BANKS; LEVEL FINANCING

Banks are the true agents of development of any economy. They have played a vital role in the overall development of economies world over. Although overall development did happen but the spread of the same is not even all along, which has resulted in uneven income in different sectors and areas. The distribution of credit, therefore, needs to be rationalized in such a manner that the benefits of the same reach out to all across the areas as well as sectors and activities.

Banks have always shied away from lending in rural and undeveloped or underdeveloped areas and sectors despite a lot of directions from the regulators as well as from the state. This is due to the fear of losing money because of the nonviability of the proposed units and schemes in these areas. Lack of proper infrastructure in rural and underdeveloped areas is mainly responsible for the poor growth of the economy in these areas. The prime reason for poor lending in such areas is lack of infrastructure which makes the projects and schemes less viable and hence does not attract bank’s attention.

Now that lot of infrastructure has reached the rural and less developed areas. There are better power availability and better road connectivity, transport, and markets in the rural areas though not as better as in the cities but there is a great push to provide more and improve the existing facilities in these areas. Banks too have opened their units in these areas. The only problem is that banks are mobilizing resources from these areas and passing on the main part of the same for investment in other areas or to their controlling offices for deployment elsewhere. The required purpose of opening branches in such areas, therefore, gets defeated by siphoning out the resources from underprivileged areas to the better-privileged areas thereby further widening the gap of development in different areas. In order to ensure the equal level of development across all the regions, the norms for the calculation of credit-deposit (CD) ratio need to be redrawn/modified. Following suggestive measure may be of help to plug the loopholes in the system:

  1. To start with block should be considered as a unit.  For the calculation of CD ratio, all branches of different banks operating in a block be made to meet the mandatory CD ratio of 60% individually. Only that part of credit which has been utilized within the limits of the block should be taken for the calculation of CD ratio for the block. These ratios should be monitored at the Block level. The block-wise unit size may be carried over to Panchayat level after some time.
  2. Branches of a bank who in order to meet the requirements of CD ratio exceed the limits of the block and deploy funds in other blocks, or for the units in urban areas or industrial areas in other blocks. All such branches of banks should be imposed with a penalty of 1% on the interest earned on the amount of loan allowed in areas beyond their block and 2% on the interest of the part of finance in urban or an industrial area in other blocks.
  3. In order to encourage branches in the metro, urban, and semi-urban areas to fund units in rural and underdeveloped areas an incentive of 2% be offered provided 80% employment in such units is given to the locals of the block in which such financing is done.
  4. Foreign banks who have branches in metros only should also be made to contribute to the development of underdeveloped areas and sectors as per the rules of engagement with them. The Incentives proposed above may also be provided to such banks also.
  5. The amount of penalty and incentives stated above to be routed through a special fund which may be called ‘ Level Development Fund’ (LDF). This fund may be maintained by the coordinator of the State level bankers committee of the concerned state. Any shortfall at any time in this fund to be made good by the concerned state govt. The incentive to be provided or penalty to be imposed be calculated quarterly basis on the figures of 15th of the last month of each quarter in order to avoid artificial fluctuations on account of any window dressing to which the banks generally resort to in order to show better figures in the balance sheets on the  closing date of the respective quarter.
  6. In the case of consortium financing, the amount financed by the respective member banks of the consortium will be treated as financing in the block in which the unit so financed is located and not the block in which the financing branch is working and the penalty would accordingly be levied.  The location of the unit is to be considered and not the location of the controlling or administrative office of the unit.
  7. In case of income or commission earned out of nonfund based business such as a letter of credit or guarantees of any type, the penalty and incentive of 1 or 2% as the case may be, will be imposed under the similar circumstances of exceeding or entering in the jurisdiction of the block as discussed above.
  8. Penalty once charged is to be nonrefundable and no claim of any type to be entertained on any pretext such as the account becoming an NPA for any reasons.
  9. Any shortfall in the amount required to meet the mandatory requirement of meeting 60% CD ratio by any branch of a bank in a block to be kept in RIDF with NABARD at the prescribed rates.
  10. Branches of the banks in any block may divert funds after meeting the mandatory CD ratio of 60% in the block in which they are functioning for deployment anywhere as per their choice. However, in case they exceed CD ratio for financing within the block where they are functioning, they shall be given an incentive on the interest on the additional amount at 1%.

The CD ratio should be ensured to be maintained at the mandatory level by each branch of a bank block-wise, and by the respective banks district-wise, region wise, and state-wise. Inter-region and inter-state financing to be excluded for the purpose of calculating respective CD ratios. Suitable penalty as proposed above to be imposed on such lending. This would discourage flight of resources from the concerned areas to the other areas and ensure a level development of all areas and sectors.

In the present as well as during the future times the lucrative market for financing is in the rural areas as there is a lot of money and market in that sector.

DEVELOPMENT: A PERSPECTIVE

Development is happening in every field around the world for making the life more comfortable for the humans. There is no end to the development as there always remains something more to be achieved. It appears that man wants to achieve complete perfection beyond which there is no further scope for any development.

In order to achieve perfection and complete satisfaction, he is restlessly toiling day and night and running after a mirage; an illusion of satisfaction. This directionless effort is, in fact, making him more and more dissatisfied thus making him wander in the wilderness.

If we just compare the development made during the last few decades, we find that lot of infrastructure such as highways, roads, airways, waterways, railways along with utilities have been developed. More houses, buildings, transport, industry, huge projects are being added to take care of the increasing human population. A lot of development has happened in the agriculture and food industry, power sector, defense, space, energy, education, and health sectors.

Despite all development, we have not been able to eliminate the miseries of this world. Still, people in some part of the world are dying of malnutrition, hunger, and lack of Medicare although there is no shortage of food, medicines, and doctors in this world. We don’t lack resources, we lack compassion and will to help others( COMPASSION ) . We live in very narrow contours of compassion and don’t share our possessions with those who are in need, although every religion of the world teaches us to help the needy.

