DEWDROPS

I was expecting some guests in the evening over a cup of tea. I went to my kitchen garden to pick up some homegrown vegetables. We have a few beautiful flowers plants in the garden which are in full bloom. I picked a good number of them and kept them in a flower vase in the drawing room to create a good impression before my guests. The room really looked lively with a lot of fragrance and freshness of flowers.

When the guests came they had words of appreciation for the beautiful flowers and wanted to know as to from where had I bought such fresh and beautiful flowers. I really felt elated by the good words and I told that the flowers were from my own garden. In the heat of excitement, I invited all to see my garden. They were all happy to see the green, fresh, and organic vegetables and the flowers and appreciated my gardening skills. There was a very cute baby with the guests. She was looking at the flowers with a strange sense of curiosity. I asked her,” Didn’t you like beautiful flowers, my dear”? “I liked, but why are there very few flowers on the plants, uncle,” She asked. I told her that since I have plucked many that day itself to decorate the drawing room and in a few days more flowers will come on the plants. She didn’t seem satisfied and shot back, “Uncle, the flowers look fine only on their plants and not in the drawing room”. I tried to convince the baby, “Didn’t you like them in the flower vase in the drawing room, my dear”. She retorted, “Uncle, when we had seen plenty of them in the flower vase, then why are you showing us a few on the plants now”. I felt embarrassed,  and then her mother came to my rescue scolding the little angel to stop arguing. “Mom, the teacher says not to pluck flowers as they too have life and they feel a lot of pain”, Shot back the little girl. She continued further and asked me with complete innocence, “Uncle, didn’t your mam ever tell you not to pluck flowers?” I felt ashamed before the little angel and admitted that my teachers too had taught me many times not to pluck flowers or harm the plants. She exclaimed with an innocent gesture by putting her little hand on her mouth, ” Oh! uncle, you didn’t obey your teachers, my God!” Her mother pulled her to her lap and advised her not to argue with the elders. “Sorry uncle”, She said and went inside to play with other children as advised by her mother.

We had tea and after a lot of chit chat the guests left but the impression the little girl created kept rewinding in my mind throughout the night and I couldn’t have a sound sleep. I got up early in the morning and went to the garden to refresh myself. I looked at the flowers but everything didn’t seem to be as usual.

The dewdrops on the petals which used to look like pearls shining under the fresh ray of the sun and displaying different rainbow colors were looking like tears on the cheeks of the flowers.

I had become sentimental by the brave and sane words of the little girl. It appeared as if the flowers had wept out of pain the whole night. I looked at the flowers with love and resentment and tried to kiss them when the tears rolled down their cheeks. This made my eyes wet and with a remorseful voice I whispered: “sorry, I will not harm you again my dear, please forgive me.”

I had become too emotional and I could hear the feeble sobs of the flowers who were hurt, annoyed, and expressing their anger and grief. I could hear them saying, “You man who considers yourself as the top of the God’s creation and very close to Him is actually the cruelest of all the creatures on this planet. You never hesitate to hurt and give pain to any creature in this world including your own race and that too without any meaningful purpose. We wouldn’t mind, had you plucked us for your basic need i.e hunger, but you did it just to decorate your home which you could do with other things without taking any life. It is not only we the plants but you kill rare animals and birds; the finest of God’s creation and hang their skin on the walls and their heads on the pillars of your house as showpieces. You want to show to your fellow men that you are very brave and have hunted such mighty beasts. We do agree that God created everything on this planet for your proper use but certainly not for your misuse. Our cries are not audible and that doesn’t mean that we don’t have pain and feelings. You cut us from our branches and put us in the flower vase with some medicated water which keeps us in a state of coma for a little longer time so that you can enjoy our freshness. It is as if we have been put on a ventilator where we can neither live nor die peacefully but keep on suffering abundance pain. God gave you wisdom with some great purpose but you use it only to show and prove that you are the most clever of all the creatures”.

