Another unit in trouble: Govt likely to restructure ZTBL’s Rs80 billion debt
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.
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Consequences the nation is suffering to elect the corrupt people who then appoint their cronies to loot the national wealth.
Pakistani version of Too Big to Fail?
....and who was the previous head of ZTBL when all this was happening and whose blessings did he have ?? There should be a third neutral umpire in this.
Did any one visit ZTBL office to seek loan, they have hundred of excuses not to give loan to genuine farmer but have no objection if the loan is required for non genuine fake farmer.
...And the biggest irony is that ZTBL's credit ratings are similar to those of National Bank of Pakistan and Standard Chartered Bank. While HBL, MCB and ABL are all rated below ZTBL! I guess credit rating agencies give too much weightage to government backing/shareholding....
Why was every one sleeping when these losses were being piled up.Give the names of 100 major loan defaulters,why should citizens pay for in-efficiency of Bank officers