Unplanned and excessive mining, construction of huge tunnels and roads, railway tracks, over the ground as well as under the ground have definitely disturbed the environment, ecology, and so, the balance of nature. Our planet has an abundance capacity to bear the load and shocks of development but that capacity is not unlimited. It does have a limit, and once we exceed the limit, there is bound to be some reaction and which has started happening.

Mankind is the only race which leaves no stone unturned to pollute the overground, underground, and in the atmosphere resources which in fact are beneficial for him, little realizing that the earth and the atmosphere also have the life which needs nourishment for their sustenance ( SAVE THE EARTH ). Disturbance and destruction beyond a point are bound to compel the earth to react. Why are we blind to these reactions which have started giving their signals in the form of change in weather, unprecedented floods, earthquakes, tsunamis, storms, volcano eruptions, wind and snow storms. Have not we seen mighty mountains crumbling like mounds of sand? The breaking of mountains can cause a temporary blockage of the rivers thus creating huge reservoirs of water and which can create havoc once these temporary blockages give in to the hydraulic pressure created by the stored water. We are unmindfuly polluting the rivers, oceans, and other water bodies which are a lifeline for the entire life on this planet.

Cruelty against nature is bound to produce negative results. We do need crops, plants, water, and trees for a living but we have to keep a balance between the development and destruction of the planet and the atmosphere(  NATURE’s EQUILIBRIUM  ). In the ancient times and even at present, in some leading religions of the world, rivers, lakes, oceans and some trees are considered to be holly and are worshiped. People used to throw coins as an offering in these water bodies. The coins used to be made of copper, silver, or gold and all these metals purify water. Watering the plants was considered as Punya( Sacred deed, virtue ). The purpose of these religious beliefs was to keep water bodies clean and pollution free. Cutting certain trees such as Peepal (Banyan), plants, even their branches was considered a sin. All this was to save and protect the environment and ecology. The love and fear of God were always kept in mind while dealing with the people and the environment. Although all days are alike yet certain days of the week were fixed to be considered as more holy and sacred for special prayers. Only pious deeds were done on these designated days. The purpose was to not let the minds of people lose sight of prayers, good deeds, and to remain connected with the lord for ensuring a blissful living.

In the name of development, we have polluted the atmosphere and made the earth a fragile planet, which is not prepared to bear more disturbance and load. The human’s population is increasing whereas the number of trees is on the decrease. With more roads, buildings, houses, and other infrastructure, the area under green cover is decreasing thus making it difficult to meet the required level of oxygen in the air. It is perhaps due to this factor that the man who considers himself as the most intelligent of all species, is trying to discover life and good environment on other planets in the universe by making huge sacrifices of resources which otherwise can be utilized for making this world as a heaven.

Perhaps we have not understood the true meaning of development. Development should ensure good health for all, a tension free life, contentment, respect, elimination of bias towards anyone, good morals, and a heart full of compassion. All these will make us true human beings and deserve to be called the ‘Top of the creation’. Otherwise, we are as good or as bad as other creatures. Have we achieved this by the way we are making development? More roads, more transport has resulted in more pollution and more accidents. There are more medicines and more qualified doctors yet there are more dangerous and fatal diseases. The number of cancer, heart attacks, and other killer diseases is on the rise. Nations have become rich and strong and have accumulated heavy stocks of weapons of mass destruction. Of what use is this development? This so-called development has changed our perceptions and ways of thinking and beliefs. Corruptions, drinking, telling lies for personal gains, cheating, adultery etc. were considered as the biggest sins but with the development, these sins are considered as a way of modern life and are recognized by the society with esteem.  Real development is an evolution of a better life. We the humans are believed to have evolved from lower species to higher species through a very long period and that is the real development.

We need to divert this direction of development towards a better life, character building and values of life. The lifeline of the human race needs to be protected. All life on this earth to be respected and protected by eliminating pollution of any type. Saving the environment is not the sole responsibility of the state. Everyone has to contribute his bit to this noble cause. Trees should not be cut unless it is extremely unavoidable. We should plant five trees against the cutting of one tree. Everyone must plant at least two trees every year in order to make good the loss already done to the environment. We have to ensure peaceful coexistence between men, animal, and the environment. That will be the development in the real sense.

 

 

BANKS: CHALLENGES AND OPPORTUNITIES

Banks at present are under tremendous stress because of ever-rising nonperforming assets (NPAs) and huge frauds which have taken a big toll on their profits, thus resulting into deterioration in their balance sheets as well as the brand image in the eyes of the public. Under these testing times, Banks are facing huge challenges which need to be faced with courage, maturity, dedication, hard work and tact. The challenges at present are enumerated as under:-