 They continued, “You are wasting God’s gift i.e the wisdom on negative tendencies and your mind games instead of utilizing the same for the further improvement of your race, character, thinking, and behavior matching God itself. Instead of going up you are going down. You are perhaps the only creature on the earth who don’t contribute to the perseverance of ecology and the balance of nature.NATURE’s EQUILIBRIUM It seems as if you are bent upon turning this beautiful planet to the worst of the hells”.

They continued, ” we provide you the best we have like our beautiful colors, our sweet fragrance, and help in maintaining the delicate balance of nature which supports life of all types including that of yours on the earth. We have nectar in our bosom which we provide to the bees who come to pollinate us and which they convert the same into sweet and nutritious honey for you. Many insects dance around us and produce a sweet humming sound which pleases your ears. we attract nature’s most beautiful butterflies and your children run after them in excitement. We deserve and expect a fair deal in return, but you instead give us a lot of pain and sufferings. Whenever we notice you approaching us we start shivering with fear”.

The feeble words of the voiceless flowers were piercing through my soul. I realized that the innocents are the real braves who have the courage to speak the truth so plainly and with the utmost ease. My mind was restless and cursing me. I promised I will not hurt them again and let them live a full life very peacefully. I assured that I will nurse them with more compassion and love. I slightly touched the cuts/wounds, I gave them the other day. The subtle repentance gave me some relief, and my day passed peacefully. I had a good sleep on that cloudy night. The words of the little angel and the feelings of the flowers had changed my behavior towards other species on this earth.

I got up early in the morning and rushed towards the garden to see the flowers in order to refresh myself. To my utter surprise, the tears appeared to have dried and the flowers too seemed to have passed the night peacefully. The flowers and the new buds that have opened during the night were vacillating by the pleasant breeze that was blowing. they seemed to be free and fearless and inviting me to come and enjoy with them. Their welcome gesture made me believe that they have trusted my words. This gave me an indescribable satisfaction.

HISTORY-A thing of Past and a Lesson to Future.

History is an important subject which no one can afford to ignore if one is really interested in making progress and development in life. Both progress, as well as development,  are relative terms and always need a platform to measure them in any field. This platform is provided by history. Without the availability of an honestly documented history written with an unbiased mind, we can’t compare our yesterdays with our present and would fail to properly plan our future. It is therefore important to have an unbiased history available in order to match our present with our past in order to understand whether we are moving in the right direction of making development and progress in life.

The date of the origin of mankind is not known. All we know is that mankind evolved from lower species and by and by developed to the present form. Evolution from lower species to higher ones also changed his ways of life like thinking, eating, dressing, behaving, fighting, defending, learning, etc. He went on making improvement in all fields of activities by utilizing the resources available to him all around. He went on moving forward from the stone age to the iron age and to the machine age and now to the electronic and atomic age.

Humans, unlike any other species, have an instinct of dissatisfaction always present in them despite all the heavens at their command. Humans are never satisfied with anything and always try to have more and more, may it be physical possessions or other mental attitudes such as enjoyments, pleasures, tastes,  power, command, respect, status, lifestyle, etc. etc. In order to satisfy their ego, they always compare their present with their past. This instinct is the cause of the so-called development and progress of mankind.

The very ancient history seems neither recorded so is not known. Some inscriptions on stones/rocks are not readable or are not decoded for lack of knowledge of the language in which these are written. Anyhow some ancient books considered to be holy by different religions or some fiction books do contain a lot of events or imaginations of historical importance, which have set a goal or a benchmark for developing various items for making life better or easy for the mankind in order to satisfy his lust for power, pleasure, and dominance over one and other.

