Islamabad 23 July: The Senate Standing Committee on Privatization was informed that the privatization of Zarai Taraqiati Bank Limited (ZTBL) could take up to nine months.
During a briefing chaired by Senator Afnanullah Khan, Senator Zeeshan Khanzada questioned the rationale for privatising a profitable institution. The Privatisation Advisor said the increase in bank profits in recent years is primarily due to higher interest rates.
Meanwhile, the committee discussed the financial challenges facing Zarai Taraqiati Bank Limited (ZTBL), which has accumulated Rs80 billion in bad loans, nearly equal to its equity of Rs88 billion.
ZTBL’s primary mandate is to provide subsidized credit to farmers and rural communities. However, years of political interference, loan write-offs, and poor recovery mechanisms have left the bank burdened with an unsustainable volume of bad loans. Experts note that lax oversight, inadequate borrower screening, and repeated loan rescheduling for political expediency have made recovery almost impossible in thousands of cases.
“ZTBL’s lending model is fundamentally broken. The bank’s inability to enforce repayment has turned it into a fiscal black hole,” said an official at the Ministry of Finance.
The bank’s president stated that defaults had reached Rs100 billion in June 2023 but had reduced due to aggressive recovery efforts. Despite this, ZTBL posted Rs42 billion in pre-tax profits over the past two years and paid Rs19 billion in taxes.
ZTBL’s statement:
In a statement, ZTBL said that it is a specialized bank primarily engaged in extension of agricultural loans to small and subsistence farmers of the country. Taking exposures on this segment of farming community is dependent on lot many risk factors including but not limited to high risk of climate change and cyclical inflation resulting in accumulation of non-performing loans, the statement said.
The bank said that it holds the highest Agriculture outstanding portfolio in the industry backed by highest number of Mobile Credit Officers who are providing Agriculture, as well as advisory services to these farmers at their door step.
The bank sustained huge accumulated losses from 2017 to 2021 amounting to Rs. 28.88 billion. However, since 2023, the present management implemented an effective transformation and restructuring strategy which resulted in profit before tax of Rs. 43.5 billion in 02 years.
The bank also subject to corporate tax of Rs. 19.5 billion in national exchequer on said profitability of last two years. An increase of Rs. 22.6 billion has been registered in the equity of bank during last 02 years.
As of June 2023, Non-Performing Loans (NPL) including charged off amounts to Rs. 69.02 billion which has since been reduced to Rs. 55.57 billion as on June 2025 registering reduction of Rs. 13.45 billion (principal amounts).
Further, as of June 2025, out of these Rs. 55.57 billion, the bank had already completely taken an amount of Rs. 35.1 billion as loss in the bank’s balance sheet in previous years and any recovery from this amount shall now directly contributes towards profitability of the bank, it added.
