Case study of ZTBL: role in development of food and fibre production: its future-I

Agricultural production has long been a mainstay of the nation's economy, successfully feeding and clothing the domestic population as well as exporting agricultural goods. Although the ZTBL has played a vital role in agricultural development in the past, it can, however, be only as much effective as the effort put into it in a planned, organised and co-ordinated way.
Unfortunately, the importance of proper planning for development of agriculture had never been realised by the Bank management after mid-nineties to the extent this sector demanded. Being ex-officer of the bank I intend to share my experiences during my service in making a general analysis of the basic factors that have limited the capacity of the bank and resultantly the agricultural production, and to identify the role which an institutional credit agency like ZTBL was required to play for effective acceleration of the efforts to achieve the goal of maximum agricultural production.
HISTORY OF ADBP (NOW ZARAI TARAQIATI BANK LIMITED)
-- Banking is traditionally an industry that calls for utmost prudence and eternal vigilance in securing the safety of public funds and retaining public confidence. Stability of a bank is always based on continued public trust and solvency. Prior to mid-eighties, the bank employees looked to the character, capacity and capital of the borrowers, while considering their loan applications. There was no corruption in the bank on a significant or debating level.
Consequently one never heard of charge sheets or employee-dismissals for acts of misconduct or corruption. A charge sheet was considered a serious weapon and was rarely used.
Banking skill and knowledge consisted more of business content and less of needing a professional qualification as far as credit delivery techniques were concerned. If one were to learn the primary thumb rules of safety, security, liquidity and profitability, and basics of negotiable instruments act, he successfully managed the branch of the bank. Under-graduates and matriculates could control not only Bank branches, but hold responsible positions even at the head office. Failure was an exception, and when an individual case occurred, it was felt as a dooms-day by the bank management. It was not professionalism, but pragmatism, sound commonsense, personal integrity and cleanliness that ruled the day. Today the bank officials are not perturbed if bad advance even to an extent of rupees 5/10 lacs emerges. No one has time or concern to ponder and correct the rut that is now found commonly everywhere.
-- The situation qualitatively changed after mid eighties. Old dedicated and experienced field staff was replaced by "agricultural graduates" MCOs. During the nineties top management also withered away due to natural process of superannuation and retirement. The new leadership that inherited the top layers was ill prepared to shoulder the added new burden. It lacked the traditional banking culture of trustworthiness and prudence. Selfish opportunism and adhoc adventuresome characterised the new management. They lacked vision. Personal greed replaced prudent goals for securing the institution's interests.
-- Why all this happened? Why wrongdoings emerged on a vast dimension in the new era, while things were smooth and fair earlier? Why the bank became inefficient and corrupt when qualified agricultural graduates and postgraduates were inducted in the system, while it remained more care taking and competent earlier with high-school passed and under graduates managed the show? The employees were then vigilant to protect and safeguard their assets, but today it is an irony that bank executives are increasingly coming under the preview of vigilance scrutiny. The custodians of public trust and confidence are increasingly becoming untrustworthy. There is today an urgent need for strictly guarding the guardians of the bank.
-- The feeling of false security, wrong business objectives, and the effect of political influence exerted on the Bank in its day-to-day administration adversely affected the management of the bank. Remote directions for routine business operations of the bank acted to the detriment of the innate initiative, self reliance and efficiency of the senior and middle level management within the bank. They became dumb rubber stamps to blindly ditto whatever instructions were received from the external controllers.
Lack of professional training, quick promotions (vertical ascendancy without horizontal movement and without gaining experience in multiple disciplines) of the top and middle management, and cross-country transfer of staff, without planning a regular career path for them resulted in unplanned deployment of the unprepared human resources leading to imperfect operations.
-- The bank faced no major crisis before mid-nineties, when the personnel of the old top management were continuing and steering the course of management. But after the mid-nineties when the new generation of those in the junior cadre succeeded to top executive posts and took control of the bank, things started drifting. The new generation of top management set-up came to occupy positions exclusively on the strength of quick promotions, after putting in few years of service in the middle posts in the hierarchy. A quickly erected structure lacked stability and durability and similarly these instantly developed top executives lacked the vision and foresight that their job demanded.