  1. The health of the Banks:-  The mounting NPAs, losses due to big frauds and continuous increase in operating expenses due to periodic increase in various types of variable costs such as salary, fuel, rent, and boarding lodging expenses are a big challenge for the banks to meet. These are a serious threat to the overall health of the banks. Concerned with this trend The Indian Banks Association (IBA) has offered a shockingly meager increase of only 2% to the bankers during the negotiations for the revision of their salary. This may be a cruel joke with the bankers but it speaks volumes about the health of the banks.
  2. Keeping the flock together:- Under the stress on resources, the workers get demoralized and start losing interest in the institution. Some may try to change job or search for the greener pastures. Only a team with high moral and a deep sense of belonging (A SENSE OF BELONGING)can keep the institution strong. This challenge needs a good and inspiring leadership at the top who could keep the flock together by providing guidance, hope, and good future to the stakeholders.
  3. Maintaining a sustainable growth:- With the graphs showing downwards trends, it is becoming difficult to manage growth in face of the tough national and international competition. All high-value proposals of multinational companies are taken by foreign banks who provide them credit at very cheaper rates because their cost of funds is very low. They can afford to give loans at thinner spreads and still make handsome profits because of high volumes and low cost of transactions. Because of reduced interests on deposits, the depositors are not attracted towards banks as in some cases, the net interest income after payment of income tax doesn’t cover the cost of inflation. Added to this is the fear in minds of the depositors about the introduction of a new law about bail-in in the banking sector, which though has been put on the back burners but people still have a fear in mind that the ghost may reappear at any time. They ponzy schemes and the crypto currencies like the Bitcoins have taken a big toll on the deposits of the banks. In view of stress on resources,  the banks are unable to fund large proposals.
  4. In-cumbersome procedures:-The age-old procedures of processing proposals with a lot of paperwork especially for the small traders and businesses and other small loans, discourage the perspective loanees from coming forward. Although some progress has been made in simplifying the procedure yet a lot needs to be done in order to attract customers.
  5. Comparatively Smaller unit size and strength of Banks:- Barring very few banks like State bank of India, the size, strength, capital base, and technological exposure of our banks is no match with the foreign banks. With the globalization and the world becoming a global village, our banks have to compete with the foreign banks. This is not possible unless we match their strength as well as the cost of operations.
  6. Diminishing of the physical interface:- With the introduction of technology in the banks, there is less interface with the customers as most of the transactions are done through the internet, mobile, or online banking, as is done in the foreign countries. Our culture, traditions, and behavior are different from theirs. Face to face interaction has an element of emotion to which we are used to, and the absence of which creates dryness in the relationship. With the increased size of business as well as the number of customers, it may be difficult to keep interface contact with them.
  7. Replacing the outdated technological infrastructure:- In order to match the competitors, the technological infrastructure needs to be updated or replaced with the more sophisticated and efficient one. This may not be economically feasible for the weak banks but in the face of competition and to ensure sustainable growth it becomes imperative to go for it. To stay in the market, an appreciable increase in the volume of business can only take care of the cost factor involved in the upgrading of electronic infrastructure. Only big volumes can reduce the cost of the transaction. The recent case of heavy costs incurred by banks while replacing the currency note holding trays of lakhs of ATMs, when the Govt. introduced new currency notes in place of old notes of different denominations is a live example of updating technology under compulsion in order to stay active in the market.
  8. Strengthening of internal controls:- In view of the rising NPAs and incidences of frauds, the strengthening of internal controls (DEFECTS IN BANK AUDITS AND INSPECTIONS) at any cost has become very urgent. The recovery of NPAs and strengthening of internal controls, management audit, effective inspections and audits of all operational activities, and forensic audits may add costs to the already burdened banks but there is no escape and must be activated in a mission mode in order to regain the public confidence.
  9. Skill building and succession planning:- Advance training in specialized fields and skill upgrading of staff is need of the hour. Gone are the days when banking was every body’s job and bankers used to be a jack of all trades but masters of none. Now with a lot of advancement in the banking field, new innovative ideas are the order of the day in order to beat the competition and the challenges. Value addition to banking products with fine packing and branding which may suit the tastes, requirements, and choices of the customers have to be tailored in order to stay ahead in the competitive atmosphere. A robust and sustainable succession planning must be done at least for the next two decades and which may be reviewed and upgraded periodically.
  10. Setting up an advisory for the clients and brand building:- The Brand building is a long and continuous process. Successful leaders have built successful Brands which have resulted in heavy returns for their businesses. A product can be easily copied by anyone but a brand can’t be copied. Banks need to attract more clients by providing them with the products suitable to their requirements and choice. The markets and businesses now are not protected against competition from across the international borders especially after the signing of the world trade agreement. Now only the strongest,  the fittest, and those who can afford to adopt a change can survive; others are bound to vanish from the scene. Under such circumstances, banks are bound to suffer losses as their products are exposed to greater risks. This is one of the reasons for a spurt in the level of NPAs of banks in the last few years.                                                                                                                                           THIS IS A BIG CHALLENGE FOR THE BANKS AND FOR MEETING THE SAME BANKS NEED TO PROVIDE EXPERT ADVICE TO THEIR CLIENTS AND FIND SOLUTIONS FOR THEIR SURVIVAL. BANKS NEED TO ESTABLISH ADVISORY WITH EXPERTS WHO COULD PROVIDE SOLUTIONS TO THEIR CLIENTS FOR SURVIVAL. The upcoming of big Malls, online shopping through big international giants like AMAZON, ALIBABA, FLIPKART, SNAPDEAL etc have adversely affected the retail market in the country. In order to compete with these big sharks, the retailers have to come up with a matching model of business in the market. Banks have to come up with new innovative models for their clients in their own interests.
  11. Retaining the existing clients:- In view of the tough competition in the sector, banks have a big challenge ahead in retaining the existing clients not speak of adding more to their kitty. The clients have various options and opportunities available to them, so the banks need to ensure that none of the good clients slips out of their grip. Gone are the days when there used to be a customer loyalty and attachment with their banks. Now the customers change banks more often than their vehicles. A regular contact with the customer/ holding customer meets by higher executives whose words and decisions matter need to be organized in order to create more confidence and bonding with the customers. Good leaders are good listeners and people love to be listened to. Promoting and advertising of banks products is very necessary. One of the cheapest ways to promote and advertise banks products is to feed their salient features as caller tunes into thousands of the mobile phones of staff members. In addition to products, the caller tune can be made to contain a mission or a brand promoting song. 

Good leaders have the tact and the wisdom to convert their weaknesses into their strengths and challenges into opportunities. All that is required is a strong will, dedication, a deep sense of belonging to the institution, and a good team of dedicated staff.

OPPORTUNITIES:- While there are big challenges, there exist equal opportunities also. Some of the opportunities available to banks are…..

