INTERNSHIP REPORT
ZARAI TARAQIATI BANK LTD.
Submited to:
Sir, Fida Hussain Bukhari
Submitted by:
Adnan Ijaz
M08MBA071
Specialization in Finance
MBA Banking & Finance 2008-2010
Hailey College of Banking &
Finance
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
University of Punjab
2
Internship Report on Zarai Taraqiati Bank Ltd. 2010
In the name of ALLAH the
most benificent, the most
merciful
3
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
ACKNOWLEDGEMENT
I have great sense of gratitude for the most Beneficent and
Merciful Allah who has always helped me in all matters of life .I
tried but He rewarded me more than the tried.
I have deep feelings for whole of my family, in general, and for
my Father, my Mother and my elder brother, in particular .They
have always soothed me, elevated me and their words and du’a
has floated me in the deep seas of troubles. All of my successes
are due to the prayers of my family.
I am thankful to all of my teachers and my class fellows and
friends whom cheerfulness and guidance is an asset for me .I am
especially thankful to the bank staff who has given me
opportunity to get precious practical knowledge and also for their
guidance during my internship. Without the help of all these I was
not able to complete this report.
4
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Preface
This Internship report is the compulsion put in by Hailey College of
Banking and Finance for the award of master degree in business
administration.
In order to accomplish the task of completion of the degree, I choose
the renowned and reputed organization that is the Zari Taraqiati Bank
Ltd. I went through 6 weeks internship training in the bank in order to
perceive the true art and the practical picture of banks’ working and to
go through the process by which the organization is making very good
out of its limited resources. The report is based on the introduction of
the bank, products offered, financial analysis and assignments I
handled during my internship.
The report is divided into two main parts; the first part includes the
introduction of bank, its products and financial analysis while the
second part is based on the assignments I handled during my
internship.
I am positive that the college will oblige me by giving its
recommendation and consent for the approval of the degree and the
purpose for which I have gone through training and report writing
procedure will be served positively.
5
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Table of Contents
.................................................................................................. 8
Part One...................................................................................... 8
Ch. 1: Introduction of Zarai Tarqiati Bank Ltd.................................8
Chapter 1..................................................................................... 9
History ..............................................................................................9
Credit Rating................................................................................................................. 11
Corporate Vision............................................................................................................ 12
Corporate Mission......................................................................................................... 12
Corporate Objectives.........................................................................13
Transformation of ZTBL to R.F.I of the country and road to excellence.........................14
Branch Network................................................................................16
Management Hierarchy......................................................................17
Board of Directors.............................................................................20
A Brief Resume of President..........................................................................................21
........................................................................................................24
Kissan Support Services Ltd...............................................................24
KSS Aim......................................................................................................................... 24
KSS Operation............................................................................................................... 24
Objectives..................................................................................................................... 24
Services/Activities so far undertaken by KSS................................................................25
Chapter 2................................................................................... 27
Products and Services.......................................................................27
ZTBL Locker Facility ..................................................................................................... 27
Products offered to Meet Finance Need of Farmers.............................28
Types of Loans Advanced..............................................................................................28
Loan Schemes...................................................................................29
Supervised agriculture scheme:....................................................................................29
Zarkhaiz (one window operation)..................................................................................29
Sada Bahar Scheme...................................................................................................... 30
Tea financing scheme................................................................................................... 30
Crop maximization project............................................................................................31
PER ACRE CREDIT LIMITS...................................................................32
Major Crops................................................................................................................... 32
Minor Crops................................................................................................................... 32
Growing Agro Forest Trees............................................................................................33
Growing Orchards......................................................................................................... 33
Mature Orchard/Fruits crops.......................................................................................... 33
6
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Types of Security...............................................................................34
Immovable Property...................................................................................................... 34
Moveable Property and Guarantees..............................................................................34
Personal Surety............................................................................................................. 35
Debt Equity Ratio..............................................................................36
Repayment Periods...........................................................................37
Recovery Procedure...........................................................................37
A) Recovery Schedule................................................................................................... 37
b) Issuance of Notices ..................................................................................................37
c) Legal Action ............................................................................................................. 38
d) Rescheduling of Loan Repayment Facility.................................................................38
d) Down Payment for Rescheduling of Loans ...............................................................39
Part Two....................................................................................67
Ch. 5: Assignments I handled during my Internship......................67
Chapter 5................................................................................... 68
Organogram of Mian Channu Branch..................................................68
Redemption of loan...........................................................................69
Opening of Current Account...............................................................73
1: Acquiring Original CNIC.............................................................................................73
2: Filling Current Account Form.....................................................................................74
3: Filling of Know Your Customer Form..........................................................................75
4: Current Account Specimen Card...............................................................................76
5: Registering name in the Current Account Register (Issuance of A/C No.)..................76
6: Filling of Deposit Slip of starting amount...................................................................77
7: Signing by AMO and Manager...................................................................................78
8: Issuance of Cheque book.......................................................................................... 78
9: Opening account in the ledger of bank.....................................................................78
ZTBL Flood Relief Fund 2010.........................................................................................82
Writing of Vouchers...........................................................................84
1. Debit Voucher........................................................................................................... 84
2. Credit Voucher.......................................................................................................... 84
3. Transfer Voucher....................................................................................................... 84
Sample of Debit/Credit Voucher.........................................................86
Sample of Transfer Voucher...............................................................92
Daily Transaction Scroll.....................................................................93
Making Entries in the Ledgers............................................................95
Disbursement and Recovery Entries...................................................95
Revolving SBS Loan...........................................................................97
Opening and Closing Cash................................................................101
Safe Register:.............................................................................................................. 101
Dispatch and Diary..........................................................................102
......................................................................................................102
7
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Learning as an internee...................................................................102
Duties.............................................................................................102
Part One
Ch. 1:Introduction of Zarai Tarqiati
Bank Ltd.
Ch. 2:Products Offered
Ch. 3:Financial Analysis
Ch. 4:SWOT Analysis
8
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Chapter 1
The Zarai Taraqiati Bank
Limited (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 352 branches
in Pakistan. The bank serves
around half a million clients
annually and has over one million
accumulated account holders.
History
Pakistan is an agricultural country and more than 60% of its population
is working related to agriculture. A development in the agricultural
sector will no doubt result in the development of the whole country. To
keep 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, Fishery, Animal
Husbandry, Poultry, Dairy Farming.
Later on the Agricultural Development Bank of Pakistan was also
established in September 1957, under the Agricultural Development
Bank Act. The Bank is to provide credit in cash or in kind, warehousing
and storage facilities to agriculturists, cooperative societies and other
bodies, of which the majority of members are agriculturists.
9
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
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. The Agricultural Development Bank of
Pakistan was a banking company for the purpose of the Banking
Companies Ordinance and the State Bank of Pakistan Act.
On 14 December 2002 the Federal Government has converted the
Agricultural 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 banks
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 clientele in the
agricultural and rural segment of the country with adequate returns to
the stakeholder.
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.
Ownership
Type of Institution
Established
President & CEO
Equity
Headquarters
Total Deposits
Government
Specialized Bank
1961
Muhammad Zaka Ashraf
18.7 Billion (2009)
Islamabad, Pakistan
PKR 8.8 billion (as Dec.31st, 2009)
10
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Total Disbursement
Homepage
PKR 77.7 billion (as Dec.31st, 2009)
www.ztbl.com.pk
ZTBL is providing affordable, rural and agriculture financial services to
the rural Pakistan, comprising 68 % of the total population. The Bank
through a country-wide network of 352 branches is serving around half
a million clients annually and over one million accumulated account
holders with the average loan size of around Rs.89,000.
Credit Rating
In August 2010, ZTBL continued to achieve AAA credit rating by JCRVIS.
Yea
Entity
r
201
AAA/
0
A-1+
200
AAA/
9
A-1+
Stand
Alone
B+/ B
B+/ B
Outl
ook
Stable
Stable
The credit rating of the bank is due to the reason that bank enjoys
sovereign guarantee of the federal government that covers its debt
obligations to State Bank of Pakistan (SBP) and ensures safety of
deposits under the Banks’ (Nationalization) Act 1974. The bank’s
lending book is largely funded through SBP’s credit lines while
contribution from deposits remains nominal. ZTBL is actively exploring
different
options
for
resource
mobilization
including
bilateral/multilateral arrangements with financial institutions. In case
these efforts materialize; it would diversify the existing funding source
of the bank, thereby reducing reliance on the SBP.
11
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
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.
12
Internship Report on Zarai Taraqiati Bank Ltd. 2010
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.
13
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Transformation of ZTBL to R.F.I
country and road to excellence.
of
the
The conversion 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 entailed ADB’s Rural
Finance Sector Development Program (RFSDP) with the objective to
transform ZTBL into a sustainable Rural Finance Institution. It also
included the up-gradation of Information technology (IT) infrastructure
for which funds from ADB’s loan were to be utilized.
Healthy and well-functioning rural finance markets are directly related
to achieving the two key national policy objectives of accelerating
rural/agriculture growth and reducing poverty. The realization of these
objectives depends on the simultaneity of developments in rural
finance and non-financial markets to foster the creation of diverse
sources of rural finance to build sustainable financial institutions, and
stimulate products and capital flows in the rural sector. For this, rural
finance must be seen as an integral part of equitable development
within a framework of macroeconomic stability.
For the majority, access to affordable rural finance services is also
important to enable them to compete in the post-World Trade
Organization scenario. Inability to compete because of high financial
costs could reduce income of the majority of farmers and rural clients,
particularly the small and subsistence clients. Lack of access to
affordable rural finance services will also prevent the clients from
switching to non-farm activities.
The ZTBL restructuring plan covering the following;
• Governance: establish an environment that facilitates good
governance and accountability;
• Systems: modernize operations through use of technology,
networking, and communication tools;
14
Internship Report on Zarai Taraqiati Bank Ltd. 2010
• Business processes: streamline products and delivery systems
so as to reduce transaction costs, simplify operations, and
increase outreach;
• Products and services: introduce products and services that
are financially economically viable;
• Human resource development: improve standards and skills
of management and staff and strengthen training capacity; and
• Information Technology: establish new hardware and software
platform to support MIS, accounting system including forensic
accounting, and risk management functions.
The reforms shall establish ZTBL as a key R.F.I of the country. By
expanding its private sector role, the bank aims to establish network of
high tech rural and agri. financial services through intermediations
under public private participation and whole-sale -retail lending
mechanism.
15
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Branch Network
Head Office
Islamabad, Pakistan
Details of Regional Offices
Total Zones
Total Audit Zones
Total Branches
16
27
9
352
Internship Report on Zarai Taraqiati Bank Ltd. 2010
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. However, at present the
bank has 7 directors including chairman. The bank also has a president
appointed by the federal government and a company secretary.
In ZTBL, the president supervises and directs the Chief Executive
Officer who supervises and directs the Head of Department, who then
supervise and direct the officers under them. The management
hierarchy of bank is as follows;
17
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Earlier the bank was functioning like a pure government institution and
permission has to be sought on every step for moving forward. Now
the bank management board will be fully empowered to run the affairs
of the ZTBL.
