Zarai Taraqiati Bank Limited (ZTBL) informed the Public Accounts Committee (PAC) that it has been unable to recover approximately Rs9 billion in outstanding loans. These non-performing loans (NPLs) have significantly impacted the bank’s financial health.

Unrecovered Loans Undermining Agricultural Credit

The uncollected amounts represent a mix of wilful defaulters and unpaid dues from farmers. This situation threatens the sustainability of rural lending programs and hinders ZTBL’s capacity to support agricultural development.

PAC Urges Stricter Legal Action and Collateral Seizure

In response, the PAC has demanded a robust strategy, calling for legal proceedings, asset recovery, and stricter measures against defaulters. The committee emphasized the need for faster enforcement of guarantees and collaterals.

Poor Loan Recovery Weakens ZTBL’s Role

The bank’s poor recovery performance has affected its ability to issue new loans. The Rs9 billion recovery gap is cited as one of the reasons for ZTBL appointing external financial advisers to kickstart loan restructuring and privatization efforts.

Governance and Oversight Reforms Recommended

PAC members recommended governance reforms at ZTBL, including better risk management, stricter credit evaluation, and performance-linked accountability for staff involved in loan issuances.

Privatization Move Aimed at Strengthening Bank Operations

ZTBL’s move to engage a financial adviser for potential restructuring and privatization is partly an effort to overhaul its business model, enhance loan oversight, and improve operational efficiency.

Need to Safeguard Rural Growth and Food Security

PAC emphasized the importance of ensuring that agrarian communities retain access to low‑cost, reliable loans. The committee called for balancing financial recovery with continued credit availability for farmers.

Next Steps Include Regular PAC Monitoring

ZTBL has been asked to present monthly updates to PAC on recovery progress, enforcement actions, and status of receivables. This oversight seeks to ensure sustainable improvements and transparency.