39000470 internship report on ztbl prepared by wasim uddin orakzai student of finance 2010 kust 2

8/3/2019 39000470 Internship Report on ZTBL Prepared by Wasim Uddin Orakzai Student of Finance 2010 KUST 2

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Zarai Taraqiati Bank Ltd. Chapter 1 Introduction to Report

CHAPTER 1

INTRODUCTION TO REPORT

1.1 BACKGROUND OF STUDY

The Zarai Taraqiati Bank Limited is the premier financial institution geared

towards the development of agriculture sector by providing financial products and

services to their customers. It is a common practice at universities during the

completion of the masters and bachelors program to attain practical experience in

different fields. Students are required to undergo an internship program of two

months to fulfill the requirement for their degree completion. The selection of thefirm is based on the choice of the student. The institute requires an internship report

based on the theoretical and practical learning of the student.

The Internship is the bridge between academic qualification and professional

career of fresh graduates. This internship report is mainly focused on the working of

the Finance and Accounts Division of the ZTBL. Moreover, the internship is a unique

aspect of education that integrates study with planned and supervised career-related

work experience. The students are involved as non-paid authentic employees

receiving academic credit for work experiences. The purpose of the internship

program is to develop and strengthen the students educational and career

preparation. By doing internship in any organization that obviously exposes the

interpersonal relationships not only with employees but also with supervisor that are

essential in obtaining a successful and satisfying career.

This background of the study is mainly focus on the performance, functions and

objectives of the Finance and Accounts Division of the ZTBL and its internal

working and operations of this division. While, the internship is any experience

where students learn by taking on responsible roles as workers in organizations and

observing and reflecting on what happens while they are in the workplace. It provides

Institute of Management Sciences, Kohat University of Science & Technology

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

management philosophy.

To acquire good work habits and gain an awareness of the communitys vast

resources.

To be responsible and work toward specific achievable goals.

To analyze the bank through different analysis such as Ratio & SWOT

analysis.

1.3 SCOPE OF THE STUDY

The scope of the conducting this study is given as under;

It is a compulsory requirement for the award of Bachelors Degree in

Business Administration from the Kohat University of Science & Technology.

This report is concerned with the performance, functions and objectives of the

Finance & Accounts Division of the ZTBL Head Office Islamabad.

It will help the students in making assignments and writing reports on the

ZTBL.

It can provide help to the management of the ZTBL in identifying their

Strengths, Weaknesses, Opportunities and Threats.

It can also provide assistance for the students in seeking annual reports for the

purpose to calculate and interpret financial ratios, in order to check the liquidity,

leverage and profitability of the ZTBL.

Further more, students are able to analyze the human resources & analyze the

marketing of products and services schemes that the ZTBL provide his customers.

1.4. IMPORTANCE OF STUDY

Banks play a central and very important role in the economic life of a country,

thats why they are considered as the lifeblood of modern economy. Today no one

can deny the importance of banking in the economy. They facilitate and expedite


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trade and commerce and provide a variety of services that one cant imagine without

banks.

I have chosen the ZTBL for my internship because it has a large network of

zonal offices and branches. Butbesides this, the ZTBL plays an important role in the

economic development and growth of Pakistan.

1.5. RESEARCH METHODOLOGY

During the internship at the ZTBL Head Office Islamabad, the most important

task was to collect as much as information on the bank in order to have a full

productive report. For the collection of information and data, I used two methods for

collecting data for the preparation of internship report such as primary and secondary

collection methods, which is given as under;

1.5.1. Primary Data Collections: In primary data collection method, I interviewed

different officers for this purpose. The interviews were not of formal nature but it

went along with time and the questions arose with identification of problems. I

prepared many questions and discuses with Bank officers asked all the detailed

function and procedures of there departments. All officers fully cooperated with me

and provided all the necessary information which was required to me. The interviewshave been taken from the bank officers and also the discussion was conducted with

the heads of different departments. For collecting primary data, I use my own

observation and discuss my problems with previous internees.

1.5.2. Secondary Data Collection: The data that are previously collected and

assembled for the some projects other than the one at hand. It is also called as

historical data. This method can almost always be gathered faster ant at a lower cost

than primary data. The secondary data is collected from following sources;

Annual Reports & Accounts manual.

ZTBL web site & Internet.

Brochures.

Pamphlets.


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Newspapers.

Business journals.

Books.

1.6. LIMITATIONS OF THE STUDY

There are some limitations which, I had to face as an internee during the

Internship program in the ZTBL Head Office Islamabad, which are described as

under;

Time was too short to visit all division and departments of the organization.

The problem of loud shedding makes delay in preparing this internship report

of the ZTBL.

All staff members avoided to give every information. However, they kept

most of the data secrets. So, it was very difficult to collect the relevant information.

The vice presidents, executives, managers and other staff members have their

own matters of bank and it was a great problem for me.

Lack of co-operation by some employees because they were non-research

oriented and also lack of accuracy of the relevant data.

Instead of all these difficulties, I have completed this internship report on the

Finance and Accounts Division of the ZTBL Head Office with full cooperation of

few managers.

1.7 SCHEME OF THE REPORT

The internship report on the Finance & Accounts Division of the ZTBL is

arranged in four sections and ten chapters. The report is arranged in the following

sequence.

SECTION-I

This section has one chapter.

Chapter 1:


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

purpose, scope, importance, research methodology, limitations and scheme of the

report.

SECTION-II

This is lengthiest section of the report; it includes the review of the ZTBL. This

section is comprised of eight chapters.

Chapter 2:

This chapter is about bank and banking, evaluation of banking, overview of banking

in Pakistan and role of banks in the economic development of the Pakistan.

Chapter 3:

This chapter encompasses the introduction, history, mission, vision, objectives,

restructuring plans, BOD, zonal offices & branches, ranking of staff members and

subsidiary of the ZTBL.

Chapter 4:

This chapter briefly describes the products & services such as loans & schemes and

the recovery procedure of the loan of the ZTBL.

Chapter 5:

This chapter is concerns with the introduction, objectives, functions, classification

and hierarchy of the Finance and Accounts Division of the ZTBL.

Chapter 6:

This chapter describes the introduction, objectives, functions and units of the Central

Accounts Department of the ZTBL.

Chapter 7:

This chapter describes the introduction and units of the Head Office Accounts

Department of the ZTBL.

Chapter 8:

This chapter is concerns with the introduction, objectives, functions and units of the

Regulatory Reporting Department of the ZTBL.


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Chapter 9:

This chapter describes the introduction, objectives, functions and units of the Budget

& Fund Reconciliation Department of the ZTBL.

SECTION-III

This section also has one chapters and it is about the various analyses of the ZTBL.

Chapter 10:

This chapter explains the SWOT analysis, ratio analysis, human resource analysis &

marketing analysisof the ZTBL.

SECTION-IV

This section contains only one chapter.

Chapter 11:

This chapter explains findings, recommendations, personal experience, conclusions &

annexures of the ZTBL.