The description of “Brahamastra”,  and “Agnibaan” during the great battles of Ramayana and Mahabharata seems to have inspired the humans to make atom bombs, long-range guns, intercontinental ballistic missile, and other items of modern warfare. The mantras whispered before firing these deadly arrows may be the secret codes as are used in releasing/firing the modern day missiles and bombs. The reference of “Urhan khatola” and Flying carpet for transport in some fiction books seem to be the base for the invention of airplanes and rockets. Similarly, the inspiration for the invention of television seems to have been taken from the description of the battle of Mahabharata by Sanjaya the advisor to the blind king Dhritarashtra, who had the power to see events at a distance right in front of him. Without being present on the battlefield he narrates all the events of the battle to the blind king in the same way as we see live today on TV. Had those events or the fictional conceptualizations been not recorded in the books as history, the modern gadgets in the present form would not have been possible.

The history of great battle techniques helps in further improvements in modern warfare. The cultural history of dance, music, poetry. paintings, engravings, designing has added to the modern-day fine arts for a better lifestyle.

The history of the old system of medicine, surgery, games, and public administration is the basis for today’s developed systems in these respective fields.

Whatever is happening today will be history tomorrow and the humans by nature would continue moving forward with improvement on the existing systems. They will never be satisfied and will go on craving for more and more development and progress in all physical fields of activity.

The irony is that despite so much struggle for the countless ages for making more and more progress, the human race remains unsatisfied as ever before. It is believed that humans evolved from the lower species and which is the actual progress in the real sense. Now they seem to be stuck up in this human form and there is no further progress. This is the reason for actual frustration and dissatisfaction for him. No efforts are taking him further to a newer and a better form of species. Is the human race the last and final destination? Had it been so, the humans would have been the most satisfied and the happiest lot, which they are not.

The progress for which we toiled for ages has failed to make our life better. If we compare ourselves with the prior races we are as good or as bad as they were.

Still, we are enslaved by greed, anger, hate, intolerance, bias, and complexes of various types. We have not made any progress on the real values of human life.

We, therefore, need to evaluate our thought process and channelize it to make progress and development in the field of values of life which the great Saints, Sufis, and messengers of God taught us. Our motto of life should be love, compassion, universal brotherhood, and tolerance so that we can make this beautiful planet a place worth living. We have to pick up from the history the best things and follow the best examples to make life worth living without any tension and fear or hate and ignore the part which takes us away from these values of life. We need to follow the BEST.

 

 

 

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THE DANGEROUS TRENDS IN BANKS; FRAUDS AND NPA’S.

Banking is mainly a commercial activity with an aim at an overall economic as well as socio-economic development of the nation. Banks are required to function within set norms and procedures. Deviations from the defined track by anyone under any circumstance is bound to derail the whole system and result in the losses both financial as well as reputational. A financial loss can be covered by provisions and insurance but the reputational loss is difficult to be covered as it spreads like an epidemic. Any mishandling of any affair of the bank especially the adequate supervision, governance, and the duly set policies and procedures are sure to result in the frauds and increase in NPA’s.

There were times when default and frauds were not so common and the society was looking at this with disdain. The things seem to have taken a complete U-turn in the present times. The recent serious fraud and NPA cases show that very reputed persons and business houses have entered into these disgraceful games without any visible sign of regret or shame on their faces. Society seems to have acknowledged such disgraceful acts as normal and a usual thing. This is a dangerous trend for society as a whole.

In many cases of big NPA’s and big frauds, the big bosses in the banks have been found hand and glove with these defaulters and the fraudsters. The lack of proper corporate governance, lack of adequate supervisions, DEFECTS IN BANK AUDITS AND INSPECTIONS and to some extent connivance with the perpetrators of frauds are the main contributors to the happening of these serious things in the banks.

The persons at the top of decision making in the financial institutions are appointed under the political influence, so they have political linkages and leanings. Any politics in the financial system is bound to spoil it and the results are before all of us. The financial institutions need to be kept autonomous in the real sense and the regulator needs to be given more teeth and authority in order to effectively regulate the economic system in the country. No doubt that the reins of the economy have to be in the hands of the government but it is always advisable to use the reins for guiding the horse to change the desired directions (BANKS; LEVEL FINANCING). If we constantly keep on pulling the reins, it will retard the speed of the running horse and prevent him from gaining the desired momentum in his speed. The banking system, therefore, needs to be allowed functional autonomy in the real sense, however within the overall control and guidance of the regulator of the economy.

