Another unit in trouble: Govt likely to restructure ZTBL’s Rs80 billion debt

The agriculture bank has to repay the amount to State Bank.


Shahbaz Rana August 07, 2012

ISLAMABAD:


The government is likely to restructure a whopping debt of Rs80.4 billion that the Zarai Taraqiati Bank Limited (ZTBL) owes to the State Bank of Pakistan (SBP) as the former’s bad debts rise alarmingly to 21% of its total lending portfolio.


The revelation came in a meeting of the Public Accounts Committee (PAC) on Tuesday, when auditors disclosed that the country’s largest specialised bank ZTBL was unable to retire the debt of Rs80.4 billion, of which Rs54.5 billion is the principal amount.

The loan had been obtained for 15 years but the bank was neither paying the principal amount or even markup after entering into a dispute over the markup rate.

“A proposal has been floated to return Rs54.4 billion to the SBP, but it is not possible at the moment,” said Acting ZTBL President Rohi Raees Khan.

She said the bank had a total lending portfolio of Rs95 billion and it was impossible to return such a big amount.

To a question, she disclosed that the bank’s bad debts have increased to Rs20 billion while provisioning was made against some categories of the infected loans as per the central bank’s regulations.

Khan said the bank was trying to get a commercial banking licence to improve its deposits, but the central bank has set certain conditions.

SBP Executive Director Haroon Rashid said the ZTBL’s debt restructuring proposal has been rejected by both the finance ministry and the central bank.

However, Finance Secretary Abdul Wajid Rana pointed out that the government has called a meeting in the finance ministry to work out a proposal to restructure the debt in such a way that is acceptable to all parties.

Published in The Express Tribune, August 8th, 2012.

Our Publications

COMMENTS (6)

Nasir Mahmood | 8 years ago | Reply

Consequences the nation is suffering to elect the corrupt people who then appoint their cronies to loot the national wealth.

ASIF | 8 years ago | Reply

Pakistani version of Too Big to Fail?

VIEW MORE COMMENTS
Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