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CHAPTER 2

INTRODUCTION TO BANKING

2.1 MEANING & ORIGIN OF BANK

Some authors are of opinion that the word bank is derived from the word

"Banquet" which means a "Bench". This is attributed to the fact that the Jewish

transacted the business of money exchange on bench in market place. A bank

includes a body of person, who carry on the business of banking or a bank may be

as an institution dealing mainly in money and credit. It accepts deposits from one

class of people at a lower rate of interest and industry for meeting the requirements.

This provides finance for successfully carrying on various stages of production as

well as distribution.

Moreover, a bank can stimulate the habit of savings amount for the people and

provide the security and interest they offer with these savings which are deposited by

people are in a position to utilize the deposited amount more productively.

In short, a bank can increase the transaction capacity of the customers by

advancing loans when they require for additional funds to finance their expanded

program of business transaction.

2.2 EVOLUTION OF BANKING


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actually standing to their credit. In Economic terminology, we can say that they

allowed the overdraft facilities to their depositors.

When every money lender and goldsmith issued receipts and most of them

allowed the overdraft facilities, there was too much confusion in the banking system.

The money lenders and goldsmiths, in order to earn profits, could not keep adequate

reserves for meeting the demands of the customers for cash. The failure on the part of

the money lenders and goldsmiths to return money caused widespread distress among

the people. In order to create confidence among the people, steps were taken to

regulate the banking organization. A conference was held in Nuremburg in 1548. It

was decided that a bank should be set up by the state which should streamline the

banking organization and technique. The first central bank was formed in Geneva in

1578. Bank of England was established in 1694. The modern commercial banking

system actually developed in the 19th century.

2.3 EVALUTION OF BANKING IN PAKISTAN

At the time of independence the areas, which now constitute the Pakistan were

producing only food grains and agricultural raw material. For Indo-Pak sub continent,

there were practically no industries and whatever raw material was produced wasbeing exported from the Pakistan. How ever commercial banking facilities were

provided fairly well here. There were 487 offices of scheduled banks in the territories

now constituting the Pakistan. As a new country without resources it was very

difficult for the Pakistan to run its own banking system immediately. Therefore in

accordance with the provision of Indian independence Act 1974, an expert committee

was appointed to study the issue.

On the recommendation of committee Reserve Bank of India continued to

function in the Pakistan, till 30th September 1984, so that problem of time and

demand, liability, coinage, currencies exchange etc be settled between India and

Pakistan. It was decided that Pakistan will take over the management of public debt


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and exchange control from reserve Bank of India on 1st April 1948, and that India

notice would continue to be legal tender to the Pakistan till 30th September 1948.

Following the announcement of independence plan in June 1947, the Hindus

residing in the territories now comprising Pakistan started transferring their assets to

India. Moreover the banks including those having the registered offices in Pakistan

transferred to India in order to bring a collapse of new state. By 30th June 1948, the

number of offices of scheduled banks declined from 487 to only 195 in the Pakistan.

There were 19 non-Indian foreign banks with the status of small branch offices,

which were engaged solely in export of crops from the Pakistani institutions i.e.,

Habib Bank and Australia Bank.

The government promulgated the Banking Companies Ordinance 1947, to

safeguard the interests of both banks and the customers. The Imperial Bank closed

down most of its offices in Pakistan, which created serious problems. The Indian

government withheld Pakistans share of Rs.75 corer in cash balance held by them at

the time of partition. The urgency of assuming control of banking and currency was

very badly felt now. The government of Pakistan decided to establish a full-fledge

central Bank. Father of the Nation, Quaid-i-Azam Muhammad Ali Jinnah,

inaugurated the State Bank of Pakistan on July 1948, after the State Bank of Pakistan

order was promulgated on 12th May 1948. The SBP provided every help and

encouragement to Habib Bank to expend its network of branches and formulated and

developed NBP in 1949 as an agent bank, which took over the agency functions in

1952 from Imperial Bank of India. In order to develop sound banking and weeding

out week institutes, the Banking Companies Act was promulgated in 1949,

empowering the SBP to control the operations of banking companies in Pakistan. In a

very short period of time number of scheduled banks and other specialized credit

institutions rose to thirty six. By June 1965, the numbers of branches of scheduled

banks were 1591. Pakistani commercial banks were nationalized in 1974, but the

process was reversed as nationalization proved to be defective. The ZTBL, MCB,


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ABL and UBL have been privatized and HBL is expected to be privatized within near

future.

The nationalization of Banks in Pakistan since 1st January 1947 has heralded a

new era of development and progress. It has taken a complete banking system with

effect form January 1981. The privatization process of state owned banks and

enterprises started in 1991.

2.3 CLASSIFICATION OF BANKS IN THE PAKISTAN

The banks are classified according to their spheres of activities. The main types

of banks are as under:

1. Central Bank: Every civilized country now has its own central bank. The

primary function of the central bank is to regulate the flow of money and credit in

order to promote efficiency, stability and growth in the country. In Pakistan, the SBP

is the countrys central bank.

2. Commercial Banks: These banks are engaged in performing the routine duties of

banking business. They collect surplus money from the people. They make loans and

advances in the form of overdrafts, cash credits, discounting bills of exchange. The

commercial banks also manufacture credit money. They also provide agency services

and general utility services. These banks are considered the lifeblood of the economic

society. Some commercial banks are owned and controlled by the government which

is called as public sector banks. For e.g., NBP, HBL, UBLetc while other

commercial banks that are owned by corporations is called as private sectors banks.

For e.g., MCB, ABL, City Banketc.

3. Exchange Banks: As name signifies, these banksmainly deal with international

trade. These banks take the responsibility of settlement of foreign exchange and

arrange the foreign business. In Pakistan, all the nationalized commercial banks have

been allowed to do the business of exchange banks.

4. Saving Banks: Saving banks are those banks which collect and keep the small

savings of the public. They are called also thrift promoting institutions. The saving


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banks invest the funds in the safest government securities. The Post offices and

saving centers perform the business of saving banks in Pakistan.

5. Agriculture Banks: The agricultural banks (specialized banks) are set up to

provide financial assistance to the agriculturists. The agriculture banks provide short

term credit to the farmers for the purchase of seeds, fertilizers, pesticides, fuel.etc.

They also make medium term advances for buying tractors and introducing modern

techniques in farming. In Pakistan, theAgricultural Development Bankof Pakistan

was set up in 1981 for meeting the financial requirement of agriculture, the ADBP is

incorporated as public limited company, according to the Company Ordinance

1984 & is name was changed to the ZTBL in 2002. An agriculture bank is also

called as domestic banks because these banks are registered and incorporated within

the country.

6. Industrial Banks: The industrial banks mainly provide medium and long term

credit to the industries. Since the industrial banks have long term deposits, they are in

a position to permit long term investment in industries. In Pakistan, the Industrial

Development Bankwas set up in 1961. The other institutions engaged in providing

financial assistance to industries are PICIC, NDFC.etc.

