Vacant positions at ZTBL hinder loan disbursements
Loans to farmers drop by 28% during first nine months of current fiscal year
Loans to farmers drop by 28% during first nine months of current fiscal year. PHOTO: FILE
ISLAMABAD:
The government has remained unable to appoint a new president of Zarai Taraqiati Bank Limited (ZTBL), amid a 28% reduction in disbursement of loans to farmers by the bank during first nine months of the current fiscal year.
ZTBL - the country’s premier public sector financial institution, responsible for meeting financing needs of the farming community, has been without a permanent president and chief executive officer since October last year. Prime Minister Imran Khan had unceremoniously removed the then president Talat Mahmood due to his affiliation with the former ruling party.
But since then, the Pakistan Tehreek-e-Insaf (PTI) government has remained unable to appoint a permanent head despite completing the competitive process.
In February this year, the federal cabinet had approved the appointment of Adnan Ghani as the new president of the ZTBL. He had been picked out of a panel of three candidates including Shahbaz Jameel and Sheikh Amanullah, who is currently the acting president.
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On February 20, the finance ministry had notified appointment of Ghani as the new president, subject to the State Bank of Pakistan’s (SBP) clearance. Ghani subsequently declined the offer due to his dual nationality and low salary package, according to the finance ministry officials.
Despite a lapse of three months, the Ministry of Finance has neither appointed the second person on the merit list, Shahbaz Jameel, nor has it re-advertised the post to select a new panel.
Sources at the finance ministry said that the ministry has put forward both the options of notifying Jameel as the new president or re-advertising the post. They said the new Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh has not yet taken a decision on the matter. A four-member committee, headed by the then finance minister Asad Umar, had shortlisted the panel out of nearly six-dozen candidates. But things have not moved forward, which have now started affecting operations of the bank.
The bank’s administrative affairs are looked after by Acting President Sheikh Amanullah since then, but the fiscal performance of the bank is deteriorating rapidly. The bank has not published its annual and quarterly financial statements since March 2017 due to the federal government’s failure to complete the board of directors of the bank.
The last available balance sheet of the bank for the period of March 2017 showed that the bank’s net profit and earnings per share (EPS) declined as compared to the corresponding period of previous year.
The data maintained by the SBP showed that the ZTBL was not doing well for the last nine months, including seven and a half months of Prime Minister Imran Khan’s government.
The ZTBL disbursed only Rs45 billion worth of loans to farmers from July through March of this fiscal year, down by Rs17.8 billion or 28.2%, over the same period of the last fiscal year, according to the central bank. The disbursements were just 45% of the annual target of Rs100 billion.
Not only that, the recovery of principal loans has also started declining. The bank recovered Rs47.6 billion worth of principal loans from July through March of this financial year. The recoveries were down by 17.6% or Rs10.2 billion, according to the SBP’s statistics.
The delay in appointing the bank’s president may cost Imran Khan’s government to miss the annual agriculture disbursement credit of Rs1.25 trillion. All of the Rs1.25-trillion amount would not go into the agriculture sector, as the central bank has also included some agro-industry related loans in it.
On many occasions, the prime minister has said that the promotion of agriculture was the first priority of his government.
But during the first year of coming into power, agriculture sector - the biggest job providing sector, grew at only 0.85% annual rate, according to the National Accounts Committee. In the last year of the Pakistan Muslim League-Nawaz (PML-N) government, the agriculture sector had witnessed a 4% growth rate.
The government had set a target of 3.8% growth in the agricultural sector for this fiscal year.
Farmers’ incomes have also shrunk due to increasing prices of the agriculture inputs. For the small and medium sized land holders, the agriculture loans have remained critical for buying these inputs.
Overall, during the first 10 months of the current fiscal year, the loans for crop growing by all the financial institutions stood at only Rs176.5 billion, down from the Rs184 billion during the same period of the last fiscal year. The agriculture machinery loans by all the financial institutions also amounted to only Rs23.5 billion in this fiscal year as against Rs25.8 billion in the same period of the last fiscal year, showed the SBP statistics.
