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A case study of the knowledge of the Zimbabwe Educational Framework among teachers, school administrators and School Development Committees in Masvingo district.

Kudzayi Savious Tarisayi

Everjoy Munyaradzi


Abstract

This study sought to assess the knowledge of education practitioners of the education legal framework obtaining in Zimbabwe. The participants in this study were sampled from workshops on financial management for teachers, school heads and School Development Committees in Masvingo district. The educational legal framework in Zimbabwe is composed of a number of statutory instruments as well as the Education Act Chap 25; 04 and the Zimbabwean Constitution. From this plethora of legal instruments guiding the Zimbabwean education system this study confined itself to the Zimbabwean constitution, Education Act Chap 25; 04, SI 87 of 1992, SI 70 of 1993 and Administration and finance Circular 6 of 1994. The study concludes that teachers, school administrators and SDCs know that education is a fundamental right. However, the study also revealed that teachers, school administrators and SDCs

were conversant on the legal instruments obtaining in Zimbabwe.

Key words: Education legal framework, Education Act, SI 87 of 1992, Zimbabwe

 

1.0 Introduction

This study sought to assess the knowledge of education practitioners of the education

legal framework obtaining in Zimbabwe. The participants in this study were sampled

from workshops on financial management for teachers, school heads and School Development Committees in Masvingo district. The educational legal framework in Zimbabwe is composed of a number of statutory instruments as well as the Education Act Chap 25; 04 and the Zimbabwean Constitution. From this plethora of legal instruments guiding the Zimbabwean education system this study confined itself to the Zimbabwean constitution, Education Act Chap 25; 04, SI 87 of 1992, SI 70 of 1993 and Administration and finance Circular 6 of 1994.

2.0 Legal Instruments

These are many pieces of legislation which were taken together form the education legal framework. This section takes a cursory analysis of the education legal framework.

2.1 The constitution of Zimbabwe

The Zimbabwean constitution as amended by the Constitution of Zimbabwe Amendment (No. 20) Act enshrines that education is a fundamental right. Section 19 (2) states that, “The state must adopt reasonable policies and measures, within its limits of the resources available to it, to ensure that children-(d) have access to appropriate education and training.” Thus, the supreme law of the country acknowledges and protects the right of children to education. The Constitution is read together with the Education Act which provides that primary education is compulsory in Zimbabwe.

2.2 The Education Act (Chap 25; 04)

The Education Act (hereafter the Act) was passed as Act 5 of 1987 and has been amended by quite a number of times. The Act has been amended by Act 26/1991, Act 24/1994, Act 19/1998 and Act 22/2001. Section 4 of the Education Act as amended recognizes education as children’s fundamental right. Mapuva and Mapuva (2014) state that, “The right to education in Zimbabwe has traditionally been a creature of statute, with the Education Act forming the legislative framework for the provision of education in the country.”Section 36(1) of the Education states “The responsible authority of every registered school to which a grant is made in terms of section thirty five shall establish a committee, to be known as a school development committee. Thus, it can be argued that it is jurisprudent on education practitioners to be knowledgeable of this legal instrument. In addition, section 36(1) of the Education Act proscribes for the establishment of school Development Committees (SDCS). Therefore, this entails that the Education Act provides a legal framework for the participation of parents in the education of their children. The Education Act can be viewed as covering all the essentials of the education system in Zimbabwe. Consequently, it can be reasoned that knowledge of this Act for education practitioners it fundamental.

2.3 Stationary Instrument 87 of 1992

The statutory instrument is derived from the Education Act (Section 36) which provides for the establishment of School Development Committees for registered non-governmental schools. Statutory Instrument 87 (1992:613) spells out some of the objects of the SDC as to:

  • Provide and assist in the operation and development of the schools;
  • Advance the moral, cultural, physical and intellectual welfare of pupils at the school; and
  • Promote the welfare of the school for the benefit of its present and future pupils and their parents, and its teachers.

Therefore, according to this legal instrument the SDC is an organ that promotes participation and empowerment of both teachers and parents in the improvement of the quality of education. In addition, SDCs have the mandate to charge and administer levies from parents of students enrolled in their schools (Statutory Instrument 87 of 1992:621). Hence, it is essential that education practitioners be conversant with this legal instrument as it provides for the role of parents in the affairs of the school.

2.4 Statutory Instrument 70 of 1993

SI 70 of 1993 is also derived from the Education Act, just like SI 87 of 1992. The statutory instrument provides guidelines for parental involvement in government schools. Statutory Instrument 70 of 1993:494 empowers School Development Association (SDA) to;

  • Promote, improve and encourage the development and maintenance of the schools;
  • Assist in the advancement of the moral, cultural, physical, spiritual and intellectual welfare of the pupils at the schools; and
  • Promote and encourage programmes of interest, both educational and social, for the benefit of the students and their parents and teachers.

Hence, it can be revealed that SDAs are empowered to make full use of locally available resources to improve the provision of education in schools. There are a few schools which are government schools in the area under study.