For the past few decades, there has developed a trend and a very unhealthy practice of outnumbering the competitors in allowing loans to different segments of the society in the name of upliftment and development. In such a mad race for scoring more numbers, the basic principles of lending are compromised resulting in the creation of mass indebtedness as well as unnecessary NPA’s Bank’s NPAs. Causes and Remedies.  Such loans seem to serve the political class in securing more votes than any improvement in the overall development of the particular sector. Agriculture and the allied sector is one such example where loans are given under pressure from the political class and where the basic parameters of loaning are compromised with the result that the poor farmers fail to repay. The debt burden on the poor goes on increasing as he fails to repay because of the failure of his crop either due to floods, or the draught, or poor seed quality, or unavailability proper pesticides and fertilisers in time. Farmer suffers on account of the failure of the crop as well as for the good production. In the absence of a suitable storing capacity/facility, a properly regulated market, and the higher input cost as compared to the cost of yield he is left with no other alternative than to shun his age-old agricultural occupation and migrates to some other activity AGRICULTURE: A SERIOUS PRIORITY. in order to make his both ends meet. And then comes another trend of mass loan waivers at the very instance of various political parties who have not the welfare of farmers in sight but the vote for their own welfare. This trend too is very serious with long-lasting implications for the economy as a whole. Money for the loan waivers for anyone doesn’t go from the pocket of any party but from the public exchequer. The state should, therefore, create proper infrastructure for the agriculture sector such as availability of seed, fertiliser and all inputs at suitable cost, irrigation facilities, the creation of flood channels for taming the floods, elimination of middlemen from the market by introducing a properly regulated market in order to ensure that the farmer/producer realises the minimum support price to cover all input cost with a suitable profit. The farmer needs to be empowered thus enabling him to stand on his own legs rather than remaining dependant on a class which keeps him exploiting forever.

The farmers are a very hardworking, honest, simple, and self-respecting class of people.  They don’t want any free favors. Even in the very adverse circumstances, they have kept the food bowl of the country full in order to feed its subjects. All they need is proper support and no undue favors or exploitations.

Loan waivers for one section induce an allurement for other sections for similar favors and this unending cycle if set in motion is a very dangerous trend for the banks and the economy as a whole. The existence of such trends in the banking system is eroding the trust of the public in these institutions of economic development. DWINDLING TRUST IN BANKS- 20 Steps/ Remedial measures Suggested Banks, therefore, need to strengthen their systems and procedures, supervisions and controls, recovery management Management of NPAs -Some recovery techniques. as well as NPA management systems.

 

TEAM BUILDING

No one is perfect in every field of activity in this world. One always needs a team to accomplish various tasks in life. Any task however small it may be requires efforts of a team for its accomplishment. A good leader requires a good team for success in his mission and likewise, a team requires a good leader for leading it. Both are supplementary to each other. Good leaders therefore always build good teams to support them in the achievement of their goals in life.

Building a good team is an art and it requires experience, wisdom, strong will, tolerance, and tact. Same applies in choosing a good leader because ‘A BAD LEADER CAN SPOIL THE EFFORTS, GOOD WORK, AND THE REPUTATION OF A GOOD TEAM AND A BAD TEAM CAN SPOIL THE FUTURE AND THE CARRIER OF A GOOD LEADER’. The history is full of such examples where the situations worsened because of the adverse combination of leaders and their teams. For success in different aspects, activities, and missions of life it is as such very important to build good teams, be it for the running of the affairs of the family, a game, an organization, a party, or a nation. At the same time, it is all the more necessary to follow a good leader for all-round success in life. Following few suggestions are made for building a good team in order to successfully achieve the desired goals and accomplish tasks:-

