ISLAMABAD: With accumulated losses exceeding Rs100 billion, the board of directors of Zarai Taraqiati Bank Ltd (ZTBL) has rehired seven top executives on a contract without following a competitive process, offering them remunerations three to four times higher than before.

There have been 13 fresh inductions for top positions in the country’s only specialised agriculture bank, according to the ZTBL management, including six from the market for whom advertisements were issued. All 13 executives, including the ZTBL acting president, would be entitled to Rs1.5 million to Rs2m monthly salaries and club memberships besides fuel and other utilities.

The board of directors (BOD) was constituted by the previous PTI government and is set to expire within a few weeks. Sources said the Ministry of Finance (MoF) and the State Bank of Pakistan, both key stakeholders as major shareholder and regulator, had raised objections over the fresh inductions, particularly the internal reappointments and wanted the vacant seats to be advertised but the board overruled their objections and upheld its induction process.

The ZTBL defended the board’s decisions in a written response, while Acting President Asadullah Habib, who was also hired on a three-year contract extendable for two more terms, conveyed through spokesperson that incumbent secretary finance hailed from his hometown and hence the Ministry of Finance would not press its objections. Both MoF and SBP did not respond to written requests for comments for almost three weeks despite reminders, although MoF kept promising on a daily basis to share its views in writing.

Board rehires top officials without competitive process, raises remunerations

Sources said the BOD hired the services of four senior executives from the market about six months ago to streamline the bank’s operations, but the outcome during this limited period was minimal. However, this provided a reason to rehire some of the existing executives after retirement or early exit at similar packages.

Those inducted from market included Group Head Operations Zahid Hussain, SEVP Azfar Latif, Vice President Sabahat Batool and Head of Digital Zeeshan Zafar. The notification for two more inductions against the posts advertised in the media are still pending. However, insiders said despite a separate and a full-fledged Human Resource Division in the ZTBL, headed by an executive vice president, the board hired third party services for inducting new executives.

Based on these inductions, it is reported that the board subsequently reappointed seven blue eyed officers under new terms and conditions, without any advertisement. The new officers will have their memberships in Islamabad Club, 600 litres petrol per month, a minimum salary of Rs1.5m and many other perks. They include Acting President Habib, Chief Financial Officer Muhammad Arif, HR Head Mehboob Rehman, SEVP Qasim Chishti, EVP Qayyum Sukhera, EVP Ijaz Ahmed and Group Head Mustansir Billah.

All of them were earlier working in ZTBL at Rs3.6m to Rs4.5m annual salaries before their reappointment. According to the source, in the process, neither the ZTBL Act nor the Service Rules were followed.

The ZTBL in its response said that SBP had raised observations on terms and conditions being offered in March this year, but after addressing the SBP’s observations, the board has decided to offer reappointments to the seven executives.

When asked about the qualifications or performances that justified the three to four times increase in remuneration packages, the ZTBL said that the board had decided to appoint senior management on a three-year performance contract with market-based remunerations to introduce a performance culture.

“Accordingly, six executives have been recruited from market whereas seven internal candidates have been offered reappointment on performance based contract.”

“The process of reappointment started in 2022 and after deliberation in several meetings of the Board/Board HR Committee, the executives have been offered hiring on a three-year contract.”

The ZTBL said the seven executives were already serving in their respective positions as regular employees and were promoted in October 2022 through a competitive process among all eligible internal candidates by a Departmental Promotion Committee constituted by the BOD. The promotions have been approved by the BOD.

“The promoted candidates have been offered reappointment on contract basis on the terms and condition given under ZTBL approved policy on contractual appointments,” the bank said, adding that terms of Banks Nationalisation Act, 1974 gave BOD the “authority to determine personnel policies”. Such policy decisions are non-statutory in nature and do not require approval of the federal government, it said.

Published in Dawn, July 3rd, 2023