2.5 Administration and Finance Circular 6 of 1994

The Administration and Finance Circular 6 of 194 is a manual on financial administration in non-governmental schools. According to Gumiro (1994) the manual contains detailed but very basic accounting procedures and other administrative matters which all school heads and SDCs need to be well acquainted with for the proper administration of the school. The Under Secretary (Revenue and Suppliers), Gumiro (1994) states that one copy of the circular should be kept by the head and another by the SDC chairperson. The distribution of the circular and explanation by the Under Secretary expounds glaringly the importance of the knowledge of its contents to the school administrator and SDCs. Thus, it becomes imperative that teachers, school heads and SDCs be conversant of the circular to a greater extent. The increase in the number of newspaper articles on alleged abuse of school funds reveals tellingly that there is non-conversance and non-adherence to the circular in schools. Examples of newspaper headlines include; Three school heads suspended over fees mismanagement (Newsday, 10 July, 2014); Two school heads jailed over fraud (The Herald, 16 July, 2012) and Three headmasters fired, four under investigation for abusing school funds (Bulawayo.24.com, 11 April, 2013).

3.0 Purpose of the study

The overall aim of the study was to analyse the knowledge of education practitioners of the legal framework obtaining in the education system in Zimbabwe.

4.0 Context of the study

The researcher used a case study approach. Yin (2003:13) states that the case study investigates, “contemporary phenomenon within its real-life context, addresses a situation in which the boundaries between phenomenon and context are not clearly evident, and uses multiple sources of evident.” The researcher carried out the study in Masvingo district. The participants were drawn from workshops on school financial management that were carried out in the district. The workshops drew five participants from each and every school, the head and deputy head and a teacher as well as the chairperson and vice-chairperson of the SDCs. The researcher purposively sampled participants from the teachers, head and deputy heads and SDCs who participated in the workshops. A purposive sample of 40 participants was selected by the researcher based on the knowledge of the population and the purpose of the study (Patton, 1990). The researcher utilised a questionnaire which had both open and closed questions. The questions covered by the questionnaire included aspects on education in the Zimbabwean Constitution, the Education Act, SI 87 of 1992, and SI 70 of 1993 and the Finance and Administration Circular 6 of 1994.

5.0 Discussion

The majority of participants (80%) revealed that they knew that education was a fundamental right according to Zimbabwe’s legal framework. However, only 40 % of the participants were able to identify the legal instruments which provide that education was a fundamental right.

In addition, all the participants revealed that at their respective schools they had a file with all the four legal instruments. The teachers, school administrators and SDCs indicated that they had the Constitution of Zimbabwe, Education Act, SI 87 of 1992 and the Finance and Administration Circular Number 6 of 1994. However, only 50 % of the participants indicated that they were conversant with the dictates of the legal instruments.

Furthermore, 90 % of the participants revealed that they did not know that the Education Act had been amended Act 19/1998 and Act 22/2001. This finding shows that schools were still utilizing the Education Act as amended by Act 24/1994 that is the revised edition of 1996.

70 % of the participants revealed that they only heard about SI 87 of 1992 during SDC elections. Statutory Instrument 87 of 1992 covers procedures, qualifications and disqualifications of members for SDC membership. Therefore, the study revealed that the SI was mainly used as an election tool while negating its other core objects already alluded to in this paper.

Moreover, the majority of participants (80%) stated that they had attended only one workshop which covered the legal instruments pertaining to the education system. Thus, the study revealed teachers, school administrators and SDCs prior to the workshop which was used for this study had not attended any other workshop covering legal instruments obtaining in the education system.

6.0 Conclusion

From the preceding discussion of the main findings of this study the researcher concludes that teachers, school heads, deputy heads and SDCs know that education is a fundamental right. The study also concludes that education practitioners and SDCs & SDAs were not up-to-date with amendments to the Education Act as revealed by the lack of knowledge on amendments by Act 19/1998 and Act 22/2001. In addition, the study concludes the schools in Masvingo district have copies of the legal instruments obtaining in the education system in the country.

7.0 Recommendations

The researcher makes the following recommendations from this study;

  • Workshops on education legal instruments should be carried out regularly.
  • Workshops should include all stakeholders in the education system in order to clarify any sources of conflict in the school system.
  • The Ministry of Primary and Secondary Education should disseminate information pertaining to any amendments on the Education Act.

 

References

  • 24.com, 11 April, 2013
  • Mapuva, L and Mapuva, J (2014) Zimbabwe’s New Constitutional dispensation and children’s right to education; University for Peace and Conflict
  • Patton, M.Q (1990) Qualitative evaluation and research methods (2nd Edition); Newbury Park, CA: Sage Publications
  • Newsday, 10 July, 2014
  • The Herald, 16 July, 2012
  • Yin, R.K. (2003) Applications of Case Study Research. Applied Social Research Methods Series, 34.London: Sage Publications
  • Legal Instruments
  • Government of Zimbabwe (2013) Zimbabwean constitution
  • Government of Zimbabwe Education Act Chap 25; 04
  • SI 87 of 1992
  • SI 70 of 1993
  • Administration and finance Circular 6 of 1994.