They lacked expertise in management needed for administering a huge corporate organisation like ZTBL and motivating and activating several thousands of staff members in a goal oriented direction. The new top management inherited status and ego, but lacked personality and image to motivate, vision to foresee and commitment to supply a long-term culture and growth path. Human resource development could not keep pace with the rapid Business growth. Business remained appreciating but human resources development kept on depreciating.
-- The executives regularly hold meetings, but no serious and sincere concern or discussion about the affairs of the bank takes place in those meetings. The top most executives intended to provide collective wisdom and inter disciplinary expertise acts as a mere rubber stamp, leaving the field exclusively to the whims and arbitrary fancies of the regional managers. This absolute power with no in-built checks and controls on the regional managers served as the main crippling effect for the decay and downfall of the bank.
-- This atmosphere became a fertile ground for breeding widespread corruption at different centers, starting from the head office, and extending to the regional office and finally the branches. Chairmen of the bank occupied arbitrary powers in a brief period of contract tenure, sure to be terminated in the near future. They lacked vision, foresight or motivation for long-term building of an edifice or culture for the Bank, but were looking only towards short-term objectives.
-- The Bank had its own terms and ruled its own territory without competition. On the one hand debt liability of the borrowers continued inflating due to high rate of corruption prevailing amongst the bank employees and on the other hand the bank imposed exorbitant interest rates and exploited the farmer's community with impunity.
To show the better achievement in recovery of loans, the borrowers were advanced frequent loans for adjustment of their previous debts which naturally resulted into over-financing, beyond the repaying capacity of the borrowers.
Unfortunately, bank management was unable to see far enough in the future the implications of this window dressing. Business growth continued, as it is persisting even today, but emergence of NPLs in the balance sheet of the bank crippled its profitability and reduced its capital adequacy.
The bank started to be categorised as loss showing bank. The concept of the Debt Restructuring Plan was the logical means of resolving the deadlock between borrowers and the Bank. But it was a far-fetched idea not in consonance with the ground realities in Pakistan.
There were not enough subject specialists available to make Corporate Restructuring and Debt Restructuring Plan in the bank. While implementing restructuring plan, both the unwilling and incapacitated defaulters were treated at par which in fact allured the good repay master borrowers waiting for another "Relief Package" for discharging their loan liabilities rather than making the prompt repayments.
-- Corruption started raising up its ugly head at alarming levels, along with the growth of business accompanied the growth in NPLs. The accumulation of NPL indicates the miserable state of affairs in the fields of credit management, inspection, audit and control, while the overwhelming response to VGHSS during 2002 indicates the total failure of HRD management in the Bank.
Fear of ever impending threat of charge sheets and disciplinary cases among honest and hard workers was main cause for exercising their option to accept VGHSS and to leave service than to continue. The corrupt elements still remained holding the field and they did not feel necessary to exercising their option to accept VGHSS.
No one may complain, if charge sheets are served on the really guilty, who disobey authority or who are caught involved in corruption. Innocent and honest employees are served a spate of charge sheets in a routine manner. If charge sheet is the weapon that is able to enforce discipline and cleanliness in services, it is justified. But in an atmosphere where charge sheets are served on some one, so that it saves the seniors from explaining chronic situations, it has turned to be counter productive. Charge sheet is not considered as a discipline enforcing process, but as a bureaucratic response to an adverse operational development in the Bank's business. It is an easy, evasive and escapist endeavour.
-- In spite of such a disaster being faced by the Bank, the HRD is still not cared of. I think more amounts are spent in disciplinary cases than in imparting training to the employees. Can a Zonal Chief in the bank take the challenge of his management skill and show and prove the ability to provide zero level operational errors of serious nature, and bane charge sheets for procedural errors in his zone? Are the systems and procedures so imperfect that it is not possible to secure this ideal state? Where is the fault, is it in all operational officer employees all the time? Is it in the system and procedures? Or is it in the management efficiency of the executives, who control and oversee the bank's functioning?
-- The most of top Bank executives are quite unfamiliar with the problems holding the field. They too deal in papers and reports and expect things to be done by writing down notes. Productivity cannot be increased just by writing notes. It requires proper vision and skill to remove the hurdles lying in the way. The whole devastation is because of the tendency of the senior management to exercise power and authority without accepting equal responsibility. There is no goal-setting, there is no spirit, and there is no mission and above all no honesty of purpose. Corruption at the lower level is fought, but incidence of corruption is proportionate to the exercise of power.
