ZARAI TARAQIATI BANK LTD.

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Dec 13 - 19, 2010

The Zarai Taraqiati Bank Ltd (ZTBL) (formerly known as Agricultural Development Bank of Pakistan) is the largest public sector financial development institution with a wide network of 27 zonal offices, 9 audit zones, and 341 branches in Pakistan.

It is a key specialized bank of Pakistan providing affordable agriculture financial services to rural sector, comprising 62 per cent of the total population.

ZTBL alone serves about half a million farmers annually and has a share of around 28.6 per cent of the total institutional agricultural credit. The bank so far has financed 532,254 tractors and 148,486 tube-wells besides being the major source of financing for farm inputs including seeds, fertilizer, pesticides, and insecticides. Priority was also accorded to the provision of more credit for livestock, dairy farming, poultry farming, aquaculture and financing of oil seed crops.

CREDIT DISBURSED BY ZTBL (RS. MILLION)

YEAR CREDIT
2001-02 29,108
2002-03 29,270
2003-04 29,933
2004-05 37,409
2005-06 47,594
2006-07 56,473
2007-08 66,939
2008-09 75,139
2009-10* 48,987
* : (July - March)

HISTORY OF ZTBL

After 1947, it was considered that the existing institutional sources of credit such as Taccavi and Cooperatives, were insufficiently meeting the credit needs of farmers. Consequently, Agricultural Development Finance Corporation was created in 1952 under a Central Act for the purpose of expanding financial facilities and promoting the development and modernization of agriculture in Pakistan.

In 1957, the Agricultural Bank of Pakistan was established and advanced both short and long-term loans. Both these institutions were merged together as Agricultural Development Bank of Pakistan in Feb 1961. On Dec 14, 2002, the federal government converted the Agricultural Development Bank of Pakistan (ADBP) into Zarai Taraqiati Bank Ltd (ZTBL) and the new venture started its operation with immediate effect.

BENAZIR TRACTOR SCHEME

In order to bridge the gap between demand and supply position of tractors in the country, the federal government has decided to launch accelerated agricultural mechanization for productivity enhancement, "Benazir Tractor Scheme" through ZTBL. The scheme envisages supply of 10,000 tractors during 2009-10 to the farmers to be selected through computerized balloting for grant of subsidy up to 50 per cent of the cost of the tractor subject to maximum of Rs200,000 per beneficiary/tractor.

AWAMI ZARAI SCHEME

All new borrowers of crop production loans will have to avail revolving limit under Awami Zarai Scheme to get inputs through M/S KSSL under kind system. This scheme is optional for existing borrowers to the bank.

SUPPLY OF AGRICULTURAL CREDIT BY ZTBL (RS MILLION)

YEAR ZTBL
2005-06 47,594.14
2006-07 56473.05
2007-08 66,938.99
2008-09 * 45,399.87
2009-10 * 48,986.53
* (July - March)

CROP MAXIMIZATION PROJECT-II

An agreement was executed between Ministry of Food & Agriculture (CMP-II M1NFA) and ZTBL in 2009 for implementation of Crop Maximization Project-II in which both have agreed to participate in establishment and operationalization of revolving fund.

FINANCING PACKAGE KARACHI

A financing package for the branches falling under Karachi Zone has been notified through which financing for fisheries, dairy, poultry farming, feed mill, horticulture, vegetable raising & nursery for orchards, covered horticulture, cut flower, ornamental plants, agriculture machinery, irrigation schemes, and milk collection centres is advanced to accelerate development.

RURAL DEVELOPMENT SCHEME

In order to provide credit assistance for dairy, poultry, sheep & goat farming in the rural areas of the State of Azad Jammu & Kashmir, a memorandum of understanding between Zarai Taraqiati Bank and Azad Kashmir Small Industries Corporation has been signed. Moreover, ZTBL has also launched crop loan insurance scheme (CLIS) as per instructions of the government/ SBP.

AGRICULTURAL CREDIT

In order to cope with the increasing demand for agricultural credit, institutional credit to farmers is provided through ZTBL, Punjab Provincial Cooperative Bank Limited, five big commercial banks, and domestic private banks. Adequate availability and access to institutional credit is essential for accelerating the pace of agricultural development and ensuring food security in the country.

The SBP allocated Rs260 billion for the year 2009-10 as compared to Rs250 billion fixed for last year indicating an increase of 11.6 per cent over the disbursement of Rs233 billion during the year 2008-09.

CONCLUSION

ZTBL is the country's premier financial institution providing financial services to agriculture sector. ZTBL is playing an 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 in the country for increasing professionalism and technical proficiencies of employees.