Analysis of “A letter to my mother” by Chenjerai Hove

The purpose of this text, which is a letter from a traveller home to his mother, is to inform her of his experiences on his travels, and is thought and feelings on this. The tone of the letter is largely one of nostalgia and suggestions of homesickness which can be seen in the many contrasting ways he portrays the way of life from his home in Africa to his new home in Norway. However the writer acknowledges that he has learned that travelling is a way to broaden one’s horizons and expand one’s mind so, but looks forward to the day he can return to his roots and share his experiences with his family. The tone of nostalgia is prevalent throughout this text, it even begins with the word ‘Remember’ which suggests that it is going to be a very reflective and personal piece. This is repeated again with reference to ‘memories’ of the way of life the writer has left behind, and the fondness with which he looks back on it. The fond recollections of home which are described in detail such as the way they view the weather, particularly the rain as something which is to be ‘celebrated’ because it ‘gives life to people, plants and animals’. This stands in stark contrast to the way in which Norwegian regard this type of weather. ‘Have not stopped cursing the weather’ shows that they see it as the opposite of the blessing that those who live in Africa see it as. This is again emphasized when the writer treats the type of people who would have cursed the rain in his home as unnatural and evil. These people are a ‘witch who wishes that life should not be brought’, this shows how the local attitudes to the rain could not be more in opposition. This all works to show the writer’s nostalgic view of his home culture and longing to be there, with people he shares the same values with. The writer goes on to talk about the weather conditions of Norway that are new to him and how his inexperience of the ice and snow could possibly lead to real, physical harm. ‘A step on the ice is a potential disaster’, this shows that he could easily fall and cause harm to himself in this new and strange environment, which instantly contrasts with the experienced and graceful Norwegians who have been living in these conditions all their lives. ‘they float on it like Arabs’. The writer also goes on to show how the Norwegian use of the ice for entertainment or sporting purposes is completely alien and almost baffling to him. ‘they even run races and win competitions’ His astonishment is again emphasized by the use of a rhetorical question-‘can you imagine?’, this shows that using something which would be strange and dangerous for him in a competitive manner is bewildering and that he doesn’t quite feel like he fits in yet and that he is so far removed from the culture as to always be an outsider. Further contrasts are shown between the geographical differences of Norway and Africa are introduced by the phrase ‘by the way’ which suggests the writer’s excitement to tell his mother about a novel experience. ‘I forget you have never seen the sea’ this could be taken to be typical of all people of his place of origin, this would be something that they could consider exciting and opening up new ideas to them. This contrasts with the way Norwegian settlements re set out, they are all in coastal areas and gain much of their sustenance from the sea, ‘Norwegians are people of the sea’ and ‘it brings everything they want’, this suggests that while the sea and all it’s bounty are enough to make the local Norwegians happy and content, it does not seem to do so for the author, further alienating him from those round him. This is further emphasized by the Norwegian folk wisdom ‘if you don’t eat fish, like me, you are supposed to be miserable’ . The Norwegians would argue that he is unhappy because he does not eat fish, however the source of his unhappiness is more likely to be his homesickness and desire to be with those he misses. The writer becomes more upbeat towards the end, and begins to describe his thoughts as he looks towards the time when he can return home and share with his mother his experiences and all that he has learned. The use of the verb phrase ‘I hope’ shows that he is looking to that time in the future not with sadness but expectation, that it is something to look forward to. The repetition of the lexical item ‘Maybe’ gives the impression that the writer is uncertain but hopeful, and that he would like nothing more than to be able to return one day. The writer goes on to list the things that he one day hopes to return to do, ‘gaze at the beauty of that African moon’ this suggests that the African moon is unique and perhaps has some magical quality. This suggests that the writer would love to be able to be at home doing these things, but must continue his journey. The writer seems to acknowledge that it may be many years before he is able to return, ‘I may be older, but I will not have given up the idea of being young’ , this suggests that while the writer knows he will be away for years, he will never forget about his homeland and the people he left behind, and will one day return. The use of the lexical item ‘idea’ suggests that the writer considers that it doesn’t matter what age he has reached, as long as he does not feel old in himself then he will not be too old to continue his journey and to continue gaining knowledge. The writer finishes on a positive note, telling his mother how he is determined to carry on his quest to learn and for life experience ‘many streams to the river of knowledge’. This metaphor is describing knowledge as a river, which is constantly flowing, changing and heading somewhere new, just like he was when he left for Norway. The ‘stream’ which flows to the rivers is his path to this knowledge, one that he feels he must continue to travel. The writer is more forceful here than before, having often used the lexical item ‘maybe’ to which showed uncertainty but hopefulness, he now uses the verb phrase ‘ I know’ , this shows his mind has been made up that he shall not give in and come home yet just because he is unhappy. The noun phrase ‘other lads’ refers to his new home in Norway, which could be considered his classroom or learning grounds for his life lessons, but also suggests it could be anywhere in the world due to lands being plural, and that he may move on to somewhere new one day. All in all the writer uses various techniques to show the contrasts of his homeland to his new home, his homesickness and his desire to soldier on, to continue to gain new knowledge and life skills and experience.

