1

On
Zarai Taraqiati Bank Limited

Submitted By:
Aamir Ali
Roll# 501
BBA(HoNs) 2012 to 2016
Submitted To:
Sir Saleem Abbass
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Preface
The pre-requisite of internship program is to make the students of BBA, aware of the practical
expertise and to tell them with the real management process.
With an intention of grooming the best executives of the future, AIBF has organized a
comprehensive internship-training program. All of us were placed in leading organizations of
business arena to gain firsthand knowledge and insight into their management and working. So,
when I was given the chance of selecting an organization, I opted for Zarai Taraqiati Bank
Limited.
Getting a chance of working in ZARAI TARAQIATI BANK LIMITED prove to be very
beneficial for me. I think that I gained comprehensive insight into the working of a Bank. But
nothing could have been possible without the co-operation and guidance of the officers of Zarai
Taraqiati Bank Limited.
After the completion of internship program, internship report has been prepared just in
accordance with the practical exposure. In preparing this report, I have put all of my best efforts
and tried my level best to give maximum knowledge. Despite all of my coherent efforts, I do
believe that there will always be a room for improvement in the efforts of learner like me.
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Acknowledgement

Every praise to Allah Almighty the merciful, who knows about whatever is there in universe,
hidden or evident. Who enables me to get such valuable knowledge, which definitely helped me
in my professional life.

I would like to thanks Mr. Luqman Basharat (Manager) that trust my abilities and gave me
opportunity to use my skill. Thanks to all staff of ZTBL. They gave me their precious time and I
learned lot from them. Thanks to all my friends and family who helped me.
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Table of contents
Executive summary …………………………………………………………. 05
Introduction of ZTBL………………………………………………………... 06
History of ZTBL………..……………………………………………………. 06
Board of director……..………………………………………………………. 09
Vision, Mission, Core values…………..…………………………………….. 10
Corporate objectives…....………………………………………………….. .. 11
Zonal setup of ZTBL………...……………………………………………….. 12
Management Hierarchy .…….……………………………………………...... 13
Departments of ZTBL…………………………………………………..……. 14
Products& Services….……………………………………………………….. 28
Loan Schemes………………………………………………………………... 29
Recovery Schedule…………………………………………………………... 32
Types of securities...………..……………………….……………………….. 33
Ratio Analysis………………………………………………………………… 36
Horizontal Analysis………………………………………………………….. 43
Vertical Analysis…………………………………………………………....... 45
SWOT analysis………………………………………………………………… 47
Working as internee…………………………………………………………… 50
Findings and Recommendations……………………………………………… 54
Conclusion…………………………………………………………………… 56
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Executive Summary

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 Zarai Taraqiati Bank
Limited. ZTBL is playing its one of the most important role in the development of the
t h
Agriculture Sector of the Pakistan. On 14 December 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 Pakistan’s total population. The Bank has
country-wide network in the form of 379 branches and is severing round about half of the million
clients annually and over accumulated account holder’s with the average loan size of around
Rs.89, 000 serving 65%, 31% & 4% of subsistence, economic and large growers respectively.
The Company’s management, combining innovative strategies, aggressive marketing, creative
synergy and visionary approach together with a lean organizational structure capable of efficient
response, succeeded in establishing ZTBL as the largest loan provider to the agricultural sector at
international level
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Introduction to ZTBL:
The Zarai Tarqiati Bank Limited (ZTBL) is
the largest public sector financial development
institution with a wide network of 31 Zonal Offices,
9 Audit Zones and 379 branches in Pakistan. The
bank serves around half a million clients annually
and has over one million accumulated account

holders.
Zarai Traqiati Bank Limited (ZTBL) previously
Agricultural Development Bank of Pakistan
(ADBP) is the premier financial institution geared
towards the development of agriculture sector
through provision of financial services and technical knowhow. The restructuring of former
ADBP is being carried out with the aim to uplift the agriculture and rural sector by raising farm
productivity, streamlining the institutional credit and increasing income generating capacity of
the farming community. ZTBL was incorporated as a Public Limited Company on 14th
December, 2002 through repeal of ADB Ordinance of 1961 and by virtue of Finance Order, all
assets, liabilities proceedings undertaking of ADBP stands transferred to and vested in Zarai
Taraqiati Bank. The new corporate structure redefines the bank's status as a public limited
company registered under companies Ordinance'1984 with an independent Board of Directors
which aims at ensuring good governance, autonomy, delivering high quality. Now the bank is
free in its function with no interference or pressure from any quarter. Earlier the bank was
functioning like a pure government institution and permission has to be sought on every step for
moving forward. Now for all practical purposes the Bank is an arm for Government for
implementing overall agriculture policy for credit front. The design of credit is linked so for as
possible with the periodic priorities and targets as laid down in annual development plans.
History of ZTBL:
Agriculture is the back bone of any country, because it plays a major role in the development of
the country, by providing food items, and providing raw material to the industrial sector.
Agriculture is the main stay of our economy. It accounts for 26% of the GDP and employ about
44% of the country’s labor force. This sector is the largest source of foreign exchange earning
 7

over 75% besides providing input for textiles, sugar, and vegetable ghee industries of the
country. More than 67.5% of the population is directly or indirectly dependent for their source of
revenue on agriculture. Some time finance is needed to fulfillment of the requirement of the
farmers. 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, fisher, animal
husbandry, poultry and dairy farming.
To provide more easy access to loan on their door step Agricultural Development Bank was
recognized in September 1957 under the Agricultural Development Bank Act. The main purpose
of establishing this bank was to advance loan to the formers. This includes cash loan, loan for
fertilizers, loan for seeds, or loan for any other agricultural machinery like tub well, tractors
etc. Establishment of Agricultural Development Bank of Pakistan (ADBP)
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. Establishment of agricultural development bank takes place
under the ordinance by the merger of two agricultural institutes, Agricultural Bank of Pakistan
and Agricultural Development Finance Corporation. New institutes ADBP had then become the
single largest institutes in the country fulfilling the viable credit needs of the agricultural sector.
The ADBP's structural reforms focuses upon good governance, financial management, increase
in farm productivity, streamlining institutional credit and enhancing operational performance.
The resultant affect will be yielding to the rural and agriculture sectors for optimal growth.

Restructuring of ADBP into ZTBL

With a view to strengthen the institutional capacity of ADBP and to revitalize the agriculture
sector, the government felt it necessary to restructure the bank. The aim of the restructuring
exercise is to increase its performance by way of providing cheaper and timely provision of funds
to activate the entire value chain of agriculture.
The Government of Pakistan has injected in Rs.10 billion and structure of ADBP has also been
changed to a public limited company incorporated under companies ordinance 1984 and renamed
it as Zarai Taraqiati Bank Limited (ZTBL). The Federal Government has converted the
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Agriculture Development Bank of Pakistan (ADBP) into Zarai Taraqiati Bank Ltd (ZTBL) and
the new venture has started its operation with immediate effect.
The new corporate structure redefines the bank statue as a public limited company with an
independent Board of Directors promulgated under the presidential ordinance which, aims at
ensuring good governance, autonomy, delivering high quality, viable and timely financial
services to a greater number of customers in the agricultural and rural segment of the country
with adequate returns to the stake holder. After this incorporation all the assets and liabilities of
ADBP became the assets and liabilities of ZTBL. This restructure was carried out with the aim to
improve the working and role of bank in the agricultural development. The bank is completely
owned by the government and it has head office in Islamabad.
The adaptation 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
demand ADB’s Rural Finance Sector Development Program (RFSDP) with the objective to
transform ZTBL into a sustainable Rural Finance Institution (RFI). It also included the up-
gradation of Information technology (IT) infrastructure for which funds from ADB’s 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 ZTBL is to extend timely
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 Zarai Taraqiati Bank Limited runs its operation in whole Pakistan and also outside Pakistan
and the persons conducting such business. The bank’s total manpower is 7665 having 4515
officers and 3150 staff. It has 49 regional offices and 379 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 years
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operational activities tried to serve the forming community through the country for their medium
and long-term development credit needs.
Organization:
First 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 49
regional 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 covering
25 villages in an average.