More than 2,000 employees of the bank have opted for Voluntary
Golden Hand Shake Scheme, offered by the bank to its employees.
Bank has established a task force for improving the operational
performance of the staff and it was monitoring the disbursement,
recovery operations and performance of field functionaries. The task
force comprised 10-15 officers and each officer will head a desk
18
Internship Report on Zarai Taraqiati Bank Ltd. 2010
exclusively to monitor 3-4 regions. This task force will be responsible to
evaluate performance of each MCO, Manager and Regional Manager on
the achievement of bank’s policies regarding credit and recovery
periodically.
19
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Board of Directors
Syed
Qamar-Uz-Zaman
Shah
Chairman Board
Mr.
Muhammad
Zaka Ashraf
President/ CEO
Mrs. Nazrat Bashir
Director
Mr.
Shafqat
Hussain Naghmi
Director
Mr. Muhammad Iftikhar
Khan
Mohmand
Director
Mr. Tauqir Ahmad
Faiq
Director
Dr. Khalid Ahmad Khokhar
Director
Mr.
Imam
Sheikh
Director
Mr. Muazam Ali
Company Secretary
20
Bux
Internship Report on Zarai Taraqiati Bank Ltd. 2010
A Brief Resume of President
Mr. Muhammad Zaka Ashraf
Present Portfolios
• President/Chief Executive Officer, Zarai Taraqiati Bank Ltd.
•
Chairman & Chief Executive, Ashraf Group of Industries
•
Chairman, Pakistan Sugar Mills Association (Punjab Zone) from
October, 2006 (Second Tenure)
•
Chairman, Sugarcane Research & Development Company, Agriculture
Department, Government of Punjab
•
President, Petarian Association, Lahore
•
Patron-in-Chief Sindh Abadgar Welfare Association (Sindh)
Posts Held
• Advisor to Chief Minister Sindh from 1989 to 1990
•
Member Executive Committee, Lahore Chamber of Commerce &
Industry from October 2002 to September 2004
•
Central Chairman All Pakistan Sugar Mills Association from October
2004 to October 2006
21
Internship Report on Zarai
Taraqiati Bank Ltd.
•
2010
Vice Chairman of The Federation of Pakistan Chambers of Commerce &
Industry’s Standing Committee on “Food & Agriculture” from January
2007 to December 2007
Academic Institutions
• Member Board of Governors of Sadiq Public School, Bahawalpur, from
1st January 1989 to 2008
Ms. Nazrat Bashir
Director
Ms. Nazrat Bashir belongs to District Management Group of Civil
Services of Pakistan. She is Masters in Economics from New York
University, New York, USA and Master in Psychology from Peshawar
University, Peshawar.
She has extensively traveled abroad and has attended various
international Seminars and Conferences such as on Micro Finance, Anti
Money Laundering, and Instruments of Financial Markets etc.
Domestically too she has attended various programmes in some of
very prestigious institutions of Pakistan.
She possesses 29 years of administrative experience in government
service in economic & financial policy and its implementation. At
present, she is working as Additional Finance Secretary, Internal
Finance, Finance Division, GoP, Islamabad. She is a certified Director
on the Panel of Pakistan Institute of Corporate Governance (PICG).
Besides Zarai Taraqiati Bank Limited, she is on the Board of Directors
of National Investment Trust (NIT) and NBP.
22
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Mr. Shafqat Hussain Nagmi
Director
Mr. Shafqat Hussain Naghmi is a civil servant from DMG Group and
currently posted as an Additional Secretary I in Federal Ministry of
Commerce, Islamabad. Previously he was posted as Chief Operating
Officer (COO) in Pakistan Cricket Board.
Tauqir Ahmad Faiq
Director
Tauqir Ahmad Faiq represents the Ministry of Food and Agriculture,
Government of Pakistan on ASF’s Board of Directors. An expert in
District Management, Secretariat Affairs, Development Project
Management and International Cooperation with combined experience
of 34 years having held the office of Secretary at Government of
Punjab’s Zakat and Usher, and Social Welfare Departments; he is
currently Additional Secretary at the Ministry of Food and Agriculture,
Government of Pakistan. Tauqir Ahmad Faiq has served as Director
General Lahore Development Authority Government of Punjab and has
also been member the Board of Revenue and Population Welfare
Department of Government of Punjab.
23
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Kissan Support
Services Ltd.
Subsidiary of ZTBL
Kissan Support Services Ltd. Is a subsidiary of ZTBL which is
established with a capital investment of 100 Million to help ZTBL in the
achievement of its objective and also to make availability of trained
human capital to the bank.
KSS Aim
To provide support staff to ZTBL & under take its non core activities.
KSS Operation
Kissan support services operates under its Memorandum & Articles of
Association.
Objectives
The main objective of KSS are following:
• To provide to the Bank all kinds of support staff and ancillary
services
• To plan, organize and establish training facilities to impart
training to the bank’s staff
• Drip Irrigation System to assist the bank clients in marketing of
their product and provide storage facilities
• To assist the bank clients in marketing of their product and
provide storage facilities
24
Internship Report on Zarai Taraqiati Bank Ltd. 2010
• To provide welfare services to the employees of the Bank
including education, vocational training, sports and recreation
facilities
• To invest any surplus money of the company not immediately
required
• To carry on any business, which may seem to the company
capable of being conveniently carried on
• To liaison & establish contracts with agricultural research
organizations for development of efficient, effective and
appropriate technologies
• To carry on business of providing consultancy, advisory and other
agency services and support services to Zarai Taraqiati Bank
Limited
• To provide to the Bank’s clients quality products and services for
efficient and improved farming
•
Etc.
Services/Activities so far undertaken by KSS
• Security Services to ZTBL
• Recruitment/provision of staff
• janitorial Services provided to:
a. ZTBL Head office buildings
b. Ztbl Farms
c. Staff college
d. Printing stationery office
e. AV Unit
f. Old record office
25
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
g. Sports club
h. Warehouse
• Management of Sports Activities
• Management of Sports Activities
• Photocopy Services
•
Day to day minor repair and maintenance of ZTBL HQ Buildings
26
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Chapter 2
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:S.No Name of Branch
1
Islamabad Branch
2
Main Branch Lahore
3
Peshawar Branch
4
Gujranwala Branch
5
Faisalabad Branch
6
Multan Branch
7
Sahiwal Branch
8
Sargodha Branch
9
Khan Pur Branch
10
Shafi Court Branch
11
Main Branch Gulshan-e-Johar
Following are the approved rates for rent of lockers and key deposits
against which lockers will be allocated:
Specificatio Rent Per
Rent after grace Key
Type
n
Annum
period
Deposit
Small 6-1/2"x4Rs.1,200/Rs.1,500/Rs. 5,000/1/2"x23"
Mediu 13-1/2"x4Rs.1,800/Rs.2,250/Rs.
m
1/2"x23"
10,000/Large 13-1/2"x8Rs.2,500/Rs.3,125/Rs.
1/2"x23"
15,000/Life Time Locker Facility
On lump-sum payment of locker rent for ten years entitle the lessee to
avail the locker facility for life time, without key deposit.
27
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
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
warehouses 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.
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.
28
Internship Report on Zarai Taraqiati Bank Ltd. 2010
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 8
years.
Loan Schemes
ZTBL is offering the following loan schemes to the farmers.
Supervised agriculture scheme:
Under this scheme agriculture loans are given for short, medium and
long term loans up to 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 provision of credit, information are provided 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 under 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.
29
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
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:
30
Internship Report on Zarai Taraqiati Bank Ltd. 2010
• Maximum Credit Ceiling of Rs.60, 000/- per acre has been
fixed.
• Farmers owing land up to five acres are eligible to avail
loans.
• 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.
31
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
PER ACRE CREDIT LIMITS
Major Crops
Wheat
16,000
Paddy (Rice)
19,000
Sugarcane
30,000
Cotton
21,000
Maize
20,000
Minor Crops
Overall Credit Limit Per Borrower
Rs.1.000 Million
Sada Bahar Scheme under one window operation or Rs.0.500 Million
otherwise
Potato
36000
Bajra
11000
Tobacco
Mustard Mung
29000
11000
Jawar
Gram
11000
12000
Tomato
19000
Guara
3000
Mash
3000
Caster Oil
6000
Lentil
11000
Barlay
9000
Groundnut
14000
Berceme
4900
Sunflower
15000
Janter
4000
Soyabean
12000
Garloc
26000
Canola
13000
Turmeric
25000
Rape Seed
11000
Ginger
30000
Til(Sesame)
12500
Lacern & Shaftal
4500
32
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Suger beet
12000
Mature
Orchard/Fruits
crops
Pear
24000
Loquat
24000
Plum
Growing Orchards
33000
Apple
37000
Papaya
22600
S.
Trees
1st Year
Almond
32000
No.
Coconut
21000
Lichi
1
Mango
24,000
32000
Cherry
33000
2
Citrus
21,000
Mango
37000
3
Apple
23,000
Apricot
31000
Banana
37000
4
Banana
29,000
Peach
32000
5
Jujuba
19,000
Citrus
34000
2nd
Year
13,000
12,000
12,000
20,000
9,000
Dates
Strawberry
Tea
Guava
Pomegrante
3rd 4th Year
Palm
Year
Olive Oil
Walnut
13,000
13,000
Persimen
11,000
13,000
Zizi Phus(Bher)
12,000
12,,000
Melon
Water Melon
23,000
30,000
Musk Melon
10,000
10,000
31000
25000
60000
24000
33000
5th Year
22000
13000
23000
14,000
15000
13,000
25000
14,000
16000
16000
26,000
16000
10,000
6
Guava
21,000
12,000
11,000
13,000
13,000
7
Coconut
29,000
6,000
6,000
7,000
8,000
8
Palm Oil
18,000
6,000
7,000
7,000
7,000
9
Dated
33,000
12,000
11,000
12,000
13,000
Growing Agro Forest Trees
SNo.
1
Trees
Bamboo
1st Year
34,000
2nd Year
8,000
33
3rd Year
3,000
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Types of Security
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
34
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Full amount of loan plus return and other charges.
3. Government securities
85% of face value or market value 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 value 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 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.
35
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Debt Equity Ratio
For
Tubewell/Tractors/Implements/Attachments/Equipments
All kinds of
Tubewells/
Turbines
New Tractor
Used Tractor,
Equipments/
attachments/
implements
and used
tractor
25%
No equity
but 10% of
the loan is to
be needed in
PLS Account
-do-
Within 5 years in annual/biannual installments commencing
one year after first disbursement
Within 8 years in
monthly/quarterly or half yearly
installments to be decided by
Manager in consultation with
borrower.
Within 5 years in
monthly/quarterly or half yearly
installments to be decided by the
Manager in consultation with
borrower.
Except Tubewell/Tractors/Implements/
Attachments/Equipments
Production Loan upto Rs.0.100 Million
Land holding upto 25 acres/loan amount upto Rs.0.2
Million
Land holding beyond 25 acres to 50 acres/loan amount
beyond Rs.0.2 Million upto Rs.0.5 Million
Land holding beyond 50 acres/loan amount beyond Rs.0.5
Million upto Rs.1 Million.