  • Always choose honest, bold, dedicated, and intelligent people in your team.
  • All the team members should have the same motto, same goal, the same concern, and a deep sense of belonging for the organisation they represent. Any personal interest spoils the team and ultimately the organisation they represent. Personal interests act as a slow poison for the organisations.
  • Full freedom should be provided to the team members to put forth their point of view while discussing the issues within the four walls and their point of view be appreciated and taken well care of. An honest difference of opinion must always be encouraged and appreciated. No member should be dodged or reprimanded during the course of discussions, rather they should be encouraged to express their views fearlessly. Please understand that you as a team leader are not the only wise person in this world, and otherwise also as a team leader, you have the right to agree or disagree with any suggestion put forth by any member and take a final decision. So listen to all with patience. Once you discourage any member from putting forth his point of view he would hesitate to contribute his share of experience and wisdom in the future. Once a common decision is agreed upon all the members should own it. There should not be any bickering by any member outside the four walls of the venue once a final decision is agreed to be implemented, not even in the circumstances where the decision fails to bring the desired results. The success or failure of a decision depends upon many visible and invisible circumstances. Some decisions may not meet the desired results.

    The leader should be honest and bold enough to own all failures and pass on the credit for all successes to his team.

  • A leader should be able to differentiate between a critic and an opponent. While a critic should be appreciated because he keeps you active and alive to the situation and provides his services without any cost to point out your shortcomings as against an opponent who opposes all your action irrespective of any discrimination between a bad and a good decision/action. Opponents should be totally ignored without taking any cognizance.
  • Keep members in your team who are not only loyal to the organisation but also loyal to you and not those who are only loyal to you and not loyal to the organisation. Beware of the sycophants who are loyal to you out of compulsion or with some motive other than the welfare of the institution. They are the ones who would be the first to desert you and hit you once you show signs of weakness or of losing grip on the management of the institution. Such dangerous species should be kept out of any decision making or implementing the process. Such elements need to be identified and kept under strict watch.
  • As a leader behave as head of the family and not as a despot.

When there is Same concern, Same motto, and the Same goal in a team and the leader provides equal opportunity to all, listens to all and appreciates the concern of the team members ; then the success and harmony always knocks at the doors of the organisation they represent.

BANK’S BUSINESS; Few Suggestions. Part…..3.

In part 1(BANK’S BUSINESS; Few Suggestions. PART….1) and 2(BANK’S BUSINESS; Few Suggestions. Part….2) of the blog, different suggestions were put forth for the banks for improving the health of their institutions. Three remaining suggestions are discussed here under:-

  • Creating different layers of income

Banks shouldn’t depend on only one type of income i.e from interest on loans and advances. They have now many other fields available for creating different layers of income such as (1) Bank insurance (2) Selling of mutual funds (3) Trading of shares          (4) Providing Depository services to clients(financial services for clients) (5) Making treasury operations more efficient (6) Better cash management (7) Providing fee-based services to various Govt. departments, institutions and Corporates for collection taxes, fees or their bills (9) Providing cash management services to big religious trusts, Corporates, railways, airlines, and metros etc.(10) Providing consultancy services for different activities (11) Providing non-fund based facilities such as letter of credits and bank guarantees (12) Acting as bankers to The Issue and underwriting the Issue of shares etc. etc.

Earning income is important but plugging its leakages by exercising effective control over all types of capital and revenue expenditures too is very important. ‘Spend where necessary but strictly avoid wastage’ is a mantra for an efficient control system on revenues.

All these services are very lucrative but require properly trained and dedicated manpower to handle these portfolios.

  • Training and upgrading of knowledge.  

Providing proper training and upgrading of knowledge of the staff at the operational levels is very necessary. It is generally observed that the staff doesn’t take the training seriously and consider deputation to training as a pleasure tour on paid holidays. This concept/notion is very dangerous. Providing training to staff is a very expensive exercise and in addition to heavy expenses, it takes a toll on the quality of services which get affected during the absence of the concerned staff from their active duties. We all know that it is only the men in the armed forces who take their training very seriously because they are aware of the fact that they would be the first to suffer the consequences of not taking the training seriously.