Non Performing Assets

1. a. EXECUTIVE SUMMARY The project is entitled â€Å"A study on The Management of Non-Performing Assets in the Canara Bank’s Loan Portfolio† is done at the Canara Bank, Donimalai Township, Sandur (TQ), Bellary (Dist), Karnataka State. INTRODUCTION: An efficient financial management is becoming inevitable for every manager in today’s corporate world. From a traditional aspect of raising funds whenever needed the importance has shifted to day to day financial decision making and problem solving.When initially the stress was on the internal analysis of the firm, procurement of funds, management of assets and allocation of capital, the present importance has shifted to decision making within the firm. With the modern aspect of finance function the responsibilities of the finance manager has also increased. In the process of making optional decision, he makes use of certain analytical tools in the analysis, planning and control activities of the firm. Financial analy sis is an essential prerequisite for making sound financial decisions.This study is intended to probe into the management of non performing assets in the Canara Bank’s Loan Portfolio, for the period of 2002-2003 to 2005-2006. The study is completely based on the analysis and interpretation of the published accounts of the bank and personal interview of the senior officials of the bank. OBJECTIVES OF THE STUDY: ? To evaluate the Canara Bank’s asset quality. ? To identify the effectiveness of the risk management system, undertaken by the bank. SCOPE OF THE STUDY: ? The scope of the study here was confined to the organization only. ? The study covers to find out the strategy required to reduce the NPAs.METHODOLOGY OF THE STUDY: ? Primary data. ? Secondary data. DATA ANALYSIS AND INTERPRETATION: When the data collected is completed the data is processed and the relevant information is obtained. The data collected is analyzed using various statistical tools like frequency d istribution, charts and percentage analysis. DURATION OF THE STUDY: This study is intended to probe into the management of non performing assets in the Canara Bank’s Loan Portfolio, for the period of 2003-2004 to 2005-2006. FINDINGS: ? The Net NPA ratio of the Canara Bank declined from 1. 88% as at March 31st 2005 to 1. 12% as at March 31st 2006. Canara Bank has recovered its NPA which is amounted to Rs. 865 crore during 2005-2006. ? The Net NPA of the Canara Bank declined from Rs. 1454 crore as on 31st March 2006. ? The Net NPA percentage of Canara Bank has reduced by over 19% during 2005-2006. RECOMMENDATIONS: ? Canara Bank should concentrate more on credit appraisal, monitoring, credit risk management and recoveries. ? Settlement is a better option for the banks wrestling with the problem of non-performing assets. ? Credit scoring allows lenders to determine whether or not you fit the profile of the type of customers they are looking for. Banks concerned should continuousl y monitor loans to identify accounts that have potential to become non-performing. CONCLUSION: ? Securitization Act will surely help banks in reduction of NPA to a great extent. ? Preventing fresh flow of NPAs to a great extent. ? Exchange of credit information among banks would be of immense help to avoid possible NPAs. 1. b. GENERAL INTRODUCTION: INDUSTRY PROFILE Banking in one form or another was in existence even in ancient times. The writings of Manu (the maker of old Hindu Law) and Kautilya (the Minister of Chandragupta Maurya) contained references to banking.However, banking as a kind of business i. e. , modern banking is of recent origin. It came into existence only after the industrial revolution. After the industrial revolution, with the increase in the size of industrial and business units, joint stock company people with small means to become shareholders of big industrial and business enterprises. Still, there were certain sections of public who were not prepared to inv est their money on the shares of joint stock companies. However they were willing to part with a little surplus money, if they were assured of the repayment of their money with a little interest thereon.So naturally, there arose the need for formation of financial institutions that could collect the surplus funds of people on terms acceptable to them and make them available to the needy for productive purpose. Accordingly a large number of financial institutions called joint stock banks were set up after industrial revolution. As such joint banks or modern banks are of recent development. MEANING OF BANKS: A banking company in India has been defined in the Banking Companies Act 1949 as â€Å"One which transacts the business of banking which means the accepting of he purpose of sending or investment of deposits of money form the public repayable on demand or otherwise and withdrawable by cheque, draft order or otherwise†. STRUCTURE OF BANKING SYSTEM IN INDIA: Indian Banking Sy stem has been categories into two: 1. Scheduled Banks. i. State Co-operative. ii. Commercial Banks. 2. Non-Scheduled Banks: Central Co-operative Banks and Primary Credit Societies. Commercial Banks. Commercial Banks are further divided into Indian Banks and Foreign Banks. Indian Banks are further divided into: 1. Public Sector Banks. 2. SBI and its Subsidies. 3. Other Nationalized Banks. 4. Regional Rural Banks.ACTIVITIES OF BANKS: I. Activities of Commercial Banks. II. Activities of Central Banks. I. Activities of Commercial Banks: The activities undertaken by commercial banks be subdivided into: a. Primary Functions. b. Subsidiary Functions. a. Primary Functions: i. Acceptance of deposits: It is very important for banks as it forms the basis of all other activities of banks. It accepts various types of deposits. They are current deposit, saving deposit, fixed deposit and recurring deposits. ii. Lending of Funds: It is also the most important function of Commercial Banks as it fetc hes the major portions of the income of the banks.Banks lend money by the way of loans, overdrafts, cash credit and discounting of bills. b. Subsidiary Functions: i. Agency Functions: The services rendered by banks as agent of their customers are called agency services. They are: †¢ Banks collect cheque, bank draft, bills, interest, dividends etc on behalf of the customer. †¢ Banks sells and purchases securities on behalf of the customers. †¢ Banks arranges for remittance of funds from one place to another place. †¢ Banks acts as trustees, executors, representatives of their customers. ii.General Utility Services: Services rendered by banks to their customers as well as the general public are called as general utility services. †¢ Banks accept precious articles, documents etc for safe custody. †¢ Banks helps exporters and importers in foreign trade. †¢ Banks issue travellers cheque, letter of credit, circular notes etc. †¢ Banks acts as a refe rence and supply information about the financial standing of the customers to others. II. Activities of the Central Bank: A. Monopoly of Note issue. B. Banker, Agent, Advisor to the government. C. Custodian of cash reserves of the banks. D. Lender of the last resort.FUNCTIONS AND IMPORTANCE’S OF BANKS: The importance of banks in the modern economy cannot be denied. Banks play a significant role in the economic development. Banks perform a number of functions. They are: 1. Banks mobilize the small scattered and ideal savings of the people, and make them available for productive purpose. In the sort, they aid the process of capital formation. 2. By accepting the savings of the people, banks provide safety and security to the surplus money of the depositors. 3. Banks provide a convenient and economical method of payment. The cheque system introduced by banks is convenient form making payments.Again the use of cheque economies the time and trouble involved in settlement of busine ss obligations. 4. Banks provide a convenient and economical means of transfer of funds from one place to another. Banks drafts are commonly used for remittances of funds from one place to another. 5. Banks helps the movement of capital from regions where it is no very useful to regions where it can be more usefully employed, by moving funds, banks increases the utility of funds. Again by moving funds from one place to another, banks contribute to the economic development of backward regions. 6.Banks influence the rates of interest in the money markets. Through the supply of money (i. e. bank money or bank deposits) banks expert a powerful influence on the interest rates in the money market. 7. Banks help trade and commerce industry and agriculture by meeting their financial requirements. But for the financial assistance provided by the banks, the pace of growth of trade and commerce industry and agriculture would have been very slow. 8. Banks direct the flow of funds into productio n channels. While lending money, they discriminate in favor of essential activities and against non essential activities.Thus they encourage the development of right types of activities which the society desires. 9. Banks always make it a point to help the industries, the prudent, the punctual and the honest and discourage the dishonest, the spendthrift, the gambler the lair and the knave (i. e. the rouge). Thus banks act as public conservators of commercial virtues. 10. Banks serves as the best financial intermediaries between the saver (i. e. the depositors or lenders) and the investor (i. e. the borrowers or the entrepreneurs). SERVICE PROFILE OF THE CANARA BANK: The bank has many financial services and different schemes.Important among them are as follows: DOMESTIC PRODUCTS SAVING BANK DEPOSITS: For individuals & non-trading organizations / institutions. CURRENT ACCOUNT: For business operations – trades, businessmen, corporate bodies. FIXED DEPOSITS: Secured way to high r eturns – individuals and institutions. KAMADHENU DEPOSITS: Re-investment money multiplier plan. CANBANK AUTO – RENEWAL: Higher return in a shorter plan. CANFLEXI DEPOSITS: A combination of savings & fixed deposits – high return & instant liquidity. ASHRAYA DEPOSITS: Respecting Indian values for senior citizens.RECURRING DEPOSITS SCHEME: Inculcating saving, a rewarding & recurring habit. FLOATING RATE DEPOSITS SCHEME (FRDS): Insures against interest rate fluctuations. LOAN PRODUCTS HOUSING LOAN SCHEME: Purchase of a ready built house / flat construction of house, purchase of a site and construction of house thereon, for undertaking repairs, renovations, upgradation, and creation of additional amenities and for taking over of the HL liability from other recognized housing finance companies and banks. HOME IMPROVEMENT LOANS: Furnishing the house / flat along with bank’s home loans / independently.CANMOBILE: Facilities purchase of new / used cards / jeeps of all make. The scheme also covers finance for purchase of brand new two wheelers. CANCARRY: Provided credit worthy individuals, professional and salaried class for buying consumer durables and household articles. CANCASH: Offer assistance for meeting unforeseen contingencies. Finance is granted against approved shares, bonds and debentures held by the clients. CANBUDGET: Fulfills the financial needs of confirmed employees of reputed PSU’s, joint stock companies, central / state / semi – government employees nd lecturers / professors / assistant professors of colleges / universities and research institutes. CANRENT: Provides loans to property owners whenever the property is leased / rented out to PSU’s central / state / semi – government undertakings. Reputed corporate banks. Financial institutions, Insurance companies and MNCs. CANMORTGAGE: Designed to meet the financial requirements against security of equitable mortgagee of property (land & building) to professional, businessman, salaried persons and individuals.VIDYASAGAR EDUCATIONAL LOAN SCHEME: Renders financial assistance for needy and meritous students for pursuing all type of studies (professionals / general) in India and Abroad. LOAN SCHEME TO TRADERS / BUSINESS ENTERPRISES: With hassle – free and minimum terms and conditions, the scheme cater to the needs of traders and other business enterprises for smooth flow of business activities. CANMAHILA: Exclusive loan scheme for women clientele. AGRI – LOAN SCHEME: Various loan schemes for agri-clinic, minor, irrigation, farm development / machinery, plantation crops fishers and for agro-exports.SSI LOAN SCHEME: A host of schemed available for technology up gradation fund in textile and jute industries, credit linked capital subsidy stand by credit for capital expenditure and margin money scheme of KVIC. OTHER PRIORITY SCHEME: These include loan for retail traders, small business, professional / self employed, medica l practitioners and loan for solar water heating / home lighting system. CREDIT CARD OPERATIONS †¢ The first Indian card issuers to bay ISO 9002 certification, CANCARD today as a distinct recognition in the domestic as well as international market. All verstors of CANCARD namely, CANCARD visa, classic, visa-corporate, master card and visa – international gold are issued through all CANARA BANK branches & 24 CANCARD service centers located at major cities across the country. †¢ Four Indian Banks are in affiliation with the bank for issue of CANCARD VISACARD. †¢ Launched DEBIT CARD on November 4, 2003, a value added and tech based product for its niche clients. CUSTOMER CENTRIC ETHOS †¢ CANARA BANK was the first to articulate the directive principles of good banking, detailing banker’s duties and customers rights. First bank to get ISO certification for one of its branches in Bangalore in the year of 1995-1996. †¢ Recommendations of the Goiporia Committee on Customer Service have been implemented by the bank. †¢ The bank has Computerized Information Facilitation Centers (CIFCs) at all circles to look exclusively into customer in a single window framework. †¢ A 24 hour tele – contact facility is also available for customers to air their grievances at corporate as well as circles levels. COMPANY PROFILE OF THE CANARA BANK: HISTORICAL TREND:Canara Bank established in 1906 with the name of Canara Bank Hindu Permanent Fund in Mangalore, India, by Ammembal Subba Rao Pai, is one of the oldest and major commercial bank of India. Its name was changed to Canara Bank Limited in 1910. The bank, along with 13 other major commercial banks of India, was nationalized on 19th July, 1969, by the Government of India. Currently (2005), the bank has 2508 branches spread all over India. The bank also has international presence in several centers, including London, Hong Kong, Moscow, Shanghai, Doha, and Dubai.In terms of business it is the largest nationalized commercial bank in India with a total business of about Rs. 2000 billion (about US $43 billion). ORGANISATION STRUCTURE: The bank has fourteen wings in the Head Office, Bangalore. 