2.4 ROLE OF ZTBL IN THE ECONOMIC DEVELOPMENT OF

THE PAKISTAN

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

country. If the banking system in a country is effective, efficient and disciplined, it

brings about a rapid growth in the various sectors of the economy such as agriculture,

industrial, and the SME sectors. If the banking system is unorganized and inefficient,

it creates maladjustments and impediments in the process of development. In

Pakistan, the banking system is very well organized. The SBP established on July 1st,1948 stands at the apex and is responsible for the operation of the banking system in

Pakistan. The other banks such as commercial, specialized or unspecialized banks

which form the banking structure in the Pakistan are playing an active role in the


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economic development of the country. The role of the ZTBL in order to achieve

economic growth and development of the Pakistan is briefly explained as under:

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

rural areas of Pakistan are now providing credit for the development of

agriculture & industrial sector. The provision of credit to agriculture &

industrial sector has greatly helped in raising agricultural productivity and

income of the farmers. This has led to increased demand for industrial goods

and expansion of trade & industry. The use of bank drafts, cheque, bills of

exchange, credit cards.etc, has revolutionized both national and

international trade.

2. Banks Promote Capital Formation. The ZTBL plays an important role

in rising of the financial resources. They encourage savings by giving various

types of incentives to the savers. They expand branches of the banks in the

rural and urban areas and mobilize savings even at far of places. These

savings are then made available to the businesses which make use of for

productive purposes in the country.

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

their money in risky enterprises. The ZTBL generally provide short, medium

& long term loans to farmers to invest in new enterprises and adopt new

methods of production. The provision of timely credit increases the

productive capacity of the country. The organized banking system helps in

directing physical resources into productive channels. It also keeps a balance

between the availability and requirements of the capital in the country.

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

role in achieving balanced development in different regions of the country.

They help in transferring surplus capital from developed regions to the less

developing regions. The trade industries etc of less developed regions are able


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to get adequate capital for meeting their business needs. This in turn, increases

investment, trade and production in the country.

5. Monetization of the Economy. The commercial banks by opening branches

in the rural and backward areas are reducing the exchange of goods through

barter. The use of money has now greatly increased the volume of production

of goods. The non monetized sector (barter economy) is now being converted

into monetized sector with the help of commercial banks.

6. Implementation of Monetary Policy. The central bank of the country

controls and regulates volume of credit through the active cooperation of the

banking system in the country. It helps in bringing price stability and

promotes economic growth within shortest possible period of time. The ZTBL

under the supervision and guidance of the SBP help in implementing and

achieving the objectives of the monetary policy which vary from time to time.

7. Financing Development Projects. The ZTBL provide short, medium & long

term loans for financing of development projects both in private and public

sectors. The ZTBL starts projects with the Ministry of Food, Agriculture &

Livestock (MINFAL) launched an integrated development program entitled

Crop Maximization Project in 15 districts. The MINFAL will provide funds

to the tune of Rs.299.833 millions to the ZTBL and thus help in accelerating

the rate of economic development in the country.

8. Booting the Exports: In order to boosts the exports of the agriculture and

industrial goods of the Pakistan, the banks have established export promotion

cell for the information and guidance of the exporters.

9. Less Reliance on Foreign Capital: A planed banking system by launching a

vigorous campaign of mobilizing idle saving in the country can meet the

capital development requirements from within the country. The country will

thus have to rely less on foreign capital for financing in the development

projects.


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CHAPTER 3

INTRODUCTION TO ZTBL

3.0 INTRODUTION

The Zarai Taraqiati Bank Limited is the leading, premier and specialized

financial institution geared towards the development of agriculture, industrial and

SME sector, by providing financial products, services and loans for their customers.

The restructuring plan is being carried out with the aim to uplift the agriculture and

rural sector by raising the productivity, streamlining the institutional credit and

increasing income generating capacity of the farming community. The ZTBL was

incorporated as the public limited company on 14th December, 2002 through repeal

of the ADB Ordinance of 1961.

The ZTBL provides financial and technological services to the agriculturalistat their doorstep for modernization of agriculture sector in Pakistan. The main

purpose of the ZTBL is to provide sustainable rural finance and services particularly

to small farmers and low-income households to strengthen the rural and agricultural


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sector, mitigate poverty, capital market and investment activities. The core values of

the ZTBL is the professional integrety, teamwork, customer satisfaction and loyalty.

The ZTBL has a one subsidiary which is known as the Kissan Support Services

Limited. The bank can charge 9% interest. The auhorized capital of the ZTBL is

Rs.25,000,000,000. This amount is dividend into Rs.2,500,000,000 ordinary shares &

the price of each shares is ten rupees. The total number of shares of the ZTBL is

Rs.1,186,961,000 and paid up capital is Rs.11,869,612,000 of the ZTBL. The

ZTBL has one chairman, one president and ten directors. The tatal number of

employees is 5,326, while 982 employees is provided by the KSSL. The ZTBL make

investment in some listed companies such as Nestle Milkpak Limited, Uqab Breeding

Farm Limited, Mubarik Dairies Limited & Dadabohy Agriculture Leasing Limited in

order to generate profit.

3.1 HISTORY OF ZTBL

It was considered after independence of Pakistan that the existing institutional

sources of credit, such as, taccavi and cooperatives, were insufficiently meeting the

credit needs of farmers. Therefore the need for establishment of a third source of

agricultural credit was essentially percolated so as to fulfil the credit requirements offarmers not only for production but even for the development purposes.

Consequently, the ADFC was brought into existence in 1952 for the purpose of

expanding financial facilities and promoting the development and modernization of

agriculture in the Pakistan. Subsequently in 1957, the ABP was established that can

provide both short term loan for production and long term loan for development. The

ADFC & ABP were merged together as the ADPB in 18th February 1961. The

ADPB is the main credit supplier to the agriculture sector in the country. According

to the Companies Ordinance 1984, the ZTBL was incorporated as a the public

limited company on 23th October, 2002. The ZTBL is governed by Memorandum

and Article of Association and registered with the SECP under Companies

Ordinance 1984. Consequently, on 18th November, 2002, all the assets, contracts,


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liabilities, proceedings and undertakings of the ADBP were transferred and vested in

the ZTBL on 14th December, 2002 by the Federal Government.

3.2 CORPORATEAVISION

To develop and operate the ZTBL as a commercially viable bank with focus

on rural and agriculture finance and to serve the needs of farming

community, by delivering financial products and services.

3.3 CORPORATE MISSION

To play an effective role in the promotion of economic growth, by enhancing

the availability of credit to the agriculture sector, through reliable access to

sustainable financing, special lending programs, technical assistance, products

& services, and to promote career development opportunities for increasing

professionalism, technical proficiencies & trainings of employees.

3.4 CORPORATE OBJECTIVES

To assist rural community, particularly the small farmers, in raising their

productivity and income levels through timely delivery of credit, advisory and

ancillary services.

To build the image of the ZTBL as a proactive, client friendly, financially &

operationally sustainable with indigenous product deployment.

To establish and provide backward and forward linkages to strengthen the

agriculture and industrial sector.

The ZTBL can engage in public and private, wholesale and retail partnership

to deepen outreach and reduce operating cost.