Board of Directors

Syed Yawar Ali chairman

Syed Talat Mahmood president
Mr.Saeed Ahmad director
Mr.Majyd Aziz Balagamwala director
Mr.Zia-ul-Mustafa Awan director
Mr.Zahid Idress Mufti director
Mr.Abdul Bari Tareen director
Muhammad Tanveer But director
Mr.Muzam Ali company secretary
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Corporate Vision

“Dedicated to serve the needs of the farming community, by delivering financial products and
technical services on a competitive and sustainable basis, in a convenient, efficient and
professional manner, leading to success of the Bank and the farmers”

Corporate Mission

“To play effective role in the promotion of economic growth, by enhancing the availability of
credit to the agriculture sector, through reliable access to sustainable financing, special lending
programs, technical assistance, and other products & services, and to promote career
development opportunities for increasing professionalism and technical proficiencies of
employees.”

Core values

Loyalty to ZTBL Vision and Mission

Integrity and Meritocracy

Quality and Efficiency

Well trained Human Resource

Credit with Technology
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Corporate Objectives

1. Develop and operate as a financially and operationally sustainable R.F.I of the country.

2. Assist rural community, particularly the small farmers, in raising their productivity and income
levels through timely delivery of credit, advisory and ancillary services.

3. Build ZTBL's image as a proactive, client friendly, financially & operationally sustainable with
indigenous product deployment.

4. Establish and provide backward and forward linkages to strengthen agri. value added commodity
chains.

5. Engage in public - private and wholesale - retail partnership to deepen outreach and reduce
operating cost.

6. To function as a rural commercial bank to mobilize rural capital formation and to commercialize
the agriculture sector by delivering the true value of credit to the client.

7. Provide a wide range of risk insurance products to its clients.

8. Open up its venues of operation to Domestic & International Banking Industry to avail
comparative advantages.
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Zonal setup of ZTBL

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Management Hierarchy

The general direction and superintendence of the affairs of the bank are entrusted to a 12
members Board of Directors consisting of a 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 one non official nominated by each province.
One member on this board represents the State Bank of Pakistan also.

In ZTBL, the president supervises and directs the senior executive who supervises and directs the
senior vice president, and senior vice president control voice president, who control Assistant
vice president, who finally supervise officers. The management hierarchy of bank is as follows;

President

Senior executive president

Senior vice President

Vice President

Assistant vice President

Officers

Non-clerical staf
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DEPARTMENTS OF ZTBL
Under this chapter we discuss different departments of ZTBL, there aims and objectives, their
functions and working environment. The material used in this department about their aims and
objectives are taken from bank. ZTBL have a great organizational set up, and lots of departments
are working under the head office. These departments are as fallows
Main departments of ZTBL
 Central Accounts Department of ZTBL
 Budget and Fund Management Department
 Regulatory Reporting Deportment
 Human Resource Operations Department
 Training and Development Department
 Performance Management Department
 Policy and Regulation Department
 Business Development and Marketing Department
 Data management department
 Information Technology Department
1. CENTRAL ACCOUNTS DEPARTMENT OF ZTBL

Aims & Objectives

The central accounts department of ZTBL formulates and maintains accounting policies and
procedures manuals accounting standards to ensure dissemination and implementation across the
bank. It formulates and prepares financial statements keeping in the view of the requirement of
Bank. It also makes sure the proper accounting of Assets, liabilities, and Income and
Expenditure.
Functions
Central accounting department issues instructions related to accounting policies and procedures.
Central Accounts Department of ZTBL consists of five units like Policy Unit, Accounts Unit,
Corporate Tax Unit, Fixed Asset unit, Prepayment Unit.
i. Policy Unit

Policy Unit plans accounting procedures of accounting in both head office and branches and
coordinate with other departments within the head office on the different policy meters. It deals
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coordination of external auditors and arrange payment to them. It formulates bank charges
schedules and circulates among the branches and submits to SBP on half yearly basis. It deals
with management letter and executive summary and suggests guidelines for adjustment of
suspense account. It performs administrative functions for the department such as sanction of
leaves and budget preparation. This unit also provides guidelines to the branches regarding
rectification of accounting errors and audit observation.
ii. Accounts unit

The Account unit of the Central Accounts Department coordinates with concerned departments
for the timely production of statement of affairs. It prepares financial statements whiling
compiling balances under relevant group of heads from trial balances. It makes the list of
abnormal entries for rectification. It prepares quarterly, half yearly and yearly financial
statements for the audit committee. It prepares annual capital adequacy ratio statement for
certification by external auditors.
iii. Tax unit

The Tax unit of the Central Accounts Department of the ZTBL provides guidelines of deduction
of the tax under the ordinance of income tax 2001 and collects tax payment documentary
evidences for tax deducted. It communicates and coordinates with tax consultant, SBP and
income tax authorities and collects related to the tax refund case form consultant. It pays advance
tax and prepares the statement along with tax related audit.
iv. Fixed assets unit

It sends out timely formats and procedures for the fixed assets to the Zones, Branches, and Head
Office Department. It deals with collection of fixed assets schedules as well as other required
documents from branches and head office department. It compiles and summarizes the fixed
assets schedules on country level along with data maintenance. This unit on quarterly basis
compiles the addition and deletion of fixed assets. It works to monitor and verify the disposal of
fixed assets and depreciation charged by the departments and head office on quarterly basis. It
calculates and accounts for the deferred tax assets and coordinates and cooperates with external
and internal auditors on the different issues of the fixed assets of the bank.
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v. Pre-payment verification unit

Pre-payment unit of the ZTBL Bank is designed to verify all payment structures related to the
Head Office. It checks availability and competence of sanction of the competent authority. It
works to check procedural compliance and completeness of documents.
2. BUDGET AND FUND MANAGEMENT DEPARTMENT

Aim and Objective

The main aim of Budget and Fund Management Department of ZTBL Bank is prepare the
financial plane for the credit limits, fund review and to arrange additional resources for
maintenance of additional liquidity for efficient distribution, timely discharge of liabilities and
operations of Bank.
Functions
Budget and fund management department of ZTBL mainly develops the policies, procedures and
standards for the budget planning and analysis. It coordinate and cooperate with administrative
and government in order to resolve budget issues. It automates budget process and preserves the
data and obtains approval from Board of Directors for annual budget. It gather the data of various
departments and analysis that for their performance. Further it consists of four units as described
below.
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i. Budget Planning Unit

The Budget planning unit of the Budget and fund management department of the ZTBL develops
departmental polices procedures and standards for the financial management and budget
planning processes and parameters. It communicates with administrative and governance groups
in order to resolve the budget issues. It compiles and process necessary information for the
preparation of annual reports. It generally evaluates and review expenditures and submits to the
audit committee. Its further role is to provide information and analysis for the purpose of the
annual planning and effective efficient decision making.
ii. Budget Analysis Unit

It generally analyzes and monitors financial activities of departments which show their
performance. On the basis its analyzed results performs the highly effective steps. It develops
assumptions and strategies for future budget cycle.

iii. Treasury Unit

Treasury Unit is engaged in the arrangement of the fund for the different purposes to the
branches and maintains their records. It manages Banks accounts with SBP and commercial
banks such as MCB, HBL, and UBL and so on. It checks out the appropriate balances in the
branches if there are excess balances then its calls for and if there is less balances then it transfer
the funds and also declare the deposit rates for the depositors. It performs the role of coordinator
while performing the role of coordination with SBP, commercial, Internal and External auditors
on the matters of treasury. It deals the matters of investment of surplus funds provided by the
branches.
iv. Funds Reconciliation Unit

It mainly plays the role of reconciliation of Bank accounts with other commercial banks at Head
Office, due maintenance of check and balance of funds received or remitted from other branches.
Advices issued by branches are responded by Funds Reconciliation Department. It also monitors
the reconciliation of bank accounts with other commercial banks.
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3. REGULATORY REPORTING DEPORTMENT

