Elderly Drivers

Stefani Ward Age Limit Essay Professor Trewitt 8 – 8:55 Mandatory Age Limits As senior citizens grow older, they do not react as quickly as they used to. It’s not realistic to allow someone to drive who could endanger others. Senior citizens over the age of 75 should not be able to drive. They have increased health problems, require more medication, and drive too slow. Senior citizens have increased health problems making it difficult to handle a car safely.For example, a person with diabetes could have trouble controlling their blood sugar level, and might be in danger of losing consciousness. A person who has a pacemaker or a defibrillator could be a threat to safety because there is a chance that the device could stop working. Vision is a vital part of driving. As a person ages, their eyesight becomes poor, making it difficult to see things. In addition, senior citizens should not be able to drive because they require more medication.Medications can have serious side effects making it difficult to drive. Both prescription and over-the-counter medicines can affect the ability to drive safely by making you feel tired, dizzy, or nauseated. Studies have shown that using certain medications or many medications increase the chance of being in an accident. Senior citizens tend to drive slower than the average person. Driving under the speed limit can cause distractions, and possibly an accident. Not only can it harm other people on the road, but the elderly too.In some states a person can be given a citation for driving under the speed limit. Senior citizens have health problems, require more medication, and tend to drive slow, making the roads unsafe. Studies show that older drivers are more susceptible to injury or even death. Roads will be much safer if the government requires elderly drivers to turn in their licenses at age 75. There will be less accidents, less stress, and increased safety on the road. If the law doesn’t pass, the roads wi ll be dangerous and will cause chaos for other drivers.