1. Personnel Wing 2. Corporate Credit Wing 3. Risk Management Wing 4. Priority Credit Wing 5. Inspection Wing 6. Department of Information Technology Wing 7. Marketing and Customer Relationship 8. Planning and Development Wing 9. Recovery Wing 10. General Administration Wing 11. Financial Management Wing 12. Treasury and International Operation Wing 13.Retail Banking and Subsidiaries Wing 14. Vigilance Wing OFFICE AND BRANCHES: Canara bank has a network of 2415 branches, spread over 22states/ 4 union territories of the country and overseas branch @ London which are administrated through †¢ Head Office at Bangalore †¢ 13 Circles offices / International Division †¢ 35 Regional offices †¢ 2441 Branches BRANCHES ABORAD: CANARA BANK established its Internation al Division in 1976, to supervise the functioning of it various foreign department to give the required thrust to Foreign Exchange business, particularly export and to meet the requirements of NRI’s.Though small in size the Bank’s presence abroad has brought in considerable foreign business, particularly NRI deposits. The presence of bank is shown under. †¢ CANARA BANK, London, UK (Branch) †¢ Indo Hong Kong International Finance Co Ltd Hong Kong (Subsidiary) †¢ AL Razouki International Exchange company , Dubai, UAE According to the latest information, both the CANARA BANK and State Bank of India have come into a mutual agreement as to both the banks will be operating as a one unit in the Moscow. CORPORATE VISION: To top as a World Class Bank with best practices in the realms of asset portfolio, Customer orientation, Product Innovation, Profitability an enhanced value for stake holders. †¢ To set new standards in IT application, Customer responsivene ss, Asset quality and profitability, culminating in higher stoke holder value. †¢ To scale new peaks in respect of IT based banking, efficient service delivery market leadership in profitability. CORPORATE MISSION: †¢ Augmenting low cost deposits. †¢ Toning up asset quality. †¢ Accent on cost control. †¢ Thrust on retail banking. †¢ Customer centric focus. Product innovation and marketing. †¢ Leveraging IT for comprehensive MIS. †¢ Maximize stockholder’s value. CORPORATE OBJECTIVE: E- Efficiency. P- Profitability and Productivity. O- Organization Effectiveness. C- Customers centric H- Hi Tech Banking ACHIVEMENTS: The Bank has already carved a niche in providing IT – based services. Computerized branches, for 65% of the branches & 81% of aggregated business provided a wide array of services such as Network ATM’s, any where Banking , Tele Banking & Remote Access Terminals etc. , The Bank was the first to launch networked ATM ’s & obtain ISO certification.CANARA BANK shares are listed & Bangalore, Mumbai & National Stock Exchanges. †¢ Establish well-developed quality circles have participated in many National & International level competitions and have returned with handsome prizes. †¢ Has set up its own Apex level Training colleges to its employees and thereby takes care of the knowledge, skills and attitudinal development of employees. †¢ Has also taken initiative in the environmental concerns. PERRFORMACE HIGHLIGHTS OF 2005-2006 †¢ Canara Bank has posted net profit of s. 581 cr for the half year ended September 2005 as against Rs. 19 cr during the corresponding previous half year, registered a growth rate of 38. 60%. †¢ The Bank operating profit registered an increase of Rs. 548 cr (57. 81%) to reach Rs. 1496 crore, up from Rs. 948 cr for the first half of the preceding financial. †¢ Return of assets a standard measure of profitability improved from 1. 08% (annuali zed) at a September 2002 to 1. 28% (annualized) as at September 2005. †¢ Number of branches moved up to 2441 from 2416 as at September 2002, besides 248 extension counter. †¢ Global deposits of the Bank aggregated to as Rs. 5, 396crore as against Rs. 67734 crore a year ago, year growth being 11. 31%. MATURITY CLASSIFICATION OF VARIOUS ASSETS AND LIABILITIES: In respects of the certain Assets and liabilities, CANARA BANK have undertaking a behavior study, embedded options in the basis of past of past data, based on which the bank is in a position to decide on the maturities of the asset and liabilities. 2. a. RESEARCH DESIGN A study on the Management of Non Performing Assets in the Canara Bank’s Loan Portfolio is done at the Canara Bank Donimalai Township, Sandur (TQ), Bellary (Dist), Karnataka State.The type of research used for the collection & analysis of the data is â€Å"Historical Research Method†. The main source of data for this study is the past recor ds prepared by the bank. The focus of the study is to determine the non-performing assets of the bank since its inception & to identify the ways in which the performance especially the non-performing assets of the Canara Bank can be improved. The data regarding bank history & profile are collected through â€Å"Exploratory Research Design† particularly through the study of secondary sources and discussions with individuals.Data Collection Method Discussion with the manager & officers of the bank to get general information about the bank & its activities. ? Having face to face discussions with the bank officials ? By taking guidance from bank guide & departmental guide. Secondary Data ? Collection of data through bank annual reports, bank manuals and other relevant documents. ? Collection of data through the literature provided by the bank. Research Measuring Tool: The tools used for data collection are: 1. Personal Interview 2. Secondary Sources 1. Personal Interview:In this, discussions more held directly with the manager & officials to get the clear-cut information about the topic and data to be collected for the purpose of analysis. 2. Secondary Sources: Annual company reports, Balance Sheets, Profit & Loss account are used to collect the data. b. 1. SATATEMENT OF THE PROBLEM: A crucial issue which is engaging the constant attention of the banking industry is the alarmingly high level of non performing assets (NPA). Another major anxiety before the banking industry is the high transaction cost of carrying non performing assets in their books.The resolution of the NPA problem requires greater accountability on the part of the corporate, greater disclosure in the case of defaults, an efficient credit information sharing system and an appropriate legal frame work pertaining to the banking system so that court procedures can be stream lined and actual recoveries made within an acceptable time frame. So the project titled â€Å"A study on the Management of Non Performing Assets in the Canara Bank’s Loan Portfolio† looks in to the implications of high NPAs and suggests effective recovery measures for resolving problem loans and thus making the banks NPAs level healthy.It also compares the position of the Canara Bank with other public sector banks in terms of their NPAs in the last three years and also to study the management of total assets and advances of the Canara Bank among other public sector banks. b. 2. OBJECTIVES OF THE STUDY: ? To evaluate the Canara Bank’s asset quality. ? To compare the position of the Canara Bank with other public sector banks in terms of their NPAs. ? To study the management of total assets and advances of the Canara Bank. ? To identify the effectiveness of the risk management system, undertaken by the bank. To analyze sector wise non-performing assets. ? To offer useful suggestions to reduce the NPA in banks. b. 3. SCOPE OF THE STUDY: ? The scope of the study here was confined to th e organization only. ? The study covers to find out the strategy required to reduce the NPAs. ? The concentration is given only in understanding the NPAs growth with the reference of Canara Bank. ? The data is purely based on the secondary data collected from website and journal. ? The scope is limited to drawn conclusions from analysis and interpretations of the primary and secondary data of the Canara Bank. . 4. METHODOLOGY: Introduction The quality of the project work depends on the methodology adopted for the study. Methodology, in turn, depends on the nature of the project work. The use of proper methodology is an essential part of any research. In order to conduct the study scientifically, suitable methods & measures are to be followed. Research Design The type of research used for the collection & analysis of the data is â€Å"Historical Research Method†. The main source of data for this study is the past records prepared by the bank.The focus of the study is to determ ine the non-performing assets of the bank since its inception & to identify the ways in which the performance especially the non-performing assets of the Canara Bank can be improved. The data regarding bank history & profile are collected through â€Å"Exploratory Research Design† particularly through the study of secondary sources and discussions with individuals. Data Collection Method Discussion with the manager & officers of the bank to get general information about the bank & its activities. ? Having face to face discussions with the bank officials ?By taking guidance from bank guide & departmental guide. Secondary Data ? Collection of data through bank annual reports, bank manuals and other relevant documents. ? Collection of data through the literature provided by the bank. Research Measuring Tool: The tools used for data collection are: 1. Personal Interview 2. Secondary Sources 1. Personal Interview: In this, discussions were held directly with the manager & official s to get the clear-cut information about the topic and data to be collected for the purpose of analysis. 2. Secondary Sources: Annual company reports, Balance Sheets, Profit & Loss account are used to collect the data. . 5. LIMITATIONS OF THE STUDY: ? The study is mainly based on the secondary data provided by the bank. As such it is subject to the limitations of the secondary data. ? The study is based only on NPAs with respect to loans. ? The study is based on the data given by the officials and reports of the bank. The confidentiality of some facts and figures is a limitation. ? The non-availability of relevant information is one of the limitations. ? The study is done only for the limited past 3 years. 3. THEORITICAL OVERVIEW NPA ITS IMPACT AND MAGNITUDE: MEANING OF NPA:An asset is classified as non- performing asset (NPA) if dues in the form of principal and interest are not paid by the borrower for a period of 180 days. How ever with effect from March 2004, default status woul d be given to a borrower if dues are not paid for 90 days. If any advance or credit facilities granted by bank to a borrower becomes non-performing, then the bank will have to treat all the advances / credit facilities granted to that borrower as non-performing without having any regard to the fact that there may still exit certain advances / credit facilities having performing status.A ‘non-performing asset’ (NPA) was defined as a credit facility in respect of which the interest and / or installment of installment of principal has remained ‘Past Due’ for a specified period of time. An amount due under any credit facility is treated as â€Å"past due† when it has not been paid within 30 days from the due date. Due to the improvement in the payment and settlement systems, recovery climate, up gradation of technology in the banking system, etc. , it was decided to dispense with ‘past due' concept, with effect from March 31, 2001. Accordingly, as from that date, a Non performing asset (NPA) shell be an advance where i.Interest and /or installment of principal remain overdue for a period of more than 180 days in respect of a Term Loan, ii. The account remains ‘out of order' for a period of more than 180 days, in respect of an overdraft/ cash Credit(OD/CC), iii. The bill remains overdue for a period of more than 180 days in the case of bills purchased and discounted, iv. Interest and/ or installment of principal remains overdue for two harvest seasons but for a period not exceeding two half years in the case of an advance granted for agricultural purpose, and v.Any amount to be received remains overdue for a period of more than 180 days in respect of other accounts. ’90 days’ overdue norm’ With a view to moving towards international best practices and to ensure greater transparency, it has been decided to adopt the '90 days overdue' norm for identification of NPAs, form the year ending March 31, 2004 . Accordingly, with effect form March 31, 2004, a non-performing asset (NPA) shell be a loan or an advance where; i. Interest and /or installment of principal remain overdue for a period of more than 90 days in respect of a Term Loan, i. The account remains ‘out of order' for a period of more than 90 days, in respect of an overdraft/ cash Credit(OD/CC), iii. The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted, iv. Interest and/ or installment of principal remains overdue for two harvest seasons but for a period not exceeding two half years in the case of an advance granted for agricultural purpose, and v. Any amount to be received remains overdue for a period of more than 90 days in respect of other accounts.As a facilitating measure for smooth transition to 90 days norm, bank has been advised to move over to charging of interest at monthly rests, by April 1, 2002. However, the date of classification of an advance as NPA sho uld not be changed on account of charging of interest at monthly rests. Banks should, therefore, continue to classify an account as NPA only if the interest charged during any quarter is not serviced fully with 180 days from the end of the quarter with effect from April 1, 2002 and 90 days from the end of the quarter with effect from March 31, 2004. Out of Order’ Status An account should be treated as ‘Out of Order’ if the outstanding balance remains continuously in excess of the sanctioned limit / drawing power. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit / drawing power, but there are no credits continuously for 180 days (to be reduced to 90 days, with effect from March 31, 2004) as on the date of Balance Sheet or credits are not enough to cover the interest debited the same period, these accounts should be treated as ‘out of order’. ‘Overdue’Any amount due to the bank und er any credit facility is ‘overdue’ if it is not paid on the due date fixed by the bank. Asset Type Percentage of Provision Sub standard (age up to 18 months)10% Doubtful 1 (age up to 2. 5 years)20% Doubtful 2 (age 4. 5 years)30% Doubtful 3 (age above 4. 