KARACHI: The Paki­stan Banks Association (PBA) says banks are willingly engaging with the recently-launched Zarkhez-e (Asaan Digital Zarai Qarza) initiative because it is structured as a commercially viable incentive scheme.

Referring to a Dawn story titled ‘The flaws of coercive sustainability’, published in the Business and Finance Weekly on Jan 5, a PBA spokesperson argued that a key distinction of Zarkhez-e is that eligibility of the borrower does not equate to entitlement. The decision of who to lend to and who not to lend to, rests squarely with banks.

He said banks also remain free to obtain security and collateral in line with their internal risk policies. He insisted that the banking industry’s participation in this scheme was not a result of pressure from the State Bank or the Ministry of Finance.

The PBA, however, acknowledged that a weak recovery framework was indeed a challenge for the banking sector. But the Zarkhez-e scheme has been designed to mitigate these legal risks through government-backed incentives: a 10pc first-loss guarantee as a tangible buffer against default and optional crop loan insurance as a tool to de-risk the portfolio, though, he said.

The spokesperson maintained that combined with real-time Nadra ID verification, PMD mobile SIM verification against CNIC, and the Land Information Management System for digital agronomic data, these cogent incentives make participation a logical business decision.

Published in Dawn, January 9th, 2026