Internship Report On ZTBL Prepared by Wasim Uddin Orakzai Student of Finance 2010 KUST 2

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 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
1 Institute of Management Sciences, Kohat University of Science & Technology
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 students 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.
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. 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. It will help the students in making assignments and writing reports on the
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
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. 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.
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:
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.
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.
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
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
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
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,
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 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
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
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
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.
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
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,
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 community, by delivering financial products and services. farming
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.
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. 2. 3. Governance: The ZTBL establish an environment that facilitates good governance and accountability. Systems: The ZTBL modernize operations through use of technology, networking and communication tools. Business Processes: The streamline products and delivery systems of the ZTBL are to reduce transaction costs, simplify operations, and increase outreach. 4. 5. 6. Products and Services: The ZTBL introduce products and services that are financially and economically viable. Human Resource Development: The ZTBL can improve standards and skills of staff & management and strengthen training capacity. 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
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
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;
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
The ranking of staff members in order of seniority in the ZTBL is given as under;
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 Employees
S.No.
Category of Employees Provided By KSSL
01 02 03 04 05 06 07 08 09
Darbans and Armed Guards Drivers Naib Qasids Mali / Beldars Typists, Assistants & Senior Assistants Security Supervisor Sweepers Players Others Total
526 291 54 25 41 03 07 20 15 982
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.
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
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
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.
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. 2. 3. 4. Revolving Credit Limit is fixed to cater production credit and ancillary requirements of the farmers during one year period. The borrowers can draw the credit in lump sum or in installments according to his requirement. The borrowers can repay in lump sum or in installments during the year when his cash position allows him. 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
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. 2. The maximum credit ceiling of Rs.60,000 per acre has been fixed. 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 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. third
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, is 50,222 million for overall four provinces. The example of production loans items are given as under; 1. 2. 3. 4. 5. 6. 7. Seeds, fertilizers and fuel Pesticides, insecticides and herbicides manual sprayers Poultry feed, chicks and medicines Hire charges of farm power Water charges and electric charges for tube well Production loan for growth of mushroom Hired labor, water rates & fuel wood for tobacco curing
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. 1. 2. 3. 4.
Provinces Panjab Sindh NWFP Balochistan
Disbursement of Loans ( Rupees) 44,327,000,000 7,384,000,000 3,802,000,000 99,000,000
%age 79.50% 13.20 6.80 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 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.
1. 2. 3.
Term wise Disbursement of Loans Short Term Loan (Production Loans) Medium Term Loan (Development Loans) Long Term Loan (Development Loans )
Maturity
12months 5 years 8 years
%age 89.80% 3.40 6.80

30
Institute of Management Sciences, Kohat University of Science & Technology
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 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.
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 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 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 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.
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
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
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.
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 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
6.1.3.1
UNITS OF CENTRAL ACCOUNTS DEPARTMENT

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.
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.
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.
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
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, 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. 2. 3. 4. 5. ZTBL Employees benefit fund Benevolent fund (officers) Benevolent fund (staff) General provident fund (officers) General provident fund (staff)
6. 7. 8. 9. 10.
Contributory provident fund Pension fund Gratuity fund Employees provident fund 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 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. II.
Branch to Branch Transactions. 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.
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 Banks 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;
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; I. II. The vouchers & advices are prepared in branch and posted to the The ITSSD compiles the Central Accounts File (CAF), 6950 on Zonal Computer Center (ZCC) on daily and weekly basis. 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. IV. The IBTU is using software for reconciliation of the Inter Branch Transactions. 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;
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 reporting as per regulatory requirements. subsequent
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
8.3.1
UNITS OF RIRD
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. II. III. IV. Central Account Department (CAD) Head Office Account Department (HOAD) Head Office Operations Department (HOOD) Budget and Funds Reconciliation Department (BFRD)
V. VI.
Recovery Department (RD) 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 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 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 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. 2. 3. 4.
The working load on employees is reduced. The chances of data loss are minimized. Quick access to data and services. Better communication among divisions, departments and units.
5. 6. 7.
Easy and quick data transfer from one branch to another. Customized annual reports are generated. 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 banks credit limits, funds review and their application. A budget is a road map that facilitate where one is and where one want to go and how can one go to ones 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
credit disbursement.
To arrange adequate resources for maintenance of adequate liquidity for efficient 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. 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 banks 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. 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 ones 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. 2) 3) Time horizon is planned for the preparation, approval and circulation of budget. 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) 6) Approval of budget criteria recommended by the Budget Criteria Committee. 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) 9) Preparation of the Budget Agenda, that contains revised estimates of current year and proposed budget estimates. Presentation of the Budget Agenda for approval from the Budget Criteria Committee, President and the BOD. 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, 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 informationetc.
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 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 organizations 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. 2. Provide many Facilities for Employees: For maintaining the employees, the ZTBL provides the facility of health, safety and employee relations & training. 3. Employees 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 ; 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 doesnt 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 thats 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 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. 4. Mobile Credit: The ZTBL can start mobile credit which is the best Increasing the Amount of Loans and Capital: The ZTBL way to effectively utilize its present resources to gain a competitive edge. 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 thats 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 ; 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 customers 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 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. 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 firms 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 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 firms 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;
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 & 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;
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 stockholders 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 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 allowanceetc. 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 preservice 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. Employees 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 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 employees
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. III. Promotions: The ZTBL can promote the employees to higher grades on House Rent: The house rent is provided to all categories of staff. This the basis of performance during each year. 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 customers 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; 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 4Ps: The 4Ps means the product, price, place & promote. The ZTBL can use 4Ps 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.
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. III. IV. There is no job rotation for employees which create job burning. The officers of RRD face many problems during preparing different financial reports which consume lot of time. 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. VI. 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. The absenteeism & turnover rate of the employees is too high thats 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. III. IV. V. The job rotation of duties of employees should be implemented to improve the performance which will enhance their skills and confidence. The motivation level of the employees should be enhanced by increasing compensation and giving extra fringe benefits. The advertisements of the products and the services of the ZTBL should be done in a proper way with a strategic management. 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. 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. XIII.
The employees attitude and behavior towards work and customers In order to increase the motivation, job satisfaction, and organizational
must be positive and polite way at time of conversation. 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. XV. The promotions should be given to the employees of ZTBL on the basis of performance rather than seniority, time period or designation. 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 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 Mathetc 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 students 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 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).
2).
BIBLIOGRAPHY
1. 2. 3. 4. 5. Annual Report of ZTBL 2007 Annual Report of ZTBL 2006 Annual Report ZTBL 2005 www.ztbl.gov.pk 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. 10. Klein, John F. (1998) Money and the Economy, Mc Grath Hill, New York. 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.

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Zarai Taraqiati Bank Ltd.

Chapter 1 Introduction to Report

CHAPTER 1 INTRODUCTION TO REPORT

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Chapter 1 Introduction to Report

PURPOSE OF THE STUDY

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SCOPE OF THE STUDY

1.4. IMPORTANCE OF STUDY

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Newspapers. Business journals. Books.

LIMITATIONS OF THE STUDY

SCHEME OF THE REPORT

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EVALUTION OF BANKING IN PAKISTAN

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CLASSIFICATION OF BANKS IN THE PAKISTAN

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ROLE OF ZTBL IN THE ECONOMIC DEVELOPMENT OF THE PAKISTAN

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CHAPTER 3 INTRODUCTION TO ZTBL 3.0 INTRODUTION

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To establish and provide backward and forward linkages to strengthen the