5 years)50% Loss Asset100% INCOME RECOGNITION-POLICY: The policy of income recognition has to be objective and based on the record of recovery. Internationally income from non-performing assets (NPA) is not recognized on accrual basis but is booked as income only when it is actually received.Therefore, the banks should not charge and take to income account interest on any NPA. However, interest on advances against term deposits, NSCs, VIPs, KVPs, and Life policies may be taken to income account on the due date, provided adequate margin is available in the accounts. Fees and commissions earned by the banks as a result of re-negotiations or rescheduling of outstanding debts should be recognized on an accrual basis over th e period of time covered by the re-negotiated or rescheduled xtension of credit. If Government guaranteed advances become NPA, the interest on such advances should not to be taken to income account unless the interest has been realized. REVERSAL OF INCOME: If any advance, including bills purchased and discounted, becomes NPA as at the close of any year, interest accrued and credited to income account in the corresponding previous year, should be reversed or provided for if the same is not realized. This will apply to Government guaranteed accounts also.In respect of NPAs, fees, commission and similar income that have accrued should cease to accrue in the current period and should be reversed or provided for with respect to past periods, if uncollected. THE CONCEPT OF GROSS NPA: Income recognition is not possible once an account becomes NPA. Interest accrued on non performing loan accounts is debited to the respective account and credited to the interest suspense account instead of t he profit and loss account. Usually no debits are permitted in non performing asset expect unavoidable expenditure like litigation expenses, insurance etc.Hence the balance outstanding in an NPA account includes: 1. Balance as on date of becoming an NPA. 2. Interest accrued but not realized. On balance sheet date banks make provisions for loan losses. This provision is calculated not on the balance outstanding but on the net balance, balance net of the amount kept in the interest suspense account. This book balance of the net of the interest suspense account is known as Gross NPA. But in cases where guarantee claim is received from credit guarantee corporations like ECGC, before making the provision for loan losses, such claim received is also netted from the gross NPA.The terminology net NPA indicates the balance in interest suspense account. For evaluation RBI and other rating agencies rely on purpose usually the net NPA balance. Thus Gross NPA means, balance outstanding minus bal ance in interest suspense account. Net NPA means: Gross NPA minus balance claim received amount and provision outstanding in that account. IMPACT OF NPA: At the Macro level, NPAs have chocked off the supply line of Credit of the potential lenders thereby having a deleterious effect on capital formation and arresting the economic activity in the country.At the Micro level, unsustainable level of NPAs has eroded current profits of banks and FIs. They have led to reduction of interest income and increase in provisions and have restricted and recycling of funds leading to various Asset Liability mismatches. Besides this, it has led to erosion in their capital base and reduction in competitiveness. The problem of NPA is not a matter of concern to banks and FIs alone. It is the matter of grave concern to the country and any bottleneck in the smooth flow of credit is bound to create adverse repercussions in the economy.The mounting menace of NPAs has raised the cost of credit, made Indian business man uncompetitive as compared to their counterparts in other countries. It has made banks more adverse to risks and squeezed genuine Small and Medium Enterprises (SMEs) from accessing competitive credit and has throttled their enterprising spirits as well, to a great extent. Due to their crippling effect on the operation of the banks, Asset quality has been considered as one of the most important parameters in the measurement of bank’s performance under the CAMELS Supervisory Rating System of RBI. THE MAGNITUDE:Non-Performing Asset (NPA) has emerged since over a decade as an alarming threat to the banking industry in our country sending distressing signals on the sustainability and endurability of the affected banks. The positive results of the chain of measures affected under banking reforms by the Government of India and RBI in terms of the two Narasimhan Committee Reports in this surging threat. Despite various correctional steps administered to solve and end this problem, concrete results are eluding. It is a sweeping and all pervasive virus confronted universally on banking and financial institutions.The severity of the problem is however acutely suffered by Nationalized Banks, followed by the SBI group, and the all India Financial Institutions. As at 31. 03. 2004 the aggregate gross NPA of all scheduled commercial banks amounted to Rs. 63883 crore. Table No. 1 gives the figures of net NPA for the last three years. The ratio of net non-performing assets to net advances also declined during 2005-06. Majority of the banks, this ratio is less than 4 percent. Punjab and Sind Bank has the highest ratio with 9. 62 percent followed by Dena Bank of India with 9. 4 percent. 4 banks reported â€Å"nil† ratio during 2005-2006.Further it is revealed that commercial banks in general suffer a tendency to understate their NPA figures. There is the practice of ‘ever-greening’ of advances, through subtle techniques. As per report appear ing in a national daily the banking industry has under – estimated its non-performing assets (NPAs) by whopping Rs. 3862. 10 Crore as on March 1997. The industry is also estimated to have under-provided to the extent of Rs. 1,412. 29 Crore. The worst offender is the public sector banking industry. Nineteen nationalized banks have underestimated their NPAs by Rs. 3,029. 29 Crore.Such deception of NPA statistics is executed through the following ways. ? Failure to identity an NPA as per stipulated guidelines: There were instances of ‘sub-standard’ assets being classified as ‘standard’. ? Wrong classification of an NPA: Classifying a ‘loss’ asset as a ‘doubtful’ or ‘sub-standard’ asset, classifying a ‘doubtful’ asset as a ‘sub-standard’ asset. ? Classifying an account of a credit customer as ‘substandard’ and other accounts of the same credit customer as ‘standardâ€℠¢, throwing prudential norms to the winds. REASONS FOR NPAs: In Priority Sector Advances: 1.Directed and pre-approved natures of loans sanctioned under sponsored programmes. 2. Mis-utilization of loans and subsidies. 3. Diversion of funds. 4. Absence of security. 5. Lack of effective follow-up (Post sanction supervision and control) 6. Absence of Bankruptcy and fore-closure loans. 7. Decrepit legal system. 8. Cost in-effective legal recovery measures. 9. Difficulty in execution of Decrees obtained. In Non-Priority Sector Advances: 1. Inadequate credit appraisal. 2. Demand recession. 3. Industrial sickness and labor problems. 4. Slow Legal system. 5. Diversion of funds. 6.Willful default. 7. Technology Obsolescence. 8. Managerial inefficiency. 9. Political compulsion and corruption. WRITING OFF NPAs: In terms of section 43(D) of the Income Tax Act 1961, income by way of interest in relation to such categories of bad and doubtful debts as may be prescribed having regard to the guideli nes issued by the RBI in relation to such debts, shall be chargeable to tax in the previous year in which it is credited to the bank’s profit and loss account or received, whichever earlier. This stipulation is not applicable to provisioning required to be made as indicated above.In other words, amounts set aside for aside for making provision for NPAs as above are not eligible for tax deductions. Therefore the banks should either make full provision as per the guidelines or write-off such advances and claim such tax benefits as are applicable, by evolving appropriate methodology in consultation with their auditors / tax consultants. Recoveries made in such accounts should be offered for tax purposes as per the rules. WRITE-OFF AT HEAD OFFICE LEVEL: Banks may write-off advances at Head Office Level, even though the relative advances are still outstanding in the branch books.However, it is necessary that provision is made as per the classification accorded to the respective ac counts. In other words, if an advance is a loss asset, 100 percent provision will have to be made there for. DEBT RECOVERY TRIBUNAL: Any person aggrieved by any measure taken by secured creditor or his authorized officer may file an appeal to Debts Recovery Tribunal, within 45days from date on which such measure was taken. That is action of taking possession of asset, takeover of management of business of borrower, appointing person to manage secured asset etc. is taken by the creditor.When a borrower files an appeal, the appeal cannot be entertained unless, the borrower deposits 75% of the amount claimed in the notice by secured creditor. The DRT can waive or reduce the amount required to be deposited. The amount is not required to be deposited at the time of filing appeal, but appeal will not heard till the amount is deposited. The borrower while filing the appeal should also file an application requesting the Debt Recovery Tribunal to admit the appeal without deposit of any amoun t. If the DRT orders partial deposit of the amount and the same is not deposited, appeal can be dismissed.The 75% deposit is only required if the appeal is filed by the borrower. If some other aggrieved person (e. g. guarantor, shareholder) files it the deposit is not required. If a person is aggrieved by the order of the DRT, it can file an appeal to the Appellate Tribunal within 30days from the date of receipt of the DRT order. If the DRT or Appellate Tribunal holds that possessions of assets by the secured creditor was wrongful and directs the secured creditor to return asset to concerned borrower, the borrower shall be entitled to compensation and costs as may be determined by DRT or Appellate Tribunal.SECURITIZATION ACT: With the enactment of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, banks can issue notices to the defaulters to pay up the dues and the borrowers will have to clear their dues within 60days. Once the b orrower receives a notice from the concerned bank and the financial institution, the secured assets mentioned in the notice cannot be sold or transferred without the consent of the lenders.The main purpose of this notice is to inform the borrower that either the sum due to the bank or financial institution be paid by the borrower or else the former will take action by way of taking over the possession of assets. Besides assets, bank can also takeover the management of the company. Thus the bankers under the aforementioned Act will have the much needed authority to either sell the defaulting companies or charge their management. OVERALL BANKING AND NPA BANKING REFORMS IN INDIA: The Nationalization of the major commercial banks in the year 1969 and 1980 had brought radical changes in the banking system in India.It had brought about major shifts in the priorities in the banking operations. Branch expansion policies of banks were tuned upto meet the banking needs of the people in rural and semi urban centers. For accelerating the socio-economic and rural development process several Governments sponsored programs were launched and lending in the priority sector, irrational lending under socio political pressures, mounting levels of bad debts, branch expansion at non viable centers etc. gradually started affecting the financial health of the banking sector in the country.Commercial banks were not following uniform accounting policies camouflaged the true financial position of banks. Quality of loan asset was not a concern and a high proportion of loan assets started becoming non performing. Most of the banks were under capitalized and some of them even with negative worth. Thus there was a compelling need for a change and various policy corrections had to be taken with the view of strengthening the economy. Thus the Government of India was forced to initiate a process of reforming the financial sector which banks constitute a dominant part. The reforms process inclu des: 1. Introduction of prudential norms. . Transparency in balance sheets. 3. Deregulation of interest rates. 4. Partial deviation from directed lending. 5. Upgradation of technology. 6. Entry of new private sector banks. NARASIMHAM COMMITTEE: The first phase of banking sector reforms was initiated in the year 1992 in pursuance of recommendations of the committee on financial sector reforms headed by Narasimham Committee. As per the recommendations of Narasimham Committee, The Reserve Bank of India introduced in a phased manner, prudential norms for income recognition, asset classification, and provisioning in the year 1998 Narasimham Committee-II came out with more tringent norms for the industry. The prudential norms were revised from time to time to fall in line with the best accounting practices and for transparency in published accounts. It is widely recognized that as a result of these reforms, the Indian Banking System is becoming increasingly mature in terms of the transfor mation of business processes and the appetite for risk management. Deregulation, technological upgradation and increased market integration have been the key factors driving change in the financial sector. EMERGING BANKING TRENDS:During the current financial year, the focus of non-going reforms in the banking sector was on soft interest rates regime, increasing operational efficiency of banks, strengthening regulatory mechanisms and on technological up-gradation. As a step towards a softer interest rate regime, RBI in its Annual Policy Statement had advised banks to introduced flexible interest rate system for new deposits, announce a maximum spread over PLR for all advances other than consumer credit and to review the present maximum spread over PLR and reduce them wherever they are unreasonably high. A BRIEF HISTORY OF NPA:The concept of Asset Quality on the books of Public Sector Banks (PSBs) and Financial Institutions (FIs) came into being when Reserve Bank of India (RBI) introd uced prudential norms on the recommendations of the Narasimham Committee in the year 1992-1993. The Committee recommended that an asset may be treated as Non-Performing Asset (NPA), if interest or installment of principal remains overdue for a period exceeding 180days and that banks and FIs should not take into their income account, the interest accrued on such Non-Performing Assets, unless it is actually received or recovered.The Committee also recommended that Assets be classified into four categories namely Standard, Sub-standard, Doubtful and Loss Assets and that certain specified percentage of the same be held as provision there against. Before the reform process, banks were booking income on an accrual basis and their balance sheets did not reflect their true specified financial health. Thus the profit, capital and reserves were overstated by them. After 10years of NPA terror in the banking industry, â€Å"Now the Banks Have Teeth†, a new law lightens the burden of bad loans for Indian Banks.The law that has been the catalyst for the bad loan clean up passed India’s Parliament in November 2002. It allows lenders to more easily foreclose on debtors assets or even demand a change in management. Within weeks of the law’s passage, banks saw a flood of loans once deemed unrecoverable being repaid in double time. The Act is The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Also know as the Securitization Act). This Act enables the setting up of asset management companies for addressing the problems of non-performing assets of banks and FIs.INDIAN BANKING AND NPA: The origin of the problem of burgeoning NPAs lies in the quality of managing credit risk by the banks concerned. What is needed is having adequate preventive measures in place namely, fixing pre-sanctioning appraisal responsibility and having an effective post-disbursement supervision. Banks concerned should continuously moni tor loans to identity accounts that have potential to become non-performing. The core banking business is of mobilizing the deposits and utilizing it for lending to industry.Lending business is generally encouraged because it has the effect of funds being transferred from the system to productive purposes which results into economic growth. However lending also carries