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

Bill Gates had been friends since high school Essay Example for Free

Bill Gates had been friends since high school Essay Mike Basset and Bill Gates had been friends since high school. They’d competed for 1st place all the time. They’d spent hour’s together writing computer programs even before people heard in programming. They grew up together and even went to university and were joint top students. They both went in the programming business and soon each opened their own computer company Bill named his ‘Microsoft’ and Mike called it ‘Compufriek’. Bill was very successful and was very famous his products all across the globe he was well know for Windows and Microsoft office. On the other hand Mike was very good but only known in the United States but still lacking behind Bill. They both got married and had children. Mike’s wife Jenny was very jealous of Marry Mrs. Gates shoe always used to talk about how successful her husband is and the contacts he makes with Difrent Company’s across the world. Mike is also fed up his only ambition from when he was a boy was to run the best computer company and here his best friend his standing in his way. One day Mr. & Mrs. Gates invited the Bassets for a barbecue in their new mansion. It was exactly noon when the Bassets arrived at the Gates. â€Å"Hello Mike† said Bill, â€Å"how’s things going? † he asked. â€Å"Alright† replied Mike. They sat down at a table, Bill has dismissed all the servants so they could spend some time together and do everything like the old days. â€Å"I have just signed a deal with the Japanese,† â€Å"Worth a lot† saying Bill as proud as it gets. â€Å"Good I wish the best for you† replied Mike but in a not meaning it sort of way. â€Å"I am fed up of this he’s always boasting about himself, oh I wish I was as rich and famous like Bill† he was saying to himself. The day went on and they had dinner. The next day Mike’s wife started to nag she kept saying how come you’re not as rich as bill and you’re better than him, he couldn’t take it. That day he wanted to eat Chinese he went to his favorite Chinese restaurant ‘Chin Dragon’. They ate dinner and after a waitress came up to them, â€Å"do you want to try our new fortune cookies† â€Å"some people have been very lucky and even there dreams came true† she said. â€Å"Well ok get us two,† replied Mike â€Å"Right away† said the waitress. She went and came back after five minutes carrying a plate with 2 cookies. â€Å"There you go,† said the waitress Mike took his and snapped it in half and took the paper out. â€Å"What does it say? † Asked Mikes wife. â€Å"Fame and fortune will come very soon,† replied Mike. His wife then takes hers and snaps it in half and took her paper. â€Å"Mines say’s your loved ones will be rich and famous! † She told Mike. â€Å"Can it be that my dream will finally come true? † He said to himself. â€Å"What does this mean? † Asked Jenny. â€Å"I don’t know† Mike replied. â€Å"But lets go home I’m tired and I need a rest† he said. When they got home Mike couldn’t stop thinking about the fortune cookies. He kept wondering was this just a coincidence that he got this in a fortune cookie, even Jenny his wife got the same thing. Can this be true can his life ambition come true? No he thought it has to be a coincidence. That night he couldn’t sleep. He kept thinking if this was true what was going to bring him this fame and fortune? All he’s working on at this moment is a simple hacking program for him self because of free time. His wife wakes up. She asks him why isn’t he asleep. He tells her what he’s thinking about and she says, â€Å"I don’t think your going to get fame and fortune just like that†Ã'Ž â€Å"What do you mean? † he replied â€Å"Well, that hacking program you’re working on for fun† she says. â€Å"Yes what about it? † he replies anxiously. â€Å"Is it power full? She asks. â€Å"Yeah its pretty good† he replies but doesn’t have a clue what’s all this got to do with his fortune. â€Å"Why don’t you access Bills files and find out what he’s planning? † she says quietly. â€Å"You want me to betray my best friend. No forget about it† he replied angrily and went to bed. The next day he gets up and goes on his computer to do a bit of work. He kept working on his hacking program until it was finished. â€Å"Honey† he called. â€Å"I’ve finished my program. † Jenny walks in and congratulates him â€Å"Well no you need to test it! † she said. â€Å"Test it? † he replied. â€Å"Who on? † â€Å"I can’t try it on anyone its illegal† â€Å"Well test it on Bills I am sure he wont mind, you are his best friend† she tells him â€Å"Just see if it works properly and the switch it off† â€Å"Well ok† he replies and starts to test it he started to input and few numbers and letters and the put search. Bills name came up on the screen. He accessed his computer. â€Å"Look what’s that? † asked Jenny â€Å"Oh it will be some of his files† â€Å"I’ll close it now I know it works† he saidÃ'Ž â€Å"No† Jenny said, â€Å"just have a quick look, it won’t hurt† He sat there looking at Bill Gates files. His ambition took control of him. He spotted a file named ‘big plan’. He began looking through it. It was a massive program what was going to change the world. He froze. All his life he wanted fame and now he could get it but at his best friends cost. Jenny kept telling him to copy the file then alter it for him so he goes wrong. She called him a coward. He didn’t know what to do. His wife kept nagging him. He finally surrendered to his ambition and downloaded the file to his computer and started to alter Bills file completely. Jenny kept saying how wonderful he was and encouraged him to carry on. He was finished. He worked day and night on this program until one day he had finished it. Bill rang him up that day and said that his whole life just went wrong. The program contract with the Japs he made has fallen because his program didn’t work. Now he has to pay Billions of pounds in compensation and at the moment cant pay that amount so he had to sell half his company. At that moment guilt started to grow in Mikes heart. His best friends life has collapsed but his road is open. He felt very sorry for him and said he was busy. In the following week Mike made a contract with the British. He sold them Bill’s program for a 30 billion contract he got 50% of the shares. His name was known all across the globe and his program sold very fast. But now he was feeling very guilty he’s now the famous rich and famous one while his friend was under debt. In those weeks Bill didn’t even find out about Mike he was to busy sorting out his problem. He went and says the program a computer competition. He was absolutely stunned when it had looked just like the one he made. He gets a bit suspicious and goes to Mike’s home straight away. When he got there he didn’t even say hello to Mike the first thing he said was â€Å"that program of yours when did you start making it? † Mike hesitated a bit knowing Bills suspicion he replies â€Å"oh I’ve been on this special project for a long time, Its been a secret† Bill talked to him about it and went back home. Mike was feeling awful he probably just lost his best friend. His guilt grew more and more over the days past. He didn’t hear from Bill for a while now and was really scared. What he didn’t know was at this time Bill was trying to see if anyone had hacked is computer. He knew that it couldn’t be just anyone because his computer was protected with extra security. Bill spent hours trying to track down the thief. One day when Bill was on his computer he was going through a list of who opened the computer and when he say a weird number. He tried to find out what it meant but couldn’t. Meanwhile Mike was not leading a happy life. He was rich and famous. Didn’t even see his wife, she was always out and about. He couldn’t go out and show his face to the public they would just give him credit for the new program and that would make things worse. One week later something very unexpected happened when Mike was at home. The F. B. I came knocking at his door. â€Å"Can I help you? † he asked â€Å"Would you please come with us? † they replied. â€Å"What seems to be the matter? † Mike asked knowing he was caught. â€Å"You are under arrest for hacking into someone’s computer and steeling ideas and programs. † They replied in a disappointed tone of voice. At that moment he knew his life was over his ambition just destroyed his life. He went quietly with them. As stepping out of their car and going towards the police station he says Bill. â€Å"I’m sorry,† he said to him. â€Å"From all the people I didn’t want to think it was you† he replied in a disappointed way. Mike walked off with the agents and into the station. He was sentenced to 15 years in prison. All of the money from the program went to Bill Gates and he got all the credit. He managed to by back all his company and start dominating the computer world once again. Mike was finished he would never write another computer program again. Bill’s life returned to normal except for one thing he had no best friend beside him. Bill Gates had been friends since high school. (2017, Aug 21). We have essays on the following topics that may be of interest to you

