Internship Report On ZTBL, Prepared by Wasim Uddin Orakzai Student of Finance 2010, KUST

Zarai Taraqiati Bank Ltd.
Chapter 1 Introduction to Report
CHAPTER 1
“INTRODUCTION TO REPORT”
1.1 BACKGROUND OF STUDY

The Zarai Taraqiati Bank Limited is the premier financial institution geared
towards the development of agriculture sector by providing financial products and
services to their customers. It is a common practice at universities during the
completion of the masters and bachelors program to attain practical experience in
different fields. Students are required to undergo an internship program of two
months to fulfill the requirement for their degree completion. The selection of the
firm is based on the choice of the student. The institute requires an internship report
based on the theoretical and practical learning of the student.
The Internship is the bridge between academic qualification and professional
career of fresh graduates”. This internship report is mainly focused on the working of
the Finance and Accounts Division of the ZTBL. Moreover, the internship is a unique
aspect of education that integrates study with planned and supervised career-related
work experience. The students are involved as non-paid “authentic employees”
receiving academic credit for work experiences. The purpose of the internship
program is to develop and strengthen the student’s educational and career
preparation. By doing internship in any organization that obviously exposes the
interpersonal relationships not only with employees but also with supervisor that are
essential in obtaining a successful and satisfying career.
This background of the study is mainly focus on the performance, functions and
objectives of the Finance and Accounts Division of the ZTBL and its internal
working and operations of this division. While, the internship is any experience
where students learn by taking on responsible roles as workers in organizations and
observing and reflecting on what happens while they are in the workplace. It provides
1
Institute of Management Sciences, Kohat University of Science & Technology
Zarai Taraqiati Bank Ltd. Chapter 1 Introduction to Report
many advantages to student that helps him throughout his life. Some advantages of
internship program are given as under;
 To gain professional experience and receive academic credit
 To enhance independence, responsibility and self-confidence
 To Interact and collaborate confidently with employees
 To share ideas with one another.
 To translate classroom knowledge into the professional work environment and
to make plan, how to carry the activities.
 To work towards the process improvement.
1.2 PURPOSE OF THE STUDY

The purpose of conducting this study is to develop some insight into the
working of the Finance and Accounts Division of the ZTBL and to gain the
experience regarding the overall operations and procedures of the bank, in order to
complete the BBA (Hons) degree as well. The purpose of the internship program is to
develop and strengthen the student’s educational and career preparation, which they
gain from university. Another important aspect of the internship program is that
internee is placed to various departments of the organization through job rotation. It
provides a glance of each department, as the period is too short for learning in detail.
Other objectives of the study are as follows:
 To gather relevant information then interpret and analyze it in a useful

manner.
 To highlight the facilities and products offered by the ZTBL to its customers.
 Internship can develop good work habits and to reduce student dropouts.
 To develop, enhance and strengthen the communication skills.
 To observe and participate in a professional work situation which represents
an area of career interest.
2
 To develop an understanding of the organization, its mission, objectives and

management philosophy.
 To acquire good work habits and gain an awareness of the community’s vast
resources.
 To be responsible and work toward specific achievable goals.
 To analyze the bank through different analysis such as Ratio & SWOT
analysis.
1.3 SCOPE OF THE STUDY

The scope of the conducting this study is given as under;
 It is a compulsory requirement for the award of Bachelor’s Degree in
Business Administration from the Kohat University of Science & Technology.
 This report is concerned with the performance, functions and objectives of the
“Finance & Accounts Division of the ZTBL” Head Office Islamabad.
 It will help the students in making assignments and writing reports on the
ZTBL.
 It can provide help to the management of the ZTBL in identifying their
Strengths, Weaknesses, Opportunities and Threats.
 It can also provide assistance for the students in seeking annual reports for the
purpose to calculate and interpret financial ratios, in order to check the liquidity,
leverage and profitability of the ZTBL.
 Further more, students are able to analyze the human resources & analyze the
marketing of products and services schemes that the ZTBL provide his customers.
1.4. IMPORTANCE OF STUDY

Banks play a central and very important role in the economic life of a country,
that’s why they are considered as the lifeblood of modern economy. Today no one
can deny the importance of banking in the economy. They facilitate and expedite
3
trade and commerce and provide a variety of services that one can’t imagine without
banks.
I have chosen the ZTBL for my internship because it has a large network of
zonal offices and branches. But besides this, the ZTBL plays an important role in the
economic development and growth of Pakistan.
1.5. RESEARCH METHODOLOGY

During the internship at the ZTBL Head Office Islamabad, the most important
task was to collect as much as information on the bank in order to have a full
productive report. For the collection of information and data, I used two methods for
collecting data for the preparation of internship report such as primary and secondary
collection methods, which is given as under;
1.5.1. Primary Data Collections: In primary data collection method, I interviewed
different officers for this purpose. The interviews were not of formal nature but it
went along with time and the questions arose with identification of problems. I
prepared many questions and discuses with Bank officers asked all the detailed
function and procedures of there departments. All officers fully cooperated with me
and provided all the necessary information which was required to me. The interviews
have been taken from the bank officers and also the discussion was conducted with
the heads of different departments. For collecting primary data, I use my own
observation and discuss my problems with previous internees.
1.5.2. Secondary Data Collection: The data that are previously collected and
assembled for the some projects other than the one at hand. It is also called as
historical data. This method can almost always be gathered faster ant at a lower cost
than primary data. The secondary data is collected from following sources;
 Annual Reports & Accounts manual.
 ZTBL web site & Internet.
 Brochures.
 Pamphlets.
4
 Newspapers.
 Business journals.
 Books.
1.6. LIMITATIONS OF THE STUDY
There are some limitations which, I had to face as an internee during the
Internship program in the ZTBL Head Office Islamabad, which are described as
under;
 Time was too short to visit all division and departments of the organization.
 The problem of loud shedding makes delay in preparing this internship report
of the ZTBL.
 All staff members avoided to give every information. However, they kept
most of the data secrets. So, it was very difficult to collect the relevant information.
 The vice presidents, executives, managers and other staff members have their
own matters of bank and it was a great problem for me.
 Lack of co-operation by some employees because they were non-research
oriented and also lack of accuracy of the relevant data.
 Instead of all these difficulties, I have completed this internship report on the
Finance and Accounts Division of the ZTBL Head Office with full cooperation of
few managers.
1.7 SCHEME OF THE REPORT

The internship report on the Finance & Accounts Division of the ZTBL is
arranged in four sections and ten chapters. The report is arranged in the following
sequence.
SECTION-I
This section has one chapter.
Chapter 1:
5
This is an introductory chapter which describes the introduction, background,

purpose, scope, importance, research methodology, limitations and scheme of the
report.
SECTION-II
This is lengthiest section of the report; it includes the review of the ZTBL. This
section is comprised of eight chapters.
Chapter 2:
This chapter is about bank and banking, evaluation of banking, overview of banking
in Pakistan and role of banks in the economic development of the Pakistan.
Chapter 3:
This chapter encompasses the introduction, history, mission, vision, objectives,
restructuring plans, BOD, zonal offices & branches, ranking of staff members and
subsidiary of the ZTBL.
Chapter 4:
This chapter briefly describes the products & services such as loans & schemes and
the recovery procedure of the loan of the ZTBL.
Chapter 5:
This chapter is concerns with the introduction, objectives, functions, classification
and hierarchy of the Finance and Accounts Division of the ZTBL.
Chapter 6:
This chapter describes the introduction, objectives, functions and units of the Central
Accounts Department of the ZTBL.
Chapter 7:
This chapter describes the introduction and units of the Head Office Accounts
Department of the ZTBL.
Chapter 8:
This chapter is concerns with the introduction, objectives, functions and units of the
Regulatory Reporting Department of the ZTBL.
6
Chapter 9:
This chapter describes the introduction, objectives, functions and units of the Budget
& Fund Reconciliation Department of the ZTBL.
SECTION-III
This section also has one chapters and it is about the various analyses of the ZTBL.
Chapter 10:
This chapter explains the SWOT analysis, ratio analysis, human resource analysis &
marketing analysis of the ZTBL.
SECTION-IV
This section contains only one chapter.
Chapter 11:
This chapter explains findings, recommendations, personal experience, conclusions &
annexures of the ZTBL.
7
CHAPTER 2
“INTRODUCTION TO BANKING”
2.1 MEANING & ORIGIN OF BANK

Some authors are of opinion that the word bank is derived from the word
"Banquet" which means a "Bench". This is attributed to the fact that the Jewish
transacted the business of money exchange on bench in market place. “A bank
includes a body of person, who carry on the business of banking” or “a bank may be
as an institution dealing mainly in money and credit. It accepts deposits from one
class of people at a lower rate of interest and industry for meeting the requirements.
This provides finance for successfully carrying on various stages of production as
well as distribution.”
Moreover, a bank can stimulate the habit of savings amount for the people and
provide the security and interest they offer with these savings which are deposited by
people are in a position to utilize the deposited amount more productively.
In short, a bank can increase the transaction capacity of the customers by
advancing loans when they require for additional funds to finance their expanded
program of business transaction.
2.2 EVOLUTION OF BANKING
8
According to the banking companies ordinance 1962 “banking is business that

receive investment or lending of deposits of money from public and repayable on
demand or otherwise and which draw able by cheque, draw orders or otherwise”. As
regards the growth of modern commercial bank, it can be traced to as early as 600BC.
The “An Outline of Money”, written by G. Crowther, has traced the history of
modern English Commercial banking. According to him, the present day banker has
three ancestors such as merchants, goldsmiths & money lenders; which are briefly
explain as under;
2.2.1 The Merchants: The earliest stage in the growth of banking can be traced to
the working of merchants. These merchants were traders in commodities. The trading
activities were carried on by them from one place to another. It was risky for the
traders to carry metallic money with themselves for payment. The traders with high
reputation began to issue receipts which were accepted as titles of money. These
receipts or letters of transfer also called hundi in Indo Sub Continent were the first
mode of payments. The merchant banking thus forms the earliest stage in the
evolution of modern banking.
2.2.2 The Goldsmiths: The second stage in the growth of banking is normally traced
to earlier goldsmiths. These goldsmiths also called Seths in India used to receive gold
and silver for safe custody. The goldsmiths began to issue receipts for the metallic
money (gold & silver) kept with them. These receipts with the passage of time
became payable to the bearer on demand. In this way the ‘goldsmiths’ note, become a
medium of exchange and a mean of payment. The goldsmiths, thus, can rightly be
termed as the fore-runners of the modern bank note.
2.2.3 The Money Lenders: The third stage in the development of banking arose
when the goldsmiths became the money lenders. By experience the goldsmiths (who
were called money lenders) came to know that they could keep a small proportion of
the total deposits for meeting the demands of customers for cash and the rest they
could easily lend. They allowed the depositors to draw over and above the money
9
actually standing to their credit. In Economic terminology, we can say that they
allowed the overdraft facilities to their depositors.
When every money lender and goldsmith issued receipts and most of them
allowed the overdraft facilities, there was too much confusion in the banking system.
The money lenders and goldsmiths, in order to earn profits, could not keep adequate
reserves for meeting the demands of the customers for cash. The failure on the part of
the money lenders and goldsmiths to return money caused widespread distress among
the people. In order to create confidence among the people, steps were taken to
regulate the banking organization. A conference was held in Nuremburg in 1548. It
was decided that a bank should be set up by the state which should streamline the
banking organization and technique. The first central bank was formed in Geneva in
1578. Bank of England was established in 1694. The modern commercial banking
system actually developed in the 19th century.
2.3 EVALUTION OF BANKING IN PAKISTAN