credit risk, which arises from the failure of borrower to fulfill its contractual obligations either during the course of a transaction or on a future obligation. The history of financial institutions also reveals the fact that the biggest banking failures were due to credit risk. Due to this, banks are restricting their lending operations to secured avenues only with adequate collateral on which to fall back upon in a situation of default.GLOBAL NPA: The core banking is of mobilizing the deposits and utilizing it for lending to industry. Lending business is generally encouraged because it has the effect of funds bein g transferred from the system to productive purposes which results into economic growth. However lending also carries credit risk, which arises from the failure of borrower to fulfill its contractual obligations either during the course of a transaction or on a future obligation. A question that arises is how much risk can a bank afford to take? Recent happenings in the business world – Enron, WorldCom, Xerox, Global Crossing do not give much confidence to banks.In case after case, these giant corporates became bankrupt and failed to provide investors with clearer and more complete information thereby introducing a degree of risk that many investors could neither anticipate nor welcome. The history of financial institutions also reveals the fact that the biggest banking failures were due to credit risk. Due to this, banks are restricting their lending operations to secured avenues only with adequate collateral on which to fall back upon in a situation of default. It needs to be recognized that prudential norms in respect of loan classification vary widely across countries.A country follows varied approaches, from the subjective to the prescriptive. Illustratively, in the United Kingdom, supervisors do not require banks to adopt any particular form of loan classification and either is there any recommendation on the number of classification categories that banks should employ. Other countries, such as, the United States follow a more prescriptive approach, wherein loans are classified into several categories based on a set of criteria ranging from payment experience to the environment in which the debtor evolves.The adoption of such a system points to the usefulness of a structured approach those facilities the supervisor’s ability to analyze and compare banks loan portfolios. India is a better bet than China for investors to pump money into non-performing assets (NPAs) restructuring as it has better environment for recovery, according to consulti ng firm Price water House Coopers (PwC). WARNING: STANDARD & POOR: Standard & Poor’s and The Credit Rating Information Services of India Ltd. , (CRISIL) estimate that India’s schedule commercial banks require between US$11billion-US$13billion in new capital to support losses embedded in impaired assets.The significant capital shortfall estimated recognizes the existing moderate reported capital position of Indian banks, the inadequate loan loss reserves maintained by the banks to absorb likely losses. The weak capital position of the Indian banking system is largely a reflection of growing asset-quality problems stemming from weak underwriting and credit management system, and the vulnerabilities of the Indian banking sector to the impact of globalization on the country’s key industry sectors. The asset-quality position also has suffered from regulations with respect to lending to priority sectors. The capital shortfall calculated assumes a significantly higher system non-performing loan level to that reported under Indian regulatory standards,† said Peter Sikora, associate director, Financial Services Rating, Standard & Poor’s, together with CRISIL are, however, of the view that non performing loan levels for Indian banks will be significantly higher at 20%-25% if more conservative classification standards are adopted and restructured, and ever greened loans are included as impaired assets. LENDING BEHAVIOUR OF BANKS:Due to the excess liquidity in the banking system, banks are now giving credit to even non-priority sectors in an aggressive manner. Now banks give credit more to unproductive purposes, like car loans, housing loans, consumer durables loans and personal loans. This reckless lending paves the way to repayment irregularities and more of NPA in the banking system. But on the others side economy has become buoyant and the borrowers are now in a position to repay the loans even if it is an unproductive loan.Banks have improved their credit appraisal system. NPA percentage in City Bank’s Car Loan Portfolio is zero, because of the sophisticated credit appraisal system followed by the bank. Banks now give priority to ‘businesses’ and lending schemes also follow the path. CLASSIFICATION OF ASSETS: CATEGORIES OF NPAs: Banks are required to classify non-performing assets further into the following three categories based on the period for which the asset has remained non-performing and the realisability of the dues: a) Sub-Standard Assets. ) Doubtful Assets. c) Loss Assets. SUB-STANDARD ASSETS: A sub-standard asset was one, which was classified as NPA for a period not exceeding two years. With effect from 31March 2001, a sub-standard asset is one, which has remained NPA for a period less than or equal to 18 months. In such cases, the current net worth of the borrower / guarantor or the current market value of the security charged is not enough is not enough recovery of the dues to t he banks in full.In other words, such an asset will have well defined credit weakness that jeopardize the liquidation of the debt and are characterized by the distinct possibility that the banks will sustain some loss, if deficiencies are not corrected. With effect from 31March 2005, a sub-standard asset would be one, which has remained NPA for a period less than or equal to 12 months. DOUBTFUL ASSETS: A doubtful asset was one, which remained NPA for a period exceeding two years. With effect from 31March 2001, as asset is to be classified as doubtful, if it has remained NPA for a period exceeding 18 months.A loan classified as doubtful has all the weaknesses inherent in assets that were classified as sub-standard, with the added characteristic that the weaknesses make collection or liquidation in full, – on the basis of currently know facts, conditions and values – highly questionable and improbable. With effect from 31March, 2005, an asset to be classified as doubtful if it remained in the sub-standard category for 12 months. LOSS ASSETS: A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI inspection but the amount has not been written off wholly.In other words, such an asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted although there may be some salvage or recovery value. It should be noted that the above classification is only for the purpose of computing the amount of provision that should be made with respect to bank advances and certainly not for the presentation of advances in the bank balance sheet. The Third Schedule to the Banking Regulation Act 1949, solely governs presentation of advances in the balance sheet.Banks have started issuing notices under The Securitization Act,2002 directing the defaulter to either pay back the dues to the bank or else give the possession of the secured assets mentioned in the notice. Ho wever, there is a potential threat to recovery if there is substantial erosion in the value of security given by the borrower or if borrower has committed fraud. Under such a situation it will be prudent to directly classify the advances as a doubtful or loss asset, as appropriate. RBI GUIDELINES FOR CLASSIFICATION OF ASSETS:Broadly speaking, classification of assets into above categories should be done taking into account the degree of well-defined credit weaknesses and the extent of dependence on collateral security for realization of dues. Banks should establish appropriate internal systems to eliminate the tendency to delay or postpone the identification of NPAs, especially in respect of high value accounts. The banks may fix a minimum cut off point to decide what would constitute a high value account depending upon their respective business levels.The cut off point should be valid for the entire accounting year. Responsibility and validation levels for ensuring proper asset cla ssification may be fixed by the banks. The system should ensure that doubts in asset classification due to any reason are settled through specified internal channels within one month from the date on which the account would have been classified as NPA as per extent guidelines. UPGRADATION OF LOAN ACCOUNTS CLASSIFIED AS NPAs:If arrears of interest and principal are paid by the borrower in the case of loan accounts classified as NPAs, the account should no longer be treated as non-performing and may be classified as ‘standard’ accounts. Asset Classification to be borrower-wise and not facility-wise: i. It is difficult to envisage a situation when only one facility to borrower becomes a problem credit and not others. Therefore, all the facilities granted by a bank to a borrower will have to be treated as NPAs and not the particular facility or part thereof which has become irregular. ii.If the debts arising out of development of letter of credit or invoked guarantees are p arked in a separate account, the balance outstanding in that account for should be treated as a part of the borrower’s principal operating account for the purpose of application of prudential norms on income recognition, asset classification and provisioning. Accounts where there is erosion in the value of Security: i. A NPA need not go through the various stages of classification in cases of serious credit impairment and such assets should be straightaway classified as doubtful or loss asset as appropriate.Erosion in the value of security can be reckoned as significant when the realizable value of the security is less than 50 percent of the value assessed by the bank or accepted by RBI at the time of last inspection, as the case may be. Such NPAs may be straightaway classified under doubtful category and provisioning should be made as applicable to doubtful assets. ii. If the realizable value of the security, as assessed by the bank / approved valuers / RBI is less than 10 p ercent of the outstanding in the borrowal accounts, the existence of security should be ignored and the asset should be straight away classified as loss asset.It may be either written off or fully provided for by the bank. RESTRCTURING / RESCHEDULING OF LOANS: A standard asset where the terms of the loan agreement regarding interest and principal have been renegotiated or rescheduled after commencement of production should be classified as sub-standard and should remain in such category for at least one year of satisfactory performance under the renegotiated or rescheduled terms.In the case of sub-standard and doubtful assets also, rescheduling does not entitle a bank to upgrade the quality of advance automatically unless there is satisfactory performance under the rescheduled / renegotiated terms. Following representations from banks that the foregoing stipulations deter the banks from restructuring of standard and sub-standard loan assets were reviewed in March 2001. In the contex t of restructuring of the accounts, the following stages at which the restructuring / rescheduling / renegotiation of the terms of loan agreement could take place can be identified: a) Before commencement of commercial production. ) After commencement of commercial production but before the asset has been classified as sub-standard. c) After commencement of commercial production and after the asset has been classified as sub-standard. PROVISIONING REQUIREMENTS: As and when an asset is classified as an NPA, the bank has to further sub-classify it into sub-standard, loss and doubtful assets. Based on this classification, bank makes the necessary provision against these assets. Reserve Bank of India (RBI) has issued guidelines on provisioning requirements of bank advances where the recovery is doubtful.Banks are also required to comply with such guidelines in making adequate provision to the satisfaction of its auditors before declaring any dividends on its shares. In case of loss asse ts, guidelines specifically require that full provision for the amount outstanding should be made by the concerned bank. This is justified on the grounds that such an asset is considered uncollectible and cannot be classified as bankable asset. Asset TypePercentage of Provision Sub-Standard (age upto 18 months) 10% Doubtful 1 (age upto 2. 5years) 20% Doubtful 2 (age 4-5years) 30%Doubtful 3 (age above 4-5years) 50% Loss Asset 100% THE NPA PROBLEM: The origin of the problem of burgeoning NPAs lies in the quality of managing credit risk by the banks concerned. What is needed is having adequate preventive measures in place namely, fixing pre-sanctioning appraisal responsibility and having an effective post-disbursement supervision. Banks concerned should continuously monitor loans to identify accounts that have potential to become non-performing. The performance in terms of profitability is a benchmark for any business enterprise including the banking industry.However, increasing NPAs h ave a direct impact on banks profitability as legally banks are not allowed to book income on such accounts and at the same time banks are forced t make provision on such assets as per the RBI guidelines. Also, with increasing deposits made by the public in the banking system, the banking industry cannot afford defaults by borrowers since NPAs affects the repayment capacity of banks. Further, RBI successfully creates excess liquidity in the system through various rate cuts and banks fail to utilize this benefit to its advantage due to the fear of burgeoning non performing assets.CREDIT APPRAISAL SYSTEM: Prevention of standard assets from migrating to non performing status is most important in NPA management. This depends on the style of Credit Management Mechanism available in banks. The quality of credit appraisal and the effectiveness of post credit appraisal and effectiveness of post credit follow up influences the asset quality of the banks in a big way. At Pre-Credit Stage: 1. Extensive enquiry about the character and the credit worthiness of the borrower. 2. Viability of the project to be financed is meticulously studied. 3. Adequate coverage of collateral is ensured to the extent possible. . Financial statement of the borrower is obtained and poor analysis of their financial strength is done. 5. Apart from the published financial statements independent enquires are made with previous bankers. 6. Pre-Credit inspection of the assets to finance is made. At Post-Credit Stage: 1. Operations in the account are closely monitored. 2. Unit visit is done at irregular intervals. 3. Asset verification is done on a regular basis. 4. Borrowers submit control returns regularly. 5. Accounts are periodically to evaluate the financial health of the unit. 6. Early warning signals are properly attended to. . Close contract with the borrower is maintained. 8. Potential NPAs are kept under special watch list. 9. Potentially viable units are restructured. 10. Repayment progra m of accounts with temporary cash flow problem is re