Final exam paper for management skill Term Example | Topics and Well Written Essays - 3000 words

Final exam for management skill - Term Paper Example Notably, one needs to acquire both theoretical and experiential knowledge to acquire the necessary leadership skills and to make sound decisions when the need arises. From this perspective, one should take every opportunity they have to learn and acquire the rights skills that will prepare them to be leaders not only when engaging in personal decisions but also when service a larger population. The formation of leadership begins with setting goals that one wishes to accomplish. Just like organizations have mission statements, a person requires one to ensure that they have a definite direction that they intend to follow while creating their leadership manifesto. Goal setting allows a person to focus on the direction of their progress and to avoid diverging out of step. Therefore, a goal is a target that one puts and gathers all the momentum to follow it. However, goal setting is a point action that requires the right strategies to be accomplished. Setting a goal without designing the strategies is similar to positioning a vehicle without giving it a start; it will never arrive to its destination. Consequently, goal setting must be followed by development of effective strategies that will lead the person towards these goals. Strategy is the vehicle that drives one towards his predesigned destination. The strategy that one adopts depends on the type of leadership that they en d to achieve. On this end, it is clear that transformational leadership is more crucial in modern organizations. A transformational leader is one who induces the right skills and behaviour within those that he or she guides to ensure that they perform in tandem with organizational goals. The process of developing a leadership manifesto requires that a person does self-evaluation to ensure that they know both their strengths and weaknesses. Personal strengths refer

See below Assignment Example | Topics and Well Written Essays - 500 words

See below - Assignment Example hile urban areas did not necessarily grow in terms of number, the size and density of urban areas, especially in the North, grew rapidly in the period immediately following the end of the civil war. This growth was fueled by several sources. Europe had recently faced several major crises, including the Irish Potato Famine (ending 1852, only a decade or before the civil war), fueling continued Irish immigration that continued as family connections were made in the United States. The Revolutions of 1848 caused political strife, as did the collapse of the second French Empire. In short, many Europeans were pushed into immigration seeking a better life, driving the unprecedented growth of American cities. A second notable source of growth for American cities in this period was immigration of black southern Americans. Finally able to move freely, many chose to leave their former slave-masters and seek better jobs in the North. These new urbanized areas incorporated America, becoming one o f America’s first â€Å"melting pots,† as long-standing Americans interacted frequently with new immigrants from the south and Europe. This increased urbanization also had significant economic impacts. American cities, fueled by massive population growth, and seemingly unlimited natural resources, quickly became some of the most productive places in the world. This created a vast amount of wealth, new businesses constantly â€Å"incorporating,† and developing into some of the most powerful institutions in the world. The richest Americans from the â€Å"Gilded Age† were some of the richest people in the history of the world up to this point, and the likes of Rockefeller and his ilk gave this era it’s gilded name. The third prong of incorporation in the United States, racial incorporation, was much less complete than the other two. Laws were set in place theoretically giving black Americans all the rights of to participate completely in the political process, if not fully in

A Speech on Bullying in Schools Assignment Example | Topics and Well Written Essays - 1000 words

A Speech on Bullying in Schools - Assignment Example According to the research findings, it can, therefore, be said that bullying among students takes various forms, such as physical, emotional, verbal or cyber harassment. This implies that the victims may experience harassment in any form that is prevalent in their schools. The researcher would like to tell that the physical and verbal forms are common with the boys while girls normally use the emotional and verbal tendencies. The cyberbullying aspect is also on the rise because of the advent of the social media networks where students interact with their peers and strangers. Similarly, both girls and boys can still apply the other forms of bullying that they like and depend on environmental and background factors. The researcher states that bullies are always known individuals, especially the popular students. They take advantage of their popularity and seniority within the school to harass others for their own personal interests. This also takes place in the presence of other studen ts who might influence the action to proceed or be prevalent in their school. The parents should try to mold their children to embrace good manners and know how to relate to others. It is also appropriate for the teachers to encourage the students to speak out whenever something like bullying happens. Bullying poses negative consequences in schools and affects the bullies and the victims in similar measures. For instance, bullying can derail a student’s academic performance due to the psychological effects and physical injuries. The mental well being of a student is vital for academics and socialization since he or she feels comfortable learning in that environment. The other undesirable consequence of bullying is that it can make a student skip classes for fear of victimization. This happens if the administration does not control the bullying activities and the students feel the school is not the right place. They end up missing classes, which drops their academic performanc e.