At the time of independence the areas, which now constitute the Pakistan were
producing only food grains and agricultural raw material. For Indo-Pak sub continent,
there were practically no industries and whatever raw material was produced was
being exported from the Pakistan. How ever commercial banking facilities were
provided fairly well here. There were 487 offices of scheduled banks in the territories
now constituting the Pakistan. As a new country without resources it was very
difficult for the Pakistan to run its own banking system immediately. Therefore in
accordance with the provision of Indian independence Act 1974, an expert committee
was appointed to study the issue.
On the recommendation of committee Reserve Bank of India continued to
function in the Pakistan, till 30th September 1984, so that problem of time and
demand, liability, coinage, currencies exchange etc be settled between India and
Pakistan. It was decided that Pakistan will take over the management of public debt
10
and exchange control from reserve Bank of India on 1st April 1948, and that India
notice would continue to be legal tender to the Pakistan till 30th September 1948.
Following the announcement of independence plan in June 1947, the Hindus
residing in the territories now comprising Pakistan started transferring their assets to
India. Moreover the banks including those having the registered offices in Pakistan
transferred to India in order to bring a collapse of new state. By 30th June 1948, the
number of offices of scheduled banks declined from 487 to only 195 in the Pakistan.
There were 19 non-Indian foreign banks with the status of small branch offices,
which were engaged solely in export of crops from the Pakistani institutions i.e.,
Habib Bank and Australia Bank.
The government promulgated the Banking Companies Ordinance 1947, to
safeguard the interests of both banks and the customers. The Imperial Bank closed
down most of its offices in Pakistan, which created serious problems. The Indian
government withheld Pakistan’s share of Rs.75 corer in cash balance held by them at
the time of partition. The urgency of assuming control of banking and currency was
very badly felt now. The government of Pakistan decided to establish a full-fledge
central Bank. Father of the Nation, Quaid-i-Azam Muhammad Ali Jinnah,
inaugurated the State Bank of Pakistan on July 1948, after the State Bank of Pakistan
order was promulgated on 12th May 1948. The SBP provided every help and
encouragement to Habib Bank to expend its network of branches and formulated and
developed NBP in 1949 as an agent bank, which took over the agency functions in
1952 from Imperial Bank of India. In order to develop sound banking and weeding
out week institutes, the Banking Companies Act was promulgated in 1949,
empowering the SBP to control the operations of banking companies in Pakistan. In a
very short period of time number of scheduled banks and other specialized credit
institutions rose to thirty six. By June 1965, the numbers of branches of scheduled
banks were 1591. Pakistani commercial banks were nationalized in 1974, but the
process was reversed as nationalization proved to be defective. The ZTBL, MCB,
11
ABL and UBL have been privatized and HBL is expected to be privatized within near
future.
The nationalization of Banks in Pakistan since 1st January 1947 has heralded a
new era of development and progress. It has taken a complete banking system with
effect form January 1981. The privatization process of state owned banks and
enterprises started in 1991.
2.3 CLASSIFICATION OF BANKS IN THE PAKISTAN

The banks are classified according to their spheres of activities. The main types
of banks are as under:
1. Central Bank: Every civilized country now has its own central bank. The
primary function of the central bank is to regulate the flow of money and credit in
order to promote efficiency, stability and growth in the country. In Pakistan, the SBP
is the country’s central bank.
2. Commercial Banks: These banks are engaged in performing the routine duties of
banking business. They collect surplus money from the people. They make loans and
advances in the form of overdrafts, cash credits, discounting bills of exchange. The
commercial banks also manufacture credit money. They also provide agency services
and general utility services. These banks are considered the lifeblood of the economic
society. Some commercial banks are owned and controlled by the government which
is called as public sector banks. For e.g., NBP, HBL, UBL…etc while other
commercial banks that are owned by corporations is called as private sectors banks.
For e.g., MCB, ABL, City Bank…etc.
3. Exchange Banks: As name signifies, these banks mainly deal with international
trade. These banks take the responsibility of settlement of foreign exchange and
arrange the foreign business. In Pakistan, all the nationalized commercial banks have
been allowed to do the business of exchange banks.
4. Saving Banks: Saving banks are those banks which collect and keep the small
savings of the public. They are called also thrift promoting institutions. The saving
12
banks invest the funds in the safest government securities. The Post offices and
saving centers perform the business of saving banks in Pakistan.
5. Agriculture Banks: The agricultural banks (specialized banks) are set up to
provide financial assistance to the agriculturists. The agriculture banks provide short
term credit to the farmers for the purchase of seeds, fertilizers, pesticides, fuel….etc.
They also make medium term advances for buying tractors and introducing modern
techniques in farming. In Pakistan, the Agricultural Development Bank of Pakistan
was set up in 1981 for meeting the financial requirement of agriculture, the ADBP is
incorporated as public limited company, according to the “Company Ordinance
1984” & is name was changed to the ZTBL in 2002. An agriculture bank is also
called as domestic banks because these banks are registered and incorporated within
the country.
6. Industrial Banks: The industrial banks mainly provide medium and long term
credit to the industries. Since the industrial banks have long term deposits, they are in
a position to permit long term investment in industries. In Pakistan, the Industrial
Development Bank was set up in 1961. The other institutions engaged in providing
financial assistance to industries are PICIC, NDFC….etc.
2.4 ROLE OF ZTBL IN THE ECONOMIC DEVELOPMENT OF
THE PAKISTAN
Banks play an important and active role in the economic development of a

country. If the banking system in a country is effective, efficient and disciplined, it
brings about a rapid growth in the various sectors of the economy such as agriculture,
industrial, and the SME sectors. If the banking system is unorganized and inefficient,
it creates maladjustments and impediments in the process of development. In
Pakistan, the banking system is very well organized. The SBP established on July 1st,
1948 stands at the apex and is responsible for the operation of the banking system in
Pakistan. The other banks such as commercial, specialized or unspecialized banks
which form the banking structure in the Pakistan are playing an active role in the
13
economic development of the country. The role of the ZTBL in order to achieve
economic growth and development of the Pakistan is briefly explained as under:
1. Development of Agriculture & Industrial Sector. The ZTBL particularly in

rural areas of Pakistan are now providing credit for the development of
agriculture & industrial sector. The provision of credit to agriculture &
industrial sector has greatly helped in raising agricultural productivity and
income of the farmers. This has led to increased demand for industrial goods
and expansion of trade & industry. The use of bank drafts, cheque, bills of
exchange, credit cards….etc, has revolutionized both national and
international trade.
2. Banks Promote Capital Formation. The ZTBL plays an important role
in rising of the financial resources. They encourage savings by giving various
types of incentives to the savers. They expand branches of the banks in the
rural and urban areas and mobilize savings even at far of places. These
savings are then made available to the businesses which make use of for
productive purposes in the country.
3. Investment in new Enterprises. Businessmen normally hesitate to invest

their money in risky enterprises. The ZTBL generally provide short, medium
& long term loans to farmers to invest in new enterprises and adopt new
methods of production. The provision of timely credit increases the
productive capacity of the country. The organized banking system helps in
directing physical resources into productive channels. It also keeps a balance
between the availability and requirements of the capital in the country.
4. Balanced Development of different regions. The ZTBL plays an important

role in achieving balanced development in different regions of the country.
They help in transferring surplus capital from developed regions to the less
developing regions. The trade industries etc of less developed regions are able
14
to get adequate capital for meeting their business needs. This in turn, increases
investment, trade and production in the country.
5. Monetization of the Economy. The commercial banks by opening branches
in the rural and backward areas are reducing the exchange of goods through
barter. The use of money has now greatly increased the volume of production
of goods. The non monetized sector (barter economy) is now being converted
into monetized sector with the help of commercial banks.
6. Implementation of Monetary Policy. The central bank of the country
controls and regulates volume of credit through the active cooperation of the
banking system in the country. It helps in bringing price stability and
promotes economic growth within shortest possible period of time. The ZTBL
under the supervision and guidance of the SBP help in implementing and
achieving the objectives of the monetary policy which vary from time to time.
7. Financing Development Projects. The ZTBL provide short, medium & long
term loans for financing of development projects both in private and public
sectors. The ZTBL starts projects with the Ministry of Food, Agriculture &
Livestock (MINFAL) launched an integrated development program entitled
“Crop Maximization Project” in 15 districts. The MINFAL will provide funds
to the tune of Rs.299.833 millions to the ZTBL and thus help in accelerating
the rate of economic development in the country.
8. Booting the Exports: In order to boosts the exports of the agriculture and
industrial goods of the Pakistan, the banks have established export promotion
cell for the information and guidance of the exporters.
9. Less Reliance on Foreign Capital: A planed banking system by launching a
vigorous campaign of mobilizing idle saving in the country can meet the
capital development requirements from within the country. The country will
thus have to rely less on foreign capital for financing in the development
projects.
15
CHAPTER 3
“INTRODUCTION TO ZTBL”
3.0 INTRODUTION
The Zarai Taraqiati Bank Limited is the leading, premier and specialized
financial institution geared towards the development of agriculture, industrial and
SME sector, by providing financial products, services and loans for their customers.
The restructuring plan is being carried out with the aim to uplift the agriculture and
rural sector by raising the productivity, streamlining the institutional credit and
increasing income generating capacity of the farming community. The ZTBL was
incorporated as the public limited company on 14th December, 2002 through repeal
of the ADB Ordinance of 1961.
The ZTBL provides financial and technological services to the agriculturalist
at their doorstep for modernization of agriculture sector in Pakistan. The main
purpose of the ZTBL is to provide sustainable rural finance and services particularly
to small farmers and low-income households to strengthen the rural and agricultural
16
sector, mitigate poverty, capital market and investment activities. The core values of
the ZTBL is the professional integrety, teamwork, customer satisfaction and loyalty.
The ZTBL has a one subsidiary which is known as the Kissan Support Services
Limited. The bank can charge 9% interest. The auhorized capital of the ZTBL is
Rs.25,000,000,000. This amount is dividend into Rs.2,500,000,000 ordinary shares &
the price of each shares is ten rupees. The total number of shares of the ZTBL is
Rs.1,186,961,000 and paid up capital is Rs.11,869,612,000 of the ZTBL. The
ZTBL has one chairman, one president and ten directors. The tatal number of
employees is 5,326, while 982 employees is provided by the KSSL. The ZTBL make
investment in some listed companies such as Nestle Milkpak Limited, Uqab Breeding
Farm Limited, Mubarik Dairies Limited & Dadabohy Agriculture Leasing Limited in
order to generate profit.
3.1 HISTORY OF ZTBL

It was considered after independence of Pakistan that the existing institutional
sources of credit, such as, taccavi and cooperatives, were insufficiently meeting the
credit needs of farmers. Therefore the need for establishment of a third source of
agricultural credit was essentially percolated so as to fulfil the credit requirements of
farmers not only for production but even for the development purposes.
Consequently, the ADFC was brought into existence in 1952 for the purpose of
expanding financial facilities and promoting the development and modernization of
agriculture in the Pakistan. Subsequently in 1957, the ABP was established that can
provide both short term loan for production and long term loan for development. The
ADFC & ABP were merged together as the ADPB in 18th February 1961. The
ADPB is the main credit supplier to the agriculture sector in the country. According
to the “Companies Ordinance 1984”, the ZTBL was incorporated as a the public
limited company on 23th October, 2002. The ZTBL is governed by Memorandum
and Article of Association and registered with the SECP under “Companies
Ordinance 1984”. Consequently, on 18th November, 2002, all the assets, contracts,
17
liabilities, proceedings and undertakings of the ADBP were transferred and vested in
the ZTBL on 14th December, 2002 by the Federal Government.
3.2 CORPORATEAVISION
To develop and operate the ZTBL as a commercially viable bank with focus
on rural and agriculture finance and to serve the needs of farming
community, by delivering financial products and services.
3.3 CORPORATE MISSION

To play an effective role in the promotion of economic growth, by enhancing
the availability of credit to the agriculture sector, through reliable access to
sustainable financing, special lending programs, technical assistance, products
& services, and to promote career development opportunities for increasing
professionalism, technical proficiencies & trainings of employees.
3.4 CORPORATE OBJECTIVES

 To assist rural community, particularly the small farmers, in raising their
productivity and income levels through timely delivery of credit, advisory and
ancillary services.
 To build the image of the ZTBL as a proactive, client friendly, financially &
operationally sustainable with indigenous product deployment.
 To establish and provide backward and forward linkages to strengthen the
agriculture and industrial sector.
 The ZTBL can engage in public and private, wholesale and retail partnership
to deepen outreach and reduce operating cost.
 The ZTBL act as rural commercial bank to mobilize rural capital formation
and to commercialize the agriculture sector by delivering the true value of
credit to the client.
18
3.5 RESTRCTURING PLAN OF ZTBL