Both these aspects of heavy expenses and non serious attitude towards training can be taken care of by following the ‘DEEP SE DEEP’ model of providing training. There is no dearth of prime training institutions in the country and abroad. A few intelligent officers from the senior scales can be deputed for training to a particular institute for training in a particular field with a clear understanding and instructions that they will follow the schedule of training very seriously, have discussions with the experts who provide training in order to remove doubt if any and come well prepared to impart the same training to other fellows in the bank on their return. These officers so trained be required to impart training to other staff members in batches at the bank’s own offices/Premise/training centres in the evening for a few hours. The staff so trained will have to follow the same routine of providing training to other staff and so on. This model will save expenses, make the trainees accountable and experts, and create in-house expertise in many fields of activities. This will also create a lasting bonding amongst various cadres of staff as well as a sense of belonging for the institution. Bank’s training centres can be made self-sustaining and income generation  units by providing training to staff of other banks in specialised fields at a suitable cost/fees.

  • Customer meets with higher level executives.

A good leader is a good listener. People want to be listened to. They feel relieved and delighted once they are listened to. They feel that they are cared for and are important. Bank’s top brass should therefore not ignore this aspect of public feeling at any cost and shouldn’t feel shy of holding customer meets and face criticism if any with a good spirit. This creates long lasting bonds with clients as they feel that they are important. Any cutoff from the masses is suicidal for the banks. Banks, therefore, need to remain in touch with their customers, listen to them and implement the good suggestion forwarded by them.

BANK’S BUSINESS; Few Suggestions. Part….2

In part one of the blog suggestions regarding resource mobilization were discussed (BANK’S BUSINESS; Few Suggestions. PART….1). In this part, few suggestions are offered for an effective and healthy credit dispensation. A healthy credit dispensation requires:-

  1. Selection of a developing and long lasting sector/a viable economic activity for credit dispensation.
  2. Selection of the right prospective borrower/group of borrowers.
  3. Proper and scientific evaluation of the proposed activity/ proposal of the prospective borrower.
  4. Proper evaluation of the risk factors involved and mitigation of the same.
  5. Availability of adequate tangible and purposeful security as well as ensuring the availability of proper margin( Borrower’s part of the investment in the proposed project/activity).
  6.  A proper evaluation of the proposal at all levels and disbursement of the same by the dedicated, sincere, honest, and well trained and qualified staff.
  7. Need-based disbursement of the loan after proper execution of the required legal documents and after meeting all the terms and conditions prescribed in the sanction letter.
  8. A regular post disbursement followup to ensure that the funds disbursed are actually utilized for the purpose for which the same have been disbursed.
  9. Regular spot inspections of the unit in order to ensure that the same is running properly and the inventory level is not depleting.
  10. Timely renewal of the facilities allowed/DP note and periodical valuation of the property mortgaged to ensure that its distress sale value is sufficient to cover the amount outstanding at any given time.
  11. A regular follow up of the loan portfolio.
  12. Any concession in the rate of interest in any sector shouldn’t be upfront, rather it should be a backend offer on the timely repayment of the loans. This would encourage timely repayment of loans and prevent them from slipping to the NPA category.
  13. A timely action for regularization of any account showing signs of sickness is always a better option. (Bank’s NPAs. Causes and Remedies.
  14. Very effective and robust recovery management. (Management of NPAs -Some recovery techniques. )
  15. Settlement of NPA account by negotiation should never be less than the value of all the available securities including the personal as well as third-party guarantee available, and the same should cover the amount due in full with up to date interest including all legal or other costs. Concession if any should not be encouraged and be given only in very deserving cases on the merits of each case.

