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ISLAMABAD: Pakistan has signed a financial advisory services agreement to begin the strategic privatization of Zarai Taraqiati Bank Limited (ZTBL), the country’s largest state-owned agricultural lender, the privatization commission said on Friday.

The move comes as Islamabad faces pressure to privatize loss-making or under-performing state-owned enterprises under International Monetary Fund loan agreements in recent years.

The government expects the sell-off drive to improve efficiency by putting such entities under competitive, corporate management.

ZTBL’s privatization comes at a time when Pakistan is striving to bolster food security in the face of extreme climate patterns by modernizing agricultural finance, helping farmers adopt new technologies and practices critical for boosting yields and resilience.

“The privatization of ZTBL is designed to catalyze investment in Pakistan’s agricultural future by combining private sector efficiency with the bank’s long-standing expertise in agricultural finance,” the commission said in a statement. “The goal is to ensure farmers have timely access to essential financial resources.”

It signed the financial advisory services agreement with a consortium led by Next Capital Limited.

ZTBL operates a network of more than 500 branches nationwide, providing credit to small farmers and rural communities.

Officials said private investment was expected to expand the bank’s product range, introduce modern banking technologies, improve governance and strengthen customer service.

Under the newly signed agreement, advisers will conduct due diligence, market sounding and investor engagement, as well as structure and market the transaction and assist in a transparent bidding process.

NEW DELHI: The international Court of Arbitration lacks any legal authority to make pronouncements on the Indus Waters Treaty between India and Pakistan as New Delhi has never recognized the legitimacy of the court, India’s foreign ministry said on Thursday.

A ruling from the Court of Arbitration last week backed Pakistan by saying that India must adhere to the Indus Waters Treaty in the design of new hydro-electric power stations on rivers that flow west into Pakistan.

Under the 1960 Indus Waters Treaty, three rivers that flow westwards were awarded to Pakistan, with India getting three eastern flowing rivers. Pakistan fears its neighbor India could choke its main water supply, with 80 percent of the country’s agriculture and hydro-power dependent on those three river flows.

In 2023, Pakistan brought a case to the Hague-based Permanent Court of Arbitration over the design of Indian hydro-power projects on rivers that were awarded to Pakistan under the treaty.

The court, in a ruling on Friday that was posted on its website on Monday, said it had jurisdiction over the dispute and ruled the treaty “does not permit India to generate hydro-electric power on the Western Rivers based on what might be the ideal or best practices approach for engineering” of these projects.

Instead, the design of these projects must adhere “strictly” to the specifications laid down in the treaty, the court said.

Pakistan’s Attorney General, Mansoor Usman, said in an interview on Tuesday that, by and large, the court had accepted Pakistan’s position, especially on the design issue of the new hydropower projects.

“I am sure it is clear now that India cannot construct any of these projects in violation of the court’s decision,” he told Reuters.

Pakistan’s foreign ministry said late Monday that the court ruling said that India had to “let flow” the waters of the three rivers for Pakistan’s unrestricted use.

The court said its findings are final and binding on both countries, according to the foreign office statement.

An Indian official pointed to a June statement by India’s foreign ministry, which said that India has never recognized the existence in law of the Court of Arbitration.

Tensions between the two countries over the Indus Waters Treaty soared when India unilaterally said in April that it would hold the treaty in abeyance in response to the killing of 26 civilians in Indian-controlled Kashmir, an attack it blamed on Islamabad. Pakistan denied involvement. Conflict then erupted in May, the most serious fighting between the two countries in decades, before it ended with a ceasefire announcement by US President Donald Trump.