Banking Sector

hey man, where is the project yaar............:SugarwareZ-064:

Can't see,

even mp members thanked u..........hows that possible.......

Plz Check it out.................................
 

ViJiT

Vijith Pujari
CONTENTS

 AN INTRODUCTION TO BANKING SECTOR IN INDIA
 PEST ANALYSIS
 7P’s OF BANKING SECTOR
 BLUEPRINTING
 4I’s OF BANKING
 RATER ANALYSIS FOR INDIAN OVERSEAS BANK
 MARKET SEGMENTATION
 COMPLAINT HANDLING–HDFC BANK
 CASE STUDY-I
 RATER
 SERVICE RECOVERY
 FISH BONE
 CASE STUDY-II (ICICI BANK)
 RATER
 BIBLIOGRAPHY
 ARTICLES
 

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ziinii

New member
hello everyone

if anyone has any project on banking send me
preferably some primary research done by someone

thanks
zeenat
 

chand_laljani

New member
Basis and Background:
In a growing economy and industrial cycle efficient units grow and flourish. Non-viable and inefficient units fade and vanish yielding place to new units. Anyone would like to keep him healthy and fit to be useful to society. Similarly SSI units strive to be efficient and profitable thereby contributing to the economic growth of the country. Sometime it is possible units fall sick for reasons known and unknown. If sickness is detected at early stages, remedial measures can be initiated and the unit may be turned around. It relives the agony and anxiety of the owners, lending agencies and other connected persons.

Incipient Sickness

1. It is of utmost importance to take measures to ensure that sickness is arrested at the incipient stage itself. The branch/bank officials should keep a close watch on the operations in the account and take adequate measures to achieve this objective. The managements of the units financed should be advised about their primary responsibility to inform the banks if they face problems which could lead to sickness and to restore the units to normal health. The organizational arrangements at branch level should also be fully geared for early detection of sickness and prompt remedial action. Banks/Financial Institutions will have to identify the units showing symptoms of sickness by effective monitoring and provide additional finance, if warranted, so as to bring back the units to a healthy track. An illustrative list of warning signals of incipient sickness that are thrown up during the scrutiny of borrowal accounts and other related records e.g. periodical financial data, stock statements, reports on inspection of factory premises and godowns, etc. is given in Appendix-I which will serve as a useful guide to the operating personnel. Further, the system of asset classification introduced in banks will be useful for detecting advances, which are deteriorating in quality, well in time. When an advance slips into the sub-standard category, as per norms, the branch/bank should make full enquiry into the financial health of the unit, its operations, etc. and take remedial action. The bank/branch officials who are familiar with the day-to-day operations in the borrowal accounts should be under obligation to identify the early warning signals and initiate corrective steps promptly. Such steps may include providing timely financial assistance depending on established need, if it is within the powers of the branch manager, and an early reference to the controlling office where the relief required are beyond his delegated powers. The branch/bank manager may also help the unit, in sorting out difficulties which are non-financial in nature and require assistance from outside agencies like Government departments / undertakings, Electricity Boards, etc. He should also keep the term lending institutions informed about the position of the units wherever they are also involved.
2. Definition of Sick SSI Unit
An SSI unit should be considered 'Sick' if
a) any of the borrowal accounts of the unit remains substandard for more than six months i.e. principal or interest, in respect of any of its borrowal accounts has remained overdue for a period exceeding one year. The requirement of overdue period exceeding one year will remain unchanged even if the present period for classification of an account as sub-standard, is reduced in due course;

or
b) there is erosion in the net worth due to accumulated cash losses to the extent of 50 percent of its net worth during the previous accounting year; and
c) the unit has been in commercial production for at least two years.
This would enable banks to take action at an early stage for revival of the units. For the purpose of formulating nursing programme, banks should go by the above definition with immediate effect.

