A bipartisan adjournment motion has been tabled in the National Assembly for a debate over the poor performance of Zarai Taraqiati Bank Limited (ZTBL). This is the third time a move has been made for a debate on the affairs of the bank.
Earlier, another motion of breach of privilege was moved against the head of ZTBL for not responding to telephone calls from an MNA and also for an explanation from the ZTBL president for giving a directive to the bank employees not to approach members of parliament for promotions, transfers and postings, with a warning that such 'sifarish' (recommendation) would go against them.
That is not all; another member had sought information on petty expenditure on petrol by the ZTBL chief. It was also asserted in this motion that the ZTBL chief ignored 'sifarish' from the Prime Minister as well as the Minister of State on Finance for obliging members of parliament. It is obvious that our elected representatives have yet to learn lessons from the experience of a nationalised banking sector.
Politically motivated loans causing huge non-performing portfolios, high administrative costs (turning banking institutions into employment exchanges) and nepotism in induction, promotion and posting of personnel were the factors cumulatively rendering them bankrupt. The taxpayers, through the State Bank of Pakistan, had to pour Rs 54 billion in the Agricultural Development Bank, now renamed as ZTBL.
Under the restructuring plan, this amount has been converted into equity. The Asian Development Bank has provided around $150 million for corporatising the institution. There is now a Board of Directors in place to monitor the performance of the management. All the directors are nominees of the Federal Government.
Some of them are eminent personalities from the private sector, besides representatives from the Ministries of Finance and Agriculture. The Chairman is Special Secretary to the Prime Minister. Thus the government has tried to replicate the formula which successfully turned around the National Bank, Habib Bank and UBL.
On the other hand, our parliamentarians, ministers, both federal and provincial, and powerful bureaucrats still try to influence the government and private businesses for jobs, promotions and postings for their favourites. It has become part of our culture and is a norm.
The only difference is that their influence over the private sector is limited compared to the public sector. Yes, political parties through their labour wings can and do create problems for management. We are witnessing an instance of it right now in Habib Bank.
The compulsion for political leaders to make a call when a voter seeks help is understandable. But then it should be left to the management to accept or ignore the request. A good management likes to have a merit based system. Good quality professionals and workers with the right skills are an asset to any organisation.
Management should and do hold it against an employee seeking outside help for furthering his/her request. With its head office in Islamabad (close to the seat of power) ZTBL is a hostage to politicians and officials. Whenever there is a flood or drought or any other calamity, Presidents and Prime Ministers willy-nilly announce some sort of relief. It can be a write-off or a reduction in the bank mark-up.
The federal government by an order had reduced the mark-up on ZTBL loans from 14 to eight percent. The bank is now seeking Rs 3.4 billion as the differential in loss of income from the government's decision. Another Rs 1.4 billion have been written off on presidential orders, and the bank now wants this amount converted into equity.
House cleaning in ZTBL has become essential to save this vital institution. Induction, postings and transfers were hitherto based on political considerations.
Now that the management is trying to remedy the malaise and break the nexus of its self-seeking staff with politicians, parliamentarians and ministers from the agriculture belt want their favourites to remain posted in their constituencies just like the police and irrigation officials of their choice, so that they remain helpful to them and not answerable to their superiors.
The politicians lament that parliament has a minimal role in major policy making in the country. Our elected representatives want the government to hold debates and consult them on all major policy issues. They are right. It should be the norm. But should there not be some soul searching on their own part?
Are they not misusing their position through frivolous privilege motions? House committees, instead of holding hearings to approve legislation, are involved in summoning PSEs' bosses to answer unimportant questions. With the National Accountability Bureau on one side and parliament on the other, a vice like situation has developed for PSE management.
The turnaround under the military government in PSEs was primarily due to the induction of professionals from the private sector on the Boards of Directors and placement of competent men in management. They were allowed to work freely to turn their institutions around without any kind of political interference.
What is being witnessed now only gives democracy a bad name. The Government needs to assign the SBP the task to privatise ZTBL on fast track basis - as per loan commitment with ADB - and the Central Bank has to shield the bank from outside influences and interference.