  1. Big market and big population:- The size of the market is fast increasing and in order to meet the requirements of the second largest population of the world, which is increasing by 20 million souls every year, ample opportunities are becoming available  to the banks to finance in all sectors, may it be agriculture, horticulture and allied, industry and manufacturing, trade and services, infrastructure, mining, shipping, transport, power, tourism and so on. In addition to this, banks have the opportunities to go for business beyond the international boundaries as the entire world is open to them for doing business. All that is required is strength and will.
  2.  The country still not fully developed:- The country is still not fully developed and there is a lot of scope for investment in almost all sectors of the economy. Still, we are calling for FDI in various fields for economic development. Banks need to enlarge their capital and size to substitute the FDI. There is no dearth of opportunities, banks need to redraw their working models suiting the economic activity and matching the foreign banks.
  3.  Advisory services:- With the advent of an open economy, there is a need to change business models in almost all sectors. Banks can provide services for providing training to clients in order to take up new business models and earn some fees and attract customers. This is already being done on a small scale by banks and govt. like some awareness programs for artisans, farmers, and agriculturists etc. EDP(entrepreneurship development programs) are conducted by EDI in the country where banks can participate and attract young budding entrepreneurs.

Money blocked in NPAs and loss assets:- There is a lot of money blocked in NPAs and loss assets on account of money lost in frauds and for which banks have already made provisions out of their incomes. These block of funds are in a way HARD AND A LITTLE TOUGH MINES of reserves for the banks. Any recovery from these heads adds to the income and overall health of the banks. These reserves must be tapped by effective recovery techniques (Management of NPAs -Some recovery techniques.) and maximum effort needs to be made to address further slippage to this category. (Bank’s NPAs. Causes and Remedies.)

Rod and reward:- Banks must not spare the rod wherever required and should not become a miser while promoting the talent and rewarding the performers.

Challenges make one more strong. Challenges provide an opportunity to face hard situations and increase one’s self-confidence. They provide an opportunity to prove your will and strength. A nation becomes strong only when it faces challenges and so are the banks. Banks have to take these challenges in the right perspective which ultimately will change their fate.

AGRICULTURE: A SERIOUS PRIORITY.

Food is the basic necessity of all living beings, and the humans are the only species who toil to grow different varieties of eatables for satisfying their hunger as well as taste. Millions of other species depend wholly on nature for food and consume very few unprocessed items throughout their life, in contrast to humans who need thousands of items differently processed in hundreds of ways in order not only to satisfy hunger but also the taste. This run for variety and taste leads to hundreds of complicated diseases and for the remedy of which he requires thousands of drugs and medicines for which he has again to depend upon agriculture.

To meet the basic requirements, production of varieties of food grains, fruits, poultry and the allied items, agriculture and the allied activities need to be given a top priority. Although a lot of development has been made in the agriculture sector including the allied activities such as horticulture, floriculture, apiculture, fishery, animal rearing, dairy, and poultry farming as well as growing of medicinal plants, yet there is a mismatch between the efforts, planning, level of production, storing, value additions, marketing, and pricing. A lot needs to be done in the field of proper planning and management of agricultural production by the concerned agencies/departments associated with this important and vital sector. All the stakeholders such as agriculture deptt. of the concerned governments, agriculture scientists, their field staff, concerned officers from electric and irrigation deptt and the bankers, especially in the underdeveloped and developing countries need to stand shoulder to shoulder with the farmers in the fields. The approach of all the concerned has to be focussed and a target-oriented and not as a mere casual social responsibility.

PROBLEMS

  • In the absence of proper and timely support and guidance especially to the marginal, small, and medium farmers they are unable to manage a balance between production, supply and demand. The incidence of continuous drought or floods leaves them in distress. Their absolute poverty gets further burdened by the bank loans they have availed. Farmers by nature are shy and hesitant about visiting various govt. offices especially which are located in the far-off cities. Under these circumstances, they are exploited by the comparatively better off people in the society including the politicians. This exploitation has discouraged them from their traditional activity since ages and compels them to migration to other activities by disposing of their land. Many such farmers go into depression and resort to suicides or become landless laborers. Maximum migration has happened in agriculture sector than in any other during the last few decades. These dangerous trends of migration and suicides are a blot on the society and the nation as a whole, so need a serious thought. WAIVING OF LOANS IS NOT THE SOLUTION. IT DOESN’T EMPOWER A FARMER IN ANY MANNER. Unless he is empowered by providing timely support, and proper guidance, he can’t come out of the vicious circle of poverty.
  • Agricultural land is shrinking day by day with the development of infrastructure, industry, services sector and housing. Fertile land especially around the cities and towns and along the highways is being converted into business markets, big housing projects, malls and palaces for holding big functions. A suitable policy needs to be made to take care of this dangerous trend.
  • Maintaining the fertility of the soil needs a serious thought. In order to produce more, we are resorting to excessive use of chemical fertilizers, pesticides, and insecticides. They not only spoil the fertility and aroma of the soil but are harmful to the entire living creatures including humans.
  • We are still resorting to flooding type of irrigation on a very large scale and thus wasting the water which is already in scarcity. In absence of proper distribution of water and proper management of existing canals, we are forced to resort to the drilling for water from the underground sources which in addition to being a costly proposition also disturbs the balance of nature.
  • Inspite of so much development we have failed to make value addition to our agricultural produce at the farmers level. This benefit of value addition by proper grading, attractive and convenient to handle packing, is reaped by someone else.
  • Convenient and cheap availability of duly certified high yielding hybrid seeds as well as replacing the traditional fruit orchards into high-density orchards are still in the infancy stage and need to be taken up on priority.