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AN OVERVIEW OF THE AFFECT OF ADVERTISING OF TOILET SOAPS ON INDIAN CONSUMERS

Anjali Sharma,  Dr. Jyotsana Khandelwal

ABSTRACT –  70 % of India Population Lives in 627000 Villages in rustic Areas.90% of the Rural Population is amassed in towns with a Population of under 2000, with agribusiness being the principle Business. This demonstrates the Potential India and needs to bring the much – required Volume Driven Growth. As far as possible in the Urban Market has come to and now advertisers are moving Rural. They are taking after “GO RURAL” Strategy.

There is an increment in Income of Rural People , development in rustic interest is required to expand twofold overlay each Quarter in light of the fact that buyers are climbing towards premium items. Notwithstanding, in the later past there has not been much change in the volume of premium cleansers in extent to economy cleansers, in light of the fact that increment in costs has driven a few shoppers to search for less expensive substitutes. The Maximum Advertisement is Personal Care Category originates from Toiletry Soaps .It will be additionally great to see some ground substances about country promoting before advertisers wander into rustic markets with their brands. Like in urban territories, People who sit in front of the TV in rustic zones, likewise impact the decision of numerous individual consideration items.

 

Key Words: Advertising, Rural India, Market Segmentation, Consumer buying behaviour.,

INTRODUCTION

Foundation of study: The latrine cleansers business sector is evaluated at 530,000 TPA including little imports. Hindustan UniLever is, obviously, the business sector pioneer. The business sector is littered over with a few, driving national and worldwide brands and an expansive number of little brands, which have constrained markets. The famous Brands in the provincial ranges incorporate Lifebuoy, Lux, Cinthol, Liril, and Nirma, Santoor. Latrine cleansers, in spite of their dissimilar brands, are not all around separated by the buyers. It is, in this way, not clear on the off chance that it is the brand faithfulness or experimentation tricked by high volume media battle, which support them. A result is that the business sector is divided. It is clear that this must prompt an exceptionally aggressive business sector. Latrine cleanser, once just a urban marvel, has now entered for all intents and purposes all ranges including remote provincial regions. The incremental interest streams from populace expand and ascend in utilization standard affected as it is by a more noteworthy sympathy toward cleanliness. Expanded deals incomes would likewise grow from up degree of value or per unit esteem. As the business sector is constituted now, it can be partitioned into four value portions: premium, prominent, rebate and economy cleansers. Premium cleansers are evaluated to have a business sector volume of around 80,000 tons. This deciphers into an offer of around 14 to 15%. Be that as it may, by quality it is as much as 30%.

Market Segmentation: Soaps are likewise arranged into men’s cleansers, women’s cleansers and basic cleansers. There are a couple claim to fame cleansers as straightforward Glycerin cleansers, shoe cleansers, uniquely seasoned cleansers, cured cleansers and child cleansers. Forte cleansers are high esteemed yet appreciate just a little share of the business sector in worth terms.

The business sector is developing at 7% a year. This implies the incremental interest era is 5% far beyond the populace development. With expanding attention to hygienic measures, the business sector could develop at a rate higher than 8% yearly. Interestingly, 60% of the business sector is presently sourced from the rustic segment. This implies the change between the two fragments is not substantial. Since upper-end business sector center is the urban ranges, edges originate from the urban area.

Variables influencing purchasing conduct: Price is the most critical component which impacts the purchasing conduct of purchaser, by which a customer goes for the different section of cleanser like premium, mainstream, sub-famous and carbolic which are fundamentally chosen by the expense consider and fat substance the cleanser. The purchasing recurrence is either month to month that is finished by the families or if there should arise an occurrence of single guys it is more than once in a month. The events when premium cleansers are obtained are typically when there are celebrations and functions. Moti Soaps are typically introduced amid celebrations and events for presents and endowments. The special procedures support deals. Different strategies like the value off’s, purchase one get two free, free endowments and different plans support deals in short run furthermore help in clearing stocks. One of the essential focuses a cleanser advertiser ought to note is that the cleansers are normally acquired by ladies in urban territories as a large portion of the everyday utilization of individual consideration items are made by ladies. A point to note is that ladies utilize more individual consideration item than men do and thus premium cleansers are for the most part focused at them. Men ordinarily settle on buy choices in country territories. Henceforth the advertiser needs to receive diverse procedure for such a business sector.

Advantages looked for by different clients from different brands are:

Magnificence – Lux; Freshness – Liril, Cinthol

Characteristic – Medimix, Margo

Child – Johnson and Johnson, Doy

Cream – Dove, Doy Care (saturating)

Sedated – Dettol, Savlon,

Glycerin – Pears, Emami

Infiltration: One of the components, which influence the interest of cleansers, is the entrance, which the items have in business sector. In the event of cleansers this has not been a noteworthy issue as the entrance in the provincial zone is as high as 97% and that for urban zone is around 99%. In this manner the roughly the entrance is around 99% for general India.