3. Viability of Sick SSI Units
A unit may be regarded as potentially viable if it would be in a position, after implementing a relief package spread over a period not exceeding five years from the commencement of the package from banks, financial institutions, Government ( Central / State ) and other concerned agencies, as may be necessary, to continue to service its repayment obligations as agreed upon
including those forming part of the package, without the help of the concessions after the aforesaid period. The repayment period for restructured (past) debts should not exceed seven years from the date of implementation of the package. In the case of tiny/decentralised sector units, the period of reliefs/concessions and repayment period of restructured debts which were hitherto, two years and three years respectively have been revised, so as not to exceed five and seven years respectively, as in the case of other SSI units. Based on the norms specified above, it will be for the banks/financial institutions to decide whether a sick SSI unit is potentially viable or not. Viability of a unit identified as sick, should be decided quickly and made known to the unit and others concerned at the earliest. The rehabilitation package should be fully implemented within six months from the date the unit is declared as 'potentially viable' / 'viable'. While identifying and implementing the rehabilitation package, banks/FIs are advised to do holding operation' for a period of six months. This will allow small-scale units to draw funds from the cash credit account at least to the extent of their deposit of sale proceeds during the period of such holding operation'


How banks should not deal with SSI sickness
By P.D. Sharma
BANK credit to SSI units is erratic in more than one sense. If it is inadequate and untimely on the one hand, it is made costlier through arbitrary means. Sickness in this sector is becoming widespread. Even in dealing with sickness, banks’ attitude is self-defeating, causing losses to them.
Consultancy company Mckinsey’s partner has estimated that the ratio of NPAs to total loans was 16% in 1998 but as per estimates based on international accounting norms this ratio is 20-21%. It has further revealed that public sector banks are over staffed to the extent of 30-35% and it is one of the reasons for making them sick. So weak or sick banks can only make borrowers sick. Sickness in the SSI sector may be gauged from the fact that even the SBI had to write off Rs 666.80 crore in 1997-98 against Rs 293.67 in 1996-97. The total debts written off by 27 PSBs in 1997-98 was Rs 2800 crore.
Banks apply almost the same financial risk rating to SSI units as to large units. Economy of scale in both cases is widely different and is not comparable. Current ratio of 1.33 attracts full marks and score gradually decreases to 1.0 when score is zero. The Naik Committee has made this ratio irrelevant and intends to lend SSI units on the basis of turn over. Banks are flouting the norms of this committee. For rating the optimum current ratio can be 1.25.
Total outside loan and tangible networth norms are also arbitrary and chosen to hurt this vulnerable sector. Some banks count family unsecured loans as part of equity while others do not do so. SBI, supposedly the champion of the SSI sector, does not count this as capital. This reduces the score and interest rate is higher.
The parameter based on profit to determine interest is most undesirable. Profit margins in the SSI sector are very thin and vary according to market conditions. Ratio of PBDIT/Interest is kept too high for maximum score. Even the bottom seems high. This parameter should be eliminated. Similarly ratio of profit after tax to sales is too high. This is a deliberate attempt to increase the interest rates for the SSI sector. Accepted return on capital at 20% is too high. Even the bottom of 10% is unachievable.
Banks differ on the modes of commuting profit. Interest on the capital of the partners and the salaries to them are not counted in the profit. This is quite illogical. In actual terms these amounts are not withdrawn but are segregated for income tax purpose.
In view of rising sickness, policies to deal with it should be such as to cause minimum loss to the bank. Banks usually run to DRT simply to transfer their problem without watching the bank interest. After obtaining decrees from DRT, banks have to auction the mortgaged assets. In most of the cases the auction fetches low amounts which have no relevance to the realisable amounts. If on the other hand, the sale is done through mutual co-operation between the bank and the borrower, much higher amounts can be realised.
Some banks have even suggested that they should be allowed to evolve an amnesty scheme on the lines of the Kar Vivad Scheme. The Government has directed banks to encourage bank-specific settlement advisory committees (SACs). The scope of these committees has been kept very narrow and will not serve any purpose.
The Government and banks have infact no pains when a single large scale sick unit drains away several hundred crores. SAIL has sought waiver of its loan of Rs 4500 crore from the Steel Development Fund and the Government is considering this actively. If a small steel unit drains away Rs 1 or 2 crore, it is subjected to all sorts of legal actions. This can hardly be termed as fair play in a democratic country.
A number of studies have clearly established that the major cause for large scale incidence of sickness in the SSI sector is the unavailability of adequate and timely working capital finance from the banks.
The RBI and the SBI have evolved a novel idea which intends to tie up with top corporate clients of small and medium scale units for recommending loans to them. This is good but will serve only a limited purpose.