SOLUTIONS

  • Development in agriculture and allied activities needs to be taken as a top priority and handled in a mission mode. All concerned agencies associated with the development of agriculture, horticulture, and all activities related thereto, need to work unitedly in complete harmony with targets of final results fixed for each agency. Agriculture is not an indoor activity so the entire support system has to move to the field and stand by the farmer from sowing to the harvesting of the crop/produce. The concerned persons from the agriculture, irrigation, flood control, and power deptt. should camp in the field rather than remaining in the offices in the cities. They should ensure that all support and guidance is available to the farmer on spot. A combined support is required. Only credit dispensation to farmers would not be sufficient. ONLY MONEY CAN’T MAKE THE MARE GO.
  • There should be a complete ban on the conversion and use of agricultural land for any purpose other than agriculture. As far as possible all other activities need to be carried out on the barren and uncultivatable land. More and more land needs to be brought under agriculture by levelling and using scientific technology.
  • Use of chemical fertilisers, pesticides, and insecticides need to be gradually replaced by organic manures. Organic farming is a mantra for improving the lot of the farmers as it is cheaper and the product sells at a better rate. With a change in the lifestyle of people, they are more inclined towards organic products. Production of vermi compost which takes about one-month in making from the dung of cows and buffaloes is comparatively easier than the traditional dumping of the animal dung for years. Vermicompost is easy to make in a very short time and is very healthy organic manure. Similarly converting all types of dry grass, weed, stubble, green grass and leaves by mixing with dung in a scientific manner into green manure, saves money and the soil as well as the environment from pollution. LIKE GREEN AND WHITE REVOLUTION WHICH HAVE CHANGED THE LOT OF THE FARMERS AND STATUS OF THE COUNTRY, THE BROWN REVOLUTION i.e CONVERTING AGRICULTURE, HORTICULTURE, AND FLORICULTURE WASTE INTO ORGANIC MANURE WITHOUT USE OF ANY CHEMICALS, NEEDS TO BE TAKEN IN A MISSION MODE.
  • Making canal irrigation more effective by plugging the leakages and proper cleaning of the same in order to ensure that there is no wastage of water and it reaches the tail end. Instead of flooding type of irrigation, sprinkle and drip irrigation be practised in order to make the best use of available water.  Rainwater harvesting is the need of the hour so all water bodies need to be properly maintained. Flood channels need to be developed and properly maintained by erecting protection walls. The underground water table needs to be charged especially around the tube and bore-wells.
  • Conservation of water is the necessity in the present times. A very inspiring, innovative and successful effort has been made in the remote cold deserts of Ladakh by a young engineer Mr. Sonam Wangchuk for conserving water by making artificial glaciers out of running water from the upstream. These artificial glaciers melt during summer and provide water for irrigation. We should take inspiration from such innovators who did it in the cold desert.
  • There is hardly any value addition to crop, vegetables, and fruits at the hands of the producer resulting in less price being realised by him. Either the middlemen or the big traders who have resources and expertise reap the benefits of value addition by proper grading and attractive packaging of the produce. In absence of cold chain transportation system and cold storing facilities available to the producer, he is compelled to dispose of his produce at throwaway price lest his produce becomes stale and starts decaying. The poor fellow is exploited by the private market regulators. It is an irony that though being an agricultural economy we are importing both vegetables and fruits from small countries whereas a big chunk of our own produce gets spoiled due to less shelf life. We need to enhance the shelf life of our fruits and vegetables by developing infrastructure like cold chain transportation system and cold storing in order to increase the shelf life of fruits and vegetables in order to check their wastage.
  •   In many cases, the farmer is unable to realise even the input cost. This frustration is visible when the farmers have thrown potatoes, tomatoes, and onions and other produce on the roads in protests and anger. The government needs to come forward and devise a system for a proper price management, procurement, and distribution of the farmer’s produce. Contract farming and forward contract system/commodity trading through exchanges may be of help to manage the prices.
  • The difference between the price at which a farmer sells and the price at which a consumers purchase is huge. Neither the producer nor the consumer is benefited. The huge margin is pocketed by someone else who exploits both of them. This has to be identified and the system put on rails so that the market is properly regulated.
  • All required ingredients such as hybrid seed, fertilisers, equipment and medicines for the crops should be made available to the farmers from a place convenient to them and that too in time.

Unless the interests of the farmers are safeguarded and the agriculture made an attractive, viable and profitable vocation migration from this sector would continue unabated thereby putting this important sector to serious problems.

There is a continuous growth in population on the globe and requirement of the food items is increasing every day. In India, the growth rate in the population is twenty million per year which creates additional demand for the food products every year. Unless proper planning is not done and implemented on the ground by all the concerned agencies, it is feared that we would become a  food deficient nation thus subjecting the country to exploitation by the food-surplus countries.

Agriculture as such needs to be given a focused attention in order of ensuring good income for the farmers so that people are attracted towards this sector.

 

 


 

 

COMPASSION.

Compassion is an attribute of God. It is in a way a reflection of God itself. All creatures of this universe possess this attribute of God in one way or the other of different degrees. Some are more compassionate than the others and some may be less but all have traces of this Godly attribute present in them.

Have not we seen a bitch feeding the orphaned kittens along with her own puppies, although cat and dog are arch rivals?. Or a shark taking a helpless drowning dog on her back rescuing him to the shore. This is compassion which is present in all creatures in one or the other form.

Humans who are considered as more closer to God and having this attribute in abundance, but with the over influence of the mind or the Satan or the Shaitan on him, this basic quality remains overshadowed or subdued. We do feel an urge to help the needy when they are in distress or need our help and care and at the same time something takes over on our concern for others and the whole attention gets diverted from the feelings of compassion for others. This negative tendency in the humans who are becoming more self-centred and selfish in the modern times of rush for everything is the real cause for dissatisfaction, tension, and depression in life.

How alighted and satisfied we feel when we are cared for by someone. How happy we are when we are assured and are confident that someone is there to come to our rescue in case of an adversity. This one-way traffic is a sign of sheer selfishness. Can someone else also hope for our help and assistance? Are we mentally and voluntarily prepared to come forward to help others? We must; in case we want to achieve happiness and satisfaction. ‘TREAT OTHERS WHAT YOU WANT OTHERS TO TREAT YOU’ is an old adage. Love begets love and hate begets hate. As you sow so shall ye reap. It is as such completely in one’s own hands to remain happy and satisfied by reciprocating the same with others.