Although absolute freedom is not available for exercising  the choice for selection of a sector for credit dispensation in view of the social responsibilities on the shoulders of the banks, yet they should after meeting their responsibility of financing the social sector/priority and the neglected sector, make a firm choice for deployment of their funds in the sectors of their choice where they have trust, experience, and confidence. Niche banking is always preferable unless the staff is well trained to handle all other sectors. Many banks have suffered a lot by fishing in the troubled waters in absence of experience to swim across the tides.

Selection of the borrower should be independent. Undue laxity, influence, or any pressure is sure to bring bad results. There should be no compromise in the selection, appraisal, sanction, and disbursement of the loan. BANKERS MUST BEAR IN MIND THE FACT THAT ONCE THEY COMPROMISE IN THE SELECTION, APPRAISAL, SANCTION, AND DISBURSEMENT  OF ANY LOAN DUE TO ANY CONSIDERATIONS, BE IT POLITICAL PRESSURE OR OTHERWISE, THEY WOULD AT THE END HAVE TO COMPROMISE A LOT WHILE RECOVERING SUCH LOAN. There is no dearth of live examples of such cases, especially in the very recent past.

There should never be any haste in the sanctioning the loan and nor should there be any undue delay. Evaluation of a proposal has to take some justifiable time. After all, it pertains to the parting with the public money which the public has kept with us with extreme confidence and trust. Unless we maintain that trust, we can’t expect to attract good resources.

Every activity has an element of risk attached to it. This has to be honestly identified and properly provided for. Suitable legal and tangible securities which are properly identified are to be obtained in addition to getting the same along with all inventories properly insured against all risks. All risk mitigation factors as advised by the risk management departments of the respective banks be adequately taken care of. Banks these days are offering margin free loans i.e 100% financing and which is not a healthy proposition. The borrower must have some stake in the activity financed to him or otherwise, he would have no pains/interest in carrying out the activity judiciously as he has nothing to lose in case of a failure.

Four qualities/attributes of the staff; Honesty, Sincerity, Dedication, and a deep Sense of Belonging for the institution are the basic necessity for building a strong financial institution. Any lacking in these basic convictions in the staff is bound to dupe the banking sector. There is no dearth of allurements to staff and once they swallow the bait, the hook is sure to get entangled in the throat of the staff as well as the bank resulting into very heavy losses. Therefore staff in the bank and especially in the credit department should be honest, dedicated, sincere and well trained and their knowledge should be got periodically updated so as to keep them abreast with the day to day changes in their field of activity. There should never be square pegs in the round holes in the credit department because of the sensitivity of this very vital portfolio in the banking sector.

Once the loan is sanctioned, both the proposed borrower as well as the branch staff are relieved and excited. This is the time when most of the mistakes are made. Even a single penny shouldn’t be released unless all legal documents are properly executed, got vetted, and all terms and conditions of the sanction letter have properly been complied with.

The sanctioned amount is to be released in need-based installments and utilization of the disbursed amount must be ensured by conducting on-site physical verification as well as from the bills produced/GST paid vouchers etc. Every loan disbursed needs regular follow up till it is fully repaid with interest. You ignore this and you will lose sight of the same and land in trouble. Giving loan and its regular follow-up are similar to sowing a crop and taking care for its growth by regular visits to the field, ensuring proper watering, hoeing, proper manuring, de watering where required, spraying of pesticides/insecticides and timely harvesting. Unless this is not done, the crop is bound to fail. Same applies to the loans disbursed.

Handling the credit portfolio is a highly technical job so needs to be handled by well experienced staff with utmost care. The changing economic situation and its exposure beyond the national and international borders makes lending more vulnerable to various risks. An inept handling of this sector therefore is a risky proposition and therefore needs to be handled by men of integrity, experience, and knowledge of the concerned subject………..To be continue as part 3.