36
NIL
15%
25%
30%
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Repayment Periods
S.
No.
1
Types
Loans
of Recovery Period
Short Term
Loans
2
Medium
Term Loans
3
Long Term
Loans
Crop production working capital loans
recoverable in lump sum commencing after the
harvest/marketing of respective crops and
within maximum period of 12 months.
Dairy farming and livestock etc. In yearly/half
yearly/monthly installments and within
maximum period of 5 years.
Tractor, agricultural machinery, poultry farming,
godowns and orchard iIn yearly/half yearly
installments within maximum period of 8 years
and. above.
Recovery Procedure
A) 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.
b) 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.
37
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
c) 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's favour 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 dispose off the mortgaged properties of defaulters
for satisfaction of its dues with out intervention of courts under
Financial Institutions (Recovery of Finances) Ordinance
2001.Rescheduling of Loan Repayment Facility .
d) 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 tocase basis and is to be allowed on borrower's 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.
38
Internship Report on Zarai Taraqiati Bank Ltd. 2010
• The borrowers shall have to pay the return for the extended
period.
d) Down Payment for Rescheduling of Loans
Rescheduling Number
1st
2nd
3rd
Rate of down payment as
against due installments to be
rescheduled
10%
20%
30%
39
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
SWOT analysis ZTBL
Strengths:
•
•
•
•
•
•
•
The total assets of the Bank stand at Rs.84 billion with authorized capital of
Rs.25 billion as of 31.12.2005, with a nation-wide working strength comprises
5500 employees.
The share of ZTBL in total national institutional agricultural credit remains around
35%.
ZTBL has a recovery ratio of 85%.
ZTBL has a social network of MCOs that work in every remote corner of country,
where any other commercial bank can’t dare to work.
Utility bills, hajj schemes applications are being collected by ZTBL.
It has introduced locker facility in some limited branches.
They have good cooperation with farmers; they meet them at least one time
in a week, which produces good cooperation among them.
Weaknesses:
•
•
•
•
•
•
ZTBL has a less number of people who have technical skill of computer and
information technology.
Up till now many branches could not be brought to online system.
As the ZTBL has to deal with the illiterate farmers that is why it has to keep itself
as simple as the farmer’s mentality.
The employees are promoted after a very long time that causes a distress among
employees.
Many branches still practice their daily transaction by book, which makes banking
laborious and time consuming.
Branches of ZTBL are ill equipped, less and poor quality furniture is provided.
40
Internship Report on Zarai Taraqiati Bank Ltd. 2010
•
Record keeping is poorly practiced.
Opportunities:
•
•
ZTBL has a great potential to serve general banking.
Deposit system introduction can generate funds for the bank.
• By making investment in new areas.
• Senior employees’ compliance with coordinators can enhance their
working abilities.
• By developing technical education, the bank can increase its progress.
Threats:
• Book keeping is proven to be a greater threat for ZTBL as there is danger
of record loss.
• There is no availability of online record which can produces confusions
among loonies.
• Although the recovery ratio is round about 85% but it is only window
dressing and not the actual one.
• There is no maintenance of duties by the staff.
• Their interest ratio is round about 9% per annum, which is very low from
other commercial banks.
41
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
ORGANIZATIONAL CHART OF
OPERATIONS DIVISION
42
Internship Report on Zarai Taraqiati Bank Ltd. 2010
AIM OF OPERATIONS DIVISIONS
To ensure efficient and sound operations of the field organization of the bank,
dissemination of agricultural technologies, make better provision for affording
efficient banking facilities, develop liability products.
43
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
OBJECTIVES OF OPERATIONS
DIVISION
1. Develop viable business products / services and achieve business
targets.
2. Develop the business plans for the bank.
3. Enable farmers to enhance the agricultural productivity by
mechanization.
4. Improve field operations and control system.
5. Control and monitor field activities.
44
Internship Report on Zarai Taraqiati Bank Ltd. 2010
FUNCTIONS OF OPERATIONS
DIVISION
1 .Develop and market new products / services, evaluate current product /
services to maintain and enhance competitive edge on Bank products.
2. Allocate deposit targets to zonal offices and its monitoring.
3. Support business development.
4. Analyzing and identification of weak areas.
5. Development of field expansion program.
6. Evaluation of the performance of branches and zones.
7. Carry out test and trial, of new viable agricultural technologies.
8. Dissemination of technical agriculture knowledge.
45
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
ZONAL OFFICE SETUP
46
Internship Report on Zarai Taraqiati Bank Ltd. 2010
LARGE BRANCH SETUP
LOAN PORTFOLIO:
MILLION RUPEES
47
ABOVE
700
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
MEDIUM BRANCH SETUP
LOAN PORTFOLIO: 3OO TO 700
MILLION RUPEES
48
Internship Report on Zarai Taraqiati Bank Ltd. 2010
SMALL BRANCH SET UP
49
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
MARKETING STRATEGY OF
ZTBL:
ZTBL LAUNCHES CARBON CREDIT SCHEME:
Islamabad—The Zarai Taraqiati Bank Limited (ZTBL) has launched a proactive strategy to adopt all the economically viable technologies feasible for
Pakistan to mitigate the effects of climate change. According to ZTBL press
release, the proactive strategy has been formulated to capitalize the great
business opportunity in trading carbon credit and solution to the problems of
climate
change,
habitat
loss
rural
poverty.
The bank has made an agreement with CDBPAK, as consultants to quantify and
capitalize carbon credits for ZTBL Carbon Credit, it added. It said that in view of
changing climate patterns the agriculture sector was undergoing phenomenal
changes including water scarcity, temperature variations, low soil fertility,
increasing population, decreasing farm sizes and require a paradigm shift in the
approach
towards
the
agriculture
The target clients of the ZTBL are farmers, who need to be apprised about using
cheap and renewable sources of energy as well as water conservation
techniques to reduce carbon emission and at the same time enhancing the
agriculture productivity at their end, it added. Realizing the challenges of the
global climate changes in the 21st century ZTBL has emerged as a pioneer in the
50
Internship Report on Zarai Taraqiati Bank Ltd. 2010
sector, the press release said adding that it has assumed the role of a green
bank by adopting an environment friendly approach Agencies.
GIVING LOANS ON EASY TERMS:
Bahawalpur: On the special directives of President Asif Ali Zardari, Zari
Taraqiati Bank Limited (ZTBL) is giving loans to farmers on easy terms and
conditions so that enhanced production of agricultural crops could be achieved.
This was stated by President ZTBL Ch. Zaka Ashraf while talking to APP here.
He said under a special package, ZTBL provides 90% investment to the growers
And all out efforts are being made to make them self-reliant and bring prosperity
to the country. Ch. Zaka Ashraf told that 10,000 tractors have been provided to
the farmers while 20,000 more tractors will be given to growers under Benazir
Tractor scheme, adding loans will also be given to the growers under the
scheme.
President ZTBL said that loans worth Rs. 72 billion will be given to the farmers
while solid steps are also being taken for the recovery of Rs. 75 billion from the
defaulters. He said, the government wanted to bring green revolution in the
country. Latest methods are being introduced and utilized to achieve the target,
he added.
CAREER FOR MANAGEMEN TTRAINEE OFFICERS:
ZTBL has the pride of being the largest Financial Institution in the rural sector of
the country. The Bank continues to operate as premier Financial Institution
catering to the credit needs of agriculturists for the development and
modernization of agriculture as well as promoting Cottage Industries in rural
areas. So we are looking for committed & enthusiastic individuals to fill the
positions of MTOs for operations of the Bank in Finance and Accounts. Fresh
MBAs or maximum one years experience may also apply.
ZTBL AND FLOW OF RURAL CREDIT:
51
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
One of the marketing strategies of Zarai Taraqiati Bank Limited is the increasing
flow of rural credit. As we know that the agriculture is the crucial contributor to the
national economy:
• Contributes a quarter to GDP.
• Employs 47% labor force.
•
Over 50% of industrial production comes from agro business.
•
Earns (directly or indirectly) 70% of export revenue.
•
Provides livelihood to 67% rural households.
• Vast Majority of poor live in rural areas (nearly 80% of all poor live in rural
areas).
• Poor are mainly dependent on agriculture for their food and livelihood
security Livestock is an important of livelihood for the poor.
Agricultural growth contributes most to poverty reduction.
• Through forward and backward linkages, agriculture. Contributes to rural
economy (farm and non farm) and creates livelihood for poor in the nonfarm sector.
The main source of agricultural growth includes:
• Dates, Mangoes, Citrus and Potatoes are high value potential horticultural
crops.
• Floriculture is fast growing sub sector, influencing domestic as well as
export markets.
• Remunerative opportunities exist for entrepreneurs in agri-business
identified high return agri-businesses include:
• Livestock fattening.
52
Internship Report on Zarai Taraqiati Bank Ltd. 2010
• Milk collection and chilling.
• Cut flowers.
• Fruit processing.
Accelerated growth of agriculture, especially of high value
agricultural activities, will continue to be cornerstone of Government overall
strategy to reduce poverty. ZTBL and micro-finance institutions; need to
increase flow of rural credit.
• During 2005-06 ZTBL disbursed Rs48 billion credits and total credit 137
billion, meeting less than one third of the total demand for Credit.
• Cumbersome legal process and lack of political will creates problem for
loan recovery.
• Access to credit remains limited and restrictive by lengthy processes
and smallholders are generally left out. But in ZTBL the process is too
shortened and easily accessible that all the smallholders are
entertained.
MARKETING STRATEGIES OF ZTBL:
There are a number of marketing strategies of Zarai Taraqiati Bank Limited
some of these strategies are listed below;
Crop Insurance:
The Benazir Credit Card Schemes and Crop Loan Insurance Schemes
have also been introduced for the benefit of cotton, rice and other crops
growers. Crop insurance Schemes have been considered an impractical
dream by the insurance sector for quite long, but innovative solutions
designed by National Insurance have made it a practical option. NICL and
National Bank of Pakistan have prepared an Agri Loan Insurance Policy
properly supported and backed by the re-insurance arrangements at a
reasonable competitive cost. Through this collaboration, agri loans of more
53
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
than Rs.30 billion have been provided insurance cover. Similarly, ZTBL
has also been provided the facility of Agri Insurance Cover.
Tractor Scheme:
The Tractor Scheme was launched to provide tractors to the farmers at a
subsidized price. A large number of tractors are to be distributed amongst
the farmers on very low interest rates. The ZTBL is supplying high
efficiency irrigation system to farmers to improve agricultural activity in
areas of scarce water. ZTBL provides tractor to farmers that have 10 acres
agricultural land. The recovery of loan is on easy terms. The farmers have
to pay back the loan in 8 years. The installment is semiannually
Which is round about 50,000 rupees? In this way the farmers can easily
pay back the amount.
Availability of Quality Seeds:
ZTBL decided to ensure the supply of quality seed, one of the most
important inputs in crop production, to have maximum yields in all crops.
As a result, production of almost all major crops, including wheat, rice,
maize, gram, moong and pearl millet, rose significantly. A special project of
improving vegetables seeds at local level has also been initiated.
Agricultural Loans:
During 2008-2009, the Government earmarked Rs.250 billion, higher by
20% over the preceding year, for banks to finance the farming community.