The regulator gives instructions What to do, when to do and how to do as Government agencies
and SBP etc, while reporting means perpetrations of the reports and submission of the reports to
the regulators. That’s why this department reports certain information to the regulators and
ensures it that bank has compiled all instructions.
Aims and objectives
It aims to fulfill the statuary reporting requirements and provides financial reporting to the
management for the specific purposes. Its objective is to provide and ensure the effectiveness in
meeting statutory reporting obligations. It makes prompt and accurate analysis to aid effective
decision making. In last it ensures the implementation of the Basal-II.
Functions
It reformulates and redesigns system of data capturing, its consolidation and subsequent reporting
keeping in mind regulatory requirements. It ensures the implementation of updated reporting
requirements, which are update time by time. It analysis the financial results and repots it to
concerned authority and arrange compliance with external and internal auditors. Furthermore it
performs the job suggested by the regulatory authority.
Reporting process
There are mainly five steps in reporting process, which are defined bellow:
Data Capturing
This is the step in which data is gathered from various sources such as field offices, deportments
such as CAD and ISD and from financial reports such as Accounts, D/R Series etc.
Consolidation
In this step the gathered data is consolidated in to single hole, because this data is collected from
various sources.
Data verification
In this step collected data is verified weather the collected data is valid and true or not, because
the collected data is not all ways reliable. It needs very careful examination due to possible errors
and mistakes, which are later rectified for report generation purpose.
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Report generation
On the basis of analyzed and verified data is injected in the form of reports which is provided by
SBP.
Submission
In this last step the complete formed reports are submitted to the regulatory authorities such as
SBP. The main sources of submission are courier and online.
4. HUMAN RESOURCE OPERATIONS DEPARTMENT

Aims
Its aim is the Provision and optimum utilization of Human Resource for sound and efficient
operations of the Bank.
Objectives:
 Implement human resource strategy, policies, procedures and Programs in areas of employee
service matters, compensation and Benefits, human resources planning and recruitment.
 Provide effective Human Resource services to line functions.

Functions

Ensure that all employee service matters are handled professionally and within the
policy framework.

Overall responsibility of leave-management and pay fixation of all employees.

Contribute to employee motivation through application of compensation and Benefits,
promotion and transfers and posting policies frameworks.

Recruitment and selection of the best talent in the market.

Organize work in various units of the Department to ensure that performance Metrics set for
the department are achieved.

Set performance parameters for the units and consistently monitor Performance of units
against the given performance metrics.

Prepare departmental budget and monitor expense against budget.

Ensure that all relevant employment laws of country are complied with.

Ensure that all change management initiatives of the Bank are implemented down the line.
 20


Ensure that confidentiality is maintained in sensitive HR issues to ensure complete trust of
management and employees.

Establish human resource requirements through a human resource plan covering qualitative
and quantitative aspects i.e. ensuring the right man for the Right job and employee headcount/
manpower numbers.
5. TRAINING AND DEVELOPMENT DEPARTMENT

Aim
Its aim is to communicate and upgrade knowledge, professional competence and develop
Positive mental attitude among all employees of the Bank.
Objective
Achieve and comply with the business plan and strategies of the Bank Through manpower
training and development.
Functions

Assess training and development needs of all employees in the Organization.

Identify best possible training and development innovations/solutions.

Ensure that the Bank possess trainers who are adequately trained to design, Deliver and
validate training and development programs.

Ensure that all requisite logistic support is available to the training academies.

Establish an environment for trainees conducive to learning.

Interact with all major training agencies, trainers and vendors to the Bank’s Advantage.

Supervise various units to ensure achieving performance metrics set for the department.

Monitor designed performance parameters for the units against the set Performance metrics.

Overall responsibility of implementation of HR policies and programs in areas Of training
and development and career planning.

Prepare departmental budget and monitor expenses against budget.

Provide guidance to units in resolution of problems and complaints.

Evaluate overseas training programs for their suitability vis-à-vis ZTBL, Propose nomination and
finalize cases accordingly.

Arrange internships for students in Business Administration of recognized Universities, in the
Field and at H.O.
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 Perform administrative functions for the Department such as sanction of Leaves, approval of
tour programs, approval of travel allowance etc.

6. PERFORMANCE MANAGEMENT DEPARTMENT

Aim
Its aim is to maximize human work performance of the Bank.
Objectives
 Ensure availability of effective performance metrics setting and assessment.
 Monitor organizational work performance through review of Achievement of
performance targets/standards set for each and every mployee concerned in the Bank.

Functions

Formulate Bank-wide performance management system to ensure that Performance metrics
are set and measured across the Bank.

Initiate and manage annual performance management cycle. Identify Anomalies and adopt
measures to resolve them.

Maintain in current state a central performance management database of all
Employees concerned.

Organize work in various units of the Department to ensure that performance Metrics set for
the department are achieved.

Set performance parameters for the units and consistently monitor Performance of units
against the set performance metrics.

Overall responsibility of implementation of HR policies and programs in areas of
performance management and enhancement.

Obtain feedback on various HR policies, procedures and programs to
Recommend improvements.

Prepare departmental budget and monitor expense against budget.

Ensure that all relevant employment laws of Pakistan are complied with.

Adopt measures for risk identification and mitigation.

Ensure that all change management initiatives of the Bank are implemented Down the line.
 22


Provide guidance to units under supervision in resolution of problems and complaints.
 Perform administrative functions for the Department such as sanction of Leaves, approval of
tour programs, approval of travel allowance etc.

7. POLICY AND REGULATIONS DEPARTMENT

Aim
Its aim is to provide best human resource management solutions.
Objectives
 Evolve HR strategy and development of policies, programs and procedures in line with HR
strategy.
 Cascade down HR programs for implementation.

Functions

Overall responsibility of Human Resource Information System to Facilitate qualitative and
quantitative analysis.

Undertake comparative policy and program analysis of related industry To recommend HR
policy and program changes.

Maintenance of employee records and database thus ensuring that Accurate and updated
employee records are available for decision-making.

Design, implement and monitor HR tools for bringing efficacious Improvement to HR system.

Prepare recommendations for formulation of pay-package.

Organize work in various units of the Department to ensure that performance metrics set for
the department are achieved.

Set performance parameter for the units and consistently monitor performance of units
against the set performance metrics.

Overall responsibility of formulation and implementation of HR policies And programs. Obtain
feedback on various HR policies, procedures and Programs to recommend improvements.

Prepare departmental budget and monitor expenses against budget.

Define financial & administrative powers for all functionaries of the Bank.

Define job description of all positions in the Bank in consultation with The
concerned Division/Department/Office.
 23

Up-dating of HR manual.

Adopt measures for risk identification and mitigation.

Recommend change management initiatives.

Perform administrative functions for the Department such as sanction of Leaves, approval of
tour programs, etc.

Arrange maintenance/destruction of old record of the bank.

8. BUSINESS DEVELOPMENT & MARKETING DEPARTMENT

Aim
Its aim is the business development of the Bank through development of liability products, brand
management and competitive marketing of liability products.
Objective
Develop and market new product/services within the overall Risk Management Guidelines, and
to evaluate current products and services Based on market information and feedback so as to
bring improvements And to derive the maximum value out of them and to maintain the
Competitive edge on Bank’s products and services.
Functions

Develop the short term/long term/annual business/operational plans.

Perform analysis- led development and marketing based on real customer Needs.

Develop business and product strategies for the Bank, including new product Development
for liability and assets products that would entail specific development of product features,
pricing and positioning.

Issuance of instructions and guidelines on various products.

Evaluate current products and services offered, based on market information And feedback,
bring improvements in the features, pricing and positioning to derive the maximum value out of
them.

Prepare advertisement, promotional programs, product brochures, brand Development programs,
marketing database management, lockers/ banking services and other related activities.

Deliver targeted customer propositions through well-planned campaigns, including radio and
television advertising, direct mail and sales promotions.

Deal with insurance matters related to liability product/services.
 24


Analyze particular customer segments and predict market changes that the Bank can turn
into opportunities.

Implement policies and directives of BoD, SBP and the GoP on deposit, utility bills, lockers and
other products.

Support users in the application of systems, attending to and resolving system problems in
conjunction with systems specialists.

 Ensure that procedures, systems, stationery, documentation etc. related to credit are in place
and in compliance with internal and external rules/ regulations for all present and new
products and services of the bank.

Devise procedure system to implement product/ services and monitoring/ evaluation with due
coverage of internal control.

Identify all operational and transactional risks to develop key risk indicators for the function.

