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Govt considering ADBP restructuring

ISLAMABAD: The government is actively considering restructuring of Agriculture Development Bank of Pakistan (ADBP) to make it commercially viable and to enable it to meet the 'millennium challenges'.

Official sources in the Federal Government said that ADBP has prepared a comprehensive restructuring plan (2001-2015) which has been submitted to the State Bank's Governor Ishrat Hussain when he visited ADBP head offices at Islamabad recently.

The Bank's administration believes that the restructuring would not only make the Bank profitable but would play a major role in the enhancement of farm productivity in the country by extending maximum credit to the farmers.

Sources said ADBP has also asked the State Bank to revive its package for sick industries offered in 1997 for a period of one year so that the Bank could recover outstanding amounts from what it calls 'chronic defaulters'.

Sources said the restructuring programme was devised in the light of directions from the State Bank Governor.

Sources said ADBP had suggested different measures in the restructuring plan to improve the operational efficiency of the Bank.

The Bank has suggested the State Bank to allow it to revive its agriculture business projects by rescheduling and restructuring loans, freezing future interest against these loans, write off and remission of loans, transfer of management and induction of financially sound directors besides permission to the Bank to secure loans from other banks.

ADBP says the State Bank should first of all start the reconstitution of the Bank's Board of Directors, which is pending since February 1998 with the SBP.

It said recovery and disbursement target for the year 2000 approved by the SBP amounts to Rs 31 billion and Rs 35 billion respectively against the memorandum of understanding that disbursement should not be kept higher than recovery. The Bank has recommened that disbursement and recovery target should now be fixed at Rs 31 billion each.

Sources said the Bank has also sought tax exemption allowed to ADBP under ADBP Ordinance that now stands withdrawn by virtue of levy of income tax at the rate of 58 percent of total income. The Bank has recommended revival of this exemption.

The Bank has also asked SBP to approve a uniform package for ADBP employees in line with other commercial banks and DFIs. Fortuna