In case you are interested to taste some abuses or get few slaps on your cheek, go and slap someone or abuse someone and see the results. The results would be surprising, as you may get your choicest abuses showered on you as well as a volley of slaps on your cheeks to your complete satisfaction. This is an example of reaction to which we all are subjected to. We don’t have or we don’t maintain our own characteristics and qualities but our life and actions have become a  mere reaction. We always react not act and this reaction produces heat, hatred, and animosity which is a cause of frustration, dissatisfaction, and depression for us. REAL PLEASURE AND SATISFACTION COMES BY GIVING, FORGIVING AND CARING FOR OTHERS AND NEVER BY HOPING AND  WISHING TO BE RECEIVING  AND BEING CARED  BY OTHERS.

Forgive and Forget is the mantra for a happy life. In the circumstances when someone abuses and frowns upon you, maybe for any reason, and instead of reacting with double the force which is bound to create a chain reaction, if you just control yourself, force a pleasant smile on your face and beg pardon from the other person, although for no fault of yours; just feel the experience. Your opponent will feel ashamed for his behaviour towards you. Embrace him and give him a warm hug and a loving pat. It may seem to be very difficult but the results are amazing. An intellectual person has said, ” If there is one fool let there be not two”. Always try to avoid situations which result in exchanging of heated arguments and ultimate quarrels. Always try to have a compassionate feeling and attitude towards others. This makes life easier for you as well as for others.

We should never fail in our duty to help others as long as we live. Compassion turns the deadliest foes into friends. We should continue increasing our area of compassion throughout our life. This would create an atmosphere of peace all around us. Kindness doesn’t cost anything but instead, it gives us a lot of satisfaction and peace of mind. There should never be any dearth of love and compassion in our heart for anyone without any discrimination of caste, colour, or race.

No one has ever achieved peace and satisfaction by amassing wealth or by owning huge stocks of worldly materials by working day and night like a slave, contrarily he becomes more greedy in the mad race of more and more material. For doing this we sacrifice the lofty principles of life and become more distressed and dissatisfied. None in this world has ever achieved peace, satisfaction, and happiness out of the materialistic possessions as the lust for the same never gets satisfied. We become slaves of the possessions and not their masters. We should never fail in our duty to help the needy and our heart should start melting with the passion of compassion for those who need our attention and help. This feeling will burn any negativity from our mind and give us a lot of satisfaction.

A compassionate heart brings us closer to God who is an embodiment of love, peace, and tranquillity. We need to behave better than any other creature in this universe only then will we really deserve to be called humans. Only compassion and love will bring satisfaction to the hearts and peace in the world.

 

 

SAVE THE EARTH

Earth is one of the wonderful planets of this Universe which is bestowed with all the ingredients and attributes for the growth and sustaining of the life of all types. No other known planet is so suitably placed in the orbit around the energy source i.e the Sun, as the Earth. Nature has created the earth in its super divine design and placed it at a distance where the energies from the Sun such as heat, light, ultraviolet and infrared rays and many other effective energies reach earth in very suitable doses thus making it a perfect habitat for the life.

The rotation of the earth around its axis makes it possible to expose all its parts to the sun in such a manner that every part of it gets energies from the sun in the required amount. Day and night are also formed by this function of the earth. The revolution of the earth around the sun in a slightly oval-shaped orbit makes it possible for it to remain at different distances from the sun which is the cause of different seasons during the year. Is this phenomena not a gift of nature for the mankind and the entire life on earth? Had this not been the case, half of the world would have been in the constant darkness and the rest in a never-ending day, as well as no change in seasons across the globe. Can one imagine such a situation? Could the life sustain on this globe in such situations? Certainly not.

Nature has created a blanket of different gases called Atmosphere around the earth which acts as a medium for the rays of the sun to reach earth and transfer energy. It created a cover of the Ozone layer around the atmosphere in order to replenish the shortfall of life-sustaining Oxygen in the atmosphere. Hundreds of metals and minerals, precious stones and jewels, oils and lubricants, water in streams running over and under the earth’s crust were provided with a definite purpose to support life in all forms, may it be the plant kingdom, reptiles, microbes, birds, animals, and the humans. Earth consists of 70% water in the oceans, lakes, rivers, ponds, and reserve deposits in the form of huge glaciers. Life exists in the water, may it be cold glaciers at a sub-zero temperature or warmer and salty oceans and also in the atmosphere such as germs and microbes.

Nature has provided everything to earth in order to sustain life on it as well in the water bodies and air. The beautiful and amazing marine life compels us to believe in God’s divine creativity.

It is beyond human comprehension to judge the divine Art of nature as to why different minerals were placed in different quantities at different places? Why so many minerals with different attributes were created? Why were rocks of different density formed and why were clay, sand, stones, deserts, mountains formed at some places and not everywhere? Scientists do give different theories to prove their point of view but they don’t fully convince the intellect. Every component of the earth, its density, movements, shape, and size is made with some specific purpose and nothing is without a reason or purpose. Is it humanly possible to create such a complex system and maintain it the way nature is maintaining?

If we look at the different living species on earth we find that they in one or the other form have similar attributes as the earth itself. All have solids, liquids, air, energy and sense in different proportions and require different types of environment to sustain on earth. The earth as discussed above creates a required atmosphere for every living creature out of a complex composition of its constituents. Take the example of humans who are at the top of creation. They fully resemble in many ways with the earth like a child to his mother. Humans too have 70% water in their body like earth. They have the solid mass of different densities. They have hard bones like the rocks in the earth. They too have veins running through the whole body carrying blood and other essentials like the under streams running beneath the earth’s crust. They have growth of hair almost on a major portion of their body like vegetation on the earth. They too keep moving like the earth. They have many types of chemical and saline liquids in their body like the earth which has a mixture of different oils such as crude oil in her body. Humans have the attribute to propagate life by fertilizing the seed and giving birth to their offsprings and the earth too does this by fertilizing the seed which falls in its soil during a particular season and which sprouts out of its bosom as a baby plant and grows by and by to become a grown tree.