Human Resources in Healthcare Essay Example | Topics and Well Written Essays - 1000 words

Human Resources in Healthcare - Essay Example It entails defining the component tasks of a job and the skills and knowledge needed to accomplish such tasks. As such, it would be conducted by the Human Resources department or other assigned individuals like trained job analysts, incumbents or supervisors. The process of job analysis begins with the determination of the purpose for conducting the job analysis. Then, the jobs to be analyzed would be identified. A critical step in this process involves explaining to the employees and determining their involvement. According to Fottler (2008a), this would ease the transition and make employees own the process. The fourth step in this process involves the collection of job analysis information. This information could be in form of work activities, work schedules, work performances and personal requirements. The organizational needs determine the method that would be used to collect this information. These include the observation method involving observing job holders as they work; interviewing job holders and their associates on the job and what it entails; carrying out a survey using structured questionnaires and checklists filled in by job holders; performing the job to gather primary information; having employees record their daily task s through a diary method.; obtaining job attributes from knowledgeable supervisors through the technical conference method; examination of the competencies associated with a job and its execution through the competency model technique; and using collected data for various occupations through the occupational information network. In the fifth step, the information gathered would be organized into a form that would be beneficial to the management and employees, ensuring that the job specifications match the job. This information would then have to be reviewed and updated frequently. The information collected from job analysis wholesomely impacts human resources activities. It informs on the training and development needs of employees. It also identifies the staffing needs of an organization and informs the recruitment of qualified employees. It enables the identification of best qualified job applicants and communication on job expectations. In many organizations, job analysis informa tion informs on the compensation and benefits of various grades of employees. Job analysis serves a critical role in performance appraisals as it gives the performance standards and facilitates the comparison of the expected to the actual performance. Finally, it informs on employee and labor relationships so as to determine appropriate action to foster such a relationship (Fottler, 2008a; Wech & Panjamapirom, 2009). In as much as job analysis should be an on-going practice, organizations set jobs for analysis when such jobs undergo changes in content and personnel functions. Job analysis would be critical when an organization introduces new work. Similarly, when new techniques emerge or major changes occur, job analysis would be crucial (Wech & Panjamapirom, 2009). Finally, when setting up a new organization, job analysis would also have to be undertaken. 2. Define Strategic Human Resources Management (SHRM) and its functions. What

CONSUMER PSYCHOLOGY AND BUYING BEHAVIOR Research Paper

CONSUMER PSYCHOLOGY AND BUYING BEHAVIOR - Research Paper Example Research shows that the congruity between product image and self-image affects the product preference of a consumer and their intentions to buy an item. This congruence with self-image could also facilitate positive attitudes and behaviour towards products. The study conducted in â€Å"Consumers and brands a study of the impact of self-image congruence on brand preference and satisfaction†, was seeking to understand the consequences of congruity of self-image on brand preference and the consumer satisfaction in the UK’s precious jewellery sector. Results indicated that congruity of self-image acted as a vitally powerful predictor of brand preferences of consumers as well as acting as a suitable predictor for satisfaction of the consumer. The respondents with above average self-image, congruity levels were found to be more likely to enjoy higher satisfaction levels, as well as increased likelihood to buy the brand. This was when compared to those who had below average se lf-image congruity levels (Gordon, 2006 p140). For this case study, the consumers were found to be dissonance-reducing buyers (Gordon, 2006 p141). They were highly involved in the jewellery purchase since the product was expensive. There was minimal difference between the brands of jewelry that existed. The consumers were also found to be complex buyers as they were buying highly valued products, and they looked for detailed information before making the purchase.

Organizational Culture and Quality Management Practices Assignment

Organizational Culture and Quality Management Practices - Assignment Example In the same way, technology also seems to be highly significant in the process of developing effective competitive strategies (Hill, 2008, p. 72). Technology makes the production of goods and services to be highly efficient and effective, which is desirable for business activities. Â  Amidst an increase in the number of businesses that are emerging in different industries, the need for high standards of quality is something that cannot be overlooked. Different industries have different ways by which they develop and apply quality standards in their management approaches. The use of quality standards ensures that the goods and services that are manufactured follow certain standards and guidelines. According to Horowitz (2010), quality management is an approach that business organizations use in enhancing customer loyalty and success in their operations. This is because customers prefer associating with companies that are known to have standards of product and service management. In this paper, I will be examining the process of development and application of quality standards in the organization that I work for as a sourcing manager, which is the healthcare industry. Â  Goes (2013), explains that the use of quality standards is something that has existed for a very long time in different industries. The need to develop and use measures and standards in the production process often shows that a business is geared towards developing and maintaining its market share. An organization that follows this trend indicates conscious efforts in achieving conformity, reducing high levels of variations and controlling the quality features of their goods and services. All these efforts are often made with the intention of replicating desirable outcomes and making improvements in the management processes of particular business organizations.