The loans for livestock also decreased from Rs90 billion to Rs86.8 billion during first ten months of this fiscal year.
Published in The Express Tribune, May 21st, 2019.
The government has remained unable to appoint a new president of Zarai Taraqiati Bank Limited (ZTBL), amid a 28% reduction in disbursement of loans to farmers by the bank during first nine months of the current fiscal year.
ZTBL - the country’s premier public sector financial institution, responsible for meeting financing needs of the farming community, has been without a permanent president and chief executive officer since October last year. Prime Minister Imran Khan had unceremoniously removed the then president Talat Mahmood due to his affiliation with the former ruling party.
But since then, the Pakistan Tehreek-e-Insaf (PTI) government has remained unable to appoint a permanent head despite completing the competitive process.
In February this year, the federal cabinet had approved the appointment of Adnan Ghani as the new president of the ZTBL. He had been picked out of a panel of three candidates including Shahbaz Jameel and Sheikh Amanullah, who is currently the acting president.
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On February 20, the finance ministry had notified appointment of Ghani as the new president, subject to the State Bank of Pakistan’s (SBP) clearance. Ghani subsequently declined the offer due to his dual nationality and low salary package, according to the finance ministry officials.
Despite a lapse of three months, the Ministry of Finance has neither appointed the second person on the merit list, Shahbaz Jameel, nor has it re-advertised the post to select a new panel.
Sources at the finance ministry said that the ministry has put forward both the options of notifying Jameel as the new president or re-advertising the post. They said the new Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh has not yet taken a decision on the matter. A four-member committee, headed by the then finance minister Asad Umar, had shortlisted the panel out of nearly six-dozen candidates. But things have not moved forward, which have now started affecting operations of the bank.
The bank’s administrative affairs are looked after by Acting President Sheikh Amanullah since then, but the fiscal performance of the bank is deteriorating rapidly. The bank has not published its annual and quarterly financial statements since March 2017 due to the federal government’s failure to complete the board of directors of the bank.
The last available balance sheet of the bank for the period of March 2017 showed that the bank’s net profit and earnings per share (EPS) declined as compared to the corresponding period of previous year.
The data maintained by the SBP showed that the ZTBL was not doing well for the last nine months, including seven and a half months of Prime Minister Imran Khan’s government.
The ZTBL disbursed only Rs45 billion worth of loans to farmers from July through March of this fiscal year, down by Rs17.8 billion or 28.2%, over the same period of the last fiscal year, according to the central bank. The disbursements were just 45% of the annual target of Rs100 billion.
Not only that, the recovery of principal loans has also started declining. The bank recovered Rs47.6 billion worth of principal loans from July through March of this financial year. The recoveries were down by 17.6% or Rs10.2 billion, according to the SBP’s statistics.
The delay in appointing the bank’s president may cost Imran Khan’s government to miss the annual agriculture disbursement credit of Rs1.25 trillion. All of the Rs1.25-trillion amount would not go into the agriculture sector, as the central bank has also included some agro-industry related loans in it.
On many occasions, the prime minister has said that the promotion of agriculture was the first priority of his government.
But during the first year of coming into power, agriculture sector - the biggest job providing sector, grew at only 0.85% annual rate, according to the National Accounts Committee. In the last year of the Pakistan Muslim League-Nawaz (PML-N) government, the agriculture sector had witnessed a 4% growth rate.
The government had set a target of 3.8% growth in the agricultural sector for this fiscal year.
Farmers’ incomes have also shrunk due to increasing prices of the agriculture inputs. For the small and medium sized land holders, the agriculture loans have remained critical for buying these inputs.
Overall, during the first 10 months of the current fiscal year, the loans for crop growing by all the financial institutions stood at only Rs176.5 billion, down from the Rs184 billion during the same period of the last fiscal year. The agriculture machinery loans by all the financial institutions also amounted to only Rs23.5 billion in this fiscal year as against Rs25.8 billion in the same period of the last fiscal year, showed the SBP statistics.
The loans for livestock also decreased from Rs90 billion to Rs86.8 billion during first ten months of this fiscal year.
Published in The Express Tribune, May 21st, 2019.