ISLAMABAD, Aug 30: The restructuring process of the Agricultural Development Bank of Pakistan (ADBP) will be completed within the next six to eight months, the bank’s chairman, Istaqbal Mehdi, said here on Friday.

“The restructuring is aimed at uplifting the agriculture and rural sector by raising farm productivity, streamlining the institutional credit and increasing income generating capacity of the farming community,” Mr Mehdi said.

It may be mentioned here that the federal cabinet on Wednesday approved the restructuring of ADBP as a solution to the mismanagement which the bank had been subjected to due to years of politicization of its operations.

The bank management will now run it on commercial lines under the overall supervision of State Bank of Pakistan (SBP), with the agricultural sector’s development being its top priority.

The chairman said after the restructuring process, the ADBP would run as a public limited company under the Companies Ordinance, 1984 after the repeal of ADBP Ordinance, 1961.

“The main aspect of the restructuring plan is aimed at alleviating the poor performance of the bank which had not aided the agricultural and rural sector to the optimum level,” he added.

Mr Mehdi said the restructuring exercise was also aimed at taking into account the employees’ and bank interests in terms of organizational and operational improvement resulting in financial sustainability.

He said the process of restructuring started a few months ago with the initiation of portfolio audit by an audit firm to have an in-depth analysis of the bank’s financial position.

To a question, he said the portfolio audit was on the verge of completion and on the basis of recommendation of portfolio audit report, necessary changes were to be incorporated in the operational financial and organizational aspects of the ADBP for attaining financial and economic sustainability.

He said as part of restructuring exercise the voluntary golden handshake scheme had been announced by the ADBP for all of its employees who were less than 59 years of age with more than 10 years of service.

The scheme has been announced keeping in view the interests of the employees and under this voluntary scheme, the employees have been offered an attractive separation package so that they may not face financial hardships after leaving the bank, he added.

The ADBP chairman said this exercise would in fact minimize the operational expenditure and the skill mismatch at the existing staffing level.

He, however, made it clear that the scheme was being offered on “voluntary basis” and no employee would be forced to leave the institution without his will.

To another question, he said the funds required for the golden handshake would be provided by the State Bank, adding, the existing strength of the bank’s employees was around 8,000.

In response to a query, he said the ADBP disbursed an amount of Rs29.5 billion as agricultural credit to farmers during the financial year 2001-02 with the recovery of over Rs33 billion.

During the current fiscal, the bank is targeting to disburse Rs35 billion as agricultural credit to farmers, he added.—APP