The cost of the premium fragment items is twice that of economy portion items. The economy and well known portions are 4/5ths of the whole cleansers market. The infiltration level of can cleansers is 88.6%. Be that as it may, the per capita utilization of cleanser in India is at 460 gms for each annum, while in Brazil it is at 1,100 gms for every annum. In India, cleansers are accessible in five million retail locations, out of which, 3.75 million retail locations are in the rustic ranges. In this manner, accessibility of these items is not an issue. 70% of India’s populace dwells in the provincial ranges; consequently around half of the cleansers are sold in the rustic markets.

Development: With expansion in expendable wages, development in country interest is relied upon to increment in light of the fact that buyers are climbing towards premium items. In any case, in the later past there has not been much change in the volume of premium cleansers in extent to economy cleansers, in light of the fact that increment in costs has driven a few shoppers to search for less expensive substitutes. The real players in individual wash (Soap) business sector are HUL, Nirma and Godrej.

REVIEW OF LITERATURE

Publised by WPP COMPANY ( OGLIVY INDIA ) Developing markets, for example, India are a vital wellspring of development for Unilever. The organization is receiving exceptional advertising ways to deal with expansion utilization of its items in these districts, situating itself as a moral brand that advantages more extensive society.

Unilever’s Lifebuoy ‘Swasthya Chetna’ (‘Health Awakening’) effort is one case. This teaches individuals on the significance of wellbeing and cleanliness in averting loose bowels and urges them to embrace a basic hand-washing administration utilizing cleanser. Swasthya Chetna is India’s biggest ever country wellbeing and cleanliness instruction program. HUL have done forceful publicizing techniques to advance its “Swasthya Chetna” Program.

Lifebuoy wellbeing officers went to 43,000 Indian towns and schools more than five years where they utilized item shows, intelligent visuals, rivalries and dramatization workshops to spread the wellbeing and cleanliness message.

The project has come to 110 million country Indians since it started in 2002. Consciousness of germs has expanded by 30% and cleanser use has expanded among 79% of folks and among 93% of youngsters in the ranges focused on. Cleanser utilization has expanded by 15%.

The crusade got acknowledgment for its development and adequacy, winning Silver in the Rural Marketing Advertisers Association of India recompenses in 2006, and the excellent prize at the Asian CSR honors 2007. It was additionally perceived by the Indian government who made a unique version postal spread devoted to the crusade. .[1]

Publised in Business.in.com by Sawmya roy on August 18,2009 – Godrej No. 1. is a hit however, from the stables of Godrej Consumer Products Ltd. It asserted the number three spot in the latrine cleanser classification for the quarter finished June 2009, eating into business sector pioneer Hindustan Unilever’s (HUL) piece of the pie.

It is currently the third most elevated offering cleanser behind Lifebuoy and Lux. Lifebuoy and Lux, both HUL items and business sector pioneers, saw piece of the pie decrease by very nearly 2 percent to 16 and 15.4 Santoor additionally stakes case to the number three spot. The ACNielsen Repot demonstrates Godrej No. 1 in the number three opening, yet just as far as volume. Since it is a markdown brand, it tumbles to number five as far as worth. Santoor and Dettol take the third and fourth spots on the Neilson Report Table.

Can cleansers have risen as the most promoted item in the individual consideration classification in the first 50% of 2009, abandoning summer skewed class top picks’ similar to talcum powders and thorny warmth powders/creams by an impressive edge. The main 10 rundown saw three of the brands from latrine cleansers – Lifebuoy Swasth, Chetna 07, Godrej No.1 Papaya Lotus and Lux Pink Soap.

The adjustment in pattern is on the grounds that customary summer classifications like talcum powder has come to stagnation because of purchasers’ work day towards different classes like the antiperspirants. The movement from talcum powders to latrine cleansers amid summers is additionally on the grounds that cleansers too are progressively being situated as a quality included, corrective class which could guarantee enduring scent, smooth skin and even decency at times. As per industry gauges, the cleanser portion is one of the greatest FMCG classes in India with washing and latrine cleansers constituting around 30 for every penny of the cleanser business sector..

Hindustan Unilever (HUL) is the greatest sponsor in the individual consideration class crosswise over print and TV media. Latrine Soaps had a 1/fourth partake in the whole individual consideration promoting in print, while the classification drove the publicizing with 30 for each penny offer on TV. HUL publicized with 42 brands in which Lux cleanser, Fair Lovely Multivitamin and Pepsodent Complete Germi Check had the most extreme share.[2]

GCPL is the second biggest shower cleanser maker in India, after Hindustan Unilever. The organization guarantees its Godrej No.1 brand is the top rated Grade 1; latrine cleansers ,have a higher fat substance than washing bars) and the business sector pioneer crosswise over north India. Rustic deals’ commitment to aggregate income has expanded to 42%, and GCPL has picked up a rate point each in piece of the overall industry of hair shading and cleansers. Godrej expanded its Market Share with the Advertising in Rural Areas with their Discount Schemes. GCPL dependably have been for the most part concentrating on “Tweak item and correspondence; construct acknowledgment through exhibition; assemble verbal exchange for the brand; and manufacture access through advancement and a savvy appropriation channel.” Conventional knowledge says rustic shoppers need redid items intended to suit their needs, their conditions and their wallets. Be that as it may, they likewise need items like those accessible in urban markets, such a variety of trust that little bargains in item quality are satisfactory. “Rustic purchasers need the same item as urban customers. On the off chance that you bargain on quality to make it reasonable now, they will avoid your image when their pay levels increment.