This amount for the current fiscal is Rs.260 billion for major and minor
crops, orchards and forestry. Credit limit was increased because of rising
prices of all inputs including electricity. Crop loan insurance scheme was
also introduced to enhance the access of farmers to agricultural loans.
Provision of agricultural credit to farmers facilitated them to procure the
costly inputs in order to ensure the target planting and production of
various crops. A new Agriculture Mode Village Program has been initiated
in 26 villages under the auspices of Zarai Taraqiati Bank Limited
54
Internship Report on Zarai Taraqiati Bank Ltd. 2010
(ZTBL). The objective is to organize the farming community at the
village level ensuring farmers easy access to agri credit.
ZTBL and Field Work:
One of the main marketing strategies of Zarai Taraqiati Bank Limited is the
field work. Through which the ZTBL officers visit the agricultural land and
meet the people, in this way they are able to know about the forming land
and also about the people. And the people too became conversant with the
officers and in this way they are able to know about the lending schemes.
ZTBL is also promoting hajj and umrah schemes.
BUSINESS PROCESS ANALYSIS:
ZTBL AND ENHANCEMENT OF CROP PRODUCTIVITY:
The economy of Pakistan is predominately agrarian in character. Despite
progress in other sectors the agriculture sector is contributing about 25% towards
the GDP. About 67.5% of the total population lives in rural areas and the
agriculture is main source for their livelihood. About 44% of the labor force is
engaged in agriculture sector and about 70% of the direct and indirect income is
generated from this sector.
The agriculture sector is multi-segmental. Majority of our farm community
comprised of subsistence farmers who are not in a position to use high quality
seeds, sufficient fertilizers and improved farm implements due To the lack of
finances available to them. Lack of finance is one of the main reasons for low per
acre productivity in our agriculture. The matter of enhancing agricultural
productivity therefore largely depends on the availability of finance and credit
facility available to the farmers in their respective areas (ADBL, 1996). Every
modern business is operated on capital or borrowed capital. Similarly, farming
also requires capital. The need for farm credit in increasing production and
effective utilization of farm resources is quite clear. Farming not only require
credit in the form of improved seeds, fertilizer and modern implements but also
55
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
requires liquid capital for financing harvesting, haulage of produce and other
similar farm operation (ADBP, 1996).
In Pakistan there are two major sources of agricultural credit, non-institutional
and institutional sources. The non-institutional credit suppliers include friends;
neighbors and professional moneylenders are the main source of credit in the
country. Institutional sources comprise of cooperative banks, Zarai Taraqiati
Bank Ltd. (ZTBL), nationalized and privatized commercial banks and Taccavi
credits (ADBP, 1996). Zarai Taraqiati Bank Ltd. (ZTBL) consolidated and
intensified its operation to play an effective role in financing of farm investments
to modernize agriculture, increase farm production and raise farm income. The
bank continued to push forward the on-going programmes and projects relating
to provision of credit and technology to targets groups covering landless,
subsistence, small farmers and rural women through its credit programmed
(Government of Pakistan, 2001).
The objectives of the study were as under:
• Analyze the utilization of credit by small farmers in the study area,
• Compare the effects of utilization of credit on crop production and income
of beneficiaries without credit and with credit.
• Suggest measures as to how the present credit scheme can further be
improved.
The present study was conducted to examine the utilization and effects of
short-term credit from Zarai Taraqiati Bank Ltd. (ZTBL) at Tehsil Kabul area of
district Swat in August 2003. Eighty respondents were selected in which forty
were the beneficiaries of ZTBL and the remaining forty were the nonbeneficiaries selected from the same area. Paired sample t-test was used to
compare the production and income of the beneficiaries without credit and
with credit. Independent sample t-test was used to compare the production
and income of beneficiaries with non-beneficiaries. On overall basis
beneficiaries’ farmer utilized 78.84% of the amount of credit for the purpose it
was received. While the remaining amount i.e. 21.15% was mis-utilized. Per
acre production of beneficiaries with credit for tomato, wheat, maize and onion
56
Internship Report on Zarai Taraqiati Bank Ltd. 2010
were 170.4 maunds (1 maund equal to 50kg), 24.6 maunds, 39.4 maunds and
152.4 maunds, respectively. In case of beneficiaries without credit it was
139.6 maunds, 18.93 maunds, 30.3 maunds and 130.7 maunds, respectively
on per acre basis. While in case of non-beneficiaries it was 144.5 mounds,
19.25 maunds, 32.2 maunds and 135.3 maunds, respectively on per acre
basis. Net return of beneficiaries with credit for tomato, wheat, maize and
onion was Rs.17410.9, Rs. 3908.67, Rs. 7695.75, and Rs. 16450.5,
respectively on per acre basis. While beneficiaries without credit it was Rs.
11863.21, Rs. 2195.54, Rs. 5981.17, and Rs. 10968.9, respectively on per
acre basis. In case of non-beneficiaries it was Rs. 13616.85, Rs. 2830.15, Rs.
6600.88, and Rs. 13465, respectively on per acre basis.
ZTBL AND BUSINESS SCHEMES:
ZTBL (Zarai Taraqiati Bank Ltd) formely known as Agriculture Development Bank
of Pakistan has been struggling since the last couple of decades to optimize its
operational efficiency. There has been tremendous pressure both by the State
Bank of Pakistan and BOD to design and implement an effective Enterprise
Resource Planning (ERP) system using Information Communication Technology
to enhance Regulatory Compliance, offer better KPI monitoring and improved
real time Management Information System enabling the Bank to launch new ICT
based schemes/products for farmers and HR Performance Management
System..
After a considerable lapse of time; ZTBL has experienced in the last two years a
most productive growth. The executive management has managed to
successfully convert the highly demoralized non-productive HR workforce into
productivity mode. Through the newly revamped productive HR workforce the
Bank has posted an overall 1.6 billion rupees in profits..
The Information Systems Division has been reorganized and revamped through
the induction of highly skilled and seasoned human resource and has enabled
the bank to do on-line loan processing using the bank’s own newly established
Wide Area Network (WAN). The efforts of the ISD development team towards the
successful modification of the architecture of the legacy loan processing system
57
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
has resulted in effectively conserving more than twenty years of continuous
business processes improvements of investment.
Through the successful modification in the architecture of the existing legacy
system; ISD has enabled the field offices to run real-time online processing jobs
centrally running on the servers at Head Office Data center.
This improvement now offers the entire portfolio of products and services to the
branch offices. The Branch staff can now entertain loan processing application,
recovery and/or release of installments under products like regular loan, Sada
Bahar, White revolution etc on the terminals in the branches.
This radical new development in the Bank’s ICT infrastructure has offered
tremendous operational efficiency. For example in the past the Branch office staff
conducted business manually and then hardcopies of the transaction data was
manually fed into the system on a weekly basis at the zonal offices.
Upon completion of the data entry of all branch offices within a zone was
completed, the Zonal office would then dispatch the consolidated data on tape
cartridges through courier services to the head office. Due to this process; at
Times considerable delays were experienced by the Bank for the compilation of
consolidated nationwide bank position.
There had been numerous monitoring, reporting and performance management
issues just because of the fact that HO was not able to have complete digitized
record of business transactions. The newly revamped Centralized loan
processing system would now enable the bank to improve the operational
efficiency tenfold with an overall reduction of operational expenses.
The Bank has selected ORACLE ERP in order to revamp the entire BackOffice
operations. In this regard, ORACLE University is currently conducting a two and
half months long rigorous training program for more than 120 bankers.
In order to fulfill State Bank regulatory compliance with reference to the
maintenance of NADRA verified client records; ISD has successfully conceived,
58
Internship Report on Zarai Taraqiati Bank Ltd. 2010
designed and developed an integrated end to end loan processing system by
mapping the ZTBL loan processing system to NADRA data base with a further
integration to the State Bank of Pakistan’s eCIB database.
Also the Loan processing system, Deposit Management system, NADRA
verification and Customer Credit worthiness are all seamlessly integrated
together. Since a few months ago, Data Cleansing in conformity to SBP and
ZTBL business procedure was conceived as difficult, if not impossible as the
entire physical record was available in the branches and there was no interface
even at Zonal offices to verify physical record with computerized loan processing
system, NADRA and SBP-CIB system.
ISD has also designed, developed and implemented Deposit Management
System at Branches as an extension of loan processing system. Most modern
database management system is being used to digitize the existing semi manual
deposit management system.
DMS has been designed to allow the bankers to post transaction themselves by
using most modern concepts like photo and signature verification on the screen.
With the deployment of the new system; all records would now be verified by
NADRA, checked for credit worthiness from the State Bank.
It has been planned that by the end of June, 2008, more than 250 branches
would be equipped with necessary hardware with preinstall DMS and NADRA
verified clients from on-line processing system.
EUROPEAN UNION AND ZTBL:
ZTBL was poised to serve the technical needs of the entire community. The Bank
took lead in serving over 0.5 million farmers and hoped to extend its outreach to
strengthen the agriculture sector. It was said by president ZTBL, MUHAMMAD
ZAKA ASHRAF on the meeting held at head office before European Union
delegates. He said that ZTBL was poised to play more proactive role for the
59
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
development of agriculture sector and alleviate rural poverty. This would have
lasting impact in modernizing and boosting agriculture sector for the country. The
president said that through its countrywide network the ZTBL being the largest
financial institution has achieved the highest landmarks of performance during
the last two years as it increased its disbursements from Rs.56 Billion to Rs.77
Billion, recovered Rs.73.8, and earned Rs4.6 Billion profit before tax. This has
given financial strength and viability to the bank. He further appraised that code
of corporate governance and control system has also been implemented.
CHINESE FIRM AND ZTBL:
China would introduce alternate energy technology for agriculture development in
Pakistan that would facilitate the farmers to meet their energy needs through
alternate resources in cost effective manner. Most recently ATBL has inked an
agreement with Chinese firm Ms Xi` an Hong Yuan equipment in Islamabad.
Under the agreement, the company will bring equipments for demonstration at
their own cost and expanse. They will make demonstration of their own
Equipment to introduce new technologies and make available for the forming
sector. On successful demonstration the product will be marketed through kissan
support services. Speaking on the occasion, the president ZTBL Ch Muhammad
Zaka Ashraf expressed the hope that the agreements would a long way in
promoting the agriculture in the country besides benefiting the farmers.
60
Internship Report on Zarai Taraqiati Bank Ltd. 2010
COMPETETIVE STRATEGY OF ZTBL
COMPETETIVE STRATEGY:
The strategy by which the organizations producing same or substitute products
compete with each other. The fourth specialized government-owned bank, Zarai
Taraqiati Bank Ltd. (ZTBL), needs financial and operational restructuring. This
bank is highly strategic, as it provides about one third (31.7%) of all credit to the
agriculture sector. Different public sector approaches have failed in the past to
61
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
transform ZTBL. The most important unresolved issue is its excessive debt
liabilities as well as shareholding pattern. SBP has proposed that the
Government should pave the way for its eventual privatization, considered to be
critical for augmenting its scale and efficiency.
