ISLAMABAD, Oct 22: The Asian Development Bank (ADB) has approved $50 million new instalment for Zarai Traqqiati Bank Limited (ZTBL) to further undertake reforms in the organization.

Official sources told Dawn that ADB mission which visited Pakistan early this month termed reforms in ZTBL, formerly known as Agricultural Development Bank of Pakistan, as “amongst the most challenging institutional reforms undertaken in Pakistan.”

The ADB approved the new $50 million tranche, out of $225 million restructuring plan funding, following a positive report given by its mission which visited Pakistan from September 28 to October 10 this year. The bank had earlier disbursed $100 million for three-year restructuring plan of the ZTBL.

The mission has acknowledged the managerial efforts of Mr. Istaqbal Mehdi, President ZTBL in achieving most of the performance benchmarks, which are part of the restructuring plan despite endemic institutional weaknesses. “The mission while observing the efforts to transform ZTBL into a progressive and forward-looking institutions, noted with satisfaction that efforts in restructuring has started showing results and that the bank is on the verge of turnaround,” says the latest ADB’s communication to the ZTBL management, also made available to Dawn.

However, the ADB desired that management should get full support of its Board and the government in implementing the restructuring plan.

The mission is of the view that besides innovative steps taken during ongoing restructuring process by ZTBL, there is a need for pro-actively sustaining the change, so that the bank is poised to be more effective in increasing the out-reach of credit to the poor masses in the rural sector.

The ADB also believes that formation of tripartite control management for good governance and streamlining institutional credit, through positioning of auditors, representatives of complaints and investigation along with regional managers for effectively working would not only help in cascading Non Performing Loans (NPL) but would also increase the audit frequency on quarterly basis thereby minimising risk.