The Auditor General of Pakistan (AGP) has uncovered financial irregularities, loan defaults, and governance lapses worth over Rs10.2 billion in the Zarai Taraqiati Bank Limited (ZTBL) during the financial year 2023–24, revealing deep flaws in credit management and oversight within the state-run institution, according to a report published by The Express Tribune.
As per the audit report, the bank’s management failed to recover billions disbursed under various agricultural credit schemes, resulting in a surge in non-performing loans. Of the total irregularities, Rs6.8 billion were linked to non-recovery of loans from defaulters who had pledged assets or guarantees.
The report noted that ZTBL neither initiated timely recovery proceedings nor enforced collateral, allowing borrowers to evade repayment.
Another Rs1.26 billion was tied to irregular loan renewals and unauthorised rescheduling, where defaulters received new financing without credit reassessment or board approval — a violation of the State Bank of Pakistan’s prudential regulations and corporate governance rules.
The AGP also flagged irregularities in government-subsidised lending schemes, including the Kisan Package and Kissan Dost Scheme, where loans worth Rs923 million were issued without verifying land ownership, project feasibility, or borrower identity.
Some disbursements were made using fake CNICs, incomplete documentation, or unverifiable beneficiary data. In addition, unjustified loan write-offs totalling Rs563 million were granted without board authorisation, which auditors said reflected “arbitrary decision-making.”
Auditors further reported missing documentation and unverified advances worth Rs341 million, including absent loan files and collateral records in multiple regional branches. Operational irregularities of Rs290 million were also observed in procurement, vehicle purchases, and branch renovations conducted without proper approval or open bidding.
The AGP concluded that ZTBL failed to conduct due diligence in assessing borrower creditworthiness, leading to performing loans turning non-performing.
The Agricultural Credit and Risk Management divisions were found to have provided delayed and inaccurate recovery data, while the internal audit department ignored early warning signs of default. The Board of Directors was also criticised for its inaction on recurring governance lapses and audit observations.
The report added that the Departmental Accounts Committee (DAC) had not held meetings on ZTBL’s audit findings despite multiple reminders from November 2024 to January 2025.
The AGP warned that continued negligence in implementing audit recommendations posed a serious threat to the sustainability of agricultural credit operations.
The audit recommended a high-level inquiry to identify officials responsible for poor loan scrutiny, unauthorised financing, and negligence in recoveries.
