ISLAMABAD, July 20: The Zarai Taraqiati Bank (ZTBL) has reduced its mark-up rate on agricultural loans from 14 to 9 per cent per annum from July 1 in pursuance of President Gen Pervez Musharraf's announcement of a relief package on the occasion of a farmers' convention.

A press release issued by the bank here on Tuesday said the reduction had been announced in order to optimize and trickle down the benefits of the restructuring to small farmers and rural poor.

It said all agricultural loans (excluding project and micro- credit) disbursed after July 1, 2004, would be charged at the rate of 9 per cent mark-up per annum. Borrowers will be eligible for the 1 per cent rebate/reduction in the mark-up from July 1, 2005, if they repaid their instalments within due date.

The bank has also notified a recovery relief package for its borrowers with an outstanding amount up to Rs5 million and an additional special package for small borrowers of the calamity-hit areas of Balochistan with an outstanding amount up to Rs0.2 million provided they apply before September 30.

The press release said reduction in the mark-up rate would also be applied on all tractor and tube-well loans disbursed up to June 30, 2004, and the reduced mark-up would be charged from July 1.

The loan instalments will be revised and farmers will be eligible for 1 per cent further rebate on repayments of revised instalments before the due date including clearance of all previous outstanding instalments (principal plus up-to-date accrued markup).

All agricultural loans (general credit) with total outstanding balance of up to Rs0.5 million as of 30.04.2004 overdue from 31.12.2000 (and in loss category now) can be settled under the package on repayment of 25 per cent of outstanding or principal amount provided the development area of the borrowers has been declared calamity-hit continuously for the last three years.

The recovery relief package offers the facility to all borrowers who apply before September 30 with a minimum 10 per cent of outstanding balance as down payment.