Financial Management Essay Example | Topics and Well Written Essays - 1500 words

Financial Management - Essay Example 2,000 liabilities and stockholders’ equity liabilities: overdraft $ 1392 Interest payable $ 4032 loan payable $ 24,000 Campbell loan payable $ 8,068 retained earnings $ 6,608 Common Stock $ 60,000 Total $ 100,068 Vertical Analysis PROFIT AND LOSS STATEMENT Company A Company B NET SALES 100% 100% COST OF GOODS SOLD 95.2% 78% GROSS PROFIT 4.8% 22% SELLING, GENERAL AND ADMINISTRATION EXPENSE 2.6% - OPERATING INCOME BEFORE IMPAIRMENT RECOVERY 2.2% - IMPAIRMENT RECOVERY 0 - Intangible asset repairment charges - 0.8% OPERATING INCOME 2.2% 3% OTHER INCOME/(EXPENSE) 0.1% CHANGE IN VALUE OF DERIVATIVE LIABILITY 0.2% - INTEREST EXPENSE 0.8% - INCOME BEFORE INCOME TAXES 1.6% 3.1% Income taxes 0.6% 0.9% Net income 1% 2.3% BALANCE SHEET COMPANY A COMPANY B Current Assets: Cash 1.6% 27.1% Trade accounts receivables 20.94% 17.3% Inventories 68.25% 22.9% Prepaid expenses 2.8% Deferred tax assets 1.25% - Other current assets 4.09% - Property plant and equipment 1.49% 14.5% Intangible assets - 0.8% Cash surrender value of life insurance - 10.9% Advance to suppliers, net of imputed interest 1.66% - Preferential supply agreement 0.19% - Long term financing costs, net of amortization 0.50% - Other assets - 3.7% Total assets 100% 100% Liabilities and stockholders equity: Current liabilities: Accrued salaries, wages and benefits - 2.6% Notes payable-banks 57.25% - Current maturities of mortgage payable 0.05% - Trade accounts payable 18.55% 6.2% Income tax payable 1.51% - Accrued expenses and derivative liabilities 1.51% - Dividends payable 0.008% 0.7% other accrued expenses - 0.5% Total current liabilities 78.9% 10% Deferred compensation - 4.8% Mortgage payable, net of current maturities 0.54% - Subordinated convertible debt net of unamortized discount of $2499 3.52% - Derivative liability for embedded conversion option 0.71% - Deferred taxes payable 0.07% - Stock holders equity: Common stock 0.4% 11.6% Additional paid in capital 4.42% - Retained earnings 13.0% 73.6% Accumulat ed other comprehensive loss (0.7%) 0.07% Treasury stock (1.30%) - Total liabilities and shareholder’s equity 100% 100% Cash flow statements Company A 2011 Cash flow from operating activities Net income 116.07% Adjustments to reconcile net income to net cash in operating activities Depreciation and amortization 10.15% Change in value of derivative liability -20.96% Amortization of convertible note discount 7.72% Impairment recovery 0.00% Provision for doubtful debts 4.84% Deferred income taxes -13.20% Foreign exchange loss, and others -0.26% Changes in: Restricted cash 0.00% Trade account receivable -364.62% Inventories -1225.27% Other current ass

Financial Analysis for Managers I Coursework Example | Topics and Well Written Essays - 750 words

Financial Analysis for Managers I - Coursework Example The rent of a warehouse where these pencils are stored is $100; hence it is a fixed cost. $100 would still need to be paid whether 10 pencils are stored there or 1000 pencils. Thus with a change in production, the fixed costs remain unmoved. Cost-Volume-Profit (CVP) analysis is a managerial accounting tool that helps to identify a relationship between the cost, profit and sales volume. It is used to 1) determine the level of output required to achieve any target profit level or 2) to find the impact changes in costs to the profitability. (Mowen & Hansen, 2005) In CVP analysis, 'break even' means to produce goods at such a quantity where there is no-profit and no-loss. It is a position where the company incurs exactly the same amount that it generates from the sales. (Mowen & Hansen, 2005) A direct cost is that cost that can be directly attributable to a specific unit of product or with a specific operation relating to production. On the other hand, an indirect cost is a fixed or overhead cost that does not relate to the production of a particular item and is incurred even when there is no output. (PHB, 2005) The core activity of an accounting teaching class is to educate the students. Therefore all those items that directly relate to the educational process of accounting would be direct costs and those that do not relate to the educational process of accounting would be treated as indirect costs. The salary paid to the accounting teacher and the costs of accounting books will be direct costs since they directly relate to the teaching of the accounting course. The costs of lighting, electricity, janitorial services, etc. would be indirect costs since they just aid in the teaching process but are not directly related to teaching the course. 5. How can out-of-pocket costs and opportunity costs be applied to your personal financial decisions Out of pocket costs and opportunity costs can be applied to an individual's personal financial decisions by comparing both of these costs. If the benefit of playing an hour of football is more that the benefit of studying for an hour, then the individual should use that hour to play football. If one hour is being spent each day at a tuition center which costs $50/hour for a 4 day week, it would cost $800 for a month using up 16 hours. If these 16 hours are used for other work like taking a horse riding lesson which is $400/month, then financially taking horse riding lesso

International Marketing Essay Example | Topics and Well Written Essays - 2500 words - 3