Agricultural Credit:
Credit requirements of the farming sector have been increasing over the years
mainly due to the rise in the use of fertilizer, pesticides and mechanization. In
order to cope with the Agriculture increasing demand for agricultural credit,
institutional credit to farmers is being provided through Zarai Taraqiati Bank
Limited (ZTBL), Commercial Banks, Punjab Provincial Cooperative Bank Ltd
(PPCBL) and Domestic Private Banks. The Government has allocated Rs 160
billion for agriculture credit disbursements for the year 2006-07 which is 23.1
percent higher than the allocation of the preceding year i.e. Rs 130 billion. The
allocations, however, are totally voluntary and indicative in nature as the
mandatory allocations policy has been totally phased out and the allocations for
commercial banks have also been made indicative. The elimination of mandatory
credit allocations coupled with active involvement of commercial banks in
agricultural finance is major milestone achieved towards mainstreaming of
Agricultural finance in the country’s financial system. The flow of necessary
funding to the sector will now be ensured through conducive policy and
regulatory environment, policy advocacy and promotional initiatives and
monitoring of agri-disbursements and portfolio build-up plans. Out of the total
Credit target of Rs 160 billion, Rs 80 billion were allocated to commercial banks,
Rs 48 billion to ZTBL, Rs 9 billion to Punjab Provincial Cooperative Bank Ltd.,
and Rs 23 billion to Domestic Private Commercial Banks. The agricultural loans
extended to the farming community during July-March, 2006-07 are discussed
below:
a) Production and Development Loans:
62
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Agricultural loans amounting to Rs. 104.8 billion were disbursed during (JulyMarch, 2006-07) as against Rs.91.2 billion during the corresponding period last
year, thereby registering an increase of 15 percent. The share of ZTBL in supply
of total agricultural credit by institutions increased and was 32.9 percent during
(July–March, 2006-07) while it was 31.8 percent during the same period last
year. However, the share of Commercial Banks has surpassed the share of
ZTBL; it was 46.8 percent of the total agricultural credit disbursed during July–
March 2006-07. While the share of PPCBL has also slightly increased as it stood
at 5 percent in supply of total agricultural credit by institutions. The share of
domestic private bank has increased; it was 15.3 percent as compared with 12
percent in the corresponding period of last year. Supply of agricultural credit by
various
b) Loan under One Window Operation:
ZTBL has launched a one-window operation to enhance credit facilities
particularly to small farmers. This will facilitate to cater for purchase for inputs
during peak sowing season of both Rabi and Kharif Crops with the collaboration
of Provincial Governments, Revenue Officials and Postal Authorities. Agriculture
Pass books are issued at the spot to intending new borrowers. Their land record
is entered and loans are sanctioned at focal points whereas payments are
released on the very next day from the concerned branch. During July-March,
2006-07, an amount of Rs 9.069 billion has been disbursed under this scheme.
c) Revolving
Scheme:
Finance
Scheme/Sada
Bahar
For providing timely input loans for crops and working capital for dairy, poultry
and fisheries, the ZTBL launched Sada Bahar Scheme (SBS). Under this
scheme credit requirements for inputs for the whole year is assessed and made
available to the borrower. The Managers are authorized to sanction loan up to
Rs. 0.5 million. During (July–March, 2006-07), ZTBL has disbursed loans of Rs.
30.912 billion under Revolving Finance Scheme (RFS) and Sada Bahar Scheme
63
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
(SBS) as against Rs. 24.149 billion disbursed during corresponding period of last
year, indicating an increase of 28 percent.
d) Credit to Women Program:
The major objective of this programme of ZTBL is to make credit more accessible
to rural women through Female Mobile Credit Officers (FMCOs). Under Credit to
Women Program, women can meet their credit needs through both Micro Credit
& General Credit Scheme. Presently, 17 FMCOs are exclusively looking after
credit needs of women in 17 branches of the Bank, whereas female borrowers
may also obtain loan through male MCOs throughout the country. During (July–
March, 2006-07) loans of Rs. 99.572 million have been disbursed under this
programme.
e) Micro Credit Scheme:
Under the Micro Credit Scheme of the ZTBL, all the Mobile Credit Officer working
in the branches process micro credit cases both for men and women to engage
rural poor in income generating activities/cottages industries. Financing under
this program is provided for 136 loanable items. All loans are recovered within 18
months of their advancement.
f) Crop Maximization Project:
In order to augment the efforts of the Government to enhance productivity on
sustainable basis, Ministry of Food, Agriculture and Livestock (MINFAL) and
Zarai Taraqiati Bank Limited (ZTBL) have launched, “Crop Maximization Project”.
The project aims at assisting the farmers to increase agriculture production. A
total of 109 villages are being covered under this project. In the project villages,
Village Organization (VOs) have been established which organize the farmers
and assist them with the collaboration of Agricultural (extension) Staff in
64
Internship Report on Zarai Taraqiati Bank Ltd. 2010
achieving the maximum productivity through proper use of inputs, water saving
devices and modern agricultural technology. Farmers owning up to 25 acres land
are entitled to receive loan from project credit line through Mobile Credit Officers.
Under this project Rs 371.403 million has been disbursed during July–March,
2006-07.
ENHANCING THE COMPETETIVENESS:
To enhance the competitiveness, ZTBL is focusing on continuing to broaden and
deepen the financial system further. To prevail in the industry Zarai Taraqiati
Bank is
• Reviewing the actual behavior and conduct of banks related to its structure
and than taking the required actions.
• Resisting contestability.
• Development of non-bank financial intermediaries is promoting
competitiveness
• Increase demand for advances results in a need for higher deposit
mobilization which increases competition.
• Interest rates in Pakistan are usually non-transparent. Ninety percent of
deposits are remunerated through profit and loss sharing arrangements
rather than at explicit interest known to the depositor in advance. But in
ZTBL the interest rates are known to the depositor in advance. That is a
good competitive strategy and due to this strategy, the bank is on the way
to success.
• To improve transparency in the pricing and documentation of loans, ZTBL
has been barred from including any clause in the loan documents that
could allow them to change lending rates unilaterally and make
Explicit all service charges so that the borrower will not incur hidden charges
during the term of the loan.
• Growth in agricultural credit recovered in financial year 2008, after a
relative slowdown in the preceding two years. The agricultural credit
disbursements rose to Rs. 211 billion in financial year 2008, up by 25.4
percent. The domestic private banks fared well both in disbursements and
in the recoveries while specialized banks could not maintain their market
share. A strong resurge in the number of borrowers is also a welcome
65
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
development during financial year 2008. The number of borrowers
increased to 1.28 million during financial year 2008 as against a declining
trend in the previous three years. Despite, rise in interest rates amid
monetary tightening, a significant increase in agricultural credit and
number of borrowers during financial year 2008 is principally attributed to
5 Agricultural credit disbursement target for financial year 2009 is set at
Rs. 250 billion. The main thing to say is that about 25% of this agricultural
credit is taken from Zarai Taraqiati Bank Limited. The structural changes in
agricultural credit are shown below which manifests that the major share of
agricultural credit is received from specialized banks and ZTBL is the
leading one.
66
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Part Two
Ch. 5:Assignments I handled during
my Internship.
67
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Chapter 5
Organogram of Mian Channu Branch
68
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Redemption of loan
On the payment of all the dues by the loanee (principal + interest), he
can free his land (or any other security provided) from any charge
created by bank for the purpose of loan. For this purpose he will have
to present the following documents:
1. Application for redemption
2. Stamp Paper of rupee 20
3. Last receipt of amount paid
4. Cheque book (if issued)
When the loanee provides these documents to assistant officer (Or any
officer appointed for these sort of work), the assistant officer asks the
peon to bring the Loan Case File of the borrower. After the file is
received by the assistant officer, he checks the documents that
whether all the documents are there in the file. Then he makes
required entries in the Passbook. These entries usually made on the
page 28 and 30. The example of entries is given below.
The following entries are made on page 28.
See page number 16
and block number 3
The
entire
loan for detail.
including interest has
been paid by the (Here page number 16
loanee.
shows the number
and date of
last
charge
created
against the land of
loanee in the favor of
bank)
The following entries are made on page 30.
See page number 18
and block number 8
for detail.
69
Internship Report on Zarai
Taraqiati Bank Ltd.
ZTBL Mian Channu
2010
(Page number 18 is
usually
the
page
where the detail of
land mortgaged has
been given, it include
the area of land,
khatoni number etc)
After these entries the officer then sends the file to Manager for
signature. On approval from the Manager for the Redemption
Application the assistant officer attaches all afore said documents with
in the file and record in the “File Movement Register” that file has
been moved from the record room for the redemption purpose.
Than the file is send to AMO (Assistant Manager Operation) for further
process. The loanee is given the date of next week to collect his
“Passbook”. During this period AMO checks the record of the loanee to
confirm that the entire due amount with respect to that particular loan
has been paid and then he signs to give approval to assistant officer to
issue “Passbook” to the loanee. The AMD (Assistant Manager) and
Manger both also sign the notice issued in the name of Patwari and
Tehsildar that the land can be transferred to the loanee as the loan has
been fully paid by him.
Then file again comes to the assistant officer, he checks the signature
both in the notice and Passbook and then stamped both. Now the
Passbook is ready to issue. Before issuing Passbook the officer record
that passbook is issued to the loanee in the “Dispatched Register”. On
the issuance of Passbook to the loanee, the officer verifies that the
person receiving the documents is the original owner of the land which
is mortgaged with the bank. After getting the Passbook, the loanee
goes to Patwari and Tehsildar for the change of record back to his
name.
The one thing which is interesting here is obtaining Stamp Paper from
the borrower. This is not a requirement but bank has made it practice
so that if in the near future, it finds that some amount is still due by
the borrower than it can write on the stamp paper whatever it wants
and then can claim the due amount from the borrower. This is
70
Internship Report on Zarai Taraqiati Bank Ltd. 2010
precautionary measure adopted by bank because once the Passbook
issued to the borrower and the land again transferred to his name, the
bank will be in no position to recover any amount which is
unexpectedly left due.
The redemption process in short can be described as the
following:
• Submission of Application
• Acceptance of application by manager
• Record of file in the “File Movement Register”
• Entries made in the passbook
• File send to AMO for checking of loan status
• On approval from AMO, the Manger and Assistant manger signed
the notice to issue Passbook
• The passbook dispatched to loanee with notice to Tehsildar to
transfer land back to his name
• After the land is transferred to the loanee name, if he wishes he
can withdraw the amount from his current account and can close
his account.
Usually the loanees do not redeem their land because they want to
avoid the cost and wastage of time when in the future they again
have to gain loan from the bank. So, they usually remain the land in
the name of the bank even after they have paid the whole loan
amount. During my internship I have seen people who has paid loan
more than 10 years ago but they came to bank after such long time
to redeem their land and the reason behind their redeem was that
they want to transfer it to someone others name otherwise they
may not come for redeem.
I have also seen one of the clients who has paid loan in 1985 but his
land is still in the name of the bank and they have not redeemed it.