INDUSTRIAL SICKNESS

23.1 A concerted effort for revival of willing and viable sick industries for overall industrial growth of the State, specially in view of chronic problems of sickness in small, medium and large industries in the State is among the topmost priorities of the State Government. It need not be emphasized that sickness in industries not only affects the revenue of the State but also results in unemployment and non-productive investment.
23.2 The State Government intends to take the following measures for prevention of sickness and revival of willing and viable sick industries.
23.2.1 Prevention of Sickness Prevention is better than cure. Periodic coordination meetings with the industrialists / entrepreneurs and financial institutions at the IADA level with respect to the industries located in such industrial areas / estates under the Chairmanship of Managing Director of the concerned Industrial Area Development Authority and at the divisional level under the Chairmanship of the Divisional Commissioner for the rest of areas under their respective jurisdiction shall be held in which the status of various industrial units operating in the areas/ divisions shall be reviewed to ensure early detection of sickness / problem, and preventive measures for the same shall be taken.
23.3 INDUSTRIAL SICKNESS IN SSI SECTOR
23.3.1 For the revival of willing and viable SSI units, the State Government proposes to form a State Level Apex Body with Secretary of Industries/Industrial Development Commissioner as its head to consider such revival efforts.
23.3.2 The State level Apex Body for rehabilitation of sick industry would be vested with adequate powers, so that it can effectively implement the management and financial restructuring. The resolution of such Apex body shall be binding upon all the concerned departments.
23.3.3 The sick SSI units would be identified by such Apex body w.e.f. such date as per the guidelines issued by RBI. Appropriate packages of relief and concessions for such units would be approved for their rehabilitation. The units declared sick by such body and opting for rehabilitation shall be eligible for relief and concessions by banks and financial institutions, as per the guidelines of the RBI within a specified time frame.
23.3.4 Such units shall be eligible for all the incentives, available to new units under this policy, provided the unit has not availed incentives as a sick unit under any earlier industrial policy.
23.3.5 Sick units shall be allowed full rebate on delayed payment surcharge during the period of sickness , if it is included in the dues of Electricity Board.
23.3.6 In case of disconnection of electricity, the sick unit shall be exempted from AMG charge and other contractual guarantee charges for the period of disconnection .
23.3.7 The balance amount of electricity dues of such sick unit after deduction of the aforesaid amount shall be paid by the unit in such installments as may be determined by such Apex body on case to case basis without any delayed payment surcharge . However, if such unit fails to pay any installment in time , for such delay in payment , it shall be liable to pay delayed payment surcharge for such duration at the rate fixed for such delayed payment surcharge.
23.3.8 The Apex Body shall periodically monitor the progress of the revival package and it shall have the competence /authority to take such actions as it may deem fit against the defaulting party including the unit and / or other department.
23.3.9 The State Level Apex Body would comprise of such persons / organisations as may be notified by the State Government from time to time and published in official gazette, in which Finance Department / Commercial Tax Department shall be necessarily represented.
23.4 SICKNESS IN LARGE & MEDIUM SECTORS
23.4.1 A committee with Industrial Development Commissioner / Industry Secretary as its head will be constituted by the State Government to evolve suitable measures for revival of viable sick industrial units including State Public Sector Undertakings in large and medium sector.
23.4.2 The Committee shall make an assessment of sick / closed State Public Sector Undertakings and for revival of technically and economically viable such undertakings, take appropriate measures which may include manpower rationalisation / disinvestment / financial restructuring etc.
23.4.3 The Committee will recommend concessions and facilities including those in this policy statement, if considered necessary for revival of the such sick units. These recommendations would be placed before the Government through State Level Empowered Committee (SLEC), which would be constituted under the Chairmanship of Chief Secretary, for final decision.
23.4.4 Concessions and facilities identified under the scheme of rehabilitation prepared by the BIFR or by State Level Inter Institutional Committee of RBI (SLIIC) would be placed before the committee headed by the Industrial Development Commissioner (IDC) / Industry Secretary for consideration and recommendation to Government through State Level Empowered Committee (SLEC) for approval.
23.4.5 Rehabilitation measures for sick / closed but potentially viable industrial units may inter-alia include financial support / relief and concessions or sacrifices from various Government Department / Organisations and or additional facilities including allocation of power from SEB / DVC and any other agency / statutory body / local authority.
23.4.6 Such closed and sick industrial units which have earlier already availed various facilities due to its sickness would not ordinarily again get facilities unless the State Government may decide to extend such facilities in public interest on case to case basis.
23.4.7 The Government shall frame an Exit Policy so as to enable such units which do not find it possible to continue and intend to dispose off their assets and clear the Bank dues.