The arrangement lies in altering the measure of the offering, not the item itself. GCPL has done quite recently that, presenting littler bundles of the same items, at value focuses provincial customers can manage. Littler bars of cleanser, home grown henna bundles for 10 pennies, sachets of powder hair color and talcum powder for 20 pennies go about as passage focuses for country shoppers, who return for bigger packs when their financial plans license. Offers of shopper items in rustic markets top instantly after the harvest and amid celebrations and the wedding season (September through December), when a large number of India’s 600,000 towns are in a have-money will-spend mind-set.

Gone are the days when the rustic customer was content with utilizing mustard oil and plain cleanser. Today, he/she is looking for uncommon marked items for every day skin and social insurance needs. Rustic buyers crosswise over pay sections are demonstrating a checked affinity towards spending on premium top notch items, which are supported by solid brand values, For occurrence, take sustenance items. Not just has the interest for cream rolls gone up in provincial markets, the offer of moment noodles, too,is developing almost twice as quick in the country business sector contrasted with the urban one. Besides, in each six country purchaser of hair color now uses hues other than dark something, which would have been named liberality 10 years prior. Indeed, even apparently urbane brands in classifications like antiperspirants and cleansing agents are said to be developing much speedier in country India than urban. [5]

CONCLUSION

It have been out that Advertisement assume a critical part in Purchasing of latrine Soaps in Rural India. With regards to Rural Market individuals are more disposed towards security on the grounds that when asked to the respondents, they said they see the Fear Appeal and change to a brand and the battle by Hindustan Unilever Limited (Swastya Yojna) have assisted them with gaining them a piece of the overall industry in Rural Market. TV Media is the Most Effective Media in light of the fact that larger part of the respondents said that they are affected by TV notice’s as opposed to some other Media. Offers assume a vital part in impacting the clients and numerous organizations have been fruitful by giving different Offers to the last client, the offers may be Discounts, Coupons, etc…The Frequency of the notices Influence the obtaining Behavior of the Customers .i.e, when the same Advertisement is Shown Again and once more, it would tend the clients to purchase the Product. The Jingles, Tagline additionally plays a vital in buying Behavior on the grounds that individuals in rustic territories would effortlessly relate it with the brand. Promotions Campaigns with Celebrity and mascots impact individuals in Rural Market to purchase the Product.

DISCUSSIONS

Organizations like Hindustan Unilever, Godrej have great vicinity in the provincial business sector on account of their consistent Advertising and Sales Promotion endeavors, so for organizations like Nirma, Wipro, Reckitt Benkiser to pick up piece of the overall industry they have to expand their Promotion endeavors.

There is a discernment that individuals in the country markets are exceptionally value delicate, yet according to the study it was discovered that when it came to toiletry cleansers individuals were prepared to bargain for cost, if the nature of the item was great. There are numerous new contestants to the country market or in the latrine cleanser industry, For Eg: ITC have come up in can cleansers and they have to do thorough publicizing in rustic regions to pick up acknowledgment in the provincial business sector. With regards to Rural Area, People are more inspired by Offers and Schemes, so it would be a decent move for the organization to turn out with offers and plans frequently. There is dependably a feeling of apprehension in psyches Of Rural individuals , so organizations can exploit this and promote the Product. Eg: HUL did it with their Swastya Chetna Program for their Soap “Lifebuoy” and picked up piece of the overall industry from this move. On the off chance that the organizations need to taste Success in Rural Markets, they need to turn out with Separate Campaigns in provincial Areas, a completely new Campaign in Rural Market. Illustration: Godrej thought of Project Dharti for their Godrej No: 1 Soap and they have picked up piece of the overall industry out of it. There is Rise in Demand for Medicated Soaps in the business sector ,so it would be useful for organizations to present sedated cleanser as their new variant.

 

REFERENCES

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A STUDY ON HYGIENIC PRACTICES OF FISHERFOLK IN KANYAKUMARI DISTRICT  

                                                                                          

Dr.Sr.S.Sahayaselvi

 Abstract

       A hygienic practice is a broader term that insists not only on cleanliness but also on hygienic culture in general. Hygienic culture arises from one’s own practices and way of life. When these practices become habits, they automatically become character. Therefore this paper is an eye opener for the readers to maintain good hygienic practices in their day to day lives and thereby to experience good health and happiness. Results indicate that washing hands with soap after changing diapers for children ,touching the pet animal, washing hands after touching the currencies and coins, habit of nail biting, not brushing teeth twice a day, scratching the heads, walking barefoot require  the attention of the sample respondents through which they are easily susceptible to  diseases arising out of unhygienic practices. Therefore this paper recommends  a few suggestions like creating awareness among the fisherfolk regarding the impact of  poor hygienic practices in the form of street plays , role plays, advertisements and T.V. programmes through which the sample respondents learn the art of preventing or minimizing unhygienic related diseases like Dengue, Allergies, Chronic Diarrohea, Nausea, Hepatitis, Scabies etc. Thus the life of the fisherfolk who contribute 0.83 per cent to India’s total GDP and 4.65 per cent to agricultural GDP of our country could be sustained.