The senior executives in top management are more vulnerable to the lure and temptations of office and power. They choose to bait bureaucrats. They have the means. However, with proper planning, the bank can grow again, and along with it, the agricultural economy of the country should be able to grow too.
-- The top Bank management should be aware that knowledge is not a commodity that can be stored in currency chests or deposited in Bank Vaults. It has necessarily to be retained in human brains and backup storage devices. "People are most valuable asset of an organisation, which no member of any senior management team would disagree with. Yet, the reality for this Bank is its employees remain under valued, under trained and under utilised only and only due to inefficient senior management. In order to implement a successful business strategy in the Bank must ensure that it has right people in the top management capable of delivering an effective strategy.
-- The distortions in the management of discipline enforcement and non-action on the prevailing widespread corruption are only one part of the situation. I am only making a parting reference to this tragic episode and intend to pass on to a darker side of another inhuman outrage, that of misusing such arbitrary powers on the meeker sections of the officers in the middle management through blatant application, malice and victimisation in the guise of taking disciplinary action by the corruption-ridden management. This manifests as deception and fraud in conducting inquiries. How the tool is being used to settle score and to strike on those not dear or near to the bosses, needs no illustration.
-- It is a common perception that employees in the public sector do not work hard or are incompetent but our day-to-day experience does not support this. It may be correct in some cases but not in general term. There are countless ordinary public servants doing their jobs effectively and even under great stress. Same is the position in the Bank. In fact most of the people working in the Bank were dedicated, competent and hard working who opted for GHSS and preferred not to continue their service due to unjust attitude of the management.
Even by now there are a number of people working with dedication and honesty and majority from the rest can be brought on track by implementing the effective policies, if so desired. The remaining Bank employees who do not do their jobs or involved in corruption should be discharged. What is required from the Bank in that case is the employee is given notice of the reasons for discharge and an opportunity to defend himself; and that the final decision is made by a fair process. One thing is very much clear that if anything lacks is the quality of management in the bank - not quality of workers.
-- Unjust decisions taken by different managements in the bank after mid-nineties providing shelter to the corrupt elements and creating embarrassing position for honest and dedicated employees resulted into a huge and infinite litigation in the bank. The things are even on record to show that the bank was burdened with this unnecessary expense merely with the intention that cost was being born by the bank and not from the own pocket of the management. This unnecessary litigation demoralised the honest and dedicated people who ultimately preferred to quit the service with the natural result that it cleaned the way for corrupt elements who are now at absolute liberty to do whatever they like.
-- Yet another wrong decision of the bank managements, particularly after 2000, was to harass the employees by adopting different techniques which created a sense of insecurity of their service amongst the bank employees and resultantly paved the way to a non-stop corruption in the bank. So much so due to that service insecurity created by the managements some honest people also tended to make money through some unfair deals just to preserve their uncertain future.
Those unfair actions of the management and reactions of the Bank employees are at climax even in the present regime of the management which has created a war like situation in the bank. The most corrupt elements have become custodians of the bank and actions of the management reflect that they are fully supported by the top management. National exchequer is being thrown away for personal whims and nobody is there to take accountable the managements for such a high levelled loss of funds.
-- An arbitrary decision taken by the Government during the year 2002 was corporatisation of the bank without changing the mind-set of its management and devising any proper future strategy. Many dedicated and honest employees lost their jobs as a result of its abortive corporatisation. Cutting jobs has not meant cutting out the work those people once did. Those who have remained have seen their workloads increase. For some the increase has been so great they are unable to perform all their new duties and suffer from burnout and frustration with the definite result that the quality of work at present in the branches is at worst level countrywide, but nobody is there to care.
Apart from many other absolutely wrong decisions taken by the bank management during its corporatization in the year 2002, a very suspicious and mysterious action was that the management got re-evaluated the fixed assets of the Bank as Rs 1.140 billions against their original worth of approximately Rs 35.000 billions (Now raised to about more than Rs 50.000 billions).
Simultaneously a comprehensive campaign was launched by the management through the print media to prove the Bank to have become almost bankrupt after having lost 90% of its loans. I don't know its background but I can say that such type of actions lost the credibility of the Bank in absolute terms.
(To be continued)