The restructuring means activity involving expansion or contraction of a
organization’s operations or changes in its assets and financial structure. The
restructuring plan of the ZTBL covering the following factors;
1. Governance: The ZTBL establish an environment that facilitates good
governance and accountability.
2. Systems: The ZTBL modernize operations through use of technology,
networking and communication tools.
3. Business Processes: The streamline products and delivery systems of the
ZTBL are to reduce transaction costs, simplify operations, and increase
outreach.
4. Products and Services: The ZTBL introduce products and services that
are financially and economically viable.
5. Human Resource Development: The ZTBL can improve standards and
skills of staff & management and strengthen training capacity.
6. Information Technology: The ZTBL establish new hardware and
software platform to support the MIS, accounting system including forensic
accounting, and risk management functions.
3.6 BOARD OF DIRECTORS

The ZTBL has one chairman, one president and ten directors. The seven
meetings of the board are held during each year. The main resposibility of the BOD is
to establish and maintain a system of internal control, prepare and present the
financial statements with aproved accounting standard and requirement of the
‘’Banking Companies Ordinance, 1962’’ and the “Companies Ordinance 1984”. The
new corporate structure redefines the bank's status as the Public Limited Company
registered under “Companies Ordinance 1984”, with an independent BOD which
19
aims at ensuring good governance, autonomy, delivering high quality. The list of the
BOD is given as under;
“List of Board of Director”
3.7 COMMIITTEES & ORGANIZATION STRUCTURE OF ZTBL

The overall management, functions, meetings of the ZTBL is control by two
committees known as “Board & Management Committees”. The sub-committees of
these two committees is explain as under;
3.7.1 Board Committees
1. Audit Committee: This committee has one chairman, four members that are
the directors of the ZTBL and one secretary from the Audit Department. The
designation of secretary is the “Chief Internal Auditor” of Audit Department.
2. Human Resource Management (HRM) Committee: This committee has
one chairman & president of the ZTBL, four members that are the directors of
the ZTBL and one secretary from the HRM Department. The designation of
secretary is the “Head” of the HRM Department.
3. Risk Management Committee: This committee has one chairman & three
members that are the directors of the ZTBL. But one member designation is
20
the risk manager. But in risk management committee, the company secretary
act as member and secretary as well.
4. Information Technology(IT) Committee: This committee has one convener
& two members that are the directors of the ZTBL. One member is from IT
Department & his designation is the Chief information officer. While one
secretary (Head) of IT Department.
3.7.2 Management Committees
1. Assets Liabilities Management Committees: This committee has one
convener (CEO) & three members. The designation of the first member is the
SEVP of Operation Department. The designation of the second member is the
risk manger. But the third member (Chief Financial Officer) act as member
and secretary as well.
2. Executive Coordination Committee: This committee has one convener
(CEO), one secretary (Compliance Officer) & three members. The
designation of the first member is the SEVP. The designation of the second
member is the EVP. The designation of third member is the risk manger.
3.7.3 Organization Structure of ZTBL: The organizational structure of the ZTBL
is shown in below diagram;
21
3.8 ZONAL OFFICE AND BRANCHES

In public sector, the ZTBL is largest financial development institution with a
wide network of 25 zonal offices and 342 branches in the Pakistan. The network of
the ZTBL Head Office is given as under;
3.9 RANKING OF STAFF MEMBERS
22
The ranking of staff members in order of seniority in the ZTBL is given as

under;
23
3.10 SUBSIDRAY
The ZTBL has one subsidiary which is known as the “Kissan Support
Services Limited”. It was incorporated as owned subsidiary of the ZTBL that
function independently effective from 1st January 2006. The KSSL is a separate and
distinct legal entity that is controlled by the ZTBL. The KSSL has an authorized
capital of Rs.100 million. Its aim is to provide a support to the management of the
ZTBL such as to focus on core banking business and assign non-core activities. The
KSSL operates under the Memorandum and Article of Association. The KSSL also
provide support staff and services to the ZTBL in the following areas;
I. The KSSL has recruited and developed support staff of following table
categories in ZTBL, Head Office as will as in field offices;
No. of
S.No. Category of Employees Provided By KSSL Employees
01 Darbans and Armed Guards 526

02 Drivers 291
03 Naib Qasids 54
04 Mali / Beldars 25
05 Typists, Assistants & Senior Assistants 41
06 Security Supervisor 03
07 Sweepers 07
08 Players 20
09 Others 15
Total 982
ll. Besides manpower support a service, the KSSL has also provided following
support services to the ZTBL;
 Provide mail management, repairing, maintenance & photographing
services to ZTBL
 Recruitment and provision of staff
 Provides farms and the ZTBL Staff College.
24
 Provide security services not only to the ZTBL Head Office but also to
branches and zonal offices.
CHAPTER 4
“PRODUCTS & SERVICES OF ZTBL”
4.0 INTRODUCTION
The ZTBL has provided many products and services for their customers. The
product and services of the ZTBL can raise the living standard of rural areas and
develop the agriculture sectors of a country as well. The Pakistan is an agriculture
country and the products and services of the ZTBL plays very important role in
increasing the GDP and accelerates economic growth. For this purpose, the ZTBL
provides many facilities for their customers, such as provides schemes and loans,
obviously help the customers to invest money in their businesses, to get maximum
profit from it and to pay low interest rates.
4.1 SCHEMES OF ZTBL

The ZTBL provides various schemes for customers, in order to strengthen the
rural and agricultural sector of econnomy, mitigate poverty and accelarte groth. The
Schemes of the ZTBL is which is briefly explains as under ;
4.1.1 Sairab Pakistan Scheme: The ZTBL can raise the irrigated area for the
purpose to accelerate rate economic growth and to facilitate the farmers. The ZTBL
has assigned the collaboration agreement with the KSB Pumps Company Limited
under the Sairab Pakistani Scheme. The ZTBL will provide loans to the farmers for
installation of tube wells and turbines whereas KSB Pumps Company Limited will
provide quality pumps, turbines, equipments to borrowers for efficient pumping of
waters. The water can plays vital role to improve per acre yield. Out of total 31
million hectors area of the Pakistan, 22 million hectors is cultivated while 9 million
25
hectors is not cultivated & waste mainly due to non-availability of water. More over
increase in water supply being a key input is required to raise cropping intensity and
hence the income of the farmer. Since inception the ZTBL financed over 143000 tube
wells amounting to Rs.15 billion. The KSB Pumps Company will provide quality
machinery and equipment for efficient pumping of water. The company shall also
provide after sale service including replacement of parts and availability of spares
through its network of dealers despite technological advancements and rapid growth
of industrial sector, agriculture is still the back bone of the Pakistan's economy. It
contributes 22% towards the GDP and employs nearly 45% of country's labor force.
It provides raw material for preparation of industrial products. So it has both pulled &
pushes effect on the economy.
4.1.2 Supervised Agriculture Credit Scheme: Under this scheme agriculture
loans are given for short, medium and long term loans up to Rs.1 million per
borrower. The loans are sanctioned for fats, livestock, orchard, tractor,
agricultural machinery, tube well and irrigation facilities. Under the scheme
besides provision of credit, information is to the farmers for planning the
farm, production, guidance for implementation of the scheme, marketing and
repayment of loans.
4.1.3 White Revolution Scheme: In order to modernize the dairy farming for
increasing milk supply, mitigate poverty in Pakistan, and improving the living
standards of the rural areas in Pakistan for the purpose to achieve growth and
development in agriculture sector of Pakistan, the ZTBL may start the
“Strategic Partnership” agreement with the Pakistan Development Diary
Company (PDDC) and the Nestle Pakistan Limited (NPL) under the white
revolution scheme. Under this participatory approach, the diary sector would
be modernized with a view to increase milk supply, mitigate poverty and
improve the living standard of the rural population. The ZTBL has earmarked
funds to the tune of Rs.5000 millions for financing of 50,000 animals
(buffaloes and imported cows) during the five years period 2007 to 2011. The
26
PDDC will also help the ZTBL in the selection of clients and processing of
loan cases. Initially the schemes will be for modernization of 5000 farmers
during 5 years period involving Rs.700 million. Under the scheme 1000 farms
would be covered on yearly basis. The modernization of dairy farm will be
carried out through financing milk cooling tank, generator, voltage stabilizer,
hot water geezer, water pump, cooling pad and other dairy equipment. There
would be maximum limit of loan of Rs.1 million per borrower party. The
PDDC would bear the entire amount of mark-up charged in the loan cases &
provided the 50% of principal part of loan is repaid in time by the borrower.
The remaining 50% amount of principal along with the amount of mark-up
would be paid by the PDDC.
The Nestle Pakistan Limited would help to select and identify good clients for
the ZTBL to improve quality breed of foreign and local dairy animals. The NPL can
provide technical guidance to the farmers through nestle veterinary doctors. The NPL
would purchase milk through its network and make weekly payments of milk sale to
the ZTBL for the adjustment of loan.
4.1.4 Micro Credit Scheme: This Scheme has been launched since 15th July, 2000
for the uplift of rural poor. The landless poor such as; tillers, harries and small land
owners having land not exceeding 2 acres may avail loan under Micro Credit
Scheme. It is operational in all branches of the ZTBL through all the Mobile Credit
Officers. Both, men and women may obtain loans under the scheme as an individual
or as a member of group of 5-10 members. The minimum credit limit is Rs. 5,000
while maximum credit limit is Rs.25,000. One hundred and thirty six income
generating activities or cottage industry items have been identified for lending under
the scheme. The loan may be advanced against one surety with 50% solvency of the
assessed value of property owned by the guarantor or security of tangible property.
Being small loans involving high cost 18% per annum mark-up is charged, whereas
2% rebate is given on timely repayment. All loans under these Schemes are
recoverable within 18 months after disbursement of loan.
27
4.1.5 Zarkhaiz Scheme (One Window Operation): For timely and conveniently
provision of credit to purchase inputs, loans is provided to the borrowers under this
scheme being conducted twice a week during Rabi & Kharif seasons. All the related
departments such as revenue, agriculture, post office….etc. attend the focal points
which are established at convenient places. The farmers get their pass books prepared
and loan 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.
4.1.6 Sada Bahar Scheme: For providing timely input loans for crops and working
capital for poultry and fishery etc, the ZTBL has launched a Sada Bahar Scheme.
This scheme is also known as “Revolving Finance Scheme”. The 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.5 Lake. The
salient features of the scheme are given as under:
1. Revolving Credit Limit is fixed to cater production credit and ancillary
requirements of the farmers during one year period.
2. The borrowers can draw the credit in lump sum or in installments according to
his requirement.
3. The borrowers can repay in lump sum or in installments during the year when
his cash position allows him.
4. The Pass Book containing transactions in his account is supplied to every
borrower free of cost.
4.1.7 Tea Financing Scheme: In order to increase the tea cultivation in Mansehra,
Swat, Mutta and Dir in Malakand Division, the tea financing scheme has been
introduced which would not only save the hard earned foreign exchange but would
28
also help to improve the socio-economic condition and living standard of the
inhabitants of the area. The salient features of the scheme are given as under:
1. The maximum credit ceiling of Rs.60,000 per acre has been fixed.
2. All the farmers owing land up to five acres are eligible to avail loans.
3. The amount of credit will be given in three installments; the first year
installment is Rs.30,000, second year installment is Rs.15,000 and third
installment is year Rs.15,000.
4. The credit would be repayable within 11 years with 6 years grace period with
prescribed markup of 9% per annum.
4.2 LOANS OF ZTBL

The ZTBL provides loans for the development and growth of rural areas and
uplift of farm activities. The loans of ZTBL are briefly explained as under;
4.2.1 Production Loans: These loans are given to farmers for seed, fertilizer,
pesticides, labor charges…etc. to grow crops and vegetables including working
capital for poultry, dairy, orchard and fishery and are recoverable within one and half
year. The amount of disbursement of production loan, at the end of December 31, is
50,222 million for overall four provinces. The example of production loans items are
given as under;
1. Seeds, fertilizers and fuel
2. Pesticides, insecticides and herbicides manual sprayers
3. Poultry feed, chicks and medicines
4. Hire charges of farm power
5. Water charges and electric charges for tube well
6. Production loan for growth of mushroom
7. Hired labor, water rates & fuel wood for tobacco curing
29
4.2.2 Development Loans: The loans for purchase of items like farm machinery,
tractors, irrigation, land development, orchard, green houses, dairy, poultry, fishery,
livestock, farming…..etc are recoverable up to one to eight years. The amount of
disbursement of development loan is 5,690 million at the end of 2007, for overall four
provinces. However, the provinces wise disbursement of loans & its percentages at
end of 31st December, 2007 is given as under;
S.No. Provinces Disbursement of Loans ( Rupees) %age