 

Key words: Hygienic practices, personal and household hygiene, unhygienic related diseases.

*Assistant Professor  of the Department of Commerce, Holy Cross College (Autonomous), Roch Nagar, Nagercoil, Kanyakumari District, TamilNadu, South India.

 

INTRODUCTION

        Practice makes a person perfect. A human being learns hygiene through his/her own culture, habits and practices. When these practices become habits, they form the character of an individual and it becomes the way of life. As an outcome if the inhabitants as well as their surrounding are free from unhygienic aspects, they can minimise the unhygienic related diseases. Hygiene refers to the set of practices that keep oneself and one’s living and working area clean in order to prevent illness and maintain freshness and sound health. Hygiene is an old concept related to medicine, as well as to personal and professional care practices. It is also related to most aspects of living, although it is most often wrongly associated with cleanliness. Hygiene is also the name of a branch of science that deals with the promotion and preservation of health. Hygiene practices vary widely, and what is considered acceptable in one culture might not be acceptable in another. The ancient Greeks spent many hours in bathing, using fragrances and make-up in an effort to beautify themselves and be presentable to others. In fact, hygiene is actually a scientific study. Maintaining a high level of hygiene helps to increase self-esteem and confidence and also minimise the chances of developing imperfections. The word ‘Hygiene’ is derived from the Greek word ‘Hygeia’ meaning the goddess of health. Hygiene enables man to maintain good health and to improve that health for long living. Man makes a healthy relationship with the environment by practising hygiene. It is a key part for quality assurance to ensure perfect health and happiness of oneself and one’s household. In general, hygienic practices keep away bacteria, virus and germs and prevent the spread of disease-causing organisms.

 

STATEMENT OF THE PROBLEM

                India is recognized as a global power in the key economic sectors. Despite these economic advances, poor hygienic practices and inadequate sanitary conditions that are prevailing in our country hamper the growth of the nation. Sanitation and hygiene are still a major concern, especially in the rural areas. According to United Nations International Children’s Emergency Fund (UNICEF) report, in India only 31 per cent of the population uses improved sanitation. According to the Public Health Association, only 53 per cent of the population washes hands with soap after defecation, 38 per cent washes hands with soap before eating and only 30 per cent washes hands with soap before preparing food. Wash Interventions significantly reduce diarrhoeal morbidity as it is well known that poor wash causes diarrhoea, which is the second biggest cause of death in children under five years. Unhygienic surrounding invites mosquitoes and flies. As a result, people are prone to both communicable and non communicable diseases. As per the statistics of the World Health Organization (WHO) diarrhoeal diseases remain a leading cause of illness and death in the developing world. Every year, about 2.2 million people die of diarrhoea; 90 per cent of these deaths are among children, mostly in developing countries. A significant number of deaths are due to a single type of bacteria, Shigella, which causes dysentery or bloody diarrhoea. It is readily controlled by improving hygiene, water supply and sanitation. At this juncture a few questions arise in the minds of the researcher like what are the personal hygienic practices that are prevailing among the sample respondents in the study area. How do they take care of household cleanliness and is there any significant difference between personal and household hygiene. To find fitting answers to this problem the research study is undertaken.

OBJECTIVES OF THE STUDY

The general objective of this paper deals with the hygienic practices of the sample respondents in the study area. The following are the specific objectives of the study.

  • To find out the demographic profile of the sample respondents in terms of personal  and household hygienic practices in the study area
  • To measure the extent of personal and household hygienic  practices of  the respondents

 

 

HYPOTHESES                                                       

Ho 1: Opinion regarding “personal hygienic practices” is equal to average level.

Ho 2 : Opinion regarding “household hygienic practices” is equal to average level.

Ho 3: There is no significant difference in mean score of personal hygiene and household hygiene

METHODOLOGY

    This study is based on both Primary and Secondary data. The primary data were collected from the three coastal taluks (i.e Agaeesthwaram, Kalkulam, Vilavancode) in Kanyakumari District wherein the coastal belt is located. These belts consist of 47 villages and from each taluk two villages were selected for this study: one with the highest population while the other village with the lowest population. From each taluk, 75 sample respondents were selected. Out of which 50 sample respondents were from the village of highest population and 25 sample respondents from the village of lowest population on the basis of multistage random sampling. The selected villages are Kanyakumari (H) and Siluvaiyanager (L) of Agaeesthwaram taluk. Colachel (H) and Chinnavalai (L) of Kalkulam taluk. Neerodi (H) and Helen Colony (L) of Vilavancode taluk. Further, from these six villages 225 samples are chosen on the basis of proportionate stratified random sampling. The collected data had been analyzed with the help of the statistical tools like percentage analysis, one way ANOVA, one sample t-test and paired sample t-test. The secondary data were collected from various books, journals and websites.