 

 

 

 

 

 

BANK’S BUSINESS; Few Suggestions. PART….1

Banks these days are under tremendous pressure for mobilizing resources as well as for credit dispensation in social as well as in other financial sectors. A very simple definition of banking is, ‘ TAKING MONEY, GIVING MONEY AND MAKING MONEY’. Banks don’t have their own funds. They take it from the public, lend again to the public, and in the process make money for themselves. They have to ensure that the procedure of running the bank is safe, secured, and a win-win situation for all the stakeholders. Seven things are very important for the banks to run their business in a secure, profitable, and growth-oriented manner;-

  1. A sound resource base.
  2. A proper credit dispensation under well-trained staff (Bank’s NPAs. Causes and Remedies). in a  secured, lucrative, and risk-free market.
  3. A robust follow-up and effective recovery. management system. Management of NPAs -Some recovery techniques.
  4. An intelligent inspection and supervision control DEFECTS IN BANK AUDITS AND INSPECTIONS system.
  5. Non banking/para-banking activities for creating different layers of income.
  6. A systematic system for training and skill development of staff.
  7. Regular contact with the client/public and listening/understanding and appreciating their point of view for a better brand building.

For creating resources Banks try to attract deposits from the public by tailoring different products suiting the capacity, requirement, and affordability of the public. Various products are made by the banks with an eye on a particular segment of society. Fixed deposits with different maturities for those who can afford to deposit fixed sums for a fixed period of time. Monthly deposits for those who can’t afford a fixed sum but can spare a comparatively lesser amount every month. Schemes for pensioners, senior citizens, Students, girl child, salaried class, industrial workers etc. etc. Current accounts for the business and trading community. Saving accounts for general savings etc. etc.

Although scores of schemes for resource mobilisation are launched by the controlling offices yet at the operating level only a few traditional schemes are given preference and the rest find a very little attention, with the result that many target groups remain untapped. Operational level, therefore, needs to focus on all the schemes and try to sell all the products available in their kitty. They should fix scheme/products wise targets of all the products launched by the bank. Staff members should be assigned individual targets of all such schemes and the controlling office should keep an eye on such programmes and encourage staff in meeting their targets

There are some very attractive schemes especially for salaried persons, professionals, self-employed, students, and even the business people who can accumulate wealth by taking benefit of monthly deposit schemes which unlike the saving bank account which has a very low rate of return. These schemes have yields available for the term/fixed deposit. Even the last few installments in such accounts attract the higher rate of interest equivalent to that of fixed deposits. For example, if a normal branch by its concerted efforts opens 1000 such accounts in a year with an average monthly deposit of Rs.5000 per month will mobilise 6 crores of rupees in one year. The figure will go up to 18 crores in 2nd year if another 1000 accounts are added in that year, If the same momentum of opening 1000 account with an average of Rupees 5000 per month is maintained for five years, the deposit growth would go to 36 crores in the third year, Rs.60 crores for the 4th and Rs 90 crores for the 5th year. A normal bank with say 1500 very effective branches will this way mobilize resources to the tune of Rs.135000 crores in just five years. Is not this growth pattern most attractive? and does this not deserve to be paid very focussed attention at all operating levels?.

For the promotion of all such schemes, all that is needed is awareness amongst the staff which further to be spread amongst the public by organizing awareness camps, special deposit mobilization fortnights with individual targets for all the staff members who have to work as a team. Rewards and appreciation letters can be offered to the staff for exceeding their targets as well as for topping in their district. or zone or in the bank as a whole.

Newspaper or other paid media advertisements are a costly affair and the public doesn’t pay much heed to such advertisements. It is advisable to distribute printed pamphlets to the public during awareness camps, through the services of newspaper vendors and also by talking to walk-in customers. A WORD OF MOUTH IS MORE EFFECTIVE THAN A WRITTEN PASSAGE.

One thing lacking in the modern time branches is proper visibility of the products in the shelf of the banks for its clients/public and the rates at which these are available. We presume that the client or the public knows everything but the fact remains that the sale persons at the counters themselves are not aware of the products available in their stores and their attractive features themselves. This needs serious remedial action by the main leadership of the banks………….(To be continued in part 2)

 

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