The ZTBL act as rural commercial bank to mobilize rural capital formation

and to commercialize the agriculture sector by delivering the true value of

credit to the client.


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3.5 RESTRCTURING PLAN OF ZTBL

The restructuring means activity involving expansion or contraction of a

organizations operations or changes in its assets and financial structure. The

restructuring plan of the ZTBL covering the following factors;

1. Governance: The ZTBL establish an environment that facilitates good

governance and accountability.

2. Systems: The ZTBL modernize operations through use of technology,

networking and communication tools.

3. Business Processes: The streamline products and delivery systems of the

ZTBL are to reduce transaction costs, simplify operations, and increase

outreach.

4. Products and Services: The ZTBLintroduce products and services that

are financially and economically viable.

5. Human Resource Development: The ZTBL can improve standards and

skills of staff & management and strengthen training capacity.

6. Information Technology: The ZTBL establish new hardware and

software platform to support the MIS, accounting system including forensicaccounting, and risk management functions.

3.6 BOARD OF DIRECTORS

The ZTBL has one chairman, one president and ten directors. The seven

meetings of the board are held during each year. The main resposibility of the BOD is

to establish and maintain a system of internal control, prepare and present the

financial statements with aproved accounting standard and requirement of the

Banking Companies Ordinance, 1962 and the Companies Ordinance 1984. The

new corporate structure redefines the bank's status as the Public Limited Company

registered under Companies Ordinance 1984, with an independent BOD which


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the risk manager. But in risk management committee, the company secretary

act as member and secretary as well.

4. Information Technology(IT) Committee: This committee has one convener

& two members that are the directors of the ZTBL. One member is from IT

Department & his designation is the Chief information officer. While one

secretary (Head) of IT Department.

3.7.2 Management Committees

1. Assets Liabilities Management Committees: This committee has one

convener (CEO) & three members. The designation of the first member is the

SEVP of Operation Department. The designation of the second member is the

risk manger. But the third member (Chief Financial Officer) act as member

and secretary as well.

2. Executive Coordination Committee: This committee has one convener

(CEO), one secretary (Compliance Officer) & three members. The

designation of the first member is the SEVP. The designation of the second

member is the EVP. The designation of third member is the risk manger.

3.7.3 Organization Structure of ZTBL: The organizational structure of the ZTBL

is shown in below diagram;


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3.8 ZONAL OFFICE AND BRANCHES

In public sector, the ZTBL is largest financial development institution with a

wide network of 25 zonal offices and 342 branches in the Pakistan. The network of

the ZTBL Head Office is given as under;

3.9 RANKING OF STAFF MEMBERS


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

under;


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3.10 SUBSIDRAY

The ZTBL has one subsidiary which is known as the Kissan Support

Services Limited. It was incorporated as owned subsidiary of the ZTBL that

function independently effective from 1st January 2006. The KSSL is a separate and

distinct legal entity that is controlled by the ZTBL. The KSSL has an authorized

capital of Rs.100 million. Its aim is to provide a support to the management of the

ZTBL such as to focus on core banking business and assign non-core activities. The

KSSL operates under the Memorandum and Article of Association. The KSSL also

provide support staff and services to the ZTBL in the following areas;

I. The KSSL has recruited and developed support staff of following table

categories in ZTBL, Head Office as will as in field offices;

S.No. Category of Employees Provided By KSSL

No. of

Employees

01 Darbans and Armed Guards 526

02 Drivers 291

03 Naib Qasids 54

04 Mali / Beldars 25

05 Typists, Assistants & Senior Assistants 41

06 Security Supervisor 0307 Sweepers 07

08 Players 20

09 Others 15

Total 982

ll. Besides manpower support a service, the KSSL has also provided following

support services to the ZTBL;

Provide mail management, repairing, maintenance & photographing

services to ZTBL

Recruitment and provision of staff

Provides farms and the ZTBL Staff College.


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Provide security services not only to the ZTBL Head Office but also to

branches and zonal offices.

CHAPTER 4

PRODUCTS & SERVICES OF ZTBL

4.0 INTRODUCTION

The ZTBL has provided many products and services for their customers. The

product and services of the ZTBL can raise the living standard of rural areas and

develop the agriculture sectors of a country as well. The Pakistan is an agriculture

country and the products and services of the ZTBL plays very important role in

increasing the GDP and accelerates economic growth. For this purpose, the ZTBL

provides many facilities for their customers, such as provides schemes and loans,

obviously help the customers to invest money in their businesses, to get maximum

profit from it and to pay low interest rates.

4.1 SCHEMES OF ZTBLThe ZTBL provides various schemes for customers, in order to strengthen the

rural and agricultural sector of econnomy, mitigate poverty and accelarte groth. The

Schemes of the ZTBL is which is briefly explains as under ;

4.1.1 Sairab Pakistan Scheme: The ZTBL can raise the irrigated area for the

purpose to accelerate rate economic growth and to facilitate the farmers. The ZTBL

has assigned the collaboration agreement with the KSB Pumps Company Limited

under the Sairab Pakistani Scheme. The ZTBL will provide loans to the farmers for

installation of tube wells and turbines whereas KSB Pumps Company Limited will

provide quality pumps, turbines, equipments to borrowers for efficient pumping of

waters. The water can plays vital role to improve per acre yield. Out of total 31

million hectors area of the Pakistan, 22 million hectors is cultivated while 9 million


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hectors is not cultivated & waste mainly due to non-availability of water. More over

increase in water supply being a key input is required to raise cropping intensity and

hence the income of the farmer. Since inception the ZTBL financed over 143000 tube

wells amounting to Rs.15 billion. The KSB Pumps Company will provide quality

machinery and equipment for efficient pumping of water. The company shall also

provide after sale service including replacement of parts and availability of spares

through its network of dealers despite technological advancements and rapid growth

of industrial sector, agriculture is still the back bone of the Pakistan's economy. It

contributes 22% towards the GDP and employs nearly 45% of country's labor force.

It provides raw material for preparation of industrial products. So it has both pulled &

pushes effect on the economy.

4.1.2 Supervised Agriculture Credit Scheme: Under this scheme agriculture

loans are given for short, medium and long term loans up to Rs.1 million per

borrower. The loans are sanctioned for fats, livestock, orchard, tractor,

agricultural machinery, tube well and irrigation facilities. Under the scheme

besides provision of credit, information is to the farmers for planning the

farm, production, guidance for implementation of the scheme, marketing and

repayment of loans.