. INDUSTRIAL SICKNESS
• A concerted effort for revival of willing and viable sick industries for overall industrial growth of the State, specially in view of chronic problems of sickness in small, medium and large industries in the State is among the topmost priorities of the State Government. It need not be emphasized that sickness in industries not only affects the revenue of the State but also results in unemployment and non-productive investment.
• The State Government intends to take the following measures for prevention of sickness and revival of willing and viable sick industries.

1. Prevention of Sickness
Prevention is better than cure. Periodic coordination meetings with the industrialists / entrepreneurs and financial institutions at the IADA level with respect to the industries located in such industrial areas / estates under the Chairmanship of Managing Director of the concerned Industrial Area Development Authority and at the divisional level under the Chairmanship of the Divisional Commissioner for the rest of areas under their respective jurisdiction shall be held in which the status of various industrial units operating in the areas/ divisions shall be reviewed to ensure early detection of sickness / problem, and preventive measures for the same shall be taken.
• INDUSTRIAL SICKNESS IN SSI SECTOR
1. For the revival of willing and viable SSI units, the State Government proposes to form a State Level Apex Body with Secretary of Industries/Industrial Development Commissioner as its head to consider such revival efforts.
2. The State level Apex Body for rehabilitation of sick industry would be vested with adequate powers, so that it can effectively implement the management and financial restructuring. The resolution of such Apex body shall be binding upon all the concerned departments.
3. The sick SSI units would be identified by such Apex body w.e.f. such date as per the guidelines issued by RBI. Appropriate packages of relief and concessions for such units would be approved for their rehabilitation. The units declared sick by such body and opting for rehabilitation shall be eligible for relief and concessions by banks and financial institutions, as per the guidelines of the RBI within a specified time frame.
4. Such units shall be eligible for all the incentives, available to new units under this policy, provided the unit has not availed incentives as a sick unit under any earlier industrial policy.
5. Sick units shall be allowed full rebate on delayed payment surcharge during the period of sickness , if it is included in the dues of Electricity Board.
Sick Units/Closed Units

As per the above tables, total number of registered SSI units is over 6700. It does not mean that all these registered units are functioning. The quick results of the third All India Census throw some light on number of working units. The Third All India Census of SSIs covered the SSI units registered up to the end of 31st March 2001. As at the and of 31st March 2001, there were 6,157 registered units in the State of Goa. The survey was conducted in respect of 4,842 units. Out of 4842 units surveyed, 2039 units were working and 2,803 units were closed. Thus the percentage of working units to total number of surveyed units is 48, whereas, that of closed units is 52.

Thus, it may be inferred that, out of 6,714 units registered as at the end of March 2003, about 50% of the units i.e., more than 3,350 units are closed units.