After the death of the client his sons came to know that the land
could not be transfer to their name because it is still mortgaged
against the loan which their father had paid in 1985. So, at that time
71
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
they reach bank for redemption because the bank always
maintained record so their file found from the record room after
little efforts. All this shows the confidence the people has on the
bank and also shows that in practical life anything can happen.
72
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Opening of Current Account
In the ZTBL, the current account usually opened only when the person
comes there for a loan. On the approval of loan, his sanctioned amount
is usually credited to his current account. The procedure of opening of
Current Account is not very complicated. The following are the main
point in the opening of a new account:
1. Acquiring original CNIC
2. Filling the Current Account Form
3. Filling of Know Your Customer
4. Filling of Current Account Card
5. Registering name in the “Current Account Register”, (Issuance
of A/C No.)
6. Filling of deposit slip of starting amount
7. Signing by AMO and Manager
8. Issuance of Cheque book
9. Opening account in the ledger of bank
1: Acquiring Original CNIC
It is mandatory to check the original CNIC of the person before opening
of current account. In the ZTBL it is routine to open account when
manager sanctioned and signed the amount of loan. Because at that
stage it becomes essential to have an account in the bank otherwise
the amount of loan will not be paid.
The other documents required to attach with the forms are:
• 2 recent pictures
• Copy of CNIC.
73
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
2: Filling Current Account Form
After obtaining original CNIC the form for current account is filled with
the information written on the CNIC. The form includes the following
information:
• Type of account
• Branch Name
• Branch Code
• Name
• Father Name
• CNIC Number
• Address
• Occupation
• Nationality
• Contact number
• Date of birth
• Marital status
• Mother name
• Name, CNIC, Contact of MCO who knows the person personally
• Next of Kin (The person who will have right to operate the
account in the event of the account holder’s death or any other
mishap)
• Starting amount
74
Internship Report on Zarai Taraqiati Bank Ltd. 2010
3: Filling of Know Your Customer Form
The Know Your Customer form is also attached with the current
account opening form and contains the following information:
• Name
• Account number
• CNIC number
• Address
• Purpose of opening of account
• Monthly income
• Source of income
• Type of customer (i.e. Walk in)
• Public figure
• Usual mode of transaction (i.e. in cash, cheque)
• Etc.
75
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
4: Current Account Specimen Card
Name:
Adress:
Account No.
Type of Account:
Name of Account Holder
Name of Account Holder
This side is used to write the name This side is used to obtain the
of account holder both in Urdu and signatures of the account holder
English.
for verification of cheques in the
future if required.
Signing Authority:
One side is used to obtain the signature of account holder; I usually
take 3 signature of him in the right side of card. While the left side of
card is used to write the account holder name in both Urdu and
English.
5: Registering name in the Current Account
Register (Issuance of A/C No.)
After filling the required forms the name of the new account holder is
registered in the Current Account Register. This register requires
writing down the name of account holder, his father name, Address
and the starting amount.
These are the following blocks made in the register requires to fill.
Account
Date
Number: It is Opening
account number Account
issued to holder.
It is a serial
number, so I
used to write
the
next
of Opening
of Balance
Account
Name:
of Father name:
Address:
Adnan Ijaz
76
Internship Report on Zarai Taraqiati Bank Ltd. 2010
number when I
have to open an
account.
15-09-2010
S/O Ijaz Naseem
Mian Channu
1000
Example: 1567
When the account number is issued, it is also written in the Account
Opening Form and Know Your Customer Form.
6: Filling of Deposit Slip of starting amount
To open an account in the ledgers of bank the account holder requires
to deposit an initial amount. This amount in ZTBL is usually 1000;
however it depends on the amount of loan sanctioned like some loans
required to deposit a larger amount with the bank before issuance of
loan from the bank. The example of such loan is of Tractor because I
have not be given chance to stay with an MCO, so I don’t know what
exact amount is required to deposit with the bank for any particular
loan.
The Deposit Slip which I used to fill during my internship consist the
following information:
Zarai Taraqiati
Bank Ltd.
Zarai Taraqiati Bank Ltd.
Bank Copy
Depositor’s Copy
Branch Name:
Branch Code:
Date:
Branch
Date:
Branch Code:
Name:
Account Number:
Name:
Number:
Particulars
Particulars
Amou
nt
Name:
Account
Total
Amount
Total Amount
Rupees in words:
Depositors
Signatures:
Rupees in words:
Depositors Signatures:
Signing Authority:
77
Amount
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Signing Authority:
7: Signing by AMO and Manager
Then the forms and deposit slip is signed by AMO (Assistant Manager
Operation) and Manger to verify that all the requirements of opening
an account is met by the account holder.
8: Issuance of Cheque book
Than on depositing of a nominal fee of rupee 30 the account holder
has been issued a cheque book. In the bank where I have completed
my internship, the cheque book is issued by the cashier when the
person deposits his starting amount of account and the amount of
issuing of cheque book.
9: Opening account in the ledger of bank
Unlike other banks, ZTBL is still working on manually written ledger
books. However, the bank is also gradually computerizing its records.
These ledger books are large books with a number on front of it which
helps in finding the record of any particular person. The ZTBL Mian
Channu branch where I have completed my internship has 52 ledgers
at that time with the current account holder of 11595 at the date of 15
September 2010. There will absolutely many accounts which will not
be alive.
When the depositor deposited the amount his name and other
particulars is written down in the ledger so that he can transact with
the bank in the future. The ledger of current account contains the
following information.
Zarai Tarqiati Bank Ltd.
Page no. 177
Branch
name:
Branch Code: 20226
Mian
Name:
Signature:
78
Channu
Internship Report on Zarai Taraqiati Bank Ltd. 2010
Father:
Address:
Account no:
Cheque book:
Date
Particulars
15-09-2010
15-09-2010
16-09-2010
By cash
Loan Paid
To Cheque.
(no.)
Debi
t
Credit
1000
50000
5000
0
Balance
Signing
authorit
y
1000
51000
1000
The above given table is the example of information usually written in
the current account of a customer. There are also many other column
available in the ledger books but they all are not used in the bank.
There are some options which are not printed there but it is a practice
to write that information, like there is no column of signature but
without a signature no one can check the validity of a cheque. So, I
have observed that the signature and thumb impression is used to
take in the right side of ledger book where a lot of space is available.
The other option which I have mentioned here but not included in the
ledger book is the cheque book number. It is also practice to write
down serial of cheque book in the space available. It makes it possible
to confirm that the cheque book which the customer is using to
transact with the bank is associated with that particular bank account
or not.
Here I have also made few entries which show how a transaction is
recorded in the ledger book. Absolutely, the date is the first option
than the particulars which shows what exactly happen on that day.
Like in the first entry the bank account has been opened with an
amount of 1000. So, I have written “by cash” in the particulars which
represents that the person has transacted in cash. Then I credited the
amount which shows that this money is given by the customer and in
the balance column it has increased the balance with the same amount
of 1000. The next column is used by the signing authority (AMO in my
case) to confirm the transaction.
As I have written before that in ZTBL current account is usually opened
only when the bank has to disburse any loan to the customer. When I
have joined the bank that was the slack time for the bank because all
the customers of bank are farmers that is why they come to bank to
79
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
get or give loan when they have to plant or harvest any crop. That is
why a number of bank customers are seasonal. They are usually a
great rush from April to June and then from November to December.
Awami Zari Scheme was the only scheme available to new borrower at
the time I was there. In this scheme a part of sanctioned amount is
given to borrower to meet the wage and water expenses and the rest
amount is paid by supply order of fertilizer and pesticides. The amount
which has to pay in the form of cash is credited to the current account
of customer from where he can withdraw it. The 2 nd entry in the sketch
of ledger above shows the disbursement of any of such loan, which has
increased the balance to 51000.
When the customer draws a cheque on the bank the entry in the
ledger will be like I have shown above with the date of 16-09-2010. The
account of the customer will be debited and the balance will be
reduced with the same amount.
A large number of ZTBL customers are illiterate so they can not fill
their cheque by themselves and due to this reason almost all the
cheques are filled in the accounts by a clerk. Before filling the cheque
of anyone he assures the balance in the account and in the same time
he records entries so he will not have to reopen the ledger to make
entry after the deposit or withdrawal of amount by the customer. So
there are some things which I have learned from the seniors which
they have developed to facilitate themselves when the customer will
come again in the future, these guidelines are following:
• Write the ledger name and its page number on the front of new
cheque book
• Write the account number on every cheque of new cheque book
• Take the Thumb Impression of every customer on the cheque
• For the man take left thumb impression and for women take right
or both
• No cheque will be paid to anyone else than account holder if it is
a loan account
80
Internship Report on Zarai Taraqiati Bank Ltd. 2010
• Fill the cheque in Urdu if the customer signs in Urdu or gives
Thumb Impression only
• Also fill the memorandum attached with in cheque book with
each cheque to record all the transaction for future reference of
client and to the bank also.
All the cheques are required to be signed by respected authority
before payment of cash, like AMO (Assistant Manager Operation).
Before his sign no cheques can be passed, he also cheques the entries
made by clerk in the ledgers before passing cheques. In this way the
entries originated by any person is double checked which reduce the
chances of any mistake.
Whenever a cheque of more than 25000 is come to cash it is required
to write a voucher of “With Holding Tax” with it so that the amount of
tax can be deducted from the payment.
The vouching will be
discussed later on.
81
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
ZTBL Flood Relief Fund 2010
Heavy monsoon rains started to hit Pakistan from 22 July 2010, causing
flash floods in several parts of Khyber Pakhtunkhwa, Baluchistan,
Punjab and Pakistan Administered Kashmir. This flood have caused
huge destruction, hundreds of villages have been swept away.
Death toll has risen to more than 1500 people, at least 1.2 million
homes have been damaged and an estimated 17.2 million people have
been affected by the floods. Floods have caused widespread damage
to public infrastructure, with roads submerged and tens of bridges
swept away, many hospitals and an estimated 7,173 schools are being
severely damaged. Power and communication lines are down in many
areas. The economic cost is also huge. Thousands acres of agricultural
land has been flooded, at least 3.2 million hectares of standing crops
have been damaged and at least 200,000 livestock animals have been
lost.
This is a snap shot of the situation after the flood and the damage final
estimates are yet to make. To help the victims of this flood ZTBL made
Flood Relief Fund 2010 and the head office asked all the branches to
collect the fund for this flood relief fund. According to circular issued by
Head Office every branch make it sure to convince the borrower,
depositors and general public to contribute in this fund for this purpose
the following procedure is required to follow:
• From any loan of below 200,000 or any payment from the
account of customer below this limit should be deducted with
amount of at least 100 rupee to contribute in the flood relief fund.
However, it is required to make sure that avoid double deduction
from any particular person’s payment. But if anyone wants to
contribute more than 100 or more than one time he can give at
any time.
• From any payment of more than 200,000 but less than 500,000
the rupee of 500 should be deducted to charge to flood relief
fund keeping in view the double deduction.
82
Internship Report on Zarai Taraqiati Bank Ltd. 2010
• From any payment of more than 500,000 the amount of 1000
should be deducted.
The amount is deducted by filling a deposit slip with the name of the
contributor to deposit in the account of flood relief fund (A/C No.3043).