Tone Analysis of Poems Essay Example | Topics and Well Written Essays - 750 words - 23

Tone Analysis of Poems - Essay Example The two poems taken for discussion are Phillis Wheatley’s On Being Brought from Africa to America and William Blake’s The Chimney Sweeper. The analysis of these two poems is done by identifying the tone of voice in each of the poems by concentrating on the specific words that the poet chooses to set the mood of the poem and to express his/her attitude regarding the subject. Phillis Wheatley’s On Being Brought from Africa to America addresses the society’s prejudices about perceiving the notion of race, religion, and identity. The poem is written in a satirical tone, expressing the poet’s mixed attitudes of gratefulness and resentment towards the society. Wheatley starts the poem with a grateful attitude from her personal experiences of Christian salvation and enlightenment of soul; nevertheless, she abruptly turns the poem’s tone into a satirical one, condemning the cultural norms of racism. The poem’s ironic tone can be seen in her personification of ‘mercy’ as a kind owner or Savior who had brought her from the Pagan land. The poet posits a plosive style in using the word ‘Pagan land’ to depict the land as a place of benighted souls. Similarly, she uses words like ‘benighted soul’, ‘sable race’, ‘scornful eye’, and ‘diabolic die’ to portray the society’s dark impression of black people and their land. The poet also expresses a sarcastic tone by comparing slavery and redemption as a grateful act of her oppressors. â€Å"Taught my benighted soul to understand That there's a God, that there's a Saviour too: Once I redemption neither sought nor knew.† The word choices like â€Å"Pagan†, â€Å"Saviour†, â€Å"Christians†, and â€Å"Cain† are allusions to biblical scriptures, providing theological implications to the subject matter of racism. The usage of biblical simile, â€Å"Black as Cain† depicts the association of sin with black color.  

Nike vs Puma Essay Example for Free

Nike vs Puma Essay Nike vs Puma Easily the biggest grudge match in Germany this month will not be between two of the countries competing, but between homegrown Adidas and, of course, American arch-rivals Nike. The business media is already hot on the Stripes versus the Swoosh, with the German brand reportedly splashing out double Nikes estimated ? 60m World Cup marketing spend. But what about the shirts themselves? Which ones would you want to play in, and which should be left on the backs of the die-hards down the pub? Out of the six countries theyre dressing, including hosts Germany, and also France, the best Adidas shirt has to be Argentinas (above left). Perhaps not as recognizable as Brazils famous bright yellow, the subtle sky-blue and white stripes belied how fearsome Argentina were from the late 1970s through the 1980s. Kept simple, although a bit too shiny for my liking, the current shirt remains true to the great players who have previously worn one. As does Hollands shirt (above right), one of eight nations wearing Nike. While every other colour is sported by several teams, no-one but the Dutch really wear orange, and during the mid-1970s they played some of the sexiest football ever. Though theyve never managed to lift the trophy, this jersey echoes the heyday of the Dutch game when their brand of Total Football, as its known, narrowly lost the 1974 final to Germany. It has none of the unnecessary graphics that have plagued the brilliant orange kit of previous years, but again its kept simple and low-key, complete with a nod to the 1970s in the form of the collar. Thats the big boys, but its another German brand thats kitting out the most countries. Puma has deals with no less than 12 federations, including Italy, all of the African teams who qualified, as well as Saudi Arabia and Iran from the Middle East. The brand has taken the opposite approach to its larger competitors, embellishing most of its shirts with designs that reflect that countrys heritage. The Hawks of Togo are depicted, as is the Ivory Coasts nickname, Les Elephants. For me, Tunisias shirt (above left) works best, showing the Eagles of Carthage merged with a sort of camouflage design. Elsewhere, there are a handful of smaller brands providing some of the teams with their kit. Umbros heritage as makers of England shirts is well-known. They also make Swedens, but their best World Cup-related gear is designed by Kim Jones, which is featured elsewhere on Cool Hunting today. Italys Lotto and Spanish new-boys Joma are also after a piece of the action, supplying the likes of Ukraine (above right) and Costa Rica respectively. If you want to be really obscure next time you take to the pitch though, an Ecuador shirt (right), made by little-known company Marathon, wins hands down.