International Marketing - Essay Example Internationalization Process A) Stages in Entry Process Internationalization process allows new ventures to gain growth and positive returns through capitalizing on their unique resources as well as capabilities. Learning also becomes possible and internationalization facilitates the new ventures to create and exploit its knowledge. While entering into any markets of any country, it becomes essential to look for opportunities for the product in that particular country so that success can be achieved. There are five basic steps that can be taken into account while expanding operation in other countries. They are ‘country identification, preliminary screening, in-depth screening, final selection and direct experience’. Country Identification It becomes too essential to carry out a common overview of prospective new markets. It may happen at times that two countries share a similar culture, political ideology or religion such as China and Cuba, similar language like the Uni ted States and Australia, similar heritage such as the United Kingdom and Australia. In this stage, the selection becomes straight forward. Preliminary Screening This is the stage where it becomes essential to have a serious look at those countries remaining after undergoing preliminary screening. Here one begins to score weight or rank the nations according to macro-economic factors such as level of domestic consumption, exchange rate, currency stability and others. This is the stage where companies begin to start calculating the nature of the market entry cost. It is to be decided what portion of the company entering into the market is possessed domestically. A proper PESTEL analysis needs to be done before entering the market of other countries. In-depth Screening This is the stage where it would be considered feasible for market entry. Therefore, it becomes important to gain detailed information on the target market so that the strategies can be formulated accordingly. Final Sel ection At this stage it becomes essential to prepare the final shortlist of the potential nations. It would be viable to look at the close competitors or the domestic companies which have already entered into the market in order to get firm costs concerning market entry. In this stage, the managers often looks for nations that it has already entered in order to check the similarities or learning which can be used for decision making. Direct Experience This is the stage where the marketing managers may travel to those particular nations in order to experience the nation’s culture as well as business practices. However, based upon the case study, the following steps of foreign market entry have been identified. 1. Identification of company’s objective in the foreign market entry 2. Preliminary country screening 3. Opportunities and threats in the target country 4. Capabilities, resources and skills needed to succeed in foreign markets 5. Identification of company’ s strength and weakness on key success factors 6. Decisions regarding entering the target market 7. Comparison and ranking of the target market B) Decision to Be Made In Each Stages In case of identifying the objective of the company in the foreign market entry, companies need to identify why it wants to enter into the foreign market. The motives may be to exploit large and

Health care marketing Essay Example | Topics and Well Written Essays - 250 words - 14

Health care marketing - Essay Example a need of people in contrast to the cosmetic plastic surgery to advertise which, the marketers have to make additional efforts like involving popular celebrities and stars in the marketing to motivate the people because cosmetic plastic surgery can generally be lived without. It is absolutely true that in times of crisis, organizations in the contemporary age have to take objective steps without wasting any time to control the damage and save their image from getting tarnished among the public because the channels and networks of information have become omnipresent and the flow of information through them is rampant. People make use of such social media websites as Facebook and Twitter to run campaigns against such companies during the times of crisis, and by condemning the activities of such companies in their posts. Organizations that wait to control the damage before sufficient damage has been cost cause themselves a lot of damage as a result of declined value amongst the public in general and the stakeholders in

Canadain provinces Dissertation Example | Topics and Well Written Essays - 750 words

Canadain provinces - Dissertation Example Population growth demonstrated a variation between the two provinces. Alberta registered the highest population in the entire country by a massive 10.3% while the province of Manitoba registered a 0.5 % growth. These statistics demonstrates a population density of 2.0 for Manitoba while that of Alberta is 4.6 people per square kilometer. Population age characteristics were found to be consistent in both provinces. In terms of gender, the females are dominant across both provinces though by slight margins. The majority of the population lies at the age group of 25-44 years among all genders while the second placed age group is between 5-14 years in both provinces. This indicates a trend of population that can be extrapolated to the entire country. In addition, the older population comprising of ages 85 and over seems to be the lowest followed by age group 75-84 years. These figures converge at a median age of 36.8 in Manitoba and 35.0 in Alberta, this indicates that the future populat ion trend in Alberta is expected to show more growth despite the exponential trend experienced in the past. Majority of the people in both provinces are above 15 years with figures indicating 79.1% and 79.2% in Manitoba and Alberta respectively. Education is a key pillar of socio-economic development in Canada. A great portion of people aged 15-24 years in Manitoba attends school on full time basis while a substantial 30.9% of population in this age group attending school on part time basis. Alberta is not any different, majority of the population around the same age group undertake education on full time basis with only 30% on part time engagement. Across all the age groups the percentage number of individuals with a University certificate, diploma or degree is higher in Alberta as compared to Manitoba. This is an indicator of the weight given to education in Alberta. Apart from the 20-34 age groups, all other age groups in Manitoba depict higher percentages of individuals with les s than a high school graduation certificate (Maclean 2).. There exist over ten religions in these regions of Canada. Protestants dominate in both provinces having almost half of the population subscribing to this religion. In second place come Catholicism, having a substantial following in both provinces but Manitoba has a higher general percentage of people who subscribe to this religion. Similar trends are evident across most of the other religions with the percentage of people who subscribe to no religion appearing third in the order of dominance. 23.6% of the entire population is atheists in Alberta while in Manitoba the percentage is slightly lower at 18.7%. Christian, n.i.e. is the fourth most dominant religion in both provinces contributing 4.03% and 4.2% in Manitoba and Alberta respectively. An aberration is evident in the fifth most dominant religion. In Alberta Muslim takes the position with a 1.7%, contrary to Manitoba where it appears ninth in the order of dominance. In Manitoba at fifth position is Christian Orthodox that has 1.4% following of the entire population. The people in these provinces use various languages with English dominating. The census indicates the majority of people use English

Learning and Instruction Part 2 Assignment Example | Topics and Well Written Essays - 1250 words

Learning and Instruction Part 2 - Assignment Example asks; (c) knowledge about strategies and tactics for acquiring, integrating, applying, and thinking about new learning; (d) prior content knowledge; and (e) knowledge of both present and future contexts in which the knowledge could be useful. Hence, my style of teaching would be constructivist with these learners as opposed to direct with novice learners. As McKeachie would have liked to put it, Strategic teaching and Strategic learning are like â€Å"flip sides† of a coin. Hence, the idea of strategic teaching must be closely aligned with that of strategic learning and the process is a two-way street where the instructor must orient his or her teaching strategies based on the level of education and prior knowledge of the student. Most interventions designed to increase either the effectiveness or efficiency of training focus on instructional materials, methods, and teaching strategies. A critical component that is often ignored in most of these approaches is the degree to which the individual is ready and able to interact with the instruction in ways that will result in meaningful and enduring learning. Q2) TEACHING LARGE CLASSES: Although people teaching large classes often try to avoid multiple-choice/ true-false tests, it has been found that such efforts seem to be appreciated by almost no one. Although researchers may criticize the limitations of anything other than essay tests, they usually are willing to accept an alternative if more than fifty students are involved. When teaching large classes, it has been found to be useful to make sure that the lectures contain enough material not covered in the supporting text to make it worthwhile for students to attend lectures. QUESTIONING: In his research McKeachie found that effective methods of questioning were usually those that succeeded specific instructions from the teacher. For instance, the line, â€Å"please state your explanation as to how you arrived at your particular answer† provided students and

Experiences of Schizophrenia Counseling Essay Example | Topics and Well Written Essays - 500 words

Experiences of Schizophrenia Counseling - Essay Example One of the greatest rewards in working with those who have schizophrenia is mentoring those who are feeling like they have hit rock bottom then climbed the ladder to emotional stability and happiness. That is when they know that have achieved success by regularly attending group therapy sessions, practiced exercises they have been taught and made progress day by day. Some challenges I face are that some of the patients are inconsolable and have thoughts of suicide. This is where I believe that family therapy is also helpful because they need as much support as they can receive. This of course is supplemental to the drug therapy which is the backbone of treatment. The behavioral and family therapies are a means of supplementing drug therapy to help re-integrate schizophrenic individuals into society through the development of social skills. By re- integrating the individuals back into society, the probability that the patients adhere to their drug therapies increases. I believe this i s crucial for them to live a normal life.

Special interest Essay Example | Topics and Well Written Essays - 1250 words

Special interest - Essay Example One kind of an interest group is that which takes the form of political groups; the aim of the creation of this kind of interest group is to influence people in the political arena to create policies that favor the interest of a political interest group. One such interest group is Texas Medical Association, this group is said to be the largest medical association that has been operational for years with the aim of representing over 46,000 physicians and other individuals related to the field of medicine (Newell, 2009, p.92). Interest groups often derive their strength from their membership. Some of the largest and most powerful interest groups in the nation include the American Association of Retired Persons (AARP). This association has a membership of over 32 million persons. With this kind of membership, pushing for championing of certain interest is not very hard. Other equally influential interest groups include the National Rifle Association (NRA), AFL-CIO and American Medical Association (Chapter 11, n.d). The relationship between interest groups and political groups is a very close one and it has been in existence for a very long period of time. Both these groups are defined to conduct separate functions in a particular nation (Bardes, 2012, p.224). A party has the task of ensuring candidates are elected for various public positions after nominating them. On the contrary, interest groups focus on the policy side of the political environment, where they try to influence the policy decision making process. Even though both these groups are defined to have different operational functions, they have a strong relationship which has lasted for quite a long period of time. For example, interest groups such as environmentalists have close ties with a particular state’s democratic political parties. The close alliance