1. Panjab 44,327,000,000 79.50%
2. Sindh 7,384,000,000 13.20
3. NWFP 3,802,000,000 6.80
4. Balochistan 99,000,000 0.20
Moreover, the term wise disbursement of loans of bank is on short, medium and long
term basis.
I. The short term loans are also called production loans having maturity period
is one year. These loans are given to farmers for seed, fertilizer, pesticides, labor
charges…etc. to grow crops and vegetables. These loans are recoverable in lump
sum commencing after the harvest or marketing of respective crops.
II. Medium term loans are for development and advance purposes the examples
of these loans are dairy farming and livestock. The installments of these loans are
made on monthly, biannually and annually basis and the recovery or maturity
period is 5 years.
III. The long term loans are for tractor, agricultural machinery, poultry farming,
and orchard. The installments of these loans are made on monthly, biannually and
yearly basis and the maturity period is 8 years and above.
“Summary of Term Wise Disbursement of Loans”

S.No. Term wise Disbursement of Loans Maturity %age
1. Short Term Loan (Production Loans) 12months 89.80%
2. Medium Term Loan (Development Loans) 5 years 3.40
3. Long Term Loan (Development Loans ) 8 years 6.80
30
4.3 RECOVERY PROCEDURE OF LOAN

The recovery procedure of the ZTBL loan is to carried and taken by three steps
such as recovery schedule, issuance of notice and legal action which is briefly explain
as under;
4.3.1 Recovery Schedule: The 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.
4.3.2 Issuance of Notice: The ZTBL can issue notice for recovery
of loan which is known as “Demand Notice”. It 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.
4.3.3 Legal Action: The 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 favor 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
Ordinance 2001”.
31
CHAPTER 5
“FINANCE & ACCOUNTS DIVISION”
5.0 INTRODUCTION OF THE FINANCE & ACCOUNTS

DIVISION
The Finance and Accounts Division of the ZTBL is responsible for handling
the financial affairs and keeping the records of all the transactions, preparation of
accounts, financial statements and budgets and to manage, distribute and reconcile
funds of all zonal offices and branches of the ZTBL. Moreover this division acts as
the backbone for the bank, in order to strengthen the rural and agricultural sector of
Paksitan, to manage funds, mitigate poverty, capital market and investment activities.
The main aim and responsibility of this division is to make policies, planning,
mobilization and administration of the bank's financial resources such as products and
services. This division provides schemes and loans for small and large farmers. By
32
getting loans and register with schemes, the farmers can invest money in their
businesses and to get maximum profit from it and to pay low interest rates. This
division manages the bank’s financial relations with the objectives of providing loans
to borrowers. The ZTBL lends money to the individuals or corporations for
consumption or investment and charge interest on the loans. But besides this, finance
is the science that deals with the funds management such as saving and lending
money while account is a record of financial transactions for an asset or individual. In
other words, an account is an arrangement between a buyer and a seller in which
payments are to be made in future.
In short, this division can a gain a tremendous importance over the other division
in the ZTBL, through its functions and truly be called as the backbone for the bank, in
order to manage funds, mitigate poverty and increase the living standard of people of
rural ares.
5.1 FUNNCTIONS OF FINANCE & ACCOUNTS DIVISION

This division mainly deals with concept of time, money and risk and how they are
interrelated. It also deals with how money is budgeted. However, finance works most
basically through individuals and business organizations depositing money in a bank.
The main functions of the FAD is given as under;
 To providing proactive financial policy, timely strategic financial planning and
risk management.
 To managing the bank’s assets and liability portfolio.
 To prepare, prompt and accurate financial reporting and preparing audited
financial statements for the bank's annual report.
 To overseeing internal controls in the processing of financial transactions
accounts, budgets, and credit of the bank.
 To reconcile funds of all zonal offices and branches of the ZTBL.
33
 To administer, monitor and control the bank’s loan and portfolios, including
management and disbursement of loans.
 To manage the cash inflows and out flows.
 To maintain a books of accounts.
 To coordinate and facilitate a business planning, budgeting and to formulate the
budgeting estimates of revenue and capital expenditure.
 To manage and rectify the accounts of zonal offices and braches.
 To consolidate all the financial statements of zonal offices and braches, in order
to make financial decisions.
 To prepare quarterly, semiannually and annual financial statements and its
agenda for presentation to the Audit Committee and the BOD & also to prepare
annual capital adequacy ratio for certification by external auditors
 This division ensuring that all financial obligations are met and collections are
made.
5.2 CLASSIFICATION OF FINANCE & ACCOUNTS DIVISION

In order to classify the finance and accounts division of ZTBL, there are four
departments, which plays very important role in financial affairs and keeping the
records of all the transaction, preparation of accounts, financial statements, budgets
and to manage, distribute and to reconcile funds of all zonal offices and branches of
the ZTBL Heads Office. The four departments & their sub unit of the FAD are given
as under;
1. Central Accounts Department (CAD)

 Policy Unit
 Accounts Unit
 Tax Unit
34
 Fixed Asset Unit (FAU)

 Pre-payment Verification Unit (PVU)
2. Head Office Accounts Department (HOAD)
 Payroll Unit
 Fund Unit
 Payment unit
 Intra Branch Transaction (Reconcilitation) Unit (IBTU)
3. Regulatory Reporting Department (RRD)
 Regulatory & Internal Reporting Unit (RIRU)
 Financial management Information Unit (FMISU)
4. Budget & Fund Reconciliation Department (BFRD)
 Budget Planning Unit
 Budget Analysis Unit
 Treasury Unit
 Fund Reconciliation Unit (FRU)
5.3 HIERARCHY OF FINANCE & ACCOUNTS DIVISION
35
CHAPTER 6
“CENTARL ACCOUNTS DEPARTMENT”
6.0 INTRODUCTION OF CAD

The CAD is abbreviated to Central Accounts Department. There are many
accounting policies & procedures used in the CAD, In order to present the true
financial position of he bank in financial statements, the accountants formulate the
36
accounting policies & procedures. This department maintains the actual or real
accounts of the ZTBL. In this department, I was attached actually to maintain the real
accounts which are assets and liabilities. They are responsible for both kinds of assets
fixed and liquid assets and to maintain the depreciation accounts for all those assets
acquired by the bank. In this department the balance sheet and profit and loss account
is also prepared for financial year, to get the image in sense of profitability or loss
and to make financial decisions.
6.1 OBJECTIVES OF CAD

 Formulation & maintenance of the accounting policies & procedures with
applicable accounting standards which ensure dissemination & implementation across
the bank.
 Preparation of financial statements as per requirement of statue and to
ensure the proper accounting of assets, liabilities, owner’s equity, income, revenues
and expenses.
6.2 FUNCTIONS OF CAD

 To issue the instructions relating to accounting policies & procedures and
allocation of specimen signature numbers to the authorized signatories of
the branches & maintenance of signature booklet.
 To notify the schedule of bank charges.
 To maintaining & updating of chart of accounts for recording of financial
transactions.
 To prepare the periodic financial statements of the bank & to deal with all
related matters.
 To Issue the guidelines and instructions regarding periodicals closing of
accounts and deductions of tax at source.
37
 To deal with all corporate tax matter & liaison with tax department, tax
advisors, consultants….etc
 The compilation of fixed assets schedule of the Head Office departments &
branches.
 Follow up and collection of fixed assets schedule along with supporting
documents from the ZTBL Head Office departments, zonal offices &
branches.
 To coordinate with internal & external auditors and the SBP inspection team
and to arrange credit rating of the bank.
 To conduct prepayment verification of sanctions pertaining to the HOAD.
 To perform administrative functions for the department such as, sanction of
leaves & approvals for tour programs & travel allowance
6.1.3 UNITS OF CENTRAL ACCOUNTS DEPARTMENT

6.1.3.1 Policy Unit:
 To device accounting procedure regarding accounting in the Head Office
and branches & to circulate revision of mark-up or return rate for
compliance by the branches.
 To deal with management latter & executive summary.
 To coordinate with external auditors & to arrange payments to external
auditor’s bills.
 To arrange compliance of internal & external audit observation relating to
the accounting matters of the ZTBL Head Office, zonal offices and
branches.
 To coordinate with other departments in the Head Office on policy matters.
 To maintains personal files of the employees, deals with their leaves & other
administrative matters, such as policy matters relating to the operation of
accounts.
38
 To update the specimen signatures booklet for use of authorized signatories

in the ZTBL Head Office, zonal offices & branches.
 To prepare bank charges schedule & there circulation among branches and
submission to the SBP on half yearly basis.
 To allocate new GLH for accounting purpose and issue instructions those
are relevant to the books of accounts.
 To provide guidelines to the zonal offices and branches regarding
rectification, settlement of accounting errors, audit observation and
adjustment of suspense account.
 To arrange & coordinate with credit rating of the bank & provide
information regarding credit rating of the bank.
6.1.3.2 Accounts Units:

 To coordinate with concerned departments of is division for timely
production of statement of affairs.
 To arrange compilation and merger of statement of affairs and it is also
provide to auditors for auditing purposes.
 TO compile balances under relevant group of heads from trial balances for
preparation of financial statements.
 To prepare list of abnormal entries & balances for rectification.
 To deal with all matters relating to system analysis, software development
& maintenance of statement of affairs.
 To Issue guidelines and instructions to the branches regarding closing of
accounts on quarterly, semiannually and annual basis.
 To prepare quarterly, semiannually and annual financial statements and its
agenda for presentation to the Audit Committee and the BOD & also to
prepare annual capital adequacy ratio for certification by external auditors.
39
 To coordinate with internal and external auditors and the SBP inspection
team regarding periodical accounts.
6.1.3.3 Tax Unit:

 To Issue guidelines regarding deduction of tax at source under the
“Income Tax Ordinance, 2001”.
 To collect tax payment documentary evidences for tax deducted at source
from the branches for submission, to tax advisor and tax department.
 To coordinate with tax consultant, income tax authorities & the SBP on tax
issues.
 To pursue the tax refund case with income tax offices, through tax
consultant.
 To prepare statement & payment of advance tax under the “Income Tax
Ordinance, 2001”.
 To guide branches for settlement of tax issues and to attend tax related audit
observations and arrange compliance.
 To arrange payments to tax advisor, appeals fee & other mandatory
payments required under the “Income Tax Ordinance, 2001”.
6.1.3.4 Fixed Asset Unit:

 To timely dispatch of format for fixed assets schedule to the ZTBL Head
Office departments, zonal offices and branches.
 The persuasion & collection of fixed assets schedule along with supporting
documents from branches as well as from ZTBL Head Office departments.
 To reconcile the data with statement of affairs of the concerned zonal
offices and branches.
 To compile or summarize the fixed assets schedule on country level.
40
 To maintain the up-to-date record of fixed assets at the zonal offices

branches and the ZTBL Head Office.
 To compile the addition and deletion of fixed assets on quarterly basis by
the ZTBL Head Office, zonal offices and branches..
 To monitor and verify the depreciation charged by departments of the ZTBL
Head Office, zonal offices and branches on quarterly basis.
 To make the adjustment of depreciation charged under intimation to
concerned accounts units and to verify the disposal of fixed assets booked
by the branches.
 To calculate the amount for the deferred tax assets.
 To coordinate with the external auditors on the issues relating to fixed assets
of the bank.
 To perform any other assignment as and when assigned by the competent
authority.
6.1.3.5 Pre-payment Verification Unit

 To verify all payments relating to Head Office.
 To check availability of sanction of the competent authority.
 To check competence financial power of approving authority.
 To check budget, its ceiling and procedural compliance.
 To check completeness of documentation and
 To verify the arithmetic accuracy of payments & budgets.
 To perform any other assignment as and when assigned by the competent
authority.
41
CHAPTER 7
“HEAD OFFICE ACCOUNTS DEPARTMENT”
7.0 INTRODUCTION OF HOAD

