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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 thefirm 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 students 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
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To develop an understanding of the organization, its mission, objectives and
management philosophy.
To acquire good work habits and gain an awareness of the communitys 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 Bachelors 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,
thats 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
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trade and commerce and provide a variety of services that one cant imagine without
banks.
I have chosen the ZTBL for my internship because it has a large network of
zonal offices and branches. Butbesides 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 interviewshave 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.
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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:
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Zarai Taraqiati Bank Ltd. Chapter 1 Introduction to Report
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.
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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 analysisof the ZTBL.
SECTION-IV
This section contains only one chapter.
Chapter 11:
This chapter explains findings, recommendations, personal experience, conclusions &
annexures of the ZTBL.
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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
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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 wasbeing 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
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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 Pakistans 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,
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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 countrys 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, UBLetc while other
commercial banks that are owned by corporations is called as private sectors banks.
For e.g., MCB, ABL, City Banketc.
3. Exchange Banks: As name signifies, these banksmainly 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
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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, theAgricultural Development Bankof 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 Bankwas 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
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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
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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.
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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 agriculturalistat 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
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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 offarmers 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,
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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.
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3.5 RESTRCTURING PLAN OF ZTBL
The restructuring means activity involving expansion or contraction of a
organizations 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 ZTBLintroduce 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 forensicaccounting, 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
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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;
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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
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The ranking of staff members in order of seniority in the ZTBL is given as
under;
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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;
S.No. Category of Employees Provided By KSSL
No. of
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 0307 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.
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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 ZTBLThe 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
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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
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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.
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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
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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 chargesetc. 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, is50,222 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
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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 13.203. NWFP 3,802,000,000 6.80
4. Balochistan 99,000,000 0.20Moreover, 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. Theseloans are given to farmers for seed, fertilizer, pesticides, labor
chargesetc. 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
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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;
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.
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.
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 themortgaged 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.
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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 asthe 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
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 banks financial relations with the objectives of providing loans
to borrowers. The ZTBL lends money to the individuals or corporations for
consumption orinvestment and charge interest on the loans. But besides this, finance
is the science that deals with the funds management such as saving and lending
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money while account is a record of financialtransactions 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 banks 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.
To administer, monitor and control the banks 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.
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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
Fixed Asset Unit (FAU)
Pre-payment Verification Unit (PVU)
2. Head Office Accounts Department (HOAD)
Payroll Unit
Fund Unit
Payment unit
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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
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.
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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, owners 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.
To deal with all corporate tax matter & liaison with tax department, tax
advisors, consultants.etc
Thecompilation 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.
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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.
Toperform 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
auditors 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.
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.
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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.
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.
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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.
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.
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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.
CHAPTER 7
HEAD OFFICE ACCOUNTS DEPARTMENT
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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.
7.1.2Funds 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, employees contributory funds such as contributory provident fund,
employees provident fund and general provident fund and also the investment of
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)
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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 whomwe 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
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.
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Zarai Taraqiati Bank Ltd. Chapter 1 Introduction to Report
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 banks liabilities & Income are transferred through credit advice. The
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.
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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;
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.
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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. Thecomputerized 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. Thematching 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;
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Zarai Taraqiati Bank Ltd. Chapter 1 Introduction to Report
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.
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.
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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 its
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
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)
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V. Recovery Department (RD)
VI. Branch Banking
8.3.2 Financial Management Information System Unit (FMISU): TheFMIS 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 organizations 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 timesuch 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
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.
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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