Expressing Global Linkage with Hope Essay Example for Free

Expressing Global Linkage with Hope Essay My chosen major is Global Business. This major trains us to develop skills in management in a global perspective and further enhance these skills in trade, competition, and investments. It entails learning patterns in international and global business specifically on the terms of imports, exports, monetary relationships, and direct investment. The specific skills learned in this major are: setting a mission and vision for the global business enterprise; developing a global business plan; conducting research in an international environment; understanding the nuances of cultural, legal, political and regulatory differences; and using technology to support global trade. By entering into a career that in inline with my major, I believe that I can be an agent of change in this country by following the example of Martin Luther King. I believe that in whatever career you undergo, if you have a pure heart and if you are willing to help other people, you can do it in your chosen field. The act of being in service to humanity doesn’t only involve going to third world countries and feeding children; helping people doesn’t mean that you donate a large amount to an organization; helping people comes from a person’s initiative and will. Being in service to humanity is a choice and it is not awarded to the richest person in the world or to an ambassador. People mostly think that helping others entail helping the poor people only. I believe that this is a misconception. Being in service to humanity entails being an agent of change to humanity. I believe that I’m my chosen career, I would be able to tap a portion of society that has been neglected of change and of help not financially but morally, emotionally, and spiritually. After graduation, my career would entail me to interact and work with people all over the world. My opinion on the logistics and success of their company in a certain place would be a great influence in their decision making. Normally, business is equated with bribery, biases, discriminations, pride, and money. A businessman’s ultimate goal is always to have profit and find ways to have more profit. I want to change the techniques of people making business. I believe that I could be in service here to be able to change the long established techniques by providing businessmen with new and fresh techniques that would suet the businessmen’s goal but not harm other people. When being a middleman for a millionaire’s business, one might be blinded by money and would find ways on how to cheat the businessmen and get more money out of him. By being grounded and remaining a God fearing person, I would want to change this. Another example would be removing discrimination in the workplace. Certain people have their own biases about location, other people, etc. , and I would personally want to change that by giving equal opportunity to people in need of work. Basically I would like to be an agent of change in this field and change the perception of businessmen that they only need to worry about profit; I believe it’s time that they start thinking about other people also benefitting from them.