For this purpose every MCO (Mobile Credit Officer) is given a deposit
slip book so that he can collect fund from the people during his visit to
the villages. And inside the bank, the accounts department makes it
sure to fill this deposit slip with every payment. The weekly report of
these funds collection is required to send to Regional Office. According
to the weekly report of last week of Ramdan, the Mian Channu branch
where I did internship was in the first position in the collection of fund
in the whole zone of Vehari.
83
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
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
84
Internship Report on Zarai Taraqiati Bank Ltd. 2010
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 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)
85
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Sample of Debit/Credit Voucher
Zarai Tarqiati Bank Ltd.
Branch----------------Branch Code
Date
Serial No.
Name-----------------Parentage-----------Village---------------Tehsil-----------------
No.
Particulars
Loan
Case no./
A/c no./
Advice
no.
154700
Debit Cash Voucher
(Cash Receipt)
G.L
Hea
d
TR
Code
RO
Code
Effecti
ve
Date
Amou
nt
Contra
Voucher/Co
ntra Branch
no.
Recor
d
no./CA
Code
Total
Amounts in words:--------------------------------------------Enclose:----------------------------------------------------------Prepared by:----------------------------------------------------Checked by:-----------------------------------------------------Authorized Signature:---------------------------------------
86
Internship Report on Zarai Taraqiati Bank Ltd. 2010
The debit voucher for the deduction of With Holding Tax from the cash
withdrawal of more than 25,000 will be filled in the following way.
First the name or branch, its code and the date is required to write.
Than the information from whom this tax is collected, his name, father
name, his village and city name will be written. After that in the
particulars it will be written “A/O of With Holding Tax” and in the GL
Head (General Ledger Head) the head number of “With Holding Tax”
(which is 3056 in the ZTBL) will be written. The amount will be written
after calculating .3% of withdrawal amount. In the total the same
amount will be written again and then this amount will be written down
in words. In the last the signing authority will sign in.
In this voucher of W.H Tax only a few columns of the voucher is used,
the other columns can be used for other types of transactions. The
explanation of each column is given below:
1: Particular:
In particulars the reason of the transaction is written down. For
example, Amount of Recovery etc.
2: Loan Case no./ Account no./ Advice no.
If the voucher is of recovery than in this column the loan case number
of the loanee who has come to pay loan will be written. This column
has 6 blocks to write, due to shortage of space these block can’t be
shown in the above sample of voucher.
Loan Case no./ Account no./
Advice no.
3
9
6
7
0
0
3: G.L Head (General Ledger Head)
It is the General Ledger Head which is required to debit. These are
standard heads used in the entire branches of ZTBL. Like 3056 is the
G.L Head for W.H Tax, it will be same when any branch of ZTBL will
collect this tax from his customer.
4: T.R Code
This code is rarely used for debit and that is why I don’t have complete
information about it. In the recovery voucher this column is used, when
MCO collects the cash than I used to write 14 and when loanee himself
87
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
comes to pay loan I used to write 15 in that place. So, it helps when
the voucher is recorded in the computer room to understand the type
of transaction.
Like, in the credit voucher I was asked to write 01 code for all the
expenses of the branch and 02 for the expenses of the Zonal Branch.
So, it helps computer to understand the type of transaction. These
codes can be different in different banks.
5: R.O Code
Originated/Respond code is used to show that whether a transaction is
originated or responded. For example in the W.H Tax example the
word “O” will be written in this column which will show that this debit
voucher is originating this transaction. And when this amount will be
transferred to the respected head in that voucher the word “R” will be
written which will show that this voucher is responding to any
transaction.
6: Effective Date
It is the date on which the amount is received. It can be different from
the date on which the voucher has been written down. For example, on
13 September an MCO is on a tour to the villages which are under his
circle; during his visit he collects recovery of 100,000 from someone.
He will issue receipt to the loanee as evidence that MCO has collected
cash from him and on the next day (14 September) when he will come
to the bank that MCO will deposit cash as a recovery in the name of
that loanee. Because the cash has been collected by him a day before
the voucher of recovery is written down so the effective date on
voucher will be 13 September while the date of Voucher in right upper
side column will be the date of 14 when the voucher is written.
Why the effective date required? The answer of this question can be
understood from the above example. The loanee has paid the MCO on
13 September, while the amount is deposited by the MCO on 14
September. So, no interest is required to be charged for the day of 14
September because the amount has been already collected a day
before. If the effective date will not be written than there will be
discrepancy between the amount collected by MCO and the amount
calculated in the accounts in the time of writing voucher because the
88
Internship Report on Zarai Taraqiati Bank Ltd. 2010
amount calculated in the accounts department will include the interest
of one more day than collected by MCO.
7. Amount
This column used to write the amount, it is also divided into many
blocks so that when write any amount it will be easily readable later
on. Like the first block in Rs. Column from right side is for figure of
hundred and the next block is of thousands.
Amount
Rs.
Ps.
1 00
1
0
2 0 00
9
0
Total
2
2
0
00
0
-
8. Contra Voucher/Contra Branch No.
This column is used when we are responding to some other voucher or
branch. During my internship I have used it once time. One of the
customer of a bank has received tractor in the Benzir Tractor Scheme
but the company failed to deliver the tractor on the agreed upon date.
And it is a contract between the bank and the company that when
company will not deliver the tractor on the agreed date, it will be
charged with the penalty of 150 rupee per day. So, the bank had a
claim on the company of rupee 25,000 due to late delivery to the
customer. The company has transferred this amount to the bank
account, so definitely the bank has a voucher written against it. Now
this penalty is in the bank account which it has to transfer to the
customer who has faced difficulty due to late delivery. So, when I
transferred the amount from bank account to the customer’s account I
was actually responding to the first voucher created with which the
amount was transferred from company to the bank account. So, I was
asked to write the voucher number of that first voucher in the column
of contra voucher of new voucher with which I am transferring amount
to customer’s account so that in future when any one need to find out
89
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
that from which reason the account of the customer is credited, he can
easily find the contra voucher number from the voucher written to
transfer amount to the customer account. And when he will open the
contra voucher number, he will find that the amount was transferred
by the company as penalty to the bank account.
So, in short it is used when we are responding to any other voucher or
branch. The Exact view of contra voucher/contra Branch No. and
Record no./CA Code are the following. These two head come under the
main head of Sundry/Suspense & Central A/C only which is not
displayed in the voucher sample due to shortage of space.
Sundry/Suspense & Central A/c only
Contra Voucher/Contra Branch
No.
3
9
6
7
0
0
Record
Code
no./CA
0
1
9. Record No./CA Code.
Record number is the number of the entry in any contra voucher to
which we are responding. A voucher can have many transactions
written on it as you can see that there are number of rows available in
the voucher to write on. So, giving contra voucher number is not the
only thing we need to write to give exact reference, we also need to
give reference of Record no. of that particular transaction in that
voucher. And CA code is used when we are responding to any Contra
Branch No.
10. Rupees in Words
Rupees in words are compulsory to fill so that to avoid any mistake in
writing amount in numbers and also to avoid any misconception in
future.
11. Encl (Enclose)
Enclose is number of receipt if any attached with the voucher. Like if I
want to write a credit voucher to pay some employee who has bought
stationary for the office use so I will attach the receipt of the stationary
he has bought from the shop with the voucher and I will write (1) in the
enclose so whenever anyone will see the voucher he will know that
there is a receipt attached with the voucher.
90
Internship Report on Zarai Taraqiati Bank Ltd. 2010
12. Signatures
There are three spaces available to sign in the voucher. These spaces
are for the person:
• One who has prepared it
• One who has checked it
• And signing authority who passes this transaction
But I have not seen anyone signing the first two places, the only
signature place is used is of signing authority because it is compulsory.
Both Debit and Credit vouchers have same columns and lines to write
on. But the transfer voucher is different from these two, it has the
same columns and lines but it is divided into two parts. Upper side is
for the debiting an account and in the down side is for crediting an
account. Because when we use to transfer amount from one account to
another account than there should be one account which is required to
debit and the other account should be credited to complete the whole
entry. The sample of Transfer Voucher has been given in the next
page.
91
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Sample of Transfer Voucher
Zarai Tarqiati Bank Ltd.
Branch----------------Branch Code
Date
Serial No.
Name-----------------Parentage-----------Village---------------Tehsil-----------------
No.
Particulars
Loan
Case no./
A/c no./
Advice
no.
154700
Transfer Voucher
G.L
Hea
d
TR
Code
RO
Code
Effecti
ve
Date
Amou
nt
Contra
Voucher/Co
ntra Branch
no.
Recor
d
no./CA
Code
Amou
nt
Contra
Voucher/Co
ntra Branch
no.
Recor
d
no./CA
Code
Total
No.
Particulars
Loan
Case no./
A/c no./
Advice
no.
G.L
Hea
d
TR
Code
RO
Code
Effecti
ve
Date
Total
Amounts in words:--------------------------------------------Enclose:----------------------------------------------------------92
Prepared by:----------------------------------------------------Checked by:-----------------------------------------------------Authorized Signature:---------------------------------------
Internship Report on Zarai Taraqiati Bank Ltd. 2010
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.
Date
Daily Transaction Scroll
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.
S Vouch G.L
r. er No. Hea
d
1 15470
0
2
701
3
4
Debit
1
1
Credit
5
1
1
Credit
00
0
50
0
56890
0
76820
0
Total
Debit
50
0
00
0
5 00
0
93
4 00
0
4 00
0
4 00
0
4 00
0
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
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 vouchers that are why I have written the amount
(11,000 and 500) in the debit column. The 2 nd 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
2. Debit Balance
3. Total Balance (1 + 2)
4. Credit Balance
5. Closing Balance (3 –
4)
400,000
11,500
411,500
5,000
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 balance will be
written in the 2nd row and in the 4th row both 1st and 2nd row will be
added to get the total balance. Now the credit balance will be written
and to get the closing balance the credit balance is required to deduct
from the total balance of 3rd 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 Closing Balance
94
Internship Report on Zarai Taraqiati Bank Ltd. 2010
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
Vouchers
Debit
2
Credit
1
Transfer
1
Total
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.
Disbursement and Recovery Entries
When a loan is sanctioned and ready to disburse it is recorded in the
respected ledgers. I am here taking example of SBS (Sada Bahar
Scheme) which is a revolving finance scheme. Every loanee has a
unique Loan Case Number which is the base of all the record of his
loan. When a loan of SBS is sanctioned its amount is not transferred to
the current account of the loanee like it is used to transfer in the AZS
(Awami Zari Scheme). In SBS the Loan Case Number is used for all
types of transactions, when a loan is sanctioned it is recorded in the
SBS ledger with the name of loanee and Loan Case Number is used as
an account number from which he can operate.
The information which is required to write in the ledger sheet when a
new loan has been passed and ready to disburse are following:
95
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
• Loan Case Number
• Name
• Parentage
• Address
• CNIC
• Maximum limit
• Date of maturity
• Cheque book number
After entering the above information the loan can be disbursed to the
loanee when he desires. Because almost all the customers of ZTBL are
low earning farmers and they require immediate cash to meet their
expenses so they draw a cheque on the bank on the same time when
their loan is entered in the ledger book. In SBS farmer can withdraw
the amount till he has reached maximum limit and the return will only
be paid on the amount which he has taken out as a loan.