The HOAD is abbreviated to Head Office Accounts Department. The main
objective of this department is to maintain accounting functions of all over the bank
and to centralize the accounts as well”. In the HOAD, the specialized accounting
software and the COBOL administrative system is used for recording the
transactions, financial information and to deduct tax from salaries of the employees.
7.1 UNITS OF HOAD

7.1.1 Payroll Unit: In this unit, I have learnt how to prepare the payroll, and how to
process the payments of bounces, leave encashment, overtime and other allowances.
This department also works on tax deduction from pay. In this unit, the COBOL
administrative system is used for the purpose to record the salaries, which is paid to
employees. The COBOL is the acronym for COmmon Business Oriented Language,
defining its primary domain in business, finance, and administrative systems for
companies and government.
In short, this unit mainly deals with the accounts related to salary of
employees, how tax is deducted and distributed to employees which are managed by
this wing.
7.1.2 Funds Unit: In this unit, I have learnt how to manage the deductions from the
salary of employees as a fund. The main objective of this unit is to maintain the book
of accounts, employee’s contributory funds such as contributory provident fund,
employee’s provident fund and general provident fund and also the investment of
42
surplus funds in approved schemes. Moreover, there are ten types of deductions from
fund in the ZTBL Head Office, which are given as under;
1. ZTBL Employees benefit fund
2. Benevolent fund (officers)
3. Benevolent fund (staff)
4. General provident fund (officers)
5. General provident fund (staff)
6. Contributory provident fund
7. Pension fund
8. Gratuity fund
9. Employees provident fund
10. Gratuity 2005 Fund trust
7.1.3 Payment Unit: In this unit, the working is related to the payments, here the
payment is not in cash, they issue notes to the employees of bank and issue cheques
to the outsiders. The basic functions are to make payments to employees or outsiders
from whom we have gotten goods or services, and then record them on papers and
also on computer database. The main function of this unit is to summarize the record
of transactions and to provide different kinds of reports to the needy department and
personals.
7.1.4 Inter Branch Transaction Unit (IBTU): In this unit, I have learnt that in this
wing all the queries related to the branches and zonal offices are maintained in the
ZTBL Head Office. Here they basically prepare the reconciliation statements relating
to zonal offices and branches in the ZTBL Head Office. This unit becomes important
for banks to protect their assets. In case of fraudulent or errors in transaction due to
negligence, a good bank reconciliation system helps detect these. In view of above it
is direly needed that to have an efficient and robust the Inter Branch Reconciliation
System with effective internal controls to handle high volume of data with accuracy
& also with an in built flexibility to handle the expectations. The main function of the
IBTU is to ensure timely reconciliation of inter branch transactions and to provide the
43
list of outstanding entries to the branches for reconciliation for the purpose to
correspond with the branches and zonal offices for settlement of outstanding entries
in order to coordinate with the ZTBL Head Office for follow-up. Here the nature of
the IBTU is to reconcile the Head Office to branch books. The transactions between
the Head Office & branches to transfer the cost and amount of assets, liabilities,
expenses & income are called the “Inter Branch Transactions”. These transactions
are of two types.
I. Branch to Branch Transactions.
II. Head Office to Branch & Vise Versa.
Moreover, Specialized accounting software is designed or being used for
reconciliation of the “Inter Branch Transactions”. Following checks are applied in
software to get accurate results & to reduce the chances of risk.
 Checking of contra branch code and central account code.
 Checking of transaction date and advice number.
 Checking of the GLH
 Checking of debt amount into credit amount.
 Checking of credit amount into debit amount.
On the other hand, in the IBTU, a document is used, known as an “advice”. It is
a printed form of document (ACF-71), is used for inter branch transaction which
contains following information.
 Nature of transaction
 Date of transaction
 Transaction amount
 Contra branch information
In other words, advice is document which is used only to communicate the
information of certain transaction to authorized offices of the ZTBL. The debit advice
is prepared to transfer the assets & expenses by one office to another office of the
ZTBL. The bank’s liabilities & Income are transferred through credit advice. The
44
vouchers are also prepared parallel to advice to record these transactions. The
performance of the IBTU is dependent on branches behavior. Hence, there is a need
to fix responsibility on branches to clear all outstanding entries either originated or to
be responded. While, outstanding entries are unmatched records of the Central
Accounts File (CAF) or a record exists either only in “O” file or “R” file.
7.1.4.1 Objectives of IBTU: The IBTU can manage the two objectives such as
internal control and prudence of the SBP instructions.
I. Inter control implies proper check on inter branch transactions to minimize
the chances of fraud & to run the operations effectively & efficiently. In this
regard various policies and procedures were formulated to secure the Bank’s
operations. These are being revised by management on different occasions to
increase the effectiveness & efficiency.
II. The SBP is regulatory body who monitors and regulates the function and
activities of banks in Pakistan. The SBP issues instructions and guidelines in
respect of operations, financial reporting, risk assessment…..etc for all banks.
In this connection relevant instruction on the issue is reproduced such as;
“For all the outstanding entries in Inter Branch Transaction account and in
suspense account must be reconciled and taken into the proper head of
account with in a maximum period of time thirty days from the date of
recording transaction.”
7.1.4.2 Unit Structure of the IBTU : This unit is divided into three sub sections on
the basis of its operations and the unit structure is given as under;
45
7.1.4.3 Responsibilities of Unit Incharge of the IBTU: The unit incharge can
supervise the over all management, in order to plan, manage & supervise daily
reconciliation process. However, unit incharge can also ensure that inter branch
accounts are properly reconciled on daily basis, randomly review of matched items
and coordination with concerned departments and units to ensure that expectations
are cleared on a timely basis. It is also the responsibility of unit incharge that is to
prepare the monthly reconcilement balancing reports.
l. Responsibilities of Computer Section of the IBTU: The main responsibility
of this department is to collect data from the ITSSD on daily basis and to
producing list of outstanding entries and its updating. However, necessary
corrections are made & monthly statement of cash in transit is prepared. The
computer section also prepares special reports for external and internal
auditors & the SBP inspection team.
ll. Responsibilities of Coordination Section of the IBTU: This section assist
unit Incharge in planning & managing of daily reconciliation process.
However, this section also assists computer section in preparation of reports
for higher management and special reports for external and internal auditors
and the SBP inspection team. This section not only coordinates with Head
Office, zonal offices and branches but also with departments and units of
Head Office for settlement of outstanding entries and coordination with sub
sections of IBTU in closing of accounts as well.
lll. Responsibilities of Record Maintenance Section of the IBTU : This section
can maintain branch wise records, diary, dispatch file and coordination with
internal and external auditors & the SBP inspection team.
7.1.4.4 Steps in Information Processing of the IBTU: There are some steps in
information processing of the IBTU, for reconciliation of transaction, which is briefly
explained as under;
46
I. The vouchers & advices are prepared in branch and posted to the
Zonal Computer Center (ZCC) on daily and weekly basis.
II. The ITSSD compiles the Central Accounts File (CAF), 6950 on
daily basis & access is given to the IBTU. The CAF, contains information about
the Inter Branch Transactions. The file consists of two sub files:-
a. The “O" file of central account file keeps the records of originating
entries.
b. The “R” file of central account file keeps the records of responding
transactions.
III. The IBTU is using software for reconciliation of the Inter Branch
Transactions.
IV. The computerized merging & matching process is started after collection of
fresh data on daily basis.
a. The “merging process” means copying a fresh data from main CAF &
pastes it in existing data base of the CAF maintained by the IBTU.
b. The “matching process “ is a process wherein “O” file reads “R” file
& match the contents of originating transactions with the responding
transactions.
V. A computerized list of outstanding entries is produced after merging and
matching of data. This can be seen on the IBR system throughout the
branches.
VI. In final step, persuation will be done by the IBTU, for reconciliation.
However, persuation means follow-up to settle the entries for advice.
7.1.4.5. Diagrammatic Representation of Information Processing of the IBTU:
The diagrammatic representation of the information processing of the IBTU is
given as under;
47
CHAPTER 8
“REGULATORY REPORTING DEPARTMENT”
8.0 INTRODUCTION OF RRD

This department sends reports to the SBP. The ZTBL has to communicate
and submit different returns to the SBP and truly be called as regulator at different
intervals. For the purpose a department named as Regulatory Reporting Department
(RRD) has been established. There are two ways of sending report to the SBP such
as, to send report through courier service or to send online. Here in this department, I
learnt how to prepare balance sheet, income statement and how to find ratios. The
RRD basically is to collect, process, analyzed, customize and provide with the
information to various stakeholders to meet their specific requirement on timely
basis. The main aim of the RRD is to compliance to the statutory reporting
requirements & makes periodic financial reporting to the management. This
department collects information from various sources such as zonal offices, branches,
ITSSD, CAD…..etc and reports the data to the SBP after consolidation.
8.1 OBJECTIVES OF RRD

 To improve effectiveness in meeting statutory reporting obligations.
 To prompt and accurate analysis to aid decision-making.
48
 To make periodic financial reporting to the management.
8.2 FUNCTIONS OF RRD

 To redesign system of data capturing, its consolidation and subsequent
reporting as per regulatory requirements.
 To ensure implementation of changes in reporting requirements as amended
from time to time and to design and implement internal reporting
mechanism.
 To coordinate with different departments and zonal offices for collection of
requisite data and to Issuance of guidelines for preparation and
consolidation of data.
 To arrange compliance of internal or external audit observation on
regulatory reports.
 To carry out periodic review and analysis of financial results and it’s
reporting to concerned.
8.3 UNITS OF RIRD

8.3.1 Regulatory and Internal Reporting Unit (RIRU): In this unit, I have
learnt how the data is process, analyzed, customize the collected data of bank and
which is then provide to various stakeholders to meat their specific requirement on
timely basis. Moreover, the main aim of this unit is to customizes the collected
information on needed basis and forward it to the respective recipients such as SBP,
Internal and external auditor, agencies…..etc. The RIRU has been designed to face
the over changing needs of internal and external reporting. Staff members have been
assigned duties in such away that is to facilitate the whole procedure of data
collection, customization, analysis & eventually the reporting.
The main source of information is the Information Technology and System
Support Department (ITSSD). The information is mainly collected through FMISU in
49
coordination and relationship management, not only with ITSSD but also with some
other departments such as:
I. Central Account Department (CAD)
II. Head Office Account Department (HOAD)
III. Head Office Operations Department (HOOD)
IV. Budget and Funds Reconciliation Department (BFRD)’
V. Recovery Department (RD)
VI. Branch Banking
8.3.2 Financial Management Information System Unit (FMISU): The FMIS is