It is perhaps because of this relationship of humans with the earth that many call it as Mother Earth.

When the earth is providing us everything for our sustenance, growth, comfort, and development, then, is not this our prime responsibility to keep it neat, clean, and healthy in our own interest? Are we sincerely contributing a bit to keep the earth in a perfectly healthy condition? The answer is a big ‘NO’. Instead, we are leaving no stone unturned to destroy the very delicate balance of nature to satisfy our various tendencies such as greed, superiority complex, taste, and sadistic pleasures and the like. There is no dearth of anything which we actually need on this planet, but still, we extract various items from the earth’s body in order to fill our stores. We are continuously extracting all known metals and minerals, oils, even rocks(marble, granite etc), coal, and precious stones etc. etc. from the body of the earth thereby disturbing its very composition. Although the earth has the quality to slowly and slowly replenish the deficiency created by us, but not at the rate and speed at which we are damaging it. Every metal which has been placed at different locations and at different depths in the earth’s body has a particular strength and they release particular radiations to counter the harmful radiations coming from other planets. Just think,  if we have iron, sodium, potassium, or calcium deficiency in our body, can we lead a healthy life? Earth also suffers when we cause such deficiencies to it.

We are recklessly extracting crude and other oils  from earth’s body thus perhaps removing the lubricants from the bones(Rocks) of the earth with the result that during movement, its joints become stiff, crack like our bones and due to uneven movement of its plates the earthquakes happen to cause a lot of destruction on the surface as well as in the oceans thereby causing great tsunamis which in turn destroy all the development we made by disturbing the nature. We don’t learn any lesson from this and continue our tirade to disturb nature. Earthquakes, tsunamis, volcanic eruptions, windstorms, hurricanes, cloudbursts, floods are all caused by our actions against nature and the earth.

We are polluting the atmosphere by burning coal and oil for power and transport. We risk life by producing atomic energy where any mishap can wipe the entire life from the globe. We have not learned any lesson from the great disasters created by atom bombs that were dropped on Hiroshima and Nagasaki, instead, we are continuously stockpiling atomic arsenals. We create smoke pollution by burning coal, wood and grass. We pollute rivers, lakes and other water bodies by throwing garbage and factory pollutants in them. We are polluting the oceans by throwing deadly missiles, and other bombs in them thus destroying the marine life. We are cutting the forests and building multi-story buildings thus converting green cover into brown habitats. Excessive use of electric and electronic gadgets is creating E-pollution. The hospital wastage full of infections, dangerous atomic wastage, electronic wastage, and plastic wastage is either dumped or thrown into the water bodies causing irreparable damage to the environment, ecology, and atmosphere.  We are extracting water from underground sources thereby disturbing the underground water table. All this is adding to the global warming and the air pollution which are very dangerous for all type of life on the earth. We are in a way digging our own graves. Unless we mend our ways, the day is not far when the earth will not bear this torture and will tremble out of pain and nothing will withstand the force of the great upheavals.

Still, there is time to mend our ways and use the abundant resources which nature has provided us in a proper manner without disturbing its balance in any manner.

Saving the earth is the responsibility of every one of us. We can’t put it on to the governments. No government can do anything without the contribution of its subjects. We do need energy, but, it is not necessary to disturb nature for that, as it has provided us with the abundance of resources for the green energy. Hydro-power, wind energy, and solar power are the best sources of renewable energy. Some intellectuals advice us to save water for the future. Not only water, we have to save all other resources and not to waste anything. Can’t we just copy the natures beautiful water management system? How nature transports pure water from the oceans which otherwise have salty water to all over the plains and mountains. If we don’t conserve water it is our fault and not nature’s. Can’t we resort to water harvesting in a big way and conserve water bodies. Nature stores water as reserves for us in lakes and ponds as well as on the mountain tops in the form of glaciers which continue melting and providing regular supply through rivers and streams. These rivers can be used to transport goods and merchandise thus reducing vehicular pollution. There will never be a dearth of anything on earth as nature knows the art of keeping a balance by itself. It is only we the humans who disturb the balance of nature and so suffer at its hands.

All eighty-four lac species(as per scriptures) existing on the earth are contributing in one or the other way to the conservation of ecology, environment, and health of the earth except Humans. It is only the humans who always remain unsatisfied and contribute to polluting and disturbing the beautiful balance of nature.

It is in our own interest to take care of our  Mother Earth, which provides us with almost everything in a neat, clean and healthy condition. Let us do this in a mission mode religiously and with utmost sincerity. This needs to be passed on to the younger generations from the very childhood; only then we can pass on a healthy and worth living planet to the coming generations.

DWINDLING TRUST IN BANKS- 20 Steps/ Remedial measures Suggested

The deteriorating health of banks during the past couple of years has shaken the public confidence in the banking systems. The ever-increasing NPAs which at present are estimated to have touched a whopping figure of about Nine lakhs crores sends shivers down the spine of the stakeholders. Every year a fresh and heavy dose is added to the portfolio of bad loans and the trend doesn’t seem to have an end. This volcanic effect if not arrested, will wipe out the important agent of economy i.e. banking from the scene.