4.1.3 White Revolution Scheme: In order to modernize the dairy farming for

increasing milk supply, mitigate poverty in Pakistan, and improving the living

standards of the rural areas in Pakistan for the purpose to achieve growth and

development in agriculture sector of Pakistan, the ZTBL may start the

Strategic Partnership agreement with the Pakistan Development Diary

Company (PDDC) and the Nestle Pakistan Limited (NPL) under the white

revolution scheme. Under this participatory approach, the diary sector would

be modernized with a view to increase milk supply, mitigate poverty and

improve the living standard of the rural population. The ZTBL has earmarked

funds to the tune of Rs.5000 millions for financing of 50,000 animals

(buffaloes and imported cows) during the five years period 2007 to 2011. The


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PDDC will also help the ZTBL in the selection of clients and processing of

loan cases. Initially the schemes will be for modernization of 5000 farmers

during 5 years period involving Rs.700 million. Under the scheme 1000 farms

would be covered on yearly basis. The modernization of dairy farm will be

carried out through financing milk cooling tank, generator, voltage stabilizer,

hot water geezer, water pump, cooling pad and other dairy equipment. There

would be maximum limit of loan of Rs.1 million per borrower party. The

PDDC would bear the entire amount of mark-up charged in the loan cases &

provided the 50% of principal part of loan is repaid in time by the borrower.

The remaining 50% amount of principal along with the amount of mark-up

would be paid by the PDDC.

The Nestle Pakistan Limited would help to select and identify good clients for

the ZTBL to improve quality breed of foreign and local dairy animals. The NPL can

provide technical guidance to the farmers through nestle veterinary doctors. The NPL

would purchase milk through its network and make weekly payments of milk sale to

the ZTBL for the adjustment of loan.

4.1.4 Micro Credit Scheme: This Scheme has been launched since 15th July, 2000

for the uplift of rural poor. The landless poor such as; tillers, harries and small land

owners having land not exceeding 2 acres may avail loan under Micro Credit

Scheme. It is operational in all branches of the ZTBL through all the Mobile Credit

Officers. Both, men and women may obtain loans under the scheme as an individual

or as a member of group of 5-10 members. The minimum credit limit is Rs. 5,000

while maximum credit limit is Rs.25,000. One hundred and thirty six income

generating activities or cottage industry items have been identified for lending under

the scheme. The loan may be advanced against one surety with 50% solvency of the

assessed value of property owned by the guarantor or security of tangible property.

Being small loans involving high cost 18% per annum mark-up is charged, whereas

2% rebate is given on timely repayment. All loans under these Schemes are

recoverable within 18 months after disbursement of loan.


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4.1.5 Zarkhaiz Scheme (One Window Operation): For timely and conveniently

provision of credit to purchase inputs, loans is provided to the borrowers under this

scheme being conducted twice a week during Rabi & Kharif seasons. All the related

departments such as revenue, agriculture, post office.etc. attend the focal points

which are established at convenient places. The farmers get their pass books prepared

and loan applications processed on the same day whereas sanction payments are

made within three days at branch. For Rabi crops, one window operation from

October to January and for Kharif crops from April to September each year which is

extendable as per requirement of particular area.

4.1.6 Sada Bahar Scheme: For providing timely input loans for crops and working

capital for poultry and fishery etc, the ZTBL has launched a Sada Bahar Scheme.

This scheme is also known as Revolving Finance Scheme. The assessment for

inputs requirements for the whole year is made at the time of first application. The

amount so assessed is treated as revolving limit provided it is within the security

limit. The managers are authorized to sanction such loan limits up to Rs.5 Lake. The

salient features of the scheme are given as under:

1. Revolving Credit Limit is fixed to cater production credit and ancillary

requirements of the farmers during one year period.

2. The borrowers can draw the credit in lump sum or in installments according to

his requirement.

3. The borrowers can repay in lump sum or in installments during the year when

his cash position allows him.

4. The Pass Book containing transactions in his account is supplied to every

borrower free of cost.

4.1.7 Tea Financing Scheme: In order to increase the tea cultivation in Mansehra,

Swat, Mutta and Dir in Malakand Division, the tea financing scheme has been

introduced which would not only save the hard earned foreign exchange but would


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also help to improve the socio-economic condition and living standard of the

inhabitants of the area. The salient features of the scheme are given as under:

1. The maximum credit ceiling of Rs.60,000 per acre has been fixed.

2. All the farmers owing land up to five acres are eligible to avail loans.

3. The amount of credit will be given in three installments; the first year

installment is Rs.30,000, second year installment is Rs.15,000 and third

installment is year Rs.15,000.

4. The credit would be repayable within 11 years with 6 years grace period with

prescribed markup of 9% per annum.

4.2 LOANS OF ZTBL

The ZTBL provides loans for the development and growth of rural areas and

uplift of farm activities. The loans of ZTBL are briefly explained as under;

4.2.1 Production Loans: These loans are given to farmers for seed, fertilizer,

pesticides, labor chargesetc. to grow crops and vegetables including working

capital for poultry, dairy, orchard and fishery and are recoverable within one and half

year. The amount of disbursement of production loan, at the end of December 31, is50,222 million for overall four provinces. The example of production loans items are

given as under;

1. Seeds, fertilizers and fuel

2. Pesticides, insecticides and herbicides manual sprayers

3. Poultry feed, chicks and medicines

4. Hire charges of farm power

5. Water charges and electric charges for tube well

6. Production loan for growth of mushroom

7. Hired labor, water rates &fuel wood for tobacco curing


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4.2.2 Development Loans: The loans for purchase of items like farm machinery,

tractors, irrigation, land development, orchard, green houses, dairy, poultry, fishery,

livestock, farming..etc are recoverable up to one to eight years. The amount of

disbursement of development loan is 5,690 million at the end of 2007, for overall four

provinces. However, the provinces wise disbursement of loans & its percentages at

end of 31st December, 2007 is given as under;

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

1. Panjab 44,327,000,000 79.50%

2. Sindh 7,384,000,000 13.203. NWFP 3,802,000,000 6.80

4. Balochistan 99,000,000 0.20Moreover, the term wise disbursement of loans of bank is on short, medium and long

term basis.

I. The short term loans are also called production loans having maturity period

is one year. Theseloans are given to farmers for seed, fertilizer, pesticides, labor

chargesetc. to grow crops and vegetables. These loans are recoverable in lump

sum commencing after the harvest or marketing of respective crops.

II. Medium term loans are for development and advance purposes the examples

of these loans are dairy farming and livestock. The installments of these loans are

made on monthly, biannually and annually basis and the recovery or maturity

period is 5 years.

III. The long term loans are for tractor, agricultural machinery, poultry farming,

and orchard. The installments of these loans are made on monthly, biannually and

yearly basis and the maturity period is 8 years and above.

Summary of Term Wise Disbursement of Loans

S.No. Term wise Disbursement of Loans Maturity %age

1. Short Term Loan (Production Loans) 12months 89.80%

2. Medium Term Loan (Development Loans) 5 years 3.40

3. Long Term Loan (Development Loans ) 8 years 6.80


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4.3 RECOVERY PROCEDURE OF LOAN

The recovery procedure of the ZTBL loan is to carried and taken by three steps

such as recovery schedule, issuance of notice and legal action which is briefly explain

as under;

Recovery Schedule: The recovery schedule in each loan case as per terms of

sanction of loan is fixed and communicated to the borrowers after disbursement of

loan. In case of default or failure in repayment of any installment on due date the

mark-up shall continue to be charged and last installment due to this may differ from

the amount of installments fixed at the time of disbursement.