The entries of disbursement can be easily explained by taking an
example that the loan has be sanctioned and it is recorded in the
ledger now loanee want to withdraw the total sanctioned amount of
50,000. The entry of this transaction will be in the following way at 0101-2010:
Date
Particul
ars
01-110
To
Cheque
No.
To
Return
Recovery
31-410
01-5-
Principal
Return
Total
Debi Credi Balan Debi Cred Balan Outst
andin
t
t
ce
t
it
ce
g
50,00
50,00
50,000
0
0
1,48
0
18,52 31,48
96
1,48
1,480
51,480
Nil
31,480
Internship Report on Zarai Taraqiati Bank Ltd. 2010
10
0
0
0
After four month a computerized outstanding balance report of all the
loans is given to each branch, it is called “OBL (Outstanding Balance
Ledger)”. The bank also adds return to the principal amount of each
loan case, like it is shown in the date of 31-04-10. (The interest rate on
SBS is 9%)
Now suppose that loanee has reached bank on 01-05-10 and he wants
to pay 20,000. The entry is shown in the date of 01-05-10. It is rule in
the bank that when the bank recovers any amount from the loanee
than first return amount will be reduced and then the principal will
reduced. Here in this example, the loanee wants to pay 20,000, so first
interest will be deducted which is 1480. To pay return we will credit it
with 1480 and then the principal will be credited with the remaining
amount (20,000-1480=18,520) as shown in the above diagram. Due to
this payment the principal is also reduced to 31,480 and because the
total return has been deducted that is why the total outstanding
amount is also 31,480.
(It is routine in the bank to check the total outstanding amount in the
ledger with OBL before receiving any recovery. This is a precaution
because the handwritten and manually calculated ledgers can have
mistakes so checking it with OBL make it sure that they are not
receiving less amount from the customer.)
Revolving SBS Loan
Now suppose a situation where loanee wants to pay his entire
outstanding loan and then wants to withdraw it again. This usually
happens when the MCO want to achieve his recovery target or the time
period of one year is completed from the date on which the loanee has
withdrawn the amount. It is compulsion for every loanee to return his
entire loan at least once in a year, if he will not pay his loan within one
year, he will be treated as defaulter and he can withdraw only 90% of
sanctioned amount from his running SBS finance.
But in SBS the default situation is rarely occurs because when the limit
of one year is near to end, the loanee can revolve his loan by paying
only interest of the loan. This can be explained by continuing the last
example, on 01-05-10 the loanee has paid 20,000 and his remaining
outstanding balance is now 31.480. Now suppose he comes again on
97
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
01-06-10 and wants to revolve his loan, on that day the following
entries will be made in his loan account:
Date
Particula
rs
01-110
To
Cheque
No.
To
Return
Recover
y
To
Return
Recover
y
31-410
01-510
01-610
01-610
01-610
To
Cheque
No.
Principal
Return
Total
Debi Credi Balan Debi Cred Balan Outst
andin
t
t
ce
t
it
ce
g
50,00
50,00
50,000
0
0
1,48
0
50,00
0
18,52 31,48
0
0
31840 241
1,48
0
31,84 Nil
0
241
50,00
0
1,480
51,480
Nil
31,480
241
31,720
Nil
Nil
(A/C
Closed
)
50,000
Because the loanee wants to pay the total outstanding amount, the
first thing to do is to calculate return on the last outstanding principal
balance. Because the loanee has already paid some part of principal on
01-05-10 due to which the principal has been reduced from 50,000 to
31,480. Now the return will be calculated from 01-05-10 to 01-06-10
(31 days) at last outstanding principal balance of 31,840.
(31,480 * 9/100 * 31/365) = 241
I have debited this return calculated and it has increased the total
outstanding to 31,720. Now the next step is to obtain all the
outstanding amount of principal and interest so that the account can
be closed and again revolved on that day. In the 2 nd entry on the date
01-06-10 I have credited all the principal amount and the balance of
principal became Nil and the same I did with the return, I have credited
the total balance of return and its balance also became Nil. Because
both principal and return balance is now Nil that is why the total
98
Internship Report on Zarai Taraqiati Bank Ltd. 2010
outstanding amount of loan is also Nil now and the Account is closed
on that situation.
Now the loanee wants to revolve his account so he will again draw a
cheque on the bank of any amount with in his sanctioned limit, in this
example I have assumed he again wants to get the total amount out of
it. So, I have again debited the amount which has increased the
principal balance and then total outstanding balance to 50,000.
These are just entries in the ledgers absolutely the loanee will have to
follow some procedures to revolve his account. Usually MCO of the
loanee asks to revolve the account and then vouchers are written and
entries are made in the ledgers and then these vouchers and entries is
passed by the AMO otherwise no payment or recovery is made.
The vouchers need to written when revolving an SBS loan accounts are
following:
• A debit recovery voucher of full outstanding amount including
Principal and Return.
Whenever an account is fully paid it is practice in the bank that
write the return collected on this account on the upper right
corner of the voucher, it helps the other employees in the end to
transfer it to the Income Account of bank and also to prepare
weekly report on recovery.
• Another debit voucher of With Holding Tax will also be filled if the
amount loanee wants to again withdraw is more than 25,000
• A debit voucher of revolving fee (100 rupee for SBS)
• A credit voucher will be written in the end of the day against the
cheque drawn by the loanee
• A transfer voucher which is used to transfer the Return recovered
on the loan to the Income Account of the bank.
Actually in revolving an account the loanee pays only the interest
amount, revolving fee and W.H Tax if any. The principal is adjusted
against the new disbursement of loan.
99
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
For example:
If 51,000 is total outstanding balance (50,000 principal + 1,000
returns) and loanee wants to revolve the account, he will have to pay
the total outstanding amount first and then he can withdraw again the
principal of 50,000.
Amount the loanee
will pay
Revolving fee
Again
disbursement
of loan
W.H Tax on 50,000
Balance
-51,000
-100
50,000
-150
-1,250
1250 is the amount which loanee will pay only and his loan will again
be revolved to a new maturity of one year. In this way revolve benefits
the two parties, one is loanee who has to pay a nominal amount and
he obtains a new maturity date. The second one is MCO who can show
that he has recovered the loan which helps him in achieving his
recovery target.
100
Internship Report on Zarai Taraqiati Bank Ltd. 2010
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.
Key Register:
It is a register which have information about the keys of the safe.
Whenever a person gives the key to someone else, he writes in the key
register the name of person who has received the key and that other
person signs it. Usually the keys remain with the cashier and another
officer of the bank but when one of them is on leave it is required to
give responsibility of keys to someone else because during their
absence the cash of bank can’t remain closed.
If there is any mishap the person who has keys according to key
register will be held responsible. Thus the key register has significance
matter; no one gives the key to someone else without entering it in
this register. When a key is given to someone else the time of giving
keys is also written in the register, it is precaution to make it clear that
on which time of day the key was with which person.
Safe Register:
Whenever the cash is placed inside or remove from the safe it is
recorded in the safe register. In the morning when cashier brings out
cash from the safe he writes the date, amount and denomination in
which cash he has obtained. And same information is required to enter
when the cash is again placed in the safe in the evening. The person
who gets cash from the safe or puts it also signs it.
The cash is also written in denomination in which it is exist. Like if bank
has 1 million than this information is not enough the denomination in
which this one million exist in bank is also written. Like the bank may
have this amount of 1 million in the following denominations.
100 notes of 5,000
500,00
0
300 notes of 1,000
300,00
0
101
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
300 notes of 500
400 notes of 100
200 notes of 50
Total
150,00
0
40,000
10,000
1,000,0
00
Dispatch and Diary
Dispatching and receiving letter is the routine work in any bank. The
letter which the bank sends to others is dispatched while the letter
which the bank received is called diary. The bank maintains the proper
record of every document which is dispatched or received.
Learning as an internee
Duties
• Reconciliation of bank statements.
• Reconciliation of customer’s ledgers.
• Preparing payment vouchers.
• How the loan given to the employees.
• Company uses both system of manual and computerized so account
manager give me the opening and closing balances of last month
inventories to check the posting that manual entries into the system. I
102
Internship Report on Zarai Taraqiati Bank Ltd. 2010
check them and point out some missing entries and give my report to
account manager that which entries are missing.
• I calculate the working days of employees and last year and the prepare
bonuses for the employees and allowance to employees to have full
attendance last year.
. New Knowledge Acquired
• Discussion with management.
• Knowledge of organizational culture.
• Accounts management.
• This is the core part of my fresh knowledge that I gained while working
in the Bank.
Accomplishment
• The overall working environment was very good in which I learned a lot.
• Got an opportunity to work in a well known organization.
• Completed all of my duties on time.
• Improved my confidence and communication skills by talking to advisor
and other managers.
• Learn about effective information dissemination within office environment.
Impact of Experience on my Career
103
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
As I am a student of Finance, so my experience as an internee in this
company will help me in future when I get the full time job as a professional. I
have learned about,
• How to let people know about your product/ services.
• Analyzing competitors and markets that any one doesn’t copy your
product.
• Through this internship experiences of working into an organization help
me to understand rules and regulations, duties during my career.
Conclusion, Suggestions and recommendations
Zarai Taraqiati Bank Limited is a well known well reputed and well established
organization in Pakistan; every thing in the organization is outstanding. All the
departments are working properly; working environment is very good after
spending 6 weeks in Finance department of the Zarai Taraqiati Bank Limited
Interacting with the employees, getting their views, observing the organizational
structure and design, some of the following recommendations have been given.
Conclusion
I will conclude my report by saying that my training program at Zarai Taraqiati
Bank Limited was a mighty experience, in terms of learning, dealing with people,
getting the how know of the working of organizations and the intricacies of
practical life. Such an experience is a necessity for every business student as it
104
Internship Report on Zarai Taraqiati Bank Ltd. 2010
helps one in choosing the area of work to adopt in professional life. This training
program sets a strong basis for students about to enter professional life to do the
correct career counseling for themselves in accordance with their ability to
integrate work with knowledge, their learning capacity and the ability to sustain
pressures.
•
Training and awareness of personnel in all sectors and at all levels is
required to face the future challenges.
Adaptation of globalization, spectacular developments in information technology,
internet, e-commerce etc is required.
Suggestions
Zarai Taraqiati Bank Limited is a huge name in the agricultural sector and a large
number of loans are provided to the agricultural sector by the Zarai Taraqiati
Bank Limited but I experienced some problems that should be encountered.
These problems are:
•
Transportation facility is not provided to the whole employees, it should be
provided to them.
•
Proper training of I. T should be given to all the employees, as it is necessary to
the company benefits.
105
Internship Report on Zarai
Taraqiati Bank Ltd.
2010
Recommendations
• Top managerial personnel should be trained both at company premises
and at the international level.
• Managers are required to get training in the modern scientific management
control methods.
BIBLOGRAPHY
WWW.ZTBL.COM.PK
WWW. GOOGLE .COM.PK
AUDIT REPORT 2008-2009
ANNUAL REPORT 2008-2009
106