It means that these units have been closed down their operations or have become sick. Sickness of industries blocks availability of funds for investment for other ventures. Following table gives an idea of sickness in SSI Sector:
Particulars As at the end of March 2003
No. of units Amount outstanding (Rs. in Lakhs)
Total No. of sick units 120 929.57
Units viable 2 6.97
Units non-viable 116 907.07
Units on which decision is Yet to be taken 02 15.71
Off viable units put under the Nursing prog. -- --
Source: Rural Planning & Credit Deptt, RBI, Mumbai
From the above table it is clear that even though about 3,350 registered units are estimated to be non-operative, no units identified by financial institutions/ approached by the units is only 120, leaving a big question mark about the remaining units. As per the above table, even in case of 116 units found to be non-viable, an amount of Rs. 907.07 lakhs is blocked.
 

chand_laljani

New member
ssi

Basis and Background:
In a growing economy and industrial cycle efficient units grow and flourish. Non-viable and inefficient units fade and vanish yielding place to new units. Anyone would like to keep him healthy and fit to be useful to society. Similarly SSI units strive to be efficient and profitable thereby contributing to the economic growth of the country. Sometime it is possible units fall sick for reasons known and unknown. If sickness is detected at early stages, remedial measures can be initiated and the unit may be turned around. It relives the agony and anxiety of the owners, lending agencies and other connected persons.

Incipient Sickness

1. It is of utmost importance to take measures to ensure that sickness is arrested at the incipient stage itself. The branch/bank officials should keep a close watch on the operations in the account and take adequate measures to achieve this objective. The managements of the units financed should be advised about their primary responsibility to inform the banks if they face problems which could lead to sickness and to restore the units to normal health. The organizational arrangements at branch level should also be fully geared for early detection of sickness and prompt remedial action. Banks/Financial Institutions will have to identify the units showing symptoms of sickness by effective monitoring and provide additional finance, if warranted, so as to bring back the units to a healthy track. An illustrative list of warning signals of incipient sickness that are thrown up during the scrutiny of borrowal accounts and other related records e.g. periodical financial data, stock statements, reports on inspection of factory premises and godowns, etc. is given in Appendix-I which will serve as a useful guide to the operating personnel. Further, the system of asset classification introduced in banks will be useful for detecting advances, which are deteriorating in quality, well in time. When an advance slips into the sub-standard category, as per norms, the branch/bank should make full enquiry into the financial health of the unit, its operations, etc. and take remedial action. The bank/branch officials who are familiar with the day-to-day operations in the borrowal accounts should be under obligation to identify the early warning signals and initiate corrective steps promptly. Such steps may include providing timely financial assistance depending on established need, if it is within the powers of the branch manager, and an early reference to the controlling office where the relief required are beyond his delegated powers. The branch/bank manager may also help the unit, in sorting out difficulties which are non-financial in nature and require assistance from outside agencies like Government departments / undertakings, Electricity Boards, etc. He should also keep the term lending institutions informed about the position of the units wherever they are also involved.
2. Definition of Sick SSI Unit
An SSI unit should be considered 'Sick' if
a) any of the borrowal accounts of the unit remains substandard for more than six months i.e. principal or interest, in respect of any of its borrowal accounts has remained overdue for a period exceeding one year. The requirement of overdue period exceeding one year will remain unchanged even if the present period for classification of an account as sub-standard, is reduced in due course;

or
b) there is erosion in the net worth due to accumulated cash losses to the extent of 50 percent of its net worth during the previous accounting year; and
c) the unit has been in commercial production for at least two years.
This would enable banks to take action at an early stage for revival of the units. For the purpose of formulating nursing programme, banks should go by the above definition with immediate effect.

3. Viability of Sick SSI Units
A unit may be regarded as potentially viable if it would be in a position, after implementing a relief package spread over a period not exceeding five years from the commencement of the package from banks, financial institutions, Government ( Central / State ) and other concerned agencies, as may be necessary, to continue to service its repayment obligations as agreed upon
including those forming part of the package, without the help of the concessions after the aforesaid period. The repayment period for restructured (past) debts should not exceed seven years from the date of implementation of the package. In the case of tiny/decentralised sector units, the period of reliefs/concessions and repayment period of restructured debts which were hitherto, two years and three years respectively have been revised, so as not to exceed five and seven years respectively, as in the case of other SSI units. Based on the norms specified above, it will be for the banks/financial institutions to decide whether a sick SSI unit is potentially viable or not. Viability of a unit identified as sick, should be decided quickly and made known to the unit and others concerned at the earliest. The rehabilitation package should be fully implemented within six months from the date the unit is declared as 'potentially viable' / 'viable'. While identifying and implementing the rehabilitation package, banks/FIs are advised to do holding operation' for a period of six months. This will allow small-scale units to draw funds from the cash credit account at least to the extent of their deposit of sale proceeds during the period of such holding operation'