that system which is helping the management of the bank financially, in making the
right decisions at the right time. On the other, hand, the MIS is the study of
information system in business and management and act as bridge between top and
low level management in the ZTBL. The FMIS provides the mangers with reports
and often online access to organization’s current performance and historical records.
This system is oriented almost exclusively for internal events but not for external
events and can help managers to gain access data of the bank at any time, which is
precise and accurate that also save the precious time in the age of globalization.
While, the FMIS help managers to collect financial information at any time such as
on daily, weekly, monthly, quarterly, semiannually and yearly results. Although, the
FMIS enables mangers, to drill down and to see daily or hourly data if required.
In short, the FMISU can plan, control and summarize the internal data of
bank, in order to make financial decision and comparison for the purpose to check the
productivity, growth and development of the ZTBL in agriculture sector of Pakistan.
8.3.2.1 Role of the FMISU: Every unit has their own importance but the FMIS is
performing and playing a vital role in the ZTBL, although its development has been
started since 1997. They are now developing and implementing the FMIS in the
ZTBL in each and every department by the use of computerized processing and
management report systems. All the information is updated day by day due to the use
50
of FMIS. The process of recording transactions is error free with the use of the FMIS,
in the ZTBL is availing many advantages which are given as under;
1. The working load on employees is reduced.
2. The chances of data loss are minimized.
3. Quick access to data and services.
4. Better communication among divisions, departments and units.
5. Easy and quick data transfer from one branch to another.
6. Customized annual reports are generated.
7. Middle managers check the financial reports.
CHAPTER 9
“BUDGET & FUND RECONCILIATION DEPARTMENT”
9.0 INTRODUCTION
The BFRD stands for Budget & Fund Reconciliation Department. This
department is also known as Budget & Fund Management Department. In this
department, I have learnt that how to respond for application of note received from
branch or any department, and issue the fund or budget to the needy department or
branch. This department maintains budget and fund for branches and other needy
departments. The BFRD receives the intimation and they transfer fund and to receive
the surplus fund form the branches. The branches send their records to BFRD. This
department monitors their record which receives from zonal offices and branches in
order to fulfill the requirements.
Here ZTBL remits the needs of the branches through commercial banks such as,
National bank of Pakistan, Habib Bank Limited, United Bank Limited, Allied Bank
Limited and Muslim Commercial Bank Limited However, this department prepares
the budget for upcoming financial year or monitors the previous budget and to create
funds. The main aim of this department is to preparation of financial plan for bank’s
credit limits, funds review and their application.
51
A budget is a road map that facilitate where one is and where one want to go
and how can one go to one’s desired goal point. While, budgeting is an effective tool
of planning and control exercised in the ZTBL to help management, in order to get
the desired goals of stakeholders’ value enhancement. However, budgets are used for,
owner oversight, goal focus and financial control. The main purpose of budget is to
plan, communicate, motivate, control and evaluate. The more clear, accurate and well
thought out budgets in the beginning the more likely you will be able to;
 To adjust plans, activities and spending as needed.
 To spend money cost-effectively.
 To reach the specific goals you have set.
 To strength the internal control system.
 To analyze, compile report and to manage funds.
Moreover, the main sources of budget are primary & secondary data, treasury &
treasury data, annual reports…..etc
9.1 O B J E C T I V E S BFRD
 To arrange adequate resources for maintenance of adequate liquidity for efficient
credit disbursement.
 To reconcile budget and fund in order to enhance the value of stakeholders.
 Timely discharge of liabilities and all operation of the ZTBL.
9.2 FUNCTIONS OF BFRD

 To developing policies, procedures and standards for budget planning and
analysis.
 To coordination with administrative and governance groups on the issues
relating to the budget.
 This department is based on the strategic planning of the bank arranging
budget estimates from all over the bank.
52
 To allocate of departmental code numbers with the change in the

organizational set up as per requirement.
 The Automation of budget process, preservation of the data and obtaining
approval from the BOD for annual budget.
 To dealing with matters relating to the appropriation and re-appropriation of
capital and revenues expenditures as well as reserves for contingencies during
the year.
 To prepare the information regarding performance of department-wise
financial activities and their analysis according to the data reflecting to the
performance.
 To monitor the expenses for ensuring financial discipline and taking remedial
steps for excess expenditures.
 To develop a future strategy for projection of budget.
 To preparation of quarterly evaluation and review on expenditure with budget
provisions and submission to the Audit Committee.
 To arrange the training and support to the departments and divisions for the
Budget Development Cycle.
 The Provision and analysis of any other information required to support
institutional planning and decision making.
 To dealing with matters relating to borrowings from the SBP.
 To make arrangements of adequate resources for bank’s requirements.
 To optimize the return on financial resources of the ZTBL.
 To reconcile bank accounts with the SBP & commercial banks at the ZTBL
Head Office.
 To provide funds to needy branches and receive back from branches having
surplus funds with them.
 To make repayment of principal installments and their interest in time in
respect of the SBP loans.
53
 The settlement of audit objections relating to the SBP, Ministry of Finance

and senior management of the bank.
 To monitor of reconciliation of the bank accounts of branches with other
commercial banks.
 The fixation of cash limit of branches and monitoring of cash of branches as
per prescribed limits and regularization of audit.
9.3 UNITS of BFRU

9.3.1 The Budget Planning Unit: This unit can develop departmental policies,
procedures, budget planning process and parameters and standards for financial
management. This unit can communicate with administrative and governance groups
on the budget process and budget issues. This unit mainly involves in processing of
information for the purpose to prepare of annual budget and to issue the budget calls
memos. However, this unit can arrange allocation of departmental code number with
the change in organizational set up whenever required. The capital and revenue
expenditure is also appropriate for additional funds from contingency and unforeseen
reserves for new schemes introduced. But the overall expenditure can evaluates and
reviews on quarterly basis against budget provision and its submission to the Audit
Committee. This unit not only provides information and analysis to support
institutional planning and decision making but also provide support to department
and divisions throughout the BDC.
9.3.1.1 The Budget Development Cycle (BDC) : There are ten steps in BDC of
ZTBL Head Office in order to achieve one’s desired goal point. The ZTBL can
monitor the budget on quarterly basis. The steps are briefly explained as under;
1) The Budget Criteria Committee is constituted by the President of the ZTBL
Head Office to discuss and finalize the budget criteria for allocation of
budget.
54
2) Time horizon is planned for the preparation, approval and circulation of

budget.
3) The call circular of budget is reviewed and finalized, which covers all
guidelines and instructions for preparation of budget proposal is issued along
with budget performance to all divisions, departments, zonal offices and
branches of the ZTBL Head Office.
4) The budget criteria is prepare for budget allocation under revenue and capital
expenditures. Presently the budget allocation under major head is made on the
following criteria ;
 Stationary and communication
 Traveling Expenditure
 Repair and maintenance
 Salary and allowance
 Rent, taxes, insurance and expenditure
 Revenue and investment on securities.
5) Approval of budget criteria recommended by the Budget Criteria Committee.

6) Examination & scrutiny of budget proposal received from all divisions,
departments, zonal offices and branches of the ZTBL Head Office and
allocation of funds under revenue and capital expenditures in accordance with
the approved budget criteria.
7) The consolidation, computerization, verification and rectification of finalized
proposed budget data of all divisions, departments, zonal offices and branches
of the ZTBL Head Office.
8) Preparation of the Budget Agenda, that contains revised estimates of current
year and proposed budget estimates.
9) Presentation of the Budget Agenda for approval from the Budget Criteria
Committee, President and the BOD.
55
10) In final step, proposed budget estimates approved by the BOD are circulated
to all zonal offices and branches of the ZTBL Head Office for implementation
through a budget circulating letter containing detailed instructions for proper
utilization of funds and judicious spending.
9.3.2 The Budget Analysis Unit: The main aim of this unit is to prepare, analyze,
coordinate and assess data regarding financial activities that reflecting the
information regarding the performance of the departments. This unit can provide
information and analysis to support institutional planning and decision-making.
However, this unit can take administrative and financial steps for excess expenditure.
For this purpose this unit can communicate with administrative and governance
groups. But the overall expenditure can evaluates and reviews on quarterly basis
against budget provision and its submission to the Audit Committee. This unit also
develops assumptions and strategy for the budget for future and to monitoring trends
in expenses.
9.3.3 Treasury Unit: The main aim of this unit is to arrange funds, to maintain
records of the ZTBL and operations of bank accounts with the SBP and commercial
banks. The remittance of funds is to be done to the needy branches on daily basis.
Moreover, payment to tractor manufacturing companies the remittance of funds is to
be done to the needy branches on weekly basis. This unit update, maintain and record
all the information regarding the remittance of funds. This unit also maintains and
monitors the liquid cash reserves with the SBP and also ensures appropriate cash
balances is maintained in branches.
The treasury unit can prepare periodic statement showing movement of the
SBP loans and position of government securities. The matters relating to investment
in securities and placement of surplus funds is also handle by this unit for the purpose
to keep the record of cash inflows and outflows, deposit rate declaration & fixation of
cash limit. This unit not only coordinates with accounts unit in finalization of
quarterly, semiannually and annual accounts but also coordinate with the SBP,
56
commercial banks and internal & external auditors with reference to the matters of
treasury unit.
9.3.4 Funds Reconciliation Unit: The main aim of this unit is reconcile the bank
accounts that are being maintained with commercial banks at the ZTBL Head Office.
This unit follows the accounting standards of funds such as how the amount is
remitted and received from branches and other transactions relating to the department
of the ZTBL Head Office. This unit can monitor the excess cash and reconciliation of
bank accounts in branches with other commercial banks. However, the preparation of
daily cash position relating to remittance and receipt of funds from branches is also
handling by this unit. However, the Fund Reconciliation Unit can respond to advices
issued by the branches relating to un-claimed deposits, the SBP penalties, to match
information…etc.
CHAPTER 10
“VARIOUS ANALYSES”
10.0 INTRODUCTION
The analysis is a tool, which is used for checking the over all performance of
any organization. It is not only used on national level but also on international level
for the purpose to check internal and external factors that influence the organization,
positively or negatively and leads the organization towards failure to success. There
57
are various analyses, such as the SWOT analysis, ratio analysis, human resource
analysis and marketing analysis, which is briefly explain as under;
10.1 SWOT ANALYSIS

The word “SWOT” is abbreviated to strengths, weakness, opportunities and
threats while analysis is a tool, which is used for checking the over all performance of
any organization. The SWOT analysis is a strategic planning tool used to evaluate the
overall organization’s strengths, weakness, opportunities & threats and involves
specifying the objective of the organization and identifying the internal and external
factors that are favorable and unfavorable to achieve that objective. The SWOT
analysis is designed to help an organization from failure to success. Finally, we do the
strength & opportunities because it is helpful while we avoid the weaknesses and
threats which is harmful for organization, which is shown in below figure.
10.1.1 Strengths: The attributes of the organization which are helpful in achieving
the objective. In other words, strengths means, the activities that an organization does
well favorable chances or positive factors in the internal environment due to which
organization achieve the objective. The strengths of the ZTBL is given as under;
1. Strong Supervision and Management: The supervision and management of
the ZTBL is very strong such as, step by step, effective and efficient that leads
the bank toward failure to success.
58
2. Provide many Facilities for Employees: For maintaining the employees, the
ZTBL provides the facility of health, safety and employee relations &
training.
3. Employee’s Traits: All staff members are well mannered in attitude,
communications & following the ethics.
4. Credit Rating: The report of Jun 22, 2008, the credit rating of the ZTBL was
reaffirmed the medium to long-term entity rating of ‘AAA’ (Triple A) with a
stable outlook and short term rating of A-1+ (A-One Plus) assigned to the
ZTBL.
5. Risk Management: The risk management of the ZTBL is still in the process
of restructuring and efforts have been put in place to adequately equip the risk
management function with credit review, credit risk rating and value at risk
models. Pakistan is an agriculture country with major portion of its economy
dependent on agricultural sector. ZTBL recognizes this responsibility and thus
also caters to agriculture sector which promises high returns.
6. Expansion of ZTBL: The ZTBL is expanding day by day because customer
accepts it. Its network expanded to 342 branches and 25 zonal offices in the
Pakistan, which will attract large number of customers.
7. The Elevator and Cameras Systems: In the age of globalization, the
elevator makes it possible to save time. While the cameras in ZTBL, make the
employees to stress on their work which is assigned or given.
10.1.2 Weakness: The attributes of the organization which are harmful in

achieving the objective. In other words, weakness means, the activities that an
organization lakes or unfavorable chances or negative factors in the internal
environment due to which organization do not achieve the objective. The weakness of
the ZTBL is given as under ;
59
1. Understaffing: The total number of employees is 5,326 in the ZTBL Head