Issuance of Notice: The ZTBL can issue notice for recovery of loan which is known

as Demand Notice. It is issued before the due date of every installment. A legal

notice is issued one month after the due date informing the borrower that if the

amount is not repaid within next one month, further legal action will be taken to

recover the dues.

Legal Action: The legal action can be initiated against the defaulter if loan is not

repaid even after expiry of legal notice period. Where the court in bank's favor has

decreed a case, account is to be settled by recovery of amount from the auction of themortgaged property. The bank may purchase the mortgaged property if considered

feasible to dispose it off later on through auction or in any manner deemed fit for

getting the best price. The bank may dispose off the mortgaged properties of

defaulters for satisfaction of its dues with out intervention of courts under Financial

Institutions Ordinance 2001.


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CHAPTER 5

FINANCE & ACCOUNTS DIVISION

5.0 INTRODUCTION OF THE FINANCE & ACCOUNTS

DIVISION

The Finance and Accounts Division of the ZTBL is responsible for handling

the financial affairs and keeping the records of all the transactions, preparation of

accounts, financial statements and budgets and to manage, distribute and reconcile

funds of all zonal offices and branches of the ZTBL. Moreover this division acts asthe backbone for the bank, in order to strengthen the rural and agricultural sector of

Paksitan, to manage funds, mitigate poverty, capital market and investment activities.

The main aim and responsibility of this division is to make policies, planning,

mobilization and administration of the bank's financial resources such as products and

services. This division provides schemes and loans for small and large farmers. By

getting loans and register with schemes, the farmers can invest money in their

businesses and to get maximum profit from it and to pay low interest rates. This

division manages the banks financial relations with the objectives of providing loans

to borrowers. The ZTBL lends money to the individuals or corporations for

consumption orinvestment and charge interest on the loans. But besides this, finance

is the science that deals with the funds management such as saving and lending


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money while account is a record of financialtransactions for an asset or individual. In

other words, an account is an arrangement between a buyer and a seller in which

payments are to be made in future.

In short, this division can a gain a tremendous importance over the other division

in the ZTBL, through its functions and truly be called as the backbone for the bank, in

order to manage funds, mitigate poverty and increase the living standard of people of

rural ares.

5.1 FUNNCTIONS OF FINANCE & ACCOUNTS DIVISION

This division mainly deals with concept of time, money and risk and how they are

interrelated. It also deals with how money is budgeted. However, finance works most

basically through individuals and business organizations depositing money in a bank.

The main functions of the FAD is given as under;

To providing proactive financial policy, timely strategic financial planning and

risk management.

To managing the banks assets and liability portfolio.

To prepare, prompt and accurate financial reporting and preparing audited

financial statements for the bank's annual report.

To overseeing internal controls in the processing of financial transactions

accounts, budgets, and credit of the bank.

To reconcile funds of all zonal offices and branches of the ZTBL.

To administer, monitor and control the banks loan and portfolios, including

management and disbursement of loans.

To manage the cash inflows and out flows.

To maintain a books of accounts.

To coordinate and facilitate a business planning, budgeting and to formulate the

budgeting estimates of revenue and capital expenditure.


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To manage and rectify the accounts of zonal offices and braches.

To consolidate all the financial statements of zonal offices and braches, in order

to make financial decisions.

To prepare quarterly, semiannually and annual financial statements and its

agenda for presentation to the Audit Committee and the BOD & also to prepare

annual capital adequacy ratio for certification by external auditors

This division ensuring that all financial obligations are met and collections are

made.

5.2 CLASSIFICATION OF FINANCE & ACCOUNTS DIVISION

In order to classify the finance and accounts division of ZTBL, there are four

departments, which plays very important role in financial affairs and keeping the

records of all the transaction, preparation of accounts, financial statements, budgets

and to manage, distribute and to reconcile funds of all zonal offices and branches of

the ZTBL Heads Office. The four departments & their sub unit of the FAD are given

as under;

1. Central Accounts Department (CAD)

Policy Unit

Accounts Unit

Tax Unit

Fixed Asset Unit (FAU)

Pre-payment Verification Unit (PVU)

2. Head Office Accounts Department (HOAD)

Payroll Unit

Fund Unit

Payment unit


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CHAPTER 6

CENTARL ACCOUNTS DEPARTMENT

6.0 INTRODUCTION OF CAD

The CAD is abbreviated to Central Accounts Department.There are many

accounting policies & procedures used in the CAD, In order to present the true

financial position of he bank in financial statements, the accountants formulate the

accounting policies & procedures. This department maintains the actual or real

accounts of the ZTBL. In this department, I was attached actually to maintain the real

accounts which are assets and liabilities. They are responsible for both kinds of assets

fixed and liquid assets and to maintain the depreciation accounts for all those assets

acquired by the bank. In this department the balance sheet and profit and loss account

is also prepared for financial year, to get the image in sense of profitability or loss

and to make financial decisions.


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6.1 OBJECTIVES OF CAD

Formulation & maintenance of the accounting policies & procedures with

applicable accounting standards which ensure dissemination & implementation across

the bank.

Preparation of financial statements as per requirement of statue and to

ensure the proper accounting of assets, liabilities, owners equity, income, revenues

and expenses.

6.2 FUNCTIONS OF CAD

To issue the instructions relating to accounting policies & procedures and

allocation of specimen signature numbers to the authorized signatories of

the branches & maintenance of signature booklet.

To notify the schedule of bank charges.

To maintaining & updating of chart of accounts for recording of financial

transactions.

To prepare the periodic financial statements of the bank & to deal with all

related matters.

To Issue the guidelines and instructions regarding periodicals closing of

accounts and deductions of tax at source.

To deal with all corporate tax matter & liaison with tax department, tax

advisors, consultants.etc

Thecompilation of fixed assets schedule of the Head Office departments &

branches.

Follow up and collection of fixed assets schedule along with supporting

documents from the ZTBL Head Office departments, zonal offices &

branches.


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To coordinate with internal & external auditors and the SBP inspection team

and to arrange credit rating of the bank.

To conduct prepayment verification of sanctions pertaining to the HOAD.

Toperform administrative functions for the department such as, sanction of

leaves & approvals for tour programs & travel allowance

6.1.3 UNITS OF CENTRAL ACCOUNTS DEPARTMENT

6.1.3.1 Policy Unit:

To device accounting procedure regarding accounting in the Head Office

and branches & to circulate revision of mark-up or return rate for

compliance by the branches.

To deal with management latter & executive summary.

To coordinate with external auditors & to arrange payments to external

auditors bills.

To arrange compliance of internal & external audit observation relating to

the accounting matters of the ZTBL Head Office, zonal offices and

branches.

To coordinate with other departments in the Head Office on policy matters.

To maintains personal files of the employees, deals with their leaves & other

administrative matters, such as policy matters relating to the operation of

accounts.

To update the specimen signatures booklet for use of authorized signatories

in the ZTBL Head Office, zonal offices & branches.

To prepare bank charges schedule & there circulation among branches and

submission to the SBP on half yearly basis.

To allocate new GLH for accounting purpose and issue instructions those

are relevant to the books of accounts.