How banks should not deal with SSI sickness
By P.D. Sharma
BANK credit to SSI units is erratic in more than one sense. If it is inadequate and untimely on the one hand, it is made costlier through arbitrary means. Sickness in this sector is becoming widespread. Even in dealing with sickness, banks’ attitude is self-defeating, causing losses to them.
Consultancy company Mckinsey’s partner has estimated that the ratio of NPAs to total loans was 16% in 1998 but as per estimates based on international accounting norms this ratio is 20-21%. It has further revealed that public sector banks are over staffed to the extent of 30-35% and it is one of the reasons for making them sick. So weak or sick banks can only make borrowers sick. Sickness in the SSI sector may be gauged from the fact that even the SBI had to write off Rs 666.80 crore in 1997-98 against Rs 293.67 in 1996-97. The total debts written off by 27 PSBs in 1997-98 was Rs 2800 crore.
Banks apply almost the same financial risk rating to SSI units as to large units. Economy of scale in both cases is widely different and is not comparable. Current ratio of 1.33 attracts full marks and score gradually decreases to 1.0 when score is zero. The Naik Committee has made this ratio irrelevant and intends to lend SSI units on the basis of turn over. Banks are flouting the norms of this committee. For rating the optimum current ratio can be 1.25.
Total outside loan and tangible networth norms are also arbitrary and chosen to hurt this vulnerable sector. Some banks count family unsecured loans as part of equity while others do not do so. SBI, supposedly the champion of the SSI sector, does not count this as capital. This reduces the score and interest rate is higher.
The parameter based on profit to determine interest is most undesirable. Profit margins in the SSI sector are very thin and vary according to market conditions. Ratio of PBDIT/Interest is kept too high for maximum score. Even the bottom seems high. This parameter should be eliminated. Similarly ratio of profit after tax to sales is too high. This is a deliberate attempt to increase the interest rates for the SSI sector. Accepted return on capital at 20% is too high. Even the bottom of 10% is unachievable.
Banks differ on the modes of commuting profit. Interest on the capital of the partners and the salaries to them are not counted in the profit. This is quite illogical. In actual terms these amounts are not withdrawn but are segregated for income tax purpose.
In view of rising sickness, policies to deal with it should be such as to cause minimum loss to the bank. Banks usually run to DRT simply to transfer their problem without watching the bank interest. After obtaining decrees from DRT, banks have to auction the mortgaged assets. In most of the cases the auction fetches low amounts which have no relevance to the realisable amounts. If on the other hand, the sale is done through mutual co-operation between the bank and the borrower, much higher amounts can be realised.
Some banks have even suggested that they should be allowed to evolve an amnesty scheme on the lines of the Kar Vivad Scheme. The Government has directed banks to encourage bank-specific settlement advisory committees (SACs). The scope of these committees has been kept very narrow and will not serve any purpose.
The Government and banks have infact no pains when a single large scale sick unit drains away several hundred crores. SAIL has sought waiver of its loan of Rs 4500 crore from the Steel Development Fund and the Government is considering this actively. If a small steel unit drains away Rs 1 or 2 crore, it is subjected to all sorts of legal actions. This can hardly be termed as fair play in a democratic country.
A number of studies have clearly established that the major cause for large scale incidence of sickness in the SSI sector is the unavailability of adequate and timely working capital finance from the banks.
The RBI and the SBI have evolved a novel idea which intends to tie up with top corporate clients of small and medium scale units for recommending loans to them. This is good but will serve only a limited purpose.




