan to minimise losses and to ensure the provision of maximum facilities to small farmers by providing them loans on low mark-up rates.

The meeting, which was held with MNA Faizullah in the chair on Tuesday, observed that corporate good governance of the bank could not be ensured with a board that is non-functional for the last two years.

Committee member Qaiser Ahmed Sheikh pointed out that the mark-up rate of 18.5pc on loans provided by the bank was too high for the poor farmers.

Briefing the committee, the ZTBL president said the bank was not supposed to provide loans on concessionary rates and that it was being run a commercial basis.

“When the Karachi Interbank Offered Rate (KIBOR) was 6pc, the bank was disbursing loans with a mark-up rate of KIBOR plus 6.5pc. Now the KIBOR is around 13.25pc and the bank is providing loans on mark-up rate of KIBOR plus 5pc,” he explained.

However, he continued, in order to facilitate the farmers, the bank was now taking measures to increase its profitability.

“As the bank has now received the Islamic Banking license, our plan is to convert at least 100 branches to Islamic banking so that deposits by the people could be increased,” the ZTBL president said. “After the conversion of these Islamic bank branches, the bank will be able to provide loans on mark-up rates of as low as 9-10pc.”

On a query regarding ZTBL’s finances, the bank’s president said that the financial situation of the bank was worst and it was expected that by end of the current year, total losses of the bank would be accumulated to over Rs8 billion.

He urged the government to announce a bailout package so as to bring the bank out of the prevalent crisis.

About the details of disbursements, the committee was informed that during the first 11 months of 2019, the ZTBL had disbursed Rs72.8 billion of loans to the farmers, of which 95pc disbursements were made to small farmers having land up to 25 acres.

Out of total disbursements, the ZTBL disbursed Rs61 billion in Punjab, Rs7.8 billion in Sindh, Rs2.8 billion in Khyber Pakhtunkhwa and Rs185 million in Balochistan.

Committee Chairman Faizullah appreciated the intentions of the newly appointed ZTBL president, hoping that during his tenure, the bank would develop and provide maximum facilitation to the farmers.

LEAVE A REPLY

Please enter your comment!
Please enter your name here