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To provide guidelines to the zonal offices and branches regarding

rectification, settlement of accounting errors, audit observation and

adjustment of suspense account.

To arrange & coordinate with credit rating of the bank & provide

information regarding credit rating of the bank.

6.1.3.2 Accounts Units:

To coordinate with concerned departments of is division for timely

production of statement of affairs.

To arrange compilation and merger of statement of affairs and it is also

provide to auditors for auditing purposes.

TO compile balances under relevant group of heads from trial balances for

preparation of financial statements.

To prepare list of abnormal entries & balances for rectification.

To deal with all matters relating to system analysis, software development

& maintenance of statement of affairs.

To Issue guidelines and instructions to the branches regarding closing of

accounts on quarterly, semiannually and annual basis.

To prepare quarterly, semiannually and annual financial statements and its

agenda for presentation to the Audit Committee and the BOD & also to

prepare annual capital adequacy ratio for certification by external auditors.

To coordinate with internal and external auditors and the SBP inspection

team regarding periodical accounts.

6.1.3.3 Tax Unit: To Issue guidelines regarding deduction of tax at source under the

Income Tax Ordinance, 2001.


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To collect tax payment documentary evidences for tax deducted at source

from the branches for submission, to tax advisor and tax department.

To coordinate with tax consultant, income tax authorities & the SBP on tax

issues.

To pursue the tax refund case with income tax offices, through tax

consultant.

To prepare statement & payment of advance tax under the Income Tax

Ordinance, 2001.

To guide branches for settlement of tax issues and to attend tax related audit

observations and arrange compliance.

To arrange payments to tax advisor, appeals fee & other mandatory

payments required under the Income Tax Ordinance, 2001.

6.1.3.4 Fixed Asset Unit:

To timely dispatch of format for fixed assets schedule to the ZTBL Head

Office departments, zonal offices and branches.

The persuasion & collection of fixed assets schedule along with supporting

documents from branches as well as from ZTBL Head Office departments.

To reconcile the data with statement of affairs of the concerned zonal

offices and branches.

To compile or summarize the fixed assets schedule on country level.

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

branches and the ZTBL Head Office.

To compile the addition and deletion of fixed assets on quarterly basis by

the ZTBL Head Office, zonal offices and branches..

To monitor and verify the depreciation charged by departments of the ZTBL

Head Office, zonal offices and branches on quarterly basis.


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To make the adjustment of depreciation charged under intimation to

concerned accounts units and to verify the disposal of fixed assets booked

by the branches.

To calculate the amount for the deferred tax assets.

To coordinate with the external auditors on the issues relating to fixed assets

of the bank.

To perform any other assignment as and when assigned by the competent

authority.

6.1.3.5 Pre-payment Verification Unit

To verify all payments relating to Head Office.

To check availability of sanction of the competent authority.

To check competence financial power of approving authority.

To check budget, its ceiling and procedural compliance.

To check completeness of documentation and

To verify the arithmetic accuracy of payments & budgets.

To perform any other assignment as and when assigned by the competent

authority.

CHAPTER 7

HEAD OFFICE ACCOUNTS DEPARTMENT


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7.0 INTRODUCTION OF HOAD

The HOAD is abbreviated to Head Office Accounts Department. The main

objective of this department is to maintain accounting functions of all over the bank

and to centralize the accounts as well. In the HOAD, the specialized accounting

software and the COBOL administrative system is used for recording the

transactions, financial information and to deduct tax from salaries of the employees.

7.1 UNITS OF HOAD

7.1.1 Payroll Unit: In this unit, I have learnt how to prepare the payroll, and how to

process the payments of bounces, leave encashment, overtime and other allowances.

This department also works on tax deduction from pay. In this unit, the COBOL

administrative system is used for the purpose to record the salaries, which is paid to

employees. The COBOL is the acronym for COmmon Business Oriented Language,

defining its primary domain in business, finance, and administrative systems for

companies and government.

In short, this unit mainly deals with the accounts related to salary of

employees, how tax is deducted and distributed to employees which are managed by

this wing.

7.1.2Funds Unit: In this unit, I have learnt how to manage the deductions from the

salary of employees as a fund. The main objective of this unit is to maintain the book

of accounts, employees contributory funds such as contributory provident fund,

employees provident fund and general provident fund and also the investment of

surplus funds in approved schemes. Moreover, there are ten types of deductions from

fund in the ZTBL Head Office, which are given as under;

1. ZTBL Employees benefit fund

2. Benevolent fund (officers)

3. Benevolent fund (staff)

4. General provident fund (officers)

5. General provident fund (staff)


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6. Contributory provident fund

7. Pension fund

8. Gratuity fund

9. Employees provident fund

10. Gratuity 2005 Fund trust

7.1.3 Payment Unit: In this unit, the working is related to the payments, here the

payment is not in cash, they issue notes to the employees of bank and issue cheques

to the outsiders. The basic functions are to make payments to employees or outsiders

from whomwe have gotten goods or services, and then record them on papers and

also on computer database. The main function of this unit is to summarize the record

of transactions and to provide different kinds of reports to the needy department and

personals.

7.1.4 Inter Branch Transaction Unit (IBTU):In this unit, I have learnt that in this

wing all the queries related to the branches and zonal offices are maintained in the

ZTBL Head Office. Here they basically prepare the reconciliation statements relating

to zonal offices and branches in the ZTBL Head Office. This unit becomes important

for banks to protect their assets. In case of fraudulent or errors in transaction due to

negligence, a good bank reconciliation system helps detect these. In view of above it

is direly needed that to have an efficient and robust the Inter Branch Reconciliation

System with effective internal controls to handle high volume of data with accuracy

& also with an in built flexibility to handle the expectations.The main function of the

IBTU is to ensure timely reconciliation of inter branch transactions and to provide the

list of outstanding entries to the branches for reconciliation for the purpose to

correspond with the branches and zonal offices for settlement of outstanding entries

in order to coordinate with the ZTBL Head Office for follow-up.Here the nature of

the IBTU is to reconcile the Head Office to branch books. The transactions between

the Head Office & branches to transfer the cost and amount of assets, liabilities,

expenses & income are called the Inter Branch Transactions. These transactions

are of two types.


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I. Branch to Branch Transactions.

II. Head Office to Branch & Vise Versa.

Moreover, Specialized accounting software is designed or being used for

reconciliation of the Inter Branch Transactions. Following checks are applied in

software to get accurate results & to reduce the chances of risk.

Checking of contra branch code and central account code.

Checking of transaction date and advice number.

Checking of the GLH

Checking of debt amount into credit amount.

Checking of credit amount into debit amount.

On the other hand, in the IBTU, a document is used, known as an advice. It is

a printed form of document (ACF-71), is used for inter branch transaction which

contains following information.