Combined Bomber Offensive (CBO) Analysis

Combined Bomber Offensive (CBO) Analysis The Anglo-American alliance during World War II (WWII) launched a series of strategic bombing campaigns against the Germans in what is now known as the Combined Bomber Offensive (CBO). The justness of the CBO is and has always been a controversial one, as some schools of thought see it as being just, and had as its primary objective the progressive destruction and dislocation of the German military, industrial and economic system. Thus, undermining the morale of the German people to a point where their capacity for armed resistance was fatally weakened[1]. However, other schools argue the aim of the CBO should be unambiguously stated as the destruction of German cities, the killing of German workers, and the disruption of civilized life throughout Germany[2]. These bombing campaigns on German cities like Dresden, which led to deliberate mass killings or murder of civilians on a large scale by the CBO, is seen as unjust. The bombing of the German city of Dresden will be used as a case study to give a balanced analysis of the CBO in this essay as it is the most controversial. This essay will analyse both schools of thought, taking into consideration if the CBO met the elements of justice in war -Jus in Bello. Analysing the involvement of the Anglo-American alliance in the CBO and the bombing of Dresden during WWII by the principles of Jus in Bello military necessity, proportionality, discrimination and humanity; this essay will determine that the CBO against Germany was just. Jus in Bello has been used as criteria to analyse and determine the justness of CBO against due to the fact that the CBO was an act in the war, which has to be analysed in order to determine if the act of the CBO met the legal and ethical justness. The CBOs objective to attack the city of Dresdens industrial and economic system was a legitimate military necessity. The doctrine of military necessity, states an attack or action must be intended to help in the defeat of the enemy; it must be an attack on a legitimate military objective[3]. Looking at the CBO attack of Dresden from this perspective, it was a legitimate military necessity; because the bombing of the industrial centres and other targets of the economic system was crucial for the CBO in order to slow down the German war machine. The concept is known as the Industrial Web theory, which was developed by Sir Hugh Trenchard, Colonel Billy Mitchell and General Giulio Douhet. Boog et. al support this principle of military necessity as they argue that the Germans could best be eliminated by destroying her armaments industry and the result of that will be breaking the civilian populations will to resist[4]. However, critiques of the principle of military necessity have debated on its controversy, and a grey area on their minds is that of the justness of the CBO on Dresden. Their argument is that the attack on Dresden might be military necessity, but why was it ok for the CBO to kill non-combatants; also their argument is based on the fact that Dresden wasnt of any importance to the Germans. Michael Walzer gives a counter argument to this school of thought when he argues that military necessity supersedes the killing of civilians in a supreme emergency, and he uses Nazi Germany in WWII as an example of supreme emergency for Great Britain[5]. He goes on further to state that: if the situation is grave enough to justify killing or putting at risk ones own citizens to accomplish military objectives, then military necessity may also justify the same risk to other non-friendly non-combatants[6]. Further to that, the arguments of the critiques on the less importance of Dresden to the Germans at the time of the CBO are incorrect. The veracity of this argument is seen in the RAFs briefing notes to its Squadrons which attacked Dresden: Dresden has developed into an industrial city of first-class importanceà ¢Ã¢â€š ¬Ã‚ ¦ its multiplicity of telephones and rail facilities is of major value for controlling the defence of that part of the front now threatenedà ¢Ã¢â€š ¬Ã‚ ¦. The intentions of the attack are to hit the enemy where he will feel it most, behind an already partially collapsed frontà ¢Ã¢â€š ¬Ã‚ ¦[7] These justifies of the attack on Dresden, on the basis of military necessity, which, resulted in production in industries stopping. The bombing of Dresden was therefore not wanton but was justified by military necessity and it was also aiming at civilian morale[8], in order to slow down the German war machine. Jus in Bellos principle of proportionality is an area of contention used by critiques to analyse the unjustness of the CBO. Proportionality means avoiding needless destruction to achieve justified ends[9]. One school of thought argues that the firebombing in Dresden caused more destruction than was necessary. John V. Denson, in his book, Costs of War, supports this theory: it seems to me that the moment has come when the question of bombing of German cities simply for the sake of increasing the terror, though under other pretexts, should be reviewedà ¢Ã¢â€š ¬Ã‚ ¦.The destruction of Dresden remains a serious query against the conduct of Allied bombingà ¢Ã¢â€š ¬Ã‚ ¦. I feel the need for more precise concentration upon military objectivesà ¢Ã¢â€š ¬Ã‚ ¦. rather than on mere acts of terror and wanton destruction, however impressive[10]. Other schools have a different perception of what is proportional and hold that the CBO was proportional with the destruction of civilian targets in Dresden. Proportionality is a hard criterion to apply, as there is no ready way to establish an independent or stable view of values against which the destruction of war is to be measured[11]. The use of the firebombing in Dresden was proportional, despite the argument that sees it as not fulfilling Jus in Bello principle of proportionality. Michael Walzer, in his book supports the justness on the basis of proportionality when he says: it would be difficult to condemn soldiers for anything they did in the course of a battle or a war that they honestly believed, and had good reason to believe, was necessary, or important, or simply useful in determining the outcome[12]. The justness of this principle is the lack of technology at the time of the attack on Dresden, which was the best approach to be utilised at the time. Precision bombing had been