         (H) Indicates the village with the highest population in the taluk and (L) indicates the village with the lowest population in the taluk

 

RESULTS AND DISCUSSION

Demographic profile is one of the important variables which decide about the practices and usage of the respondents. The following table clearly depicts the demographic profile of the respondents with hygienic practices in the study area.

   Note: ** denotes significant at 1% level

                *denotes significant at 5% level

    Since p-value is less than 0.01, the null hypothesis was rejected at 1% level of significance in case of personal hygiene and 5% level of hygiene in case of households hygiene. Hence, it is concluded that there is a significant difference between age group and hygienic practices. The younger generation that is below 25 are conscious and careful about hygienic practices through an awareness of social media and their social gathering in public places. Hence they are clean and careful about the hygienic related diseases.

 Since p-value is less than 0.01, the null hypothesis was rejected at l % level of significance in case of both personal and house hold hygiene. It is concluded that there is a significant difference in case of education and hygienic practices. Now- a-days a good number of fisherfolk are being educated in schools and colleges compared to yesteryears. Hence they are conscious about hygienic aspects and the impact of unhygienic practices.

Since p-value is less than 0.05, the null hypothesis was rejected at 5% level of significance. Hence, it is inferred that there is a significant difference between the sizes of the family with hygienic practices. It is understood that the hygienic practices depend upon the size of the family because when members in the family are less in number, they are able to maintain both personal and household hygiene. So, family size determines the personal and household hygiene practices.

PERSONAL HYGIENE

Personal hygiene helps us to keep bacteria, viruses and fungal far away from our bodies. It is an aid to protect our mental health and activity. Good personal hygiene will help us to keep feeling good about ourselves. Since those who do not take care of their personal hygiene i.e., dirty clothes, body odour and bad breath will suffer from discrimination and this will mainly lead to mental problems. The following table clearly depicts the personal hygiene practices of the sample respondents in the study area.

          Ho 1 : Opinion regarding “personal hygienic practices” is equal to average level.

             Note: ** denotes significant at 1% level

                        *denotes significant at 5%level

Since, p value is less than 0.01, the null hypothesis is rejected at 1 per cent level of significance. Hence, it is concluded that the opinion regarding personal hygienic practices are not equal to average level. Based on the mean score, the first three highest score is given to washing hands before eating, taking bath daily and washing hands before cooking, are reaching the above average level with mean scores of 4.23, 4.20 and 4.04, respectively. It shows that washing hands help the respondents to avoid bacteria and keep them cleaner and healthier. It is the outcome of influence of media and the literacy rate of women in the houses.

The lowest mean score is given to the habit of nail biting, not brushing teeth twice a day and washing hands after touching the currency (money) with mean score of 1.29, 2.32, 2.22, respectively. It shows that the respondents lack awareness regarding these variables. Studies show that brushing teeth twice a day for at least 3- 5 minutes help people to keep free from bacteria, viruses and illnesses. It reduces plaque by 70 per cent and gum problems by 36 per cent. ( Sobiya Moghul:2012). Brushing the teeth at least twice a day ensures our breath stays fresh and clean smelling (Ruth Taylor: 2014). Hence it requires the attention of the policy makers as well as the well wishers of the fisher folk. Through these aforesaid practices the sample respondents are easily prone to get germs and bacteria which are susceptible to unhygienic related diseases.

HOUSEHOLD HYGIENE

Hygiene in home and everyday life settings plays an important part in preventing the spread of infectious diseases. The main sources of infection in the home are people (who are carriers or are infected), foods (particularly raw foods) and water. Household water treatment and safe storage ensure that drinking water is safe for consumption. The following table clearly depicts the practices of household hygiene

Ho 2 : Opinion regarding “household hygienic practices” is equal to average level.

      Note: ** denotes significant at 1% level

       Since, p value is less than 0.01 the null hypothesis is rejected at 1 per cent level of significance. Hence, it is concluded that the opinion regarding household hygienic particles are not equal to average level. The highest score is given to the variables like Washing the vegetables /meat thoroughly, Drying the clothes in the sunlight, Washing the sink and  the bath room daily with its mean score of 4.47,4.41 and 4.17 respectively. It is inferred that through their personal experiences and advice of medical people they follow the basic household practices.   While the lowest mean score is given to Cleaning water tanks/pots regularly, Sharing the towels/Using other’s dress and Washing the vessels with hot water 2.88. 2,86 and 1.39 respectively. It is inferred that when one member in the family is affected by communicable diseases, it easily spreads to the others through sharing of towels or clothes. It is concluded that through all these attributes, one is easily prone to health related problems and they are exposed to bacteria, germs and virus. Hence their immune system is very poor and weak. Moreover   Cleanliness in the kitchen helps to prevent the spread of diseases ( Dodi Tov:2014). Hence the vessels in the kitchen and plates should be rinsed in hot water which avoids food poisoning. The following clearly shows that whether there is a significant difference between personal and household hygiene of the sample respondents in the study area.