Nature of transaction

Date of transaction

Transaction amount

Contra branch information

In other words, advice is document which is used only to communicate the

information of certain transaction to authorized offices of the ZTBL. The debit advice

is prepared to transfer the assets & expenses by one office to another office of the

ZTBL. The banks liabilities & Income are transferred through credit advice. The

vouchers are also prepared parallel to advice to record these transactions. The

performance of the IBTU is dependent on branches behavior. Hence, there is a need

to fix responsibility on branches to clear all outstanding entries either originated or to

be responded. While, outstanding entries are unmatched records of the Central

Accounts File (CAF) or a record exists either only in O file or R file.


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are cleared on a timely basis. It is also the responsibility of unit incharge that is to

prepare the monthly reconcilement balancing reports.

l. Responsibilities of Computer Section of the IBTU: The main responsibility

of this department is to collect data from the ITSSD on daily basis and to

producing list of outstanding entries and its updating. However, necessary

corrections are made & monthly statement of cash in transit is prepared. The

computer section also prepares special reports for external and internal

auditors & the SBP inspection team.

ll. Responsibilities of Coordination Section of the IBTU: This section assist

unit Incharge in planning & managing of daily reconciliation process.

However, this section also assists computer section in preparation of reports

for higher management and special reports for external and internal auditors

and the SBP inspection team. This section not only coordinates with Head

Office, zonal offices and branches but also with departments and units of

Head Office for settlement of outstanding entries and coordination with sub

sections of IBTU in closing of accounts as well.

lll. Responsibilities of Record Maintenance Section of the IBTU : This section

can maintain branch wise records, diary, dispatch file and coordination with

internal and external auditors & the SBP inspection team.

7.1.4.4 Steps in Information Processing of the IBTU: There are some steps in

information processing of the IBTU, for reconciliation of transaction, which is briefly

explained as under;

I. The vouchers & advices are prepared in branch and posted to the

Zonal Computer Center (ZCC) on daily and weekly basis.

II. The ITSSD compiles the Central Accounts File (CAF), 6950 on

daily basis & access is given to the IBTU. The CAF, contains information about

the Inter Branch Transactions. The file consists of two sub files:-

a. The O" file of central account file keeps the records of originating

entries.


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b. The R file of central account file keeps the records of responding

transactions.

III. The IBTU is using software for reconciliation of the Inter Branch

Transactions.

IV. Thecomputerized merging & matching process is started after collection of

fresh data on daily basis.

a. The merging process means copying a fresh data from main CAF &

pastes it in existing data base of the CAF maintained by the IBTU.

b. Thematching process is a process wherein O file reads R file

& match the contents of originating transactions with the responding

transactions.

V. A computerized list of outstanding entries is produced after merging and

matching of data. This can be seen on the IBR system throughout the

branches.

VI. In final step, persuation will be done by the IBTU, for reconciliation.

However, persuation means follow-up to settle the entries for advice.

7.1.4.5. Diagrammatic Representation of Information Processing of the IBTU:

The diagrammatic representation of the information processing of the IBTU is

given as under;


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CHAPTER 8

REGULATORY REPORTING DEPARTMENT

8.0 INTRODUCTION OF RRD

This department sends reports to the SBP. The ZTBL has to communicate

and submit different returns to the SBP and truly be called as regulator at different

intervals. For the purpose a department named as Regulatory Reporting Department

(RRD) has been established. There are two ways of sending report to the SBP such

as, to send report through courier service or to send online. Here in this department, I

learnt how to prepare balance sheet, income statement and how to find ratios. The

RRD basically is to collect, process, analyzed, customize and provide with the

information to various stakeholders to meet their specific requirement on timely

basis. The main aim of the RRD is to compliance to the statutory reporting

requirements & makes periodic financial reporting to the management. This

department collects information from various sources such as zonal offices, branches,

ITSSD, CAD..etc and reports the data to the SBP after consolidation.

8.1 OBJECTIVES OF RRD

To improve effectiveness in meeting statutory reporting obligations.

To prompt and accurate analysis to aid decision-making.

To make periodic financial reporting to the management.

8.2 FUNCTIONS OF RRD

To redesign system of data capturing, its consolidation and subsequent

reporting as per regulatory requirements.


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To ensure implementation of changes in reporting requirements as amended

from time to time and to design and implement internal reporting

mechanism.

To coordinate with different departments and zonal offices for collection of

requisite data and to Issuance of guidelines for preparation and

consolidation of data.

To arrange compliance of internal or external audit observation on

regulatory reports.

To carry out periodic review and analysis of financial results and its

reporting to concerned.

8.3 UNITS OF RIRD

8.3.1 Regulatory and Internal Reporting Unit (RIRU): In this unit, I have

learnt how the data is process, analyzed, customize the collected data of bank and

which is then provide to various stakeholders to meat their specific requirement on

timely basis. Moreover, the main aim of this unit is to customizes the collected

information on needed basis and forward it to the respective recipients such as SBP,

Internal and external auditor, agencies..etc. The RIRU has been designed to face

the over changing needs of internal and external reporting. Staff members have been

assigned duties in such away that is to facilitate the whole procedure of data

collection, customization, analysis & eventually the reporting.

The main source of information is the Information Technology and System

Support Department (ITSSD). The information is mainly collected through FMISU in

coordination and relationship management, not only with ITSSD but also with some

other departments such as:

I. Central Account Department (CAD)

II. Head Office Account Department (HOAD)

III. Head Office Operations Department (HOOD)

IV. Budget and Funds Reconciliation Department (BFRD)


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V. Recovery Department (RD)

VI. Branch Banking

8.3.2 Financial Management Information System Unit (FMISU): TheFMIS is

that system which is helping the management of the bank financially, in making the

right decisions at the right time. On the other, hand, the MIS is the study of

information system in business and management and act as bridge between top and

low level management in the ZTBL. The FMIS provides the mangers with reports

and often online access to organizations current performance and historical records.

This system is oriented almost exclusively for internal events but not for external

events and can help managers to gain access data of the bank at any time, which is

precise and accurate that also save the precious time in the age of globalization.

While, the FMIS help managers to collect financial information at any timesuch as

on daily, weekly, monthly, quarterly, semiannually and yearly results. Although, the

FMIS enables mangers, to drill down and to see daily or hourly data if required.

In short, the FMISU can plan, control and summarize the internal data of

bank, in order to make financial decision and comparison for the purpose to check the

productivity, growth and development of the ZTBL in agriculture sector of Pakistan.

8.3.2.1 Role of the FMISU: Every unit has their own importance but the FMIS is

performing and playing a vital role in the ZTBL, although its development has been

started since 1997. They are now developing and implementing the FMIS in the

ZTBL in each and every department by the use of computerized processing and

management report systems. All the information is updated day by day due to the use

of FMIS. The process of recording transactions is error free with the use of the FMIS,

in the ZTBL is availing many advantages which are given as under;

1. The working load on employees is reduced.

2. The chances of data loss are minimized.

3. Quick access to data and services.

4. Better communication among divisions, departments and units.


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5. Easy and quick data transfer from one branch to another.

6. Customized annual reports are generated.

7. Middle managers check the financial reports.

CHAPTER 9

39000470 internship report on ztbl prepared by wasim uddin orakzai student of finance 2010 kust 2

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