Develop and adopt early warning system to proactively mitigate these risks.

Develop customer service quality standards.

Perform any other work/ job assigned by the higher management.

Sub-Units of business development and marketing unit:

1. Business Development Unit

Devise procedures, ways and means to increase resource base of the Bank.

Develop the short term/long term/annual business plans of the Bank.

Allocate deposit targets to Zonal offices and monitor/pursue on regular basis.

Develop new products to promote customer loyalty and retention so that Bank is able to
maintain and strengthen the current market-holding/share.

Obtain internal and external clearance to ensure regulatory/ statutory Compliance for
products and services offered by the Bank.

Prepare product financials, indicating its pricing and revenue targets.

Deal insurance matters related to deposit.

Support users in the application of systems, attending to and resolving system problems
in conjunction with system specialists

Develop and adopt early warning system to proactively mitigate these risks.
 25

2. Marketing Unit

Enhance and establish a positive corporate image for the Bank through various marketing
mediums including brochures printed material, press, outdoor advertisement, electronic
media and website.

Responsible for product lifecycle management initiatives including product launching
and product repositioning activities.

Conduct needs assessment/ market survey of the target market to gather the
requisite intelligence to design products and services that meet the market expectations
thus improving the market- penetration of the Bank.

Prepare training material in coordination with HR Division. Arrange workshops for the
relevant staff for all new products and services developed.

Prepare effective marketing and promotional campaigns to ensure achievement of
product revenue targets.

Work closely with the Training and Development Department and be responsible for preparing
and carrying out Training to select Trainers.

 Ensure that procedures, systems, stationery, documentation etc. related to credit are in place
and in compliance with internal and external rules/ regulations for all present and new
products and services of the bank.

Develop and adopt early warning system to proactively mitigate these risks.

Devise procedure system to implement product/ services and monitoring/ evaluation with due
coverage of internal control.

Perform any other work/ job assigned by the higher management.

9. DATA MANAGEMENT DEPARTMENT

The main objectives of the data management department are related to timely and efficient
supply of the inputs devices and training of the employees for the efficient supply of the data to
the head office. They make advices to the system development department for the proper
utilization of the software to the branches.
AIMS AND OBJECTIVES:
The aims and the objectives of the Data Management Department in ZTBL are as follows:
 26


Ensure efficient operations of regional computer centers and training of computer personnel by
latest tools and techniques.

Ensure timely supply of input by the branches to regional computer centers. The other
operation of this department is to make sure that all the data from the branches should be sent
to the regional office by the every Saturday of the week.

Processing and timely supply of output to branches. The instructions from different
departments are sent to the branches and one copy of this information is sent to the Data
Management Department. So it is also the responsibility to make sure that all the information is
sent to the branches.

It is also the responsibility of this department to make ensure coordination of computerization of
activities between users and MIS division.

It is also the responsibility of the data management department to provide feedback to
system development department (SDD) for improvements in the application software.

Wings of data base department

Data base department have three wings which are:
Policy and coordination wing
The policy and coordination wing controls all the policy matters and the management matters of
the department. It is the responsibility of the wing to ensure coordination and close interaction
with regional offices and their sub branches.
Field batch processing wing
The functions of the field batch processing wing are to coordinate with all the regional offices
and provide the data to the head office on required time. The other functions of the wing are to
coordinate with hard ware development department. It is the responsibility of Field Batch
Processing wing to ensure timely production of weekly, monthly, half yearly and yearly outputs
at R.C.Cs in respect of the entire region. This wing is liable to ensure timely supply of data from
the field to head office in the form of computer diskettes and in written form.
Technical support wing
Technical support wing provides the technical assistance to the department in case of storing of
data and any problem occurs in the hardware as well in the software. It is the responsibility of
this wing to provide technical assistance to solve operational problems, as reported by RCCs
from time to time in case of storing the data as well as in case of any fault in the hardware. It is
 27

also the responsibility of technical support wing to receive software from system development
departments and provide it to the Data Management Department.

10. INFORMATION TECHNOLOGY DEPARTMENT

The bank continued to deploy the latest information and communication technology to enhance
the quality, efficiency and speed of services to improve the operations. For data
transmission from field to Head Office through telecommunication lines, ISO successfully
deployed the Wide Area Network (WAN) between the Head Office and the
32 Zonal Offices around the country. WAN facility was also extended to two computer centers
located at Gilgit and Chitral. This has reduce the delivery time of data from the Zonal Office to
Head Office and a lot of improvement has been witnessed in meeting the various reporting
deadlines of State Bank of Pakistan.
To enhance efficiency of inter- office communications, ISO successfully extended the e-mail
facility at the Head Office as well as the Zonal Offices which has improved the quality and
speed of communication between these offices.
ISO provided latest hardware including Personal Computers to all field offices across the country
which has given impetus to the modernization and automation of bank's operation.
On the software front, a comprehensive branch-based Deposit Management System was
developed under ORACLE that provides automation and control over the management and
operations of the deposit products of the bank. Other software’s developed include
Nonperforming Loan System in the field, Software for White Revolution Scheme, SAM
Reporting System, Payroll Management System, NADRA'S CNIC Verification System,
CPF/GPF System for Accounts, Performance Appraisal Module of HR, etc.
The bank has also launched evening banking facilities at designated branches in the year 2008 in
order to survive in the competitive financial services market. ZTBL also plans to enter into
strategic partnership with an organization of international repute on fund remittances to facilitate
its clients as well as general public.
 28

PRODUCTS AND SERVICES

ZTBL Locker Facility
Zarai Taraqiati Bank Ltd. apart from its core functional activity marked with country based agri-
business, has started to serve its valued customers by offering lockers facility. Initially, this
facility is being offered at following 11 branches:-
Name of Branch
Main branch Lahore
Islamabad Branch
Peshawar branch
Gujranwala Branch
Faisalabad Branch
Multan Branch
Sahiwal Branch
Sargodha branch
Khan pur Branch
Shafi Court branch
Main Branch Gulshan-e- johar
PRODUCTS OFFERED TO MEET FINANCE NEED OF FARMERS
Zarai Taraqiati 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 fulfill our 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 to be modernized to increase the per acre production
and also to build ware houses 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 to fulfill the need of different types of customers.
 29

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 installments 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 godowns and orchard in
yearly/half yearly installments within maximum period of 8years.
Loan Schemes
ZTBL is offering the following loan schemes to the farmers.

Development Loans:

These type of loans advanced for the Installation of tube wells Pumping sets/lift irrigation pumps
(including peter engines) Open Wells. Purchase of improved farm machinery (including tractors,,
power tillers, implements, cutter binders (reaper wind rover), threshers, trolley, spraying
equipment, cane crusher and miscellaneous agricultural equipment, tractor pulled harvesters, self
propelled combines.

Production Loan:

Those types of loans which are advanced for seed, fertilizer, pesticides, labor charges and POL
etc. to grow crops and vegetables including working capital for poultry, dairy, orchard, fishery
and are recoverable within 18 months.

Production/Seasonal Loans Items:

 Seeds
 Fertilizers
 30

 Pesticides/Insecticides, Herbicides (Feticides) Manual Sprayers

White Revolution Scheme:

In order to modernize the dairy farming for increasing milk supply and mitigate poverty in the
country and improving the living standards of the rural inhabitants, a strategic partnership
between ZTBL and MIs. Pakistan Dairy Development Company has been agreed upon and an
agreement in this regard has been signed on 6th June, 2007. The salient features of this strategic
partnership are given here as under:

i. The company shall recommend good dairy farmer to ZTBL and send the loan request
to the bank along with necessary documents.

ii. The concerned branch of the bank will process the case as per prescribed procedure
of the bank.

iii. 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. The loan will be considered against securities acceptable to the bank excluding
surety, hypothecation of animal and assets created out of bank’s loan.

iv. There would be maximum limit of loan of Rs. 1 million per borrower/party

Initially the scheme will be for modernization of 5,000 farm during 5 years period which
involved Rs.700 million, 1000 farm would be covered under the scheme on yearly basis. The
project shall be started on pilot basis in potential area namely Lahore, Hyderabad, Quetta and
Peshawar zones and its expansion would be made gradually.