Office. In age of technology and globalization, the understaffing may cause
unnecessary work burden on employees decreasing their efficiency.
2. Lack of Refreshment Courses: Although the ZTBL has its own Training
and Development Canter but it needs to give refreshment courses to its
employees more frequently so that they came explore new dimensions and
conquer worlds.
3. Seniority Based Promotion: Promotion in the ZTBL is purely on seniority
basis rather than on performance. This really de-motivates the employees
because they know that it doesn’t matter whether they perform well or bad.
4. Lake of Job Rotation: Most of the employees work in a particular
department and they specialize only in one department. In case of absence of
one employee, any other employee cannot perform this work. In this way
bank not only loses the business but also results in dissatisfaction of the
customer.
5. Shortage of skillful Labor: The shortage of skillful labor or manpower that
will lead the organization from success to failure. Because in the ZTBL, there
are many contract and temporary based employees that has lake of managerial
& financial skills.
6. Lake of Qualification: The employees working on the same position may
have different degrees like B.Sc., B.A.… etc which devaluate the students of
MBA, BBA, and other well qualified staff. So there is a lack of professional
staff in different departments and lack of theoretical knowledge of the
employees as well.
7. The Rate of Absenteeism and Turnover: The absenteeism &
turnover rate is too high that’s results the conflicts in the organization.
10.1.3 Opportunities: The attributes of the organization which are helpful in

achieving the objective. In other words, opportunities means, the activities that an
60
organization does well or favorable chances or positive factors in the external

environment due to which organization achieve the objective. The opportunities of
the ZTBL is given as under ;
1. Proper Utilization of Recourses: The Organization is made up
three types of recourses, such as human, physical & financial resources which
come from external environment. However, in the age of globalization for
achieving growth, the competent, skillful and the English speaking employees
are on of the requirement of the organization.
2. Increasing Extensive Advertisments: The ZTBL can increase the
extensive advertisements of new products, services, vacancies, in order to
increase customers & heir competent employees from external environment.
3. Mobile Credit: The ZTBL can start mobile credit which is the best
way to effectively utilize its present resources to gain a competitive edge.
4. Increasing the Amount of Loans and Capital: The ZTBL
increases the amount of loan for their customers, which is five lacks, in order
to attract the large number of customers. The ZTBL issue a large amount of
capital to agriculture sector, in order to, utilize its resources more efficiently
and to earn more profit.
5. Creating Public Relations: The ZTBL also, involves in creating
public relations that will increase the image and profitability of the bank.
Often, public relations are conducted through the media that is, newspapers,
television, magazines, internet….etc that’s attract a large number of
customers.
10.1.4 Threats: The attributes of the organization which are harmful in achieving
the objective. In other words, threats means, the activities that an organization lakes
or negative factors in the external environment due to which organization do not
achieve the objective. The threats of the ZTBL is given as under ;
61
1. Avoid Discrimination: The ZTBL can avoid discrimination because it is

harmful for the bank in achieving its objective. The bank can hire the employees
from external environment. The right person is for right for job will leads the
organization towards failure to success.
2. Avoid Illegal Activities: The employees of the ZTBL can avoid the illegal
activities in external environment that will reduce the reputation and image of the
ZTBL.
3. Internet Banking: It is the main problem that was found to be a lack of trust in
the new banking channel by customer. However, effective complaint management
can increase customer’s loyalty and trust in Internet Banking. However, the
“Crises Management Plan” has been developed which is under review by the
senior management. The objective of this plan is to have clear guidelines and
communication in the event of any crises occurrence, which may threaten the
safety of its staff, the security of its assets, the continuity of its operation and the
reputation of the ZTBL.
10.2 RATIO ANALYSIS

The term “ratio” means, “the relationship between any two variables”, while
analysis is a tool, which is used for checking the over all performance of any
62
organization. In other words, the ratios analysis is used to identify the financial
strengths and weaknesses. For this purpose, we use ratio analysis of financial
statements such as, balance sheet and income statement. However, “ratio analysis is a
tool, which involves methods of calculating & interpreting financial ratios to analyze
and monitor the firm performance”. There are many ratios such as liquidity ratios,
profitability ratios, debt ratios, activity ratios. For this purpose, we use data from
2005 to 2007 of annual reports of the ZTBL, to check the liquidity, leverage and
profitability.
10.2.1 Liquidity Ratios
It is measured by its ability to satisfy short-term obligations when they
become due. There are many ratios of liquidity such as, current ratio, quick ratio and
networking capital, which is given as under;
10.2.1.1 The Current Ratio: The calculation of current ratio of the ZTBL from 2005
to 2007 is calculated and interpreted as under;
 Interpretation of Current Ratio: If we interpret the current ratio of the

ZTBL, it is slowly increasing from 2005 to 2007. The current ratio in 2005
lower than rest of the years which is 1.31 which means that the bank is able to
pay the current liabilities 1.31 times from its current assets. In 2006, the
current ratio is 1.32 and then sharply increased to 1.40 in 2007. However, the
higher the current ratio, the more the bank is considered to be liquid in order
to satisfy short term obligation.
63
10.2.1.2 Quick Ratio: The calculation of quick ratio of the ZTBL from 2005 to
2007 is calculated and interpreted as under;
 Interpretation of Current Ratio: If we interpret the quick ratio of ZTBL, it is

higher in 2005 while lower in 2006. The quick ratio of 1.0 or greater is occasionally
recommended but for the organizations, the quick ratio cannot provides a better
measure of overall liquidity only when a firm’s inventory cannot be converted into
cash, because the short term investment is lower than short term financing from 2005
to 2007.
10.2.1.3 Net Working Capital (NWC): The calculation of the NWC of the ZTBL
from 2005 to 2007 is calculated and interpreted as under ;
 Interpretation of NWC: The NWC of the ZTBL from 2005 to 2007 is

increasing gradually and has positive working capital & considering favorable,
because the total current assets are greater than total current liabilities and the bank is
better able to pay its short term obligation as they become due. On the other hand, if
total current assets are lower than total current liabilities, the firm has negative
64
working capital & considering unfavorable. In this case the bank is not able to pay its
short term obligation as they become due.
10.2.2 Leverage Ratios
It measures the firm's ability to repay long-term debt that is used in a firm’s
capital structure. There are many ratios of leverage; i.e. debt ratio, total debt to net
worth ratio & time interest earned ratio which are given as under;
10.2.2.1 Debt Ratio: The calculation of debt ratio of the ZTBL from 2005 to 2007 is
calculated and interpreted as under;
 Interpretation of Debt Ratio: The debt ratio of the ZTBL in 2005 is 84.17%,
which is a highest from the rest of the years while lower in 2006 which is 83.50% and
then gradually increase to 84% in 2007. The high the ratio, the more the bank is
risky & having more leveraged while low ratio will leads a firm less risky &
having less leveraged. The high leveraged consider to beunfavrable if the creditors
of the bank can start to demand repayment of debt.
10.2.2.2 Total Debt to Net Worth Ratio: The total debt to net worth ratio of the
ZTBL from 2005 to 2007 is calculated and interpreted as under;
65
 Interpretation of Total Debt to Net Worth Ratio: If we interpret the debt

to net worth ratio of the ZTBL, it is gradually decreasing from 2005 to 2007. In 2005,
the debt to net worth ratio is greater form the rest of the year which is 5.32% while
lower in 2007, which is 5.24%. In 2007, the ZTBL can improved the debt to net
worth ratio, which is 5.24% and is lower & considered to be favorable from the rest
of the years. The higher the debt to net worth ratio, greater will be the business is
considered to be risky and consider to be unfavorable. The lower the debt to net
worth ratio, lower will be the business is considered to be risky and consider to be
favorable. The high leverage usually indicates the business has a lot of risk because it
must meet principal and interest on its obligations.
10.2.2.2 Time Interest Earned Ratio: The time interest earned ratio of the ZTBL
from 2005 to 2007 is calculated and interpreted as under;
 Interpretation of Time Interest Earned Ratio: The time interest earned ratio of
the ZTBL in 2005 is 1.16 which is lower from the rest of the years while highest
in 2007 which is 1.47. The higher the time interest earned ratio, the bank is better
able to fulfill its interest obligation. In 2007, the time interest earned ratio is
improved due to the highest amount of the earning before interest & taxes as
compared to other years.
10.2.3 Profitability Ratios

This ratio examines the relationship between the profits made on trading
activities against the sales. It is the indication of business ability to use capital, labor
66
& management to generate profit. There are many ratios of profitability, such as
ROA, ROE and EPS which is given as under;
10.2.3.1 Return on Assets (ROA): The return on asset of the ZTBL from 2005 to
2007 is calculated and interpreted as under;
 Interpretation of Return on Assets (ROA): The ROA is gradually increasing

from 2005 to 2007 due to increase in the amount of total assets and total income. The
ROA in 2005 is lower from the rest of the year which is 0.50% that shows a bank can
earn less money on more investment. The ROA is gradually decrease to 0.49% while
sharply increase to 1.11% in 2007, that shows a bank can earn more money on less
investment. The Higher the ROA ratio shows that the bank has efficiently managed
its assets portfolio to earn a more money on total assets, achieving economic
efficiency & more opportunities of financing in the year 2007 as compared to the rest
of years.
10.2.3.2 Return on Equity (ROE): The ROE of the ZTBL from 2005 to 2007 is
calculated and interpreted as under;
67
 Interpretation of Return on Equity (ROE): The ROE is moderate in 2005

which is 9.29% & gradually decreased to 8.25% in 2006 due to the lower in income.
Any how, the ROE is sharply increased to 13.65% in 2007 due to increase in the
amount of total income and stockholder’s equity. The highest ROE indicates that
bank can earn a high return on less equity is generating cash internally. The higher
the ROE ratio, the greater will be the opportunities to earn high return & consider to
be favorable while lower the ROE ratio, the lower will be the opportunities to earn
low return & consider to be unfavorable.
10.2.3.3 Earnings Per Shares (EPS): The EPS of the ZTBL is calculated &
interpreted as under;
 Interpretation of EPS: The EPS from 2005 to 2006 is gradually increasing

from 0.346 to 0.350 respectively. A small increase is seen in 2006 due to increase in
net income which is 419,806. While in 2007, the EPS is sharply increased to 0.870
due to further increase in net income with same amount of total number of ordinary
shares. Higher the EPS indicates that the ZTBL can earn on behalf of each share, but
not the amount of earnings actually distributed to shareholders.
10.3 Human Resource Analysis

The organization is made up by three types of resources such as human,
physical and financial resources. Recently, the ZTBL can properly utilize their
resources more efficiently in order to strengthen the rural and agricultural sector,
mitigate poverty and investment activities. But the most important is the human
resource and which the key ingredient for successes of any organization. Hiring and
68
retaining productive people is critical to the success of every organization which is

permanent, temporary or contract basis. The Human Resource Division mainly
involve in hiring of employees, training and development of employees, employees
motivation….etc. “Activities necessary for staffing the organization and sustaining
high employee performance” The achievements of the ZTBL and the implementation
plans for future can never be possible without skilled and motivated employee, for
this purpose the HRD makes continuous effort to attract highly educated, skilled and
trained manpower in different fields especially in the filed of IT, HR and Finance.
Trainings, workshop, seminars, support for higher education are the few activities
being carried out to upgrade the skills of professionals working. The ZTBL can
motivate their employees by providing compensation packages, house rent, medical
allowance…etc. The Human resource analysis is briefly explained as under;
1. Hiring of Employees: The ZTBL can hire the employees by submitting the CV
in the Human Resource Department. If the person is eligible for the post, then the
Head of HRD will call to inform the person for the interview. Recruitment staff
including job description, preparation, preparing advertisement, checking
application forms, short listing, interviewing and selecting candidates through the
selection procedure is done by HRD.
2. Training & Development of Employees: Once the employees are recruited by
the Human Resource Department, it is very important to develop their skills.
There are two ways to develop their skills and to give trainings in the ZTBL Staff
collage such as theoretical and practical training. However, initial training or pre-
service training is given to the employees at initial stages of fresh candidates. This
training covers the theory related topics such as banking rules, regulations and
operations. After completing the theoretical training, they are placed on different
branches for getting practical training.
3. Employee’s Motivation: The ZTBL can motivate their employees by providing
different facilities. The employees, who are motivated, exert a greater effort to
perform the assigned tasks effectively and efficiently than those who are not
69
motivated. Various measures are used in the ZTBL for motivating the employees.
The techniques are as follows;
I. Compensation Package: The compensation is based on the employee’s
knowledge, education, skills and experience. There is no fixed pay scale in the
bank. Many people get different salaries even though they had been selected
for the same batch under the same circumstances with same qualification but
mostly depend on the grade on which the employees is ranked.
II. Promotions: The ZTBL can promote the employees to higher grades on
the basis of performance during each year.
III. House Rent: The house rent is provided to all categories of staff. This
allowance is not payable to those who are provided with accommodation by
the ZTBL. The ZTBL can also provide the accommodation facility for their
employees, in order to reduce the absenteeism.
IV. Medical Allowance: The ZTBL will reimburse the cost of medical
advice and medicines, claimed by the employees for themselves and their
dependents on production of medical certificates from employees indicating
disbursement made by him.
10.4 The Marketing Analysis
The marketing is a process of managing the performance of business
activities designed to plan product, price and promote; in order to achieve
organizational objectives. Though it sounds simple, the actual practice poses many
challenges. The marketing analysis of any organization plays a vital role in directing
its future direction. A good marketing analysis can give new heights, whereas a
poorly designed analysis can prove to be disastrous. However, the marketing is based
on the customer’s satisfaction through its value added products and services. The
ZTBL regularly use different methods of marketing in order to aware and attract
customers regarding their products and services. The marketing analysis is done by
using various methods used by the ZTBL, which is briefly explained as under;
70
1. Print Media Advertisement: The ZTBL give different advertisement