The Role of Information Security Policy Essay Example for Free

The Role of Information Security Policy Essay The framework for an organization’s information security program is composed of policies and their respective standards and procedures. This article will examine the relationship between policies, standards, and procedures and the roles they play in an organization’s information security program. In addition, the roles that of individuals inside and outside of the organization with respect to the creation of policy and standards will be discussed. Finally, how an organization can meet information security need at each level of security and how this relates to the information security policy (ISP) content. Information Security Policy (ISP) Definition Policies form the foundation of everything an organization is and does. Likewise, an ISP is the beginning of a company’s information security program. A policy is a high-level plan on how an organization intends to respond to certain issues. An ISP sets the tone of the organizations information security program and establishes the will and intent of the company in all information security matters. The ISP also defines how the company will regulate its employees. Policies must support an organization’s objectives and promote the organization’s success. Policies must never be illegal and must be defensible in a court of law. Policies must be supported and administered fairly and consistently throughout the organization (Whitman Mattford, 2010). The following paragraphs list some tips for developing and implementing an ISP. A Clear Purpose It is essential that an ISP have a clearly defined purpose. Specific objective should guide the creation of the ISP and the purpose should articulate exactly what the policy is to accomplish (McConnell, 2002).  McConnell (2002) further notes that, â€Å"If you cannot explain why the policy exists, you cannot expect your employees to understand it or follow it† (p. 2). Employee Input In developing policies, it is a good idea to gain the input of the employees to which the policy will apply. Ideally, there should be at least one representative from each department. Allowing various employees give input to the policy, will help to ensure that nothing is overlooked and that the policy is easily understood (McConnell, 2002). Security Awareness and Training Program In addition to gaining the employee’s acknowledgement of the ISP at their orientation, the ISP should be part of the security awareness and training program. Ongoing awareness training can focus on various security policies (McConnell, 2002). It is important to keep the awareness of information security matters fresh in the minds of the employees to avoid complacent behaviors that may lead to serious violations. Enforcement Enforcement is critical to the success of any policy; policies that are not enforced are soon ignored. McConnell (2002) notes, â€Å"A policy that you are unable or unwilling to enforce is useless† (p. 2). If a policy is unenforceable, it should be removed or revised to the point where it is enforceable. Not only must a policy be enforceable, it must be enforced from the top down. When managers set the example, the rest of the staff are more likely to follow (McConnell, 2002). Standards While policy sets the overall plan or intent of the organization in regards to information security, standards define the specific elements required to comply with policy. For example, an acceptable usage policy may prohibit employees from visiting inappropriate websites; the standard defines what websites are considered inappropriate (Whitman Mattford, 2010). Standards may be developed in house, but the common preferred way is to utilize already established industry standards that can then be tailored to the  organization’s specific needs. Procedures Procedures are the step-by-step actions necessary to comply with the policy. Procedures are driven by standards that are governed by policy (Whitman Mattford, 2010). Most policy violations may be traced back to either a willful or negligent failure to follow procedures. Roles Senior Management Senior management initiates the need for policy creation; it is their intent and purpose that the policy is created to communicate. Senior management is the final authority and gives the final approval for the policy. Information Security Officer (ISO) The ISO is essentially the policies champion overseeing all aspects of the ISP and the agent reporting to senior management. The ISO creates a governance committee that works together to develop and update policy. The ISO oversees organizational compliance with security policies (California Office of Information Security and Privacy Protection, 2008). IT Staff The information technology (IT) staff is responsible for installing and maintaining the technical controls to ensure users are compliant with the security policies. For example, the IT staff may install software that blocks access to prohibited websites. The IT staff also conducts monitoring of employee activity on the company network. Managers Mangers, as already stated, must lead by example. When managers do not follow and enforce policies, it communicates to the employees that policies are not important and that following them is optional. A body will always follow its head; likewise a department will always follow the example of its managers. End Users The average end user is perhaps the greatest security asset and the greatest security threat; clear security policies and proper security awareness training are the deciding factors. People should be made aware of common  security threats such as social engineering attacks and the importance of safeguarding their password information. They should be trained to understand exactly what the organization expects form them in regards to information security (Whitman Mattford, 2010). External Agents There may be times when outside people may need to have access to an organizations network such vendors, consultants, and temporary employees. Such people should be required to sign an acknowledgement form agreeing to abide by all security policies, standards, and procedures. Security Levels The Bulls-eye Model The bulls-eye model is a way of tailoring the ISP to the needs of the organization at various security levels. The four levels of the bulls-eye are: policies, networks, systems, and applications (Whitman Mattford, 2010). Whitman and Mattford (2010) state, â€Å"In this model, issues are addressed by moving from the general to the specific, always starting with policy† (p. 120). Policy AN information security policy, as already discussed, sets the foundation for an organization’s information security program (Ungerman, 2005). While all policies are high-level, there are different levels that a policy may address. The enterprise information security policy (EISP) is the overall policy that encompasses all other information security policies within the organization. Issue specific security policies (ISSP) target specific issues and contain more low-level elements than the EISP. An example of an ISSP is an acceptable use policy (SUP). Finally, there are system specific security policies (SysSP). A SysSP is so low-levelthat it may appear more like a procedure than a policy. A SysSP through either managerial guidance or technical specifications defines system-specific controls needed to conform to an ISSP. An example of an SysSP would be the implementation of website filtering software to enforce the company’s AUP (Whitman Mattford, 2010). Network Network-level security is about securing the network and as such is heavily  focused on controlling access through user authentication. EISP may define who may access the network in addition to how and why. An ISSP may then specify what type of authentication and access control models may be used. SysSPs can then proscribe technical specifications, such as software requiring a periodic password change, to facilitate compliance with the ISSP (Whitman Mattford, 2010). System System-level security is concerned with securing the actual system components of the network such as the computers, printers, and servers. Examples of ISSPs at the system level are AUP, password policies, and policies prohibiting the installation of unapproved hardware and software by end users (Whitman Mattford, 2010). Application Application-level security deals with any type of application form out-of –the-box software like MS Office to enterprise resource planners (ERP) like SAP. Policy considerations here would be controlling user access and application update policy. Policy controls who has access to which applications and to which features (Whitman Mattford, 2010). Conclusion References California Office of Information Security and Privacy Protection. (2008, April). Guide for the Role and Responsibilities of an Information Security Officer Within State Government. Retrieved from http://www.cio.ca.gov/ois/government/documents/pdf/iso_roles_respon_guide.pdf McConnell, K. D. (2002). How to Develop Good Security Policies and Tips on Assessment and Enforcement. Retrieved from http://www.giac.org/paper/gsec/1811/develop-good-security-policies-tips-assessment-enforcement/102142 Ungerman, M. (2005). Creating and Enforcing an Effective Information Security Policy. Retrieved from http://www.isaca.org/Journal/Past-Issues/2005/Volume-6/Documents/jopdf-0506-creating-enforcing.pdf Whitman, M., Mattford, H. (2010). Management of Information Security (3rd ed.). Mason, OH: Cengage Learning. Retrived from The University of Phoenix eBook Collection database.

Compare Nuclear and Wind Energy

Compare Nuclear and Wind Energy At present, society is developing rapidly so mankind needs more electricity. Most countries are using the method of burning fossil fuels to make power to produce the materials which effects the environment because carbon dioxide, sulfur dioxide and nitric oxide are emitted. These gases can help to build the greenhouse effect and acid rain pollution, which will make the earths temperature warmer and the rain acidic. Therefore, mankind uses new ways to produce energy, such as, nuclear, wind and solar. In this essay, nuclear energy will be compared and contrasted with wind energy; both of them are energy for sustainable development, though the main differences are their location, environment and efficiency. The similarity is that both nuclear energy and wind energy are will have a negative affect for environment, although both of them are not product bad for environment gas. According to Darvill (2010), the nuclear energy is produced by the large nuclei splitting to release energy. However, after nuclear fission, the nuclear power plant will produce some danger waste, when the radiation happening, Marples (1996) stated that Iodine-131, Cesium-137, and Strontium-90 were the most serious radioactive elements to be disseminated by the disaster at Chornobyl. The cases it was nuclear and pollution. For example, Marples (1996) reported that the famous nuclear leakage is the disaster at Chornobyl on the middle of ninety century which the contaminated areas include, approximately 20 percentage of the territory of Belarus, circa 8 percentage of Ukraine and about 0.5-1.0 percentage of the Russian Federation, altogether the total area is about the size of the Northern Ireland combined the state ad d of Kentucky or of Scotland. Besides that, wind energy is also harmful to the environment. Because wind power energy needs to build a high tower, put a large propeller on the top, the wind blow the propeller turn round. Furthermore the windmill can kill birds, Darvill (2012) show than migrating flocks tend like to dependent on strong wind move. However, the windmills also like to build in those areas. Therefore the species will be abatement or disappear to break the ecological balance, which is the same badly for environments. Both ways to make electricity are bad for environments. One obvious difference is the geographical limitations of power generation. When a country found the new way to make energy, this is the most important thing they considered. Nuclear energy and wind power energy both have geographic limitations. Most nuclear power stations are built in coastal regions, because the nuclear power stations need to use the sea water as the coolant. If the stations were building inland, nuclear power station also can use the fresh water as the coolant, however the investment would be raised. The location of wind power is more important for generation, mankind would like to build a lot of these towers together, to set up a wind farm and produce more energy, before building the station, the most important part is to choose a place which has strong wind as wind farm. Duncan (2000) pointed out that the wind speed should be around in 25 meter per second to make sure that the wind turbines are working stably, it than mean the wind must strong and reliable. Such as Darvill (2010) showed that at the open plains, on the tops of hills and gaps in mountains. Therefore, wind energy cannot be used everywhere. Another difference between nuclear energy and wind energy is efficiency. Nuclear power stations work as the fossil fuel burning stations, both of which are heating the water to make steam, that turn turbines and make electrical power. One ton of uranium produces more energy than that produced by several million tons of coal or several million barrels of oil (Thinkquest). Thus, the nuclear power energy is more efficientlyÂÂ  than the fossil fuels when making power. However wind power energy is a kind of low efficiency energy. Duncan (2000) illustrated that both of from solar energy and wind power energy, the cost of produced electricity are substantial higher than for a heat power station, furthermore the generators are erratic since they require sunshine or wind to work. For example Currently only 1 percentage of the state of Californias electricity supply comes from 17000 wind mills, with the equivalent output of one fossil-fuel plant (Duncan, 2000). The efficiency is the obvio us difference for nuclear energy and wind energy. In conclusion, nuclear energy and wind power energy are both have different and similar property. The similarity is both of them are not product the bad for environment gas. The nuclear energy is high efficiency energy, it cost less source to make more energy; Even though, after fission, it would produce waste, which is dangerous the wash, it is danger. Furthermore, the wind energy is efficiency is too low and the geographical limitation is a big problem. In my opinion, the nuclear energy power can be the popular to use in future, because nuclear is more efficiency, the waste problem will with the social development to resolve.