PDDC 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 PDDC.

Supervised agriculture scheme:

Under this scheme agriculture loans are given for short, medium and long term loans upto Rs.
1.00 million per borrower/per case. The loans are sanctioned for In Fats, livestock, orchard,
tractor, agricultural machinery, tube well and irrigation facilities etc. under the scheme besides
 31

provision of credit, information are to the farmers for planning the farm, production, guidance
for implementation of the scheme, marketing and repayment of loans.

Zarkhaiz (one window operation):

For timely and conveniently provision of credit to purchase inputs, loans are provided to the
borrowers less than One Window Operation being conducted twice a week during Rabi and
Kharif seasons. 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.

Sada Bahar Scheme:

For providing timely input loans for crops and working capital for poultry and fishery etc, the
Bank has launched a Sada Bahar Scheme. 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.O.500 million. Scheme’s main features are as under:

 Revolving Credit Limit is fixed to cater production credit and ancillary requirements of
the farmers during one year period.
 The documentation once completed remains applicable for three years with yearly
cleanup/renewal without any further documents.
 The borrowers can draw the credit in lump sum or in installments according to his requirement.
 Like-wise he can repay in lump sum or in installments during the year when his cash
position allows him.
 Pass Book containing transactions in his SBS Account is supplied to every borrower free of cost.
Tea financing scheme:

In order to increase the tea cultivation in District Mansehra, Swat, Mutta, Shangla par and Dir in
Malakand Division, tea financing scheme has been introduced which would not only save the
hard earned foreign exchange but would also help improve the socio-economic condition of the
inhabitants of the area. The salient futures of the scheme are given as under:

 Maximum Credit Ceiling of Rs.60, 000/- per acre has been fixed.
 Farmers owing land up to five acres are eligible to avail loans.
 32

 Credit will be given in 3 installments: first year Rs.30, 000/-, 2nd year Rs.15, 000/- 3rd year
Rs.15, 000/- provided the disbursed loan is used properly.
 The credit would be repayable within 1 year with 6 years grace period with prescribed markup
of 9% per annum. Rebate of 1 % will be allowed in mark-up on timely repayment and proper
utilization of the loan.

Crop maximization project:

Ministry of Food, Agriculture and Livestock (MINF AL), Government of Pakistan has launched
Crop Maximization Project in 109 villages in various districts throughout the country to increase
the productivity/yield of crops. Under the project MINFAL has to provide funds of Rs, 299.893
million to ZTBL for disbursing loans to the project farmers for purchase of inputs. Till the time
funds of Rs.468 Million have since been received by the Bank for the purpose. These funds are to
be revolved for meeting input credit needs in the project villages till 30th June, 2014 after which
Bank will return the principal amount to MINFAL. Accordingly Credit needs of the project
farmers are being met by respective ZTBL branches through Village Organizations formed for
the purpose. Duly the currency of the project Bank is authorized to charge 4% per annum mark-
up on loans to project growers to meet its operational cost, however in case of default Bank’s
normal rate of return i.e. 9% p will be applicable.

Recovery Schedule:

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 installment on due date the mark-up shall
continue to be charged and last installment due to this may differ from the amount of installments
fixed at the time of disbursement.

Issuance of Notices:

Demand notice is issued before the due date of every installment.

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.
 33

Legal action:

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 vs. favor has decreed a 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 disposes-off the mortgaged properties of defaulters
for satisfaction of its dues without intervention of courts under Financial Institutions (Recovery
of Finances) Ordinance 2001.

Rescheduling of Loan Repayment Facility

Rescheduling of Loan Repayment Facility ZTBL allows rescheduling of repayment of

installments to its borrowers in order to maintain credit discipline and to mitigate their genuine
problems in real hardship cases and in areas declared as calamity hit by the respective Provincial
Governments.

The Rescheduling facility is to be considered by bank on case basis and is to be allowed on

borrowers request only. The relaxation in recovery period shall not be allowed beyond one year
in any case. The borrowers shall have to execute a supplementary loan agreement on Non
Judicial Stamp Paper of appropriate value to give legal cover to extended period.

The borrowers shall have to pay the return for the extended period.

Rescheduling Rate of down payment as against due

Number installments to be rescheduled

1st 10%

2nd 20%

3rd 30%

Types of Security
1 Immovable Property

2 Movable Property
 34

3 Personal Sureties

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 Pass Book 75%
 Alienability Certificate 66%
 Residential/Commercial Buildings 70%
 Lease hold rights of a leased land of CDA/KDA with 99 years lease 70%

Moveable Property and Guarantees

1. Unconditional Bank guarantee from scheduled Banks
Up to maximum amount of an un-conditional Bank guarantee after keeping sufficient margin for
un-paid mark-up, cost, charges and 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 values 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 which ever is less
 35

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.
 36

RATIO ANALYSIS

Financial analysis is the process of identifying the financial strengths and weakness of the firm
by properly establishing relationship between the items of balance sheet and profit and loss
account, in order to make rational decision in keeping with the objective of the organization, for
that purpose the management use analytical tools. To evaluate the financial condition and
performance of the business entity, the financial analyst needs to perform "checkups" on various
aspects of the business financial health.

A tools frequently used during these checkups is a financial ratio analysis, which relates two
piece of financial data by dividing one quantity by the other we calculate ratios because in this
way we get a comparison that may prove more useful than the raw number by themselves. The
business itself and outside providers of capital (creditors and investors) all undertake financial
statement analysis. The type of analysis varies according to the specific interest party involved.
The nature of analysis is depending at the purpose of analyst.

Liquidity Ratios
Liquidity ratios measure the company’s ability to meet its short-term obligations in the short
span of time. There are many ratios of liquidity such as, current ratio, quick ratio and
networking capital. Data is taken from 2010 to 2012 to calculate liquidity ratios of ZTBL.
The Current Ratio:
Current ratio is calculated and interpreted as under;
Year Current Assets Current
Current Liabilities Ratio

2015 11846996 1.798

65887460
2014 111024570 1.74
63632110
2013 106259151 1.65
64370348

Interpretation of Current Ratio:

The current ratio of the ZTBL is slowly increasing from 2010 to 2012. This trend shows that the
bank is able to pay its current liabilities from its current assets.
 37

Thus the higher the current ratio, the more the bank is considered to be liquid in order to satisfy
its short term obligation. It is depend on the items which comprises the current assets. The major
part of current assets of ZTBL consists of cash, cash with other banks so the lesser current ratio is
also considered favorable.
Quick Ratio:

Year Quick Assets Quick

Current Liabilities Ratio
2015 12525067 0.19
65887460
2014 14232906
63632110 0.226
2013 13662350 0.212
64370348

Interpretation of Quick Ratio:

Above calculated results shows that the quick ratio of ZTBL is higher in 2010 while lower in
2012. That is why it is not in the favor of the organization. The quick ratio of 1.0 or greater is
recommended for the organizations. But the quick ratio cannot provide a better measure of
overall liquidity only when a firm’s inventory cannot be converted into cash.
Net Working Capital (NWC):

Year T.C.A – T.C.L Net Working

Capital
2015 118469963 – 65887460 82582503
2014 111024570 – 63632110 47392460
2013 106259151 – 64370348 41888803

Interpretation of NWC:
The NWC of the ZTBL from 2013 to 2015 is increasing gradually. It shows that the bank has
positive working capital that can be used to meet its current needs. Because the total current
assets are greater than total current liabilities and the bank is better able to pay its short term
obligation as they become due. So it is favorable for the bank and positive working capital is
always recommended for any organization.
 38

Leverage Ratios
Leverage ratios, also referred to as gearing ratios, measure the extent to which a company utilizes
debt to finance growth. Leverage ratios can provide an indication of a company’s long-term
solvency. Leverage ratios include debt ratio, total debt to net worth ratio & time interest earned
ratio which are given as under;
Debt Ratio:
Year Total Liabilities Debt Ratio
Total Assets
2015 104463319 0.7922
131859354
2014 98146493 0.80
122467960
2013 95881306 0.815
117585949

Interpretation of Debt Ratio:

The debt ratio provides an indication of a company’s capital structure and whether the company
is more reliant on debt or shareholder equity to fund assets and activities. The debt ratio of the
ZTBL in 2013 is a highest from the rest of the years while lower in 2014&2015. The higher ratio
shows that bank is more rely on the debt that is why considered to be more risky. The high
leverage ratio considered to be unfavorable if the creditors of the bank can start to demand
repayment of debt. Low ratio means bank is more rely on shareholders’ equity instead of debt.
Total Debt to Net worth Ratio:
Year Total Liabilities Total Debt
Net Worth to Net Worth
2015 104463319 3.81
27396035
2014 98146493 4.03
24321467
2013 95881306 4.41
21704643

Interpretation of Total Debt to Net worth Ratio:

 39

If we interpret the debt to net worth ratio of the ZTBL, it is gradually decreasing from 2013 to
2015. The higher the debt to net worth ratio, greater will be the business is considered to be risky
and consider being unfavorable. The lower the debt to net worth ratio, lower will be the business
is considered to be risky and consider being favorable. The high leverage usually indicates the
business has a lot of risk because it must meet principal and interest on its obligations.
Time Interest Earned Ratio:
The time interest earned ratio of the ZTBL from 2013 to 2015 is calculated and interpreted as
under;
Year EBIT Times Interest
Interest Expense Earned ratio
2015 10936065 1.552
7046657
2014 8103670 1.67
4826511
2013 9150536 1.46
6261631

Interpretation of Time Interest Earned Ratio:

Times interest earned is the ratio of earnings before interest and tax (EBIT) of a business to its
interest expense during a given period. The time interest earned ratio of the ZTBL in 2013 is 1.46
which is lower from the rest of the years, Lower values are unfavorable. The ratio is highest in
2014 which is 1.67. Higher value of times interest earned ratio is favorable meaning greater
ability of a bank to repay its interest and debt. In 2014, the time interest earned ratio is improved
due to the highest amount of the earnings before interest & taxes as compared to other years.
Profitability Ratios
Profitability ratios measure a company’s performance and provide an indication of its ability to
generate profits. As profits are used to fund business development and pay dividends to
shareholders, a company’s profitability and how efficient it is at generating profits is an
important consideration for shareholders. Following is the interpretation of profitability ratios.
Ratio income before tax

Year income before tax Ratio income before tax

Total assets
2015 3889408 2.94%
 40

131859354
2014 3277159 2.67%
122467960
2013 2877842 2.44%
117585949
Interpretation of income before tax ratio:
The RIBT is the ratio that shows that how much money is retained by the bank before deducting
the money to be paid as taxes. The RIBT is steadily increasing from 2013 to 2015 due to increase
in the amount of total assets and total income before tax. The RIBT in 2013 is lower from the rest
of the year. The Higher the RIBT ratio shows that the bank has good operating performance
without tax implications and efficiently managed its assets to earn a more money.
Income after tax ratio:
Year income after tax Ratio income after tax
Total assets
2015 2589527 1.96%
131859354
2014 2145149 1.75%
122467960
2013 1864286 1.58%
117585949

Income after tax ratio:

The RIAT is incessantly increasing from 2013 to 2015 due to increase in the amount of total
assets and income after tax. The RIBT in 2013 is lower from the rest of the year shows that a
bank can earn less money on more investment. The Higher the RIAT ratio shows that the bank
has efficiently utilize its assets portfolio to earn a more money on total assets.
Return on Assets (ROA):
The return on asset of the ZTBL from 2010 to 2012 is calculated and interpreted as under;

Year Net Income Return on Assets

Total assets
2015 3074568 2.33%
131859354
2014 2616824 2.1%
122467960
2013 2269967 1.93%
 41

117585949

Interpretation of Return on Assets (ROA):

The ROA is gradually increasing from 2013 to 2015 due to increase in the amount of total assets
and total income. The ROA in 2013 is lower from the rest of the year that shows a bank can earn
less money on more investment. The Higher the ROA ratio shows that the bank has efficiently
managed its assets portfolio to earn a more money on total assets, achieving economic efficiency
& more opportunities of financing.

Return on Equity (ROE):

The ROE of the ZTBL from 2013 to 2015 is calculated and interpreted as under;

Year Net Income Return on Equity

Stock holder equity
2015 3074568 24.5%
12522441
2014 2616824 20.89%
12522441
2013 1864286 14.88%
12522441

Interpretation of Return on Equity (ROE):

The ROE is reasonable in 2013 and then increased in 2014 due to the increase in income.
Anyhow, the ROE is sharply increased in 2012 due to increase in the amount of total income and
stockholder’s equity. The highest ROE indicates that bank can earn a high return on less equity is
generating cash internally. The higher the ROE ratio, the greater will be the opportunities to earn
high return & consider being favorable while lower the ROE ratio, the lower will be the
opportunities to earn low return & consider to be unfavorable.
Loan to deposit ratio: it is calculated as under

Year loan Loan to Deposit

Deposit
2015 88060424 7.93
11096956
 42

2014 84743706 9.45

8962457
2013 84792594 8.83
9602772

Interpretation of Loan to deposit: Loan to deposit ratio of the ZTBL show negative trend in
2015. The ratio in the year of 2013 is 8.83 which is sharply increasing 9.45 in 2014. In 2015 the
ratio decreases from 9.45 to 7.93 which is unfavorable. The increase in ratio favorable for the
organization and if the ratio decrease it will be unfavorable for the organization.

Earnings Per Shares (EPS): The EPS of the ZTBL is calculated & interpreted as under;
Net Income EPS
No. of ordinary shares
2015 3074568 1.23
2500000
2014 2616824 1.05
2500000
2013 1864286 0.75
2500000

Interpretation of EPS:
The EPS from 2013 to 2015 is gradually increasing from 0.75 to 1.23 respectively. In 2015, the
EPS is increased due to further increase in net income with same amount of total number of
ordinary shares. Higher the EPS indicates that the ZTBL can earn on behalf of each share, but not
the amount of earnings actually distributed to shareholders.
 43

Horizontal Analysis of Balance Sheet

In this Horizontal Analysis the year 2010 is taken as a base year to calculate the change in
other financial years. All the columns are representing change with respect to 2010.

Particulars 2015 2014 2013

ASSETS % % %
Cash & balances with treasury banks 128.36 111.32 100
Balances with other banks 82.44 102.37 100
Lendings to financial institutions 0.000 0.000 0.000
Investments – net 228.06 153.63 100
Advances – net 103.85 99.94 100
Operating fixed assets 104.28 103.130 100
Deffered Tax Assets- net 75.26 75.55 100
Other assets – net 122.22 102.32 100
LIABILITIES

Bills payable 96.07 68.00 100

Borrowings 100.068 100 100
Deposits and other accounts 115.55 93.33 100
Sub-ordinated loans 100 100 100
Liabilities against assets subject to finance lease 0.000 0.000 0.000
 44

Deferred tax liability - - -

Other liabilities 122.42 109.53 100

NET ASSETS
REPRESENTED BY

Share capital 100 100 100

Reserves 150.25 122.76 100
Unappropriated profit 158.67 126.58 100
Surplus on revaluation of assets - net of tax 213.6 156 100

Horizontal Analysis of Profit & Loss

Particulars 2015 2014 % 2013 %

Mark-up/return/interest earned 127.25 106.8 100
Mark-up/return/interest expensed 100.63 102.18 100
Net mark-up/interest income 146.32 110.27 100
Provision against non-performing loans and
advances 76.90 49.92 100
Write offs under Government relief packages 207.07 92.69 100
Bad debts written off directly - - -
77.93 49.95 100
Net mark-up/interest income after provisions 170.89 131.85 100
NON MARK-UP/INTEREST INCOME
Fee, and brokerage income 158.63 85.86 100
Dividend income 48.62 94.37 100
Other income 97.09 70.32 100
Total non mark-up/interest income 101.5 70.56 100
133.88 99.20 100
NON MARK-UP/INTEREST EXPENSES
Administrative expenses 133.75 85.11 100
Provision against other assets - - -
Other charges 120.14 161.70 100
Total non mark-up/interest expense 133.19 91.23 100
 45