used prior to that and it was impracticable, thus, area bombing had to be the means employed[13]. Moreover, with the bombing of Dresden, the Germans supplies of liquid fuels were eliminated with a far smaller cost in causality than would have been incurred had there been no resort to the bombing and destruction of the industrial capacity[14]. Discrimination is another principle which has been used in this essay to analyse how just the CBO on Germany in WWII was. Discrimination within Jus in Bello means avoiding direct and intentional harm to non-combatants[15]. Looking at the CBO based on this, it was a just act, as it did not set out with the intention of attacking and killing civilians. A.C. Grayling in his book argues that there is no such thing as putting non-combatants to the sword during the course of sacking their towns, as this is not classed as murder; for this is no less than their soldiers would do if matters were the other way round and they were sacking your town instead[16]. However, some school of thoughts hold that the attack on Dresden was a deliberate bombing of the civilian population, thus, makes the CBO unjust. They further support their argument that attacks on civilian populations have often happened in wars throughout history, but this fact does not amount to a justification of the practice; moreover, there are no acceptable circumstances in which killing civilians is allowed[17]. This essay argues in line with Douhet, an air power theorist that war as a national phenomenon, involves the totality of a nations activities and forces, and no longer organised forces alone; this is why the distinction between combatants and non-combatants are superseded[18] . The CBO, therefore, was against Germany and not the Nazi government, thus, all the Germans are classed as combatants. Thus, the principle of discrimination was respected and followed, as the CBOs main aim was to attack the enemys industry, and civilian casualties were an unavoidable side-effect[19] as was the case in Dresden. Jus in Bello principle of humanity, also shows how just the CBO against the Germans in WWII was. Humanity is defined as regulating the conduct of those involved in fighting as well as safeguarding human life and curbing the level of violence[20]. Critiques argue that the CBO was inhumane especially with the firebombing which caused untold pain and suffering to the population: it was a war of despair and mounting torments there were no signs that the bombings would lead to a collapse. It was incomprehensible how people struggled on.[21] They also hold that the wholesale destruction of German cities, Dresden foremost among them, could have been averted, even if attacks on urban rail centres had continued[22]. The above argument is flawed given that the degree of devastation suffered by the people of Dresden in the firestorm was an unfortunate weather condition, as prevailing wind helped, and did much of the damage and caused many of the deaths, and was not intended by the CBO, who, at the request of the Russians forces, had seen Dresden as an important choke-point for supplies and troops moving[23]. Further to that, the CBO was just, as it was humane as it shortened the war and prevented a lot more death and loses on both sides. Hasting in his book sums this humanity point when he states: we just wanted to get it over with if we could bring the end closer by dropping bombs on Germany that was fine by us[24]. In conclusion, the CBO was just, despite the controversies surrounding the bombing of Dresden, which others might see as an unjust and legally wrong act of the CBO which goes against Jus in Bello principle of proportionality. However, the principle of military necessity outweighs this school of thought as the German armament production figures continued to rise through much of 1944, and these would undoubtedly have been very much higher but for the effects of the bombing on both industry and workforce[25]. Thus, the CBO was a necessary and ethically just act, and attacks on industrial targets like supplies of fuel, which resorted to the bombing of industrial capacity[26] in order to slow down the Germans fighting edge. References Archives, The National Archives. The Rise and Fall of the German Air Force 1933-45. Kew, Richmond, Surrey: United Kingdom, 2008. Bess, Michael. Choices Under Fire: Moral Dimensions of World War II. Knopf Doubleday Publishing Group, 2008. Biddle, Tami Davis. Rhetoric and REality in Air Warfare. New Jersy: Princeton University Press, 2002. Charles Guthrie, Michael Quinlan. Just War; The Just War Tradition: Ethics in Modern Warfare. London, New York and Berlin: Bloomsbury Publishing, 2007. Christopher, Paul. The Ethics of War Peace. Uppper Saddle River, New Jersey: Pearson Education, Inc., 2004. Denson, John V. The Cost of War: Americas Pyrrhic Victories. New Brunswick, New Jersey: Transaction Publisher, 1997. Grayling, A C. Among the Dead Cities. London: Bloomsbury Publishing Plc, 2006. Green, Leslie C. The Contemporary Law of Armed Conflict. Manchester, Canada: Manchester University Press, 2008. Hastings, Max. Armageddon: The Battle for Germany 1944-45. Chatham, Kent: Mackays of Chatham plc, 2004. Hippler, Thomas. Bombing the People: Giulio Douhet and the Foundations of Air-Power Strategy, 1884-1939. Cambridge: Cambridge Univeristy Press, 2013. Horst Boog, Gerhard Krebs, Detlef Vogel. Germany and the Second World War, Volume VII. Oxford: Clarendon Press, 2006. Johnson, James Turner. Morality and Contemporary Warfare. Binghamton, New York: Yale University Press, 1999. Overy, Richard J. The Air War, 1939-1945. New York: Stein and Day, 1980. Walzer, Michael. Just and Unjust Wars. New York: A Member of the Perseus Books Group, 2000. [1] Biddle, (2002), p.215 [2] Denson, (1997) p.352 [3] Walzer, (2000), p.144 [4] Boog et. al, (2006), p.365 [5] Christopher, (2004), p.163 [6] id. [7] Hastings, (2004), p.387 [8] Grayling, (2006), p. 202 [9] Johnson, (1999), p36 [10] Denson, (1997), p.352 [11] Walzer, (2000), p.129 [12] id. [13] Grayling, (2006), p. 227 [14] The National Archives (2008) p.298 [15] Johnson, (1999), p36 [16] Grayling, (2006), p.4 [17] ibid., (2006), p.4 [18] Hipper, (2013), p.170 [19] Grayling, (2006), p.216 [20] Green, (2008), p.17 [21] Hastings, (2004), p.376 [22] Ibid. p. 355 [23] Grayling, (2006), p.224 [24] Hastings, (2004), p. 370 [25] Ibid.378 [26] The National Archives, (2008), p.298