INDUSTRIAL SICKNESS

23.1 A concerted effort for revival of willing and viable sick industries for overall industrial growth of the State, specially in view of chronic problems of sickness in small, medium and large industries in the State is among the topmost priorities of the State Government. It need not be emphasized that sickness in industries not only affects the revenue of the State but also results in unemployment and non-productive investment.
23.2 The State Government intends to take the following measures for prevention of sickness and revival of willing and viable sick industries.
23.2.1 Prevention of Sickness Prevention is better than cure. Periodic coordination meetings with the industrialists / entrepreneurs and financial institutions at the IADA level with respect to the industries located in such industrial areas / estates under the Chairmanship of Managing Director of the concerned Industrial Area Development Authority and at the divisional level under the Chairmanship of the Divisional Commissioner for the rest of areas under their respective jurisdiction shall be held in which the status of various industrial units operating in the areas/ divisions shall be reviewed to ensure early detection of sickness / problem, and preventive measures for the same shall be taken.
23.3 INDUSTRIAL SICKNESS IN SSI SECTOR
23.3.1 For the revival of willing and viable SSI units, the State Government proposes to form a State Level Apex Body with Secretary of Industries/Industrial Development Commissioner as its head to consider such revival efforts.
23.3.2 The State level Apex Body for rehabilitation of sick industry would be vested with adequate powers, so that it can effectively implement the management and financial restructuring. The resolution of such Apex body shall be binding upon all the concerned departments.
23.3.3 The sick SSI units would be identified by such Apex body w.e.f. such date as per the guidelines issued by RBI. Appropriate packages of relief and concessions for such units would be approved for their rehabilitation. The units declared sick by such body and opting for rehabilitation shall be eligible for relief and concessions by banks and financial institutions, as per the guidelines of the RBI within a specified time frame.
23.3.4 Such units shall be eligible for all the incentives, available to new units under this policy, provided the unit has not availed incentives as a sick unit under any earlier industrial policy.
23.3.5 Sick units shall be allowed full rebate on delayed payment surcharge during the period of sickness , if it is included in the dues of Electricity Board.
23.3.6 In case of disconnection of electricity, the sick unit shall be exempted from AMG charge and other contractual guarantee charges for the period of disconnection .
23.3.7 The balance amount of electricity dues of such sick unit after deduction of the aforesaid amount shall be paid by the unit in such installments as may be determined by such Apex body on case to case basis without any delayed payment surcharge . However, if such unit fails to pay any installment in time , for such delay in payment , it shall be liable to pay delayed payment surcharge for such duration at the rate fixed for such delayed payment surcharge.
23.3.8 The Apex Body shall periodically monitor the progress of the revival package and it shall have the competence /authority to take such actions as it may deem fit against the defaulting party including the unit and / or other department.
23.3.9 The State Level Apex Body would comprise of such persons / organisations as may be notified by the State Government from time to time and published in official gazette, in which Finance Department / Commercial Tax Department shall be necessarily represented.
23.4 SICKNESS IN LARGE & MEDIUM SECTORS
23.4.1 A committee with Industrial Development Commissioner / Industry Secretary as its head will be constituted by the State Government to evolve suitable measures for revival of viable sick industrial units including State Public Sector Undertakings in large and medium sector.
23.4.2 The Committee shall make an assessment of sick / closed State Public Sector Undertakings and for revival of technically and economically viable such undertakings, take appropriate measures which may include manpower rationalisation / disinvestment / financial restructuring etc.
23.4.3 The Committee will recommend concessions and facilities including those in this policy statement, if considered necessary for revival of the such sick units. These recommendations would be placed before the Government through State Level Empowered Committee (SLEC), which would be constituted under the Chairmanship of Chief Secretary, for final decision.
23.4.4 Concessions and facilities identified under the scheme of rehabilitation prepared by the BIFR or by State Level Inter Institutional Committee of RBI (SLIIC) would be placed before the committee headed by the Industrial Development Commissioner (IDC) / Industry Secretary for consideration and recommendation to Government through State Level Empowered Committee (SLEC) for approval.
23.4.5 Rehabilitation measures for sick / closed but potentially viable industrial units may inter-alia include financial support / relief and concessions or sacrifices from various Government Department / Organisations and or additional facilities including allocation of power from SEB / DVC and any other agency / statutory body / local authority.
23.4.6 Such closed and sick industrial units which have earlier already availed various facilities due to its sickness would not ordinarily again get facilities unless the State Government may decide to extend such facilities in public interest on case to case basis.
23.4.7 The Government shall frame an Exit Policy so as to enable such units which do not find it possible to continue and intend to dispose off their assets and clear the Bank dues.