135.15 113.87 100

PROFIT BEFORE TAXATION 135.15 113.87 100
Taxation - Current 113.45 90.36 100
- Prior years
- Deferred - - -
128.24 111.68 100
PROFIT AFTER TAXATION 138.90 115.06 100
Unappropriated profit brought forward 164.61 130.04 100
Profit for appropriation 157.59 125.95 100
Profit after taxation for the year 138.90 115.06 100
Comprehensive income for equity 138.90 115.06 100
Net Change In Value of Securities 123.5 120.14
Deferred Income Tax 176.55 171.69 100
Total comprehensive income 135.44 115.28 100

Vertical Analysis of Balance Sheet

Particulars 2015 2014 2013

ASSETS % % %
Cash & balances with treasury banks 2.67 2.495 2.33
Balances with other banks 6.82 9.126 9.284
Lendings to financial institutions - - -
Investments – net 13.56 9.837 6.66
Advances – net 66.78 69.19 72.11
Operating fixed assets 0.895 0.953 0.962
Deffered Tax Assets- net 0.25 0.27 0.37
Other assets – net 9.00 8.12 8.26
100 100 100
LIABILITIES

Bills payable 0.222 0.26

Borrowings 38.99 42.915 43.59
Deposits and other accounts 8.415 7.31 8.166
Sub-ordinated loans 2.430 2.616 2.625
Liabilities against assets subject to finance lease - - -
Deferred tax liability - - -
Other liabilities 29.24 28.182 (26.798)
 46

NET ASSETS 32.729 14.307 3.948

REPRESENTED BY

Share capital 9.496 10.225 10.649

Reserves 2.147 1.889 1.602
Unappropriated profit 7.768 6.672 0.716
Surplus on revaluation of assets - net of tax 1.364 1.072 0.716

100 100 100

 47

Vertical Analysis of Profit & Loss

Particulars 2015 % 2014 % 2013 %

Mark-up/return/interest earned 100 100 100
Mark-up/return/interest expensed 39.00 39.90 41.74
Net mark-up/interest income 61.00 61.90 58.26
Provision for non-performing loans 9.27 7.26 15.34
Provision for the investment 0.00070 0.00073 0.007
Write offs under Government relief 0.127 0.0068 0.007
Bad debts written off directly 0.000 0.000 0.000
9.400 7.17 15.35
Net mark-up/interest income after provisions 57.58 52.9 42.90
NON MARK-UP/INTEREST INCOME
Fee, and brokerage income 1.007 0.075 0.094
Dividend income 0.15 0.35 0.39
Gain on sale of securities 2.07 0.005 -
Unrealized loss on investments (0.26) - -
Other income 36.94 31.85 48.41
Total non mark-up/interest income 39 32.28 48.90

NON MARK-UP/INTEREST EXPENSES 100.000 100.000 100.000

Administrative expenses 62.50 47.34 59.46
Provision against other assets (0.27) 3.37 (0.13)
Other charges 0.014 0.023 0.015
Total non mark-up/interest expense 62.24 50.75 59.46

PROFIT BEFORE TAXATION 33.91 34.45 32.96

Taxation - Current 11.94 11.32 13.39
-Prior years - - -
-Deferred (0.46) 0.57 (2.00)
11.48 11.90 11.39
PROFIT AFTER TAXATION 22.87 22.55 20.95
Unappropriated profit carry forward 72.17 67.88 55.79
Profit for appropriation 95.05 90.43 76.75
Profit after taxation for the year 22.87 22.55 20.95
Other Comprehensive Income 22.87 22.55 20.95
Net Change In Value of Securities 4.76 5.51 4.90
Deferred income tax (0.47) (0.55) (0.34)
Total comprehensive income 27.15 27.51 25.51
 48

SWOT ANALYSIS OF THE ZTBL

Under this chapter strength, weaknesses, opportunities and threats are discussed. ZTBL is a
leading institute in Pakistan for providing different types of loans in Pakistan. Due to having big
organizational setup it have certain strengths due to it’s wide setup, but at the same time it have
to face certain weaknesses. In this chapter some opportunities are also discussed due to which
ZTBL can expand their operations and in the end threats are also discussed.

STRENGTHS
The bank provide its services almost whole the Pakistan.
 ZTBL is a leading institute which offers loans to the country peoples at simple terms and
conditions.
 ZTBL advance loans to the farmers at their door step after fulfilling the loans security
requirements.
 Professional and experienced team is available in the entire department at Head Office.
 Professionals and experts team of mobile credit officers is available in ZTBL for advancing and
recoveries of loans.
 New technologies and machineries are introducing by ZTBL for the agriculture purpose.
 Fringe benefits are given to the employee of the bank that plays key role in the motivation of the
employees.
 The bank also gives the substantial loan to their employee.
 ZTBL has a proper training institute for their MCO (Mobile Credit Officers) in order to make
them updated with the changing trends.
 The flow of information is very systematic, branches to the regions and regions to the head
office, and head office to the regions and regions to the breaches.
 Through the restructuring process the over staff have highly decrease by Golden Hand Shake
scheme.
 There is coordination and good communication environment between the departments of ZTBL.
 The head office Audit Department also checks the whole payment process. So proper system of
checks and balance for the payment is there.
 49

 Performance of all the branches are controlled and evaluated on the basis of monthly operations
reports (MRO) received and checked by the branches development and control department.
 Employee’s performance is also cheeked down by ACR system.
 No competitor in the field of loaning to agriculture sector.
 For the proper training and development to the staff, the staff colleges are available at Karachi
and Islamabad.
 One window operation is announced time to time to facilitate the farmer.
 Data is properly maintained and keep it up to date.
 Government launches different scheme or packages to the farmers like relief packages, tractor
scheme etc.
 ZTBL is playing a greater role in the poverty alleviation program.

WEAKNESSES
 ZTBL loan recovery system is very much low due to inefficient system.
 ZTBL have expensive technological machinery which is used in work process, and cost of
repairing is also too high.
 Due to public organization there is political influence in job hiring there is overstaffing.
 Non-payment attitude and default culture.
 In the ZTBL there is no work breakdown structure, all the work burden is on one or two person
in the department.
 There is political influence for advancing loans.
 Old staff, unqualified and un-skill persons are also working over there.
 There is no proper advertisement strategies follow for the promotion of the ZTBL.
 There is no proper advertisement for the promotion of agricultural products.
 The loan is not properly utilized for the agriculture purpose.
 The process of advancing loan is too much lengthy.
 The working environment of the department is very poor in some sensitive department.
 The rule and regulation are not strictly followed like late coming
etc. Seniority based promotion.
 There is no any new recruitment since 1996 because of overstaff so there is lack of new talent.
 50

 The accountability system is in very bad condition.

OPPORTUNITIES
 Present government is more emphasizing on the accountability. So this is a golden change for
ZTBL for Recoveries of the political loaning.
 Present government has also introduced micro credit scheme, which enhance the operations and
profit ability of the bank.
 This is a time to reduce the over staff and new recruitment should be done.

THREATS

 Interference in the posting and transferring by those personalities whom are related with the
operation of the bank.
 Large no of un-viable branches.
 Delay in the finalization of the cases field in the banking tribunals/special banking courts.
 Recovery of the loan depends upon the crops the farmer have maintained, flood and drought
made causes destruction of the crops which will make the farmer defaulters.
 Due to shortage of water the agricultural land is going to be expired in Pakistan.
 Also the rate of the agricultural crops is decreasing season by season.
 There is some other bank also coming in this sector like The Bank of Punjab.
 51

WORKING AS INTERNEE

Writing of vouchers
Vouchers are the important evidence of all the transactions takes place in the bank. In the
accounts department of ZTBL it is the back bone, every transaction of bank with reference to
cash required a voucher to be drawn against it.
The vouchers are of three types:
1. Debit Voucher (Receipt of Amount)
2. Credit Voucher (Payment)
3. Transfer Voucher

1. Debit Voucher
Debit Voucher is used when bank received any amount from anyone. The example is of deposited
amount by the depositors, the payment of loan by the loanee etc.

2. Credit Voucher
It is used for the payment of any amount by the bank to anyone. Like the cheque drawn on bank,
the expenses of bank itself etc.

