Payment of Rs 10,000 service charge mandatory: ZTBL subsidiary sending MoUs to tractor firms
MUSHTAQ GHUMMAN
ISLAMABAD (January 30 2009): A subsidiary of Zarai Taraqiati Bank Limited, Kissan Support Services (Private) Limited, has sent a Memorandum of Understanding to tractor companies for signing, according to which, it will be mandatory for the companies to pay minimum Rs 10,000 per tractor for the KSSL.
Official documents obtained by Business Recorder reveal that the service charges at a minimum of Rs 10,000 per tractor would be paid to the authorised paying branch of ZTBL by the tractor company that accepts the MoU. The charge appears excessive by all counts especially considering that the tractors are targeted to provide support to poor farmers. A survey conducted by this scribe shows that there is a consensus that the service charge is actually a commission.
The proposed MoU was sent by Anjum Saeed Akhtar, Managing Director/CEO of KSSL on December 1, 2008. Local tractor manufacturers are resisting this 'service charge' and moving from pillar to post and requesting that the charge be duly notified, the sources added.
"If ZTBL has decided to provide loans to purchase tractors through its subsidiary "KSSL," all it has to do is notify the decision. If KSSL wishes to levy a service charge at an indicative rate of Rs 10,000 per tractor, it will be made part of taxes, like others imposed by the government," the sources quoted one of the manufacturers stating in a letter to the MD, KSSL on January 28, a copy of which is available with this scribe.
The MoU sent to the tractor companies is as follows without edit. It maybe noted that blank spaces are provided for the tractor company to fill its registered name. This MoU has been signed between Kissan Support Services (Pvt) Limited, a company incorporated under Companies Ordinance 1984 hereinafter referred to as "KSSL" a subsidiary of Zarai Taraqiati Bank Ltd (ZTBL) and between M/s _____________________________ a company registered under Companies Ordinance 1984, hereinafter referred to as "_________________" for collaboration to supply tractors manufactured by the company.
OBJECTIVE: To arrange cultivation of crops timely and efficiently, ZTBL's borrowers/farmers are facing a lot of constraints such as undue delay and over charging of funds in purchase of tractors. As such to facilitate the farming community KSSL has planned to intervene and offer its services for efficient delivery of tractors to the purchasers/borrowers.
MoU: This MoU provides details of services to be rendered by KSSL a well as obligations under the said collaboration. Now therefore, this MoU witnesses as under:- While issuing supply order to ______, ZTBL branches will provide a copy to KSSL through E-mail or fax followed by post.
On receipt of E-mail/faxed copy of supply order, KSSL will get register the booking order with _______________ on the same day to obtain seniority Number of the borrower. When the tractor is ready for delivery, ________ will intimate the expected delivery date to KSSL duly endorsing copies to respective ZTBL Branch and borrower.
On receipt of confirmed delivery intimation letter, the KSSL will arrange the issuance of demand draft by the respective ZTBL branch under intimation to KSSL. On receipt of demand draft the _______ will ensure the transportation of tractor through KSSL to the premises of respective ZTBL Branch for handing over the same to the authorised official of KSSL for the purpose within the given time schedule.
The failure to deliver the tractor in time, Rs 150/- per day will be charged by debiting _________________________ account with ZTBL and credit to the borrowers account. The authorised official will deliver the tractor to respective customer by obtaining acknowledgement of receipt of tractor showing actual date of physical delivery of tractor with make/model, from the customer.
KSSL's authorised official of ZTBL branch will dispatch the above said documents (with a copy of KSSL) to paying branch for crediting the tractor manufacturers' account.
The __________ undertakes to authorise the paying branch of ZTBL to deduct service charges at a minimum rate of Rs 10, 000/- per tractor while crediting the remaining amount to its account in lieu of demand draft issued for the purpose. The amount deducted on this account will be credited to KSSL's account opened by it for the purpose.
The _____________ will ensure that after sales services are adequately and promptly provided by its authorised workshops for tractors delivered to ZTBL's borrowers through KSSL. KSSL will also ensure transit/annual insurance of tractors delivered through it. Both parties ie KSSL and ______________ will be bound to observe the relevant time subject to above conditions specifically agreed for booking/delivery of tractors to the customers in letter and spirit.
Copyright Business Recorder, 2009