The Pakistan Banks Association (PBA) has confirmed that commercial banks are willingly engaging with the Zarkhez-e (Asaan Digital Zarai Qarza) initiative, citing the program’s structure as a commercially viable and incentive-driven scheme. This statement comes in response to a Dawn report published on January 5, which highlighted perceived challenges in coercive approaches to sustainable lending.
A PBA spokesperson clarified that a key feature of Zarkhez-e is that borrower eligibility does not automatically guarantee entitlement to loans. Lending decisions, including borrower selection and terms, remain entirely at the discretion of participating banks. Institutions are also free to enforce security and collateral requirements based on their internal risk policies. The spokesperson emphasized that banks’ participation is voluntary and not the result of pressure from either the State Bank of Pakistan or the Ministry of Finance.
While acknowledging that a weak recovery framework poses challenges to the banking sector, the PBA highlighted that the Zarkhez-e scheme incorporates government-backed incentives to reduce legal and financial risks for lenders. The program offers a 10 percent first-loss guarantee as a buffer against default and provides an optional crop loan insurance feature, enabling banks to manage risk while supporting agricultural financing.
Digital verification tools further enhance the program’s risk management framework. Real-time verification of borrower identities through Nadra ID, cross-checking of PMD mobile SIMs against CNICs, and access to agronomic data through the Land Information Management System collectively streamline due diligence and portfolio monitoring. The PBA argued that these technological measures, combined with financial incentives, make participation in Zarkhez-e a rational and profitable business decision for banks.
The association also highlighted that Zarkhez-e’s design aims to support the agricultural sector while maintaining the financial stability of lending institutions. By reducing potential defaults and providing structured government support, the initiative aligns commercial interests with policy objectives to expand agricultural credit.
In summary, the PBA reiterated that the banking industry’s engagement with Zarkhez-e reflects careful business assessment rather than regulatory coercion. With robust incentive mechanisms and integrated digital verification systems, the program provides a model for promoting sustainable agricultural financing while safeguarding banks against operational and legal risks.
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