. INDUSTRIAL SICKNESS
• A concerted effort for revival of willing and viable sick industries for overall industrial growth of the State, specially in view of chronic problems of sickness in small, medium and large industries in the State is among the topmost priorities of the State Government. It need not be emphasized that sickness in industries not only affects the revenue of the State but also results in unemployment and non-productive investment.
• The State Government intends to take the following measures for prevention of sickness and revival of willing and viable sick industries.

1. Prevention of Sickness
Prevention is better than cure. Periodic coordination meetings with the industrialists / entrepreneurs and financial institutions at the IADA level with respect to the industries located in such industrial areas / estates under the Chairmanship of Managing Director of the concerned Industrial Area Development Authority and at the divisional level under the Chairmanship of the Divisional Commissioner for the rest of areas under their respective jurisdiction shall be held in which the status of various industrial units operating in the areas/ divisions shall be reviewed to ensure early detection of sickness / problem, and preventive measures for the same shall be taken.
• INDUSTRIAL SICKNESS IN SSI SECTOR
1. For the revival of willing and viable SSI units, the State Government proposes to form a State Level Apex Body with Secretary of Industries/Industrial Development Commissioner as its head to consider such revival efforts.
2. The State level Apex Body for rehabilitation of sick industry would be vested with adequate powers, so that it can effectively implement the management and financial restructuring. The resolution of such Apex body shall be binding upon all the concerned departments.
3. The sick SSI units would be identified by such Apex body w.e.f. such date as per the guidelines issued by RBI. Appropriate packages of relief and concessions for such units would be approved for their rehabilitation. The units declared sick by such body and opting for rehabilitation shall be eligible for relief and concessions by banks and financial institutions, as per the guidelines of the RBI within a specified time frame.
4. Such units shall be eligible for all the incentives, available to new units under this policy, provided the unit has not availed incentives as a sick unit under any earlier industrial policy.
5. Sick units shall be allowed full rebate on delayed payment surcharge during the period of sickness , if it is included in the dues of Electricity Board.
Sick Units/Closed Units

As per the above tables, total number of registered SSI units is over 6700. It does not mean that all these registered units are functioning. The quick results of the third All India Census throw some light on number of working units. The Third All India Census of SSIs covered the SSI units registered up to the end of 31st March 2001. As at the and of 31st March 2001, there were 6,157 registered units in the State of Goa. The survey was conducted in respect of 4,842 units. Out of 4842 units surveyed, 2039 units were working and 2,803 units were closed. Thus the percentage of working units to total number of surveyed units is 48, whereas, that of closed units is 52.

Thus, it may be inferred that, out of 6,714 units registered as at the end of March 2003, about 50% of the units i.e., more than 3,350 units are closed units.

It means that these units have been closed down their operations or have become sick. Sickness of industries blocks availability of funds for investment for other ventures. Following table gives an idea of sickness in SSI Sector:
Particulars As at the end of March 2003
No. of units Amount outstanding (Rs. in Lakhs)
Total No. of sick units 120 929.57
Units viable 2 6.97
Units non-viable 116 907.07
Units on which decision is Yet to be taken 02 15.71
Off viable units put under the Nursing prog. -- --
Source: Rural Planning & Credit Deptt, RBI, Mumbai
From the above table it is clear that even though about 3,350 registered units are estimated to be non-operative, no units identified by financial institutions/ approached by the units is only 120, leaving a big question mark about the remaining units. As per the above table, even in case of 116 units found to be non-viable, an amount of Rs. 907.07 lakhs is blocked.
 

man_001

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Hey im searching for banking sector analysis (from general point of view n to not from equity research point-of-view)

Please help me out if possible
 
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