Another monster endangering the industry is the increasing incidences of big frauds in the banking sector in the recent years. It appears as if the bankers have surrendered before the fraudsters and the defaulters. The causes have already been discussed in earlier blogs Defects in bank audits and inspections and Bank’s NPAs. The faith and trust of the public in the banking sector is shaken badly. BANK IS THE OTHER NAME OF TRUST. PEOPLE KEEP MONEY WITH BANKS ON THE TRUST THAT THEY WILL GET GOOD RETURNS AND THEIR FUNDS WOULD REMAIN SAFE. However, with all said and done, the following 20 measures are suggested to regain public confidence in the banking sector:-

  1. Remove uncertainty in the banking operations once for all. Clean up the balance sheet and don’t keep any NPAs under the lid. Any evergreening or hiding of NPAs may be a short time solution but its effects are dangerous. BRING COMPLETE TRANSPARENCY IN THE OPERATIONS.
  2. Once done, you can start afresh and can put the progress on track and by moving slowly and cautiously you can regain the lost speed by putting in more vigor, experience, honesty, and hard work.
  3. With speed, you need to avoid accidents by choosing the right tracks and extra vigilance. Make internal inspection and controls more effective and purposeful rather than a mere formality. The concurrent audit is a very effective tool for inspections as it nips the evil in the bud. Make it more effective by allocating the job to experienced and hard working people. More stress should be on spot rectification rather than just pointing out and reporting. Any mistake or an irregularity if allowed to stay for some time takes roots and destroys the system, so spot rectification is need of the hour to stop the spread of the weed.
  4. At present, there seem to be too many inspections by different departments and controlling heads and some of which are an overlapping on one and the other. Too much of everything is bad including the number of inspections. The number doesn’t matter, it is the quality which counts. It is generally seen that inexperienced people and not so good performers are placed in the audit and inspection wings in the bank. This attitude needs to be totally changed, and efficient, knowledgeable and hardworking people should be allocated this job. Unless a serious thought is given to this issue and the inspection/audit deptt. is not strengthened, the chances of intrusions into the systems would continue, thereby adversely affecting the health of the banks.
  5. Specially trained staff should handle credit appraisals, sanctions, and disbursement of loans. Follow up of credit disbursed should be done on time and in a very effective manner. Inexperienced and untrained staff is prone to make mistakes, mishandle, and ultimately land the bank in trouble. Don’t jump into the fields about which you have no experience. Many banks went into trouble especially in the consortium financing because of their lack of adequate experience and blindly following the leader of the consortium.
  6. Controlling offices to be more vibrant and vigilant. Every tier through which the credit proposal moves including the board of directors, must add value to the proposal and share responsibility. No one can shirk responsibility on the pretext of being nontechnical in the respective field. This is a very dangerous attitude. People at the helm should be more serious, accountable and responsible.
  7. Banks should have experts as directors on the boards of the bank who could provide better guidance and direction based on their rich expertise and experience in their respective fields. Persons with political leanings/connections should as far as possible be not appointed as directors on the boards of the banks.
  8. A periodic rotation/shifting of people in the credit wing be done regularly as well as proper training and refresher courses be conducted for the persons handling credit in order to keep them abreast with day to day changes in the credit market, its procedures, and emerging risks.
  9. No proposal should be handled in a hurry. It may be processed expeditiously but not in a hurry. The prospective borrower is always in hurry, make him appreciate that even hurry takes some time. There have been instances when the highest body of the bank i.e. board of directors have complained that sufficient time was not provided for evaluating the agenda of the board meeting and some proposals were introduced as a supplementary agenda item on the day of the board meeting. How can one expect any value addition by any expert to such an item on the agenda?
  10. With the digital and online banking have taken roots, the interface interaction with the customers seem to have taken the back seat. Although the banks have effective complaint redressal systems yet face to face interaction is very important. Banks must conduct periodic customer meets at all levels and listen to the point of view and suggestions of customers and redress their grievances if any. The customer is the working capital of the bank. His suggestions must be evaluated and acted upon on merits of each case.
  11. Interaction with the staff by the executives at different levels helps in knowing their expectations from the bank as well as sharing the expectations of the management with the staff. This needs to be done periodically wherein individual staff targets can be set and evaluated. The concerns and policies of the bank must be shared with the staff as a family and they should be involved in the overall development of the institution and encouraged to meet individual targets. This can help banks to build good teams and induce a sense of responsibility, understanding, and a deep sense of belonging to the institution.
  12. The policy decisions of the board as well as of the regulators must be strictly followed in letter and spirit.
  13. Banks must learn from the past experience and avoid entering into waters whose depth and force of the flow is not known.
  14. Avoid wasteful and avoidable expenditure as you are under the constant public glare. This creates a lot of negative publicity for the institution.
  15. The seniors at all levels have to be a role model for others in the field of dedication, devotion, hard work, honesty, transparency, simplicity, no favoritism, and expenditure control.
  16. Banks should not spare the rod where ever required without any prejudice or bias. They should also be not miser in encouraging and promoting people to achieve the given targets.
  17. Banks must have a workable and sound whistleblower policy. People at the top need to be sensitive to even minor and feeble signals of misdeeds by anyone in the institution. They should read between the lines and make independent investigations where ever required.
  18. Banks should create and strengthen other layers of income from para-banking activities and also try to increase income from fee-based and non-fund based business.
  19. Banks, till date, had been enjoying the luxury of managing comfortable NIM (Net interest margin) which is a ratio of the difference in interest earned on assets and interest paid on deposits to the assets. Since there are a number of well-organized trade and industry association both at the local and national level who manage to get the interest on trade and industrial loans reduced, but unfortunately there is hardly any organized body representing the depositors who can watch their interests. The result is that depositors have no option than to accept whatever is offered to them. The consumers of the credit manage a good deal, banks manage a comfortable NIM, and all this adversely affects the returns for the depositors. This situation is fast changing with more awareness especially through the internet and the depositors are searching for the better green pastures in the shape of mutual funds and other instruments with better security and returns. The shift of capital to cryptocurrencies is a matter of concern for the banks. In such circumstances, the banks may find it a bit hard to mobilize funds except after sacrificing a good part of their NIM.
  20. In view of above banks need to make long-term strategies for managing funds and lay more stress on non-fund based and fee-based income. A more scientific asset liability management and better risk management strategy will go along way in increasing incomes of the banks. The funds locked in bad debts need a special focus of the top management. The recently passed insolvency and bankruptcy act is a boon for the secured creditors though with a cost yet very useful for recovery and cleaning the balance sheets of the banks. The suggestions put forth are not exclusive and the banks can take any other measure to improve its working and image in the overall interests of all the stakeholders and also in order to regain the lost ground.