Ho 3: There is no significant difference in mean score of personal hygiene and household hygiene

Since, p value is less than 0.01, the null hypothesis is rejected at 1 per cent level of significance. Hence it is concluded that there is a significant difference between personal hygiene and household hygiene. Based on the mean score, the opinion on measurement of hygiene shows that household hygiene (67.07) is higher than personal hygiene (45.69). From this, it is clear that people are giving more importance to household hygiene than personal hygiene. It is understood the proximity of houses of the sample respondents are very close to one another. Moreover there are no source of outlet of drainage facilities and all these dirty waters run off in the street and fish being a perishable product bring bad smell to these households. Hence for household hygiene more priority is given in the study area than personal hygiene. It requires the attention of the policy makers.

FINDINGS  

  • Since p-value is less than 0.01, the null hypothesis was rejected at 1% level of significance in case of personal hygiene and 5% levels of hygiene in case of house hold hygiene. Hence, it is concluded that there is a significant difference between age group and hygienic practices
  • Since p-value is less than 0.01 the null hypothesis was rejected at l % level of significance in case of both personal and household hygiene. It is inferred that there is a significant difference in case of education and hygienic practices
  • Since p-value is less than 0.05 the null hypothesis was rejected at 5% level of significance. Hence, it is understood that there is a significant difference between size of the family and hygienic practices.
  • For personal hygiene the highest score is given to washing hands before eating, washing hands before cooking, wearing clean clothes daily, taking bath daily which reach the above average level with mean scores of 4.23, 4.04, 4.04 and 4.20 respectively
  • The lowest mean score is given to  washing hands with soap after changing diapers for children, touching the pet animal, washing hands after touching the currencies or coins  habit of nail biting, not brushing teeth twice a day, scratching the heads, walking barefoot with mean score of 2.51, 1.29, 2.32, 2.22, 2.74 and 2.72 respectively.
  • In case of household hygiene the lowest mean score is given to Cleaning water tanks/pots regularly, Sharing the towels/Using other’s dress and Washing the vessels with hot water 88.2,86 and 1.39 respectively. It is inferred that due to absence of these practices if one member in the family is susceptible to germs automatically the rest of the members in the family are prone to communicable diseases.
  • The opinion on measurement of hygiene shows that household hygiene (67.07) is higher than personal hygiene (45.69). From this, it is clear that people are giving more importance to household hygiene than personal hygiene.

SUGGESTIONS

  • The Primary Health Organisation can organise Health awareness camps to maintain the personal and household hygienic practices among the coastal inhabitants
  • The Social Welfare Department can conduct awareness programmes on poor hygienic practices and its outcome and how the germs and dirt enter from hands to mouth and create diseases, in the form of street plays or advertisement or T.V serial programmes .
  • The schools and colleges can impart the knowledge of hygienic practices and teach how to enhance health and well being.
  • The fisher folk can be motivated to brush twice a day to maintain oral health. As a result the general health of the fisherfolk can be improved.
  • Once in 5 years the banks can collect the old currency notes from its customers and exchange with the new currency note which might prevent the bacteria, virus, germs and dirt that are sticking in the
  • The Government can request the RBI to print currency notes in the form of eco friendly materials so that the currency notes which pass from hands to hands could be hygienic.
  • The fisherwomen can wash their household utilities after cooking or eating with the help of warm water which prevents the spread of diseases and avoid food poison.
  • The local authorities or municipalities should construct drainage channel to dispose the household wastages which in turn reduces the mosquitoes, flies, germs and worms.

 CONCLUSION                                                     

              “With the onset of multi-resistant germs increasing, proper hand hygiene is one of the most effective measures to maintain good health.” According to the Center for Disease Control (CDC), some scientists estimate that up to 80% of all infections are transmitted by hands.  So it is the sole responsibility of every citizen to keep oneself, household and public places clean and free from microorganisms and dirt by washing hands with soap regularly. Then automatically we can experience perfect health and happiness. The Government who is the guardian of the common people should see that the hygienic practices are followed by the people at regular intervals with the help of primary health care services and NGOs. Then the life span of human index might rise and people could experience good health and happiness. Thus our nation would be the trend setter in adherence and maintaining the hygienic practices and proudly we can call our nation as ‘Clean India’.

Acknowledgement 

            The author is thankful to the University Grants Commission for financial support to carry out this work.

REFERENCE

  1. Archana Sharda, Jagat Sharda(2010) Factors influencing choice of oral hygiene products used among the population of Udaipur, India, International Journal of Dental Clinics 2010:2 (2):7-12,  volume 2  edited from http://intjdc.org/index.php/intjdc/article/viewfile/2.2.2/51
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  4. Shini Mathew Pulickal (2015),’ Nutritional Lifestyle in Children and Health’, Health Action, Vol 28.No.9 pg-36-37
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Product Innovation in the Smart Phone Industry: Giving a New Path to Business

Naib Singh