regarding their products and services, in order to attract large number of
customers from time to time in the newspapers.
2. The 4P’s: The 4P’s means the product, price, place & promote. The ZTBL
can use 4P’s regularly in order to attract large numbers of customers, by
proving lot of products and services.
I. Product: The ZTBL strategy is offer most comprehensive portfolios of
personalized financial solutions that are customer tailored to serve the
requirements of customer.
II. Price: The ZTBL follows the strategy of “low margins, high volume”
with its low mark up and easy repayment schedule it tends to be more
attractive even for consumers with less money.
III. Promotion: The ZTBL effectively advertises its services and product
using the through broachers, book let magazines and low margin on loan
is also the base of promotion.
IV. Placement: With a wide network of ZTBL the bank operates through 25
zonal offices with 342 branches under them with over 1250 agriculture
graduates known as MCO.
3. Internet and Electronic Media Advertisement: The ZTBL consistently give
information regarding their products and services on the internet and also give
commercials on the television for awareness and attracting the large number
customers.
4. Brochures: They have designed different brochures for each department and for
each product; these are given to customers for information and attraction
purposes.
5. Sports Sponsorship: The ZTBL can sponsor different sports promotion activities
on television and radio like Cricket, Hockey….etc.
71
CHAPTER 11
“FINDINGS & RECOMENDTIONS”
A two months internship program can never provide all the information about
an organization. One roughly gets to spend a single week in each department. So in
this section only some of the problems have been pinpointed and possible solutions
have been recommended the concerned personnel of the department narrated some of
these problems. The finding and recommendation for ZTBL Head Office are given as
under;
10.1. FINDINGS
I. The employees working on the same position may have different degrees like
B.Sc., B.A.… etc which devaluate the students of MBA, BBA, and other well
qualified staff. So there is a lack of professional staff in different departments.
II. There is no job rotation for employees which create job burning.
III. The officers of RRD face many problems during preparing different financial
reports which consume lot of time.
IV. The employees are not satisfied with the compensation package; they are just
getting experience and want to shift to another organization that has strong
position in the agriculture finance market.
V. The availability of staff training makes employees aware of work and is know
done by the ZTB Staff College which is provided by the KSSL.
72
VI. The absenteeism & turnover rate of the employees is too high that’s results
the misunderstanding and conflicts in the bank.
VII. In the ZTBL, there is problem is understaffing of employees. The total
number of employees is 5,326 in the ZTBL Head Office. In age of technology
and globalization, the understaffing may cause unnecessary work burden on
employees decreasing their efficiency.
10.2. RECOMMENDTIONS
I. Although sill, there is cooperative environment in the ZTBL, but there is a

need to further boost it up. There must be cooperation among staff members,
management, customer and shareholders.
II. The job rotation of duties of employees should be implemented to
improve the performance which will enhance their skills and confidence.
III. The motivation level of the employees should be enhanced by increasing
compensation and giving extra fringe benefits.
IV. The advertisements of the products and the services of the ZTBL should be
done in a proper way with a strategic management.
V. To hire creative, skillful and young employees on the basis of their
eligibility and experience but not on discrimination basis. The recruitments
should be strictly on merit basis and induction should be after proper and
extensive training.
VI. To remove the file keeping barriers, which waist a lot of time on searching
of files. There should be a proper check and balance. The documentary
records of the ZTBL should be correct and complete.
VII. More rewards and bonus schemes should be for management as well as
for employees and promotion should be based on performance of employees
and not on favoritism.
73
VIII. The ZTBL has developed a web site but still only its front home page has
been developed while other banks have good attractive sites.
IX. The efforts should be made to reduce the employee turnover and
absenteeism rate because it creates misunderstanding and conflicts in the
ZTBL.
X. In order to increase cooperation among employees, management has to
arrange different parties or get together which will create love, care and
cooperation among employees.
XI. The MIS is still not fully understood by all of the employees. To cope
with this situation, the management should arrange workshops and short
courses, so that the employees can benefit fully from the MIS.
XII. The employee’s attitude and behavior towards work and customers
must be positive and polite way at time of conversation.
XIII. In order to increase the motivation, job satisfaction, and organizational
commitment the organization should give special incentives to all the old as
well as new employees. This may be in the form of promotion or increase in
pay or other facilities provided to them on performance basis.
XIV. The promotions should be given to the employees of ZTBL on the basis
of performance rather than seniority, time period or designation.
XV. The job rotation techniques should be adopted so as to make the staff
knowledgeable of the operation of various departments of the ZTBL.
10.3 PERSONAL EXPERIENCE

My internship at Bank ZTBL was a positive experience. This experience
gave me a chance to analyze and change myself for the better. An internship program
provides me an opportunity to bridge what I learn in the classroom with real life job
requirement. As we know that when any one enter into an organization for internship
or for job, most important thing is his communications skills. So the thing that helped
me and boosted my confidence was communication skill. As we have studied
74
Business communication skills and presentation during the BBA program, it gave me
the confidence to speak in front of many people. While working as an internee in the
ZTBL, I observed that the first rule of game is to respect your customer. As an
employee one has to listen to whatever customer has to say with full attention and
patience. Moreover the right tactics for convincing customers on your view point
requires great communicational skills.
The subjects such as Finance, Accounting, Statistics, Business Math…etc that
I studied during my BBA program that help me to understand the operations &
functions of the Finance & Accounts Division of the ZTBL. During my internship I
improve my soft skills, expand knowledge of related field and gain experience by
work under the highly experienced person, to see the norms and value of the
organization, which may be called the culture of the organization. Actually all the
organizations have their own culture, norms and value under which the organizations
exist.
In short, I am really impressed with the friendly and challenging culture of the
ZTBL having such a high level of professionalism, task orientation and event
celebrations like 14th August and 6the September. As internee in the ZTBL, I utilize
my communication skills, abilities, confident; what I have studied till 7th term & now
it is time to convert the theoretical knowledge into the practical knowledge because I
will go in the practical life after some time, so we must aware about the internal
working of organization.
10. 4 CONSLUSION
While concluding my report, I would like to say that an internship report
normally covers one academic term and may be either paid or unpaid. The main
purpose of the internship is to develop and strengthen the student’s educational and
career preparation. I did my internship at ZTBL, working in the Finance and
Accounts Division. My internship goals included completing the reports assigned to
me, learning about the ZTBL, which is public limited company and also developing
75
positive relationships with employees. Some of my activities as an internee post in

the ZTBL is to coordinate with employees, working on my giving tasks, performing
full concentration and preparation of my internship reports. So an internship is an
opportunity to gain real-life experience doing the work of an employee in your career
area of interest. Ideally, this experience allows me to try out many aspects of the job
and to apply skills learned in the classroom environment. An internship is any
experience where students learn by taking on responsible roles as workers in
organizations and observing and reflecting on what happens while they are in the
workplace.
11.5 ANNEXTURES
1).
76
2).
77
78
BIBLIOGRAPHY
1. Annual Report of ZTBL 2007
2. Annual Report of ZTBL 2006
3. Annual Report ZTBL 2005
4. www.ztbl.gov.pk
5. www.wikipedia.com
6. Saeed, M Nasir. (2007) Money Banking & Finance, Imtiaz Book depot,
Khalid Plaza, Urdu Bazar Lahore.
7. Iffland, Charles & Langueton, Pierre. (1996) International Banking, Irwin

Book Co., New York.
8. Khan Rana, Safdar Hussain & Khan Rana, Ahmad Shabir. (1991) Banking
Currency and Finance, Ilmi Kutab Khana, Lahore.
9. Klein, John F. (1998) Money and the Economy, Mc Grath Hill, New York.
10. Meenai, S A. (1992) Money and Banking in Pakistan, Habib Publisher,

Multan.
11. Siddiqi, Asrar H. (1998) Practice And Law Of Banking In Pakistan,6th Ed,
Royal Book Co., Karachi.
12. Saeed, M Nasir. (1994) Economics of Pakistan, Ilmi Kutab Khana, Lahore.
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95

Internship Report On ZTBL, Prepared by Wasim Uddin Orakzai Student of Finance 2010, KUST

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Internship Report On ZTBL, Prepared by Wasim Uddin Orakzai Student of Finance 2010, KUST

Caricato da

Copyright:

Formati disponibili

Zarai Taraqiati Bank Ltd.

Chapter 1 Introduction to Report

1.1 BACKGROUND OF STUDY

1.2 PURPOSE OF THE STUDY

 To gather relevant information then interpret and analyze it in a useful

 To develop an understanding of the organization, its mission, objectives and

1.3 SCOPE OF THE STUDY

1.4. IMPORTANCE OF STUDY

1.5. RESEARCH METHODOLOGY

1.7 SCHEME OF THE REPORT

This is an introductory chapter which describes the introduction, background,

2.1 MEANING & ORIGIN OF BANK

2.2 EVOLUTION OF BANKING

According to the banking companies ordinance 1962 “banking is business that

2.3 EVALUTION OF BANKING IN PAKISTAN

2.3 CLASSIFICATION OF BANKS IN THE PAKISTAN

Banks play an important and active role in the economic development of a

1. Development of Agriculture & Industrial Sector. The ZTBL particularly in

3. Investment in new Enterprises. Businessmen normally hesitate to invest

4. Balanced Development of different regions. The ZTBL plays an important

3.1 HISTORY OF ZTBL

3.3 CORPORATE MISSION

3.4 CORPORATE OBJECTIVES

3.5 RESTRCTURING PLAN OF ZTBL

3.6 BOARD OF DIRECTORS

“List of Board of Director”

3.7 COMMIITTEES & ORGANIZATION STRUCTURE OF ZTBL

3.8 ZONAL OFFICE AND BRANCHES

3.9 RANKING OF STAFF MEMBERS

The ranking of staff members in order of seniority in the ZTBL is given as

01 Darbans and Armed Guards 526

4.1 SCHEMES OF ZTBL

4.2 LOANS OF ZTBL

S.No. Provinces Disbursement of Loans ( Rupees) %age

“Summary of Term Wise Disbursement of Loans”

4.3 RECOVERY PROCEDURE OF LOAN

5.0 INTRODUCTION OF THE FINANCE & ACCOUNTS

5.1 FUNNCTIONS OF FINANCE & ACCOUNTS DIVISION

5.2 CLASSIFICATION OF FINANCE & ACCOUNTS DIVISION

1. Central Accounts Department (CAD)

 Fixed Asset Unit (FAU)

5.3 HIERARCHY OF FINANCE & ACCOUNTS DIVISION

6.0 INTRODUCTION OF CAD

6.1 OBJECTIVES OF CAD

6.2 FUNCTIONS OF CAD

6.1.3 UNITS OF CENTRAL ACCOUNTS DEPARTMENT

 To update the specimen signatures booklet for use of authorized signatories

6.1.3.2 Accounts Units:

6.1.3.3 Tax Unit:

6.1.3.4 Fixed Asset Unit:

 To maintain the up-to-date record of fixed assets at the zonal offices

6.1.3.5 Pre-payment Verification Unit

7.0 INTRODUCTION OF HOAD

7.1 UNITS OF HOAD

8.0 INTRODUCTION OF RRD

8.1 OBJECTIVES OF RRD

 To make periodic financial reporting to the management.

8.2 FUNCTIONS OF RRD

8.3 UNITS OF RIRD

8.3.2 Financial Management Information System Unit (FMISU): The FMIS is

9.2 FUNCTIONS OF BFRD

 To allocate of departmental code numbers with the change in the

 The settlement of audit objections relating to the SBP, Ministry of Finance