3. Transfer Voucher
As the name shows it is used when the amount is required to transfer from one head to another.
The example is the transfer of utilities bills accepted by the bank to the respected utilities
provided company (MEPCO, PTCL etc.). The transfer of return to the income account of bank, it
is also used when the loan is sanctioned so it is required to transfer amount of loan to the loanee
account.
Another use of transfer account is to correct mistakes in the ledger, for example if an account is
mistakenly debited in place of another account. So the transfer voucher can be written to credit
the first account and debit the second one to correct the mistake.
In the end of day all the vouchers written during the day is required to be write down in the daily
Scroll (which will be discussed later on) and then all the vouchers of day is sewed and then
sealed so that no new voucher can be placed or removed from the record. These vouchers used to
store in record room and they keep piling up there. Every voucher has at least two copies, one
 52

for the customer and one for the bank record. For easy recognition the vouchers are made of
different colors.
 Debit Voucher (Have three copies and in white color)
 Credit Voucher (Have two copies and in blue color)
 Transfer Voucher (Have two copies and in yellow color)

Daily Transaction Scroll

Daily transaction scroll is written by operations officer every day in a bank. It is the record of all
the cash inflows, outflows and transferred on a particular day. Both cashier and operation officer
writes his own scroll at the end of day when they have to close the cash. The closing balance in
both these scrolls must be same otherwise there are some transactions which have not been
recorded correctly either by the cashier or the operation officer.
If I will divide the page of scroll than the following are the important columns and part of it:

Zarai Tarqiati Bank Ltd. Branch Code

Daily Transaction Scroll
Date
Sheet Number
Name of Branch---------------------------

The above are the sketch of columns used in the upper side of scroll page. Sheet number is used
when there are more vouchers to write and they cannot be written on a single sheet so the next
sheet is required to use in such situation the number of sheet should be written so that they can
be arranged in a proper way.

Sr Voucher G.L Debit Credit Debit Credit

. No. Head

1 154700 11 000
2 701 500
3 568900 5 000
4 768200 4 000 4 000
 53

Total 11 500 5 000 4 000 4 000

The above view is of the rest of the page where all the vouchers are recorded. The sheet is
divided into two sections the left side part is used to write the debit and credit vouchers and their
amounts, while the right side is used to write the debit and credit of transfer vouchers.
The above is the example of writing of different vouchers. The first two vouchers are debit
nd
vouchers that are why I have written the amount (11,000 and 500) in the debit column. The 2
voucher name is not written completely which is an ease which can be used if the same serial is
going on and only the last number is changing. The third voucher is a credit voucher and its
amount (5,000) is written in the credit side in front of it. The fourth voucher is representing a
transfer voucher so its effect will be shown in the right side of the sheet. In both Debit and Credit
column of the right side of sheet is filled with the same amount because in transfer voucher one
account will be going to be debit and the other will be credit so the net effect will be zero.
In the end all the amounts of all the vouchers are totaled in their respective columns. Like in this
example the debit vouchers total amount is 11,500 and the total of credit vouchers is 5,000. The
debit and credit side of transfer vouchers side will always be the same, which are 4,000 in the
example. After getting this total the next step is to calculate and write the closing balance.

1. Opening Balance 400,000

2. Debit Balance 11,500
3. Total Balance (1 + 2) 411,500
4. Credit Balance 5,000
5. Closing Balance (3 – 4) 406,500

To calculate the closing balance first step is to write the Opening Balance which is absolutely the
Closing Balance of last day. Here in the example I have assumed it 400,000. After it the debit
nd th st nd
balance will be written in the 2 row and in the 4 row both 1 and 2 row will be added to get
the total balance. Now the credit balance will be written and to get the closing balance the credit
rd
balance is required to deduct from the total balance of 3 row.
To close the cash, this closing balance should match the closing balance in the books of cashier.
When comparing with the cash scroll of cashier the Total Balance, Credit Balance and then
 54

Closing Balance all should be similar otherwise there will be something which is skipped during
writing even by the Officer or by the cashier.
When closing cash, in the end of this scroll sheet the number of total debit, credit and transfer
vouchers is required to be written so that nothing can be added or erased from the above scroll by
any one.

Number of Debit Credit Transfer Total

Vouchers
2 1 1 4

As you can find that in the above given example of scroll, there are two debits, one credit and
one transfer vouchers have been written so the same number is written in the ending column of
scroll sheet.

Making Entries in the Ledgers

In ZTBL the record of current accounts and loans are manually maintained. There are many
records which have been computerized but still the hand written ledgers are used. Making entries
in the Ledgers requires simple concept of debit and credit. However the understanding of
banking practices are required so that to follow the exact way of recording any transaction
because usually the column written on the ledger books are not used for the purposes for which
they are made. The employee usually has established their own way of writing transactions in the
ledgers the way in which they feel easy. I have found many columns unused in the ledgers of
Sada Bahar Loan Scheme or they have been used to write other information which is different
from the heading of columns.

Opening and Closing Cash

In the beginning of every day the cashier opens the cash in time. The cash remains locked in the safe
and it requires two keys two open. One key is always remains with the cashier and the other key
remains with the manager; however manager can further gives it to someone else. In the branch
where I have completed my internship, the AMO has the second key.
 55

FINDINGS & RECOMMENDATIONS:

FINDINGS:
During this six weak internship program I got a better experience of job environment in public
sector. During the internship period I found there are many areas where management attention is
required. In ZTBL peoples are use to inefficient working environment, some of those just come
to mark present.
 ZTBL communication is not efficient, they have their personnel conflicts.
 Data is not available in certain cases;
 Employees do not have knowhow about their work.
 New recruitment is taken place after a very long interval.
 There is lack of new skills and hot blood.
 Work atmosphere is so boring, there is need to introduce new set up
 In the ZTBL, In era of technology and globalization, the understaffing may cause unnecessary
work burden on employees decreasing their efficiency.

RECOMMENDATIONS
 The communication tools must be efficient for the proper communication and the working of the
department.
 The ZTBL has to improve its recovery system in order to meet the future credit
requirements. The data collection tools must be improved.
 The additional computers must be provided for the timely collection of data and also for the
storage of the data.
 The extra employees in the department should be transferred to some other departments.
 The efforts have been taken to enhance timely disbursement to small farmers with greater
outreach through efficient governance which will alleviate poverty in the rural sector.
 Provide cheaper rate of interest thus every former avail the opportunity of credit.
 Branches and Mobile Credit Officers have to direct contact with the farmers and rural people
therefore both are playing an important and vital role for the development and uplift of
agriculture sector.
 ZTBL has to eliminate the seniority base promotional strategies.
 56

 There is need to recruit new energetic talent from the market thus new ideas are introduced in the
operations.
 It is ensure to reduce the involvement of political leader during the loan disbursement thus one
should get his part if he or she deserve.
 There is need to follow the advertisement promotional strategies thus introduce ZTBL to every
farmer of the country.
 The availability of staff training makes employees awareness of work and ZTBL Staff College is
providing effectively.
 Concentrate on small farmers instead of large farmers to reduce the poverty percentage from the
country.
 There must be a research department in the ZTBL that focus the problems in the agricultural
sector and find the best possible solution.
 There must be intranet within the ZTBL institutes thus records are made available at any time,
and communication is made efficient.
 ZTBL has to introduce ATM card service to facilitate their customers
 ZTBL has to focus on commercial banking also
 Introduction of New Branches to expand their business.
 Introduction of DMS to overall branches.
 57

CONSLUSION
During my internship here in ZTBL, I found that ZTBL has high level of professionalism and
challenging environment and its culture is friendly. ZTBL seems Top Agriculture Financing in
the future as indicated by the financial indicators. It keeps energy and potential to serve the
deserving clients in all over the world. The bank has set itself a vision to be a world-class bank.

This can only be achieved with dedication and a passion to excel in every activity. I really
admire ZTBL’s policy makers for designing investor friendly and
customer oriented products.
The bank is really working well and contributing a valuable part in the economy of Pakistan
through tax, giving loan to government, giving loans to the businesses for their survival and
expansion, generating a well skilled human resource and employment etc. During this internship,
I really learned Professionalism, leadership skills, communication skills, problem solving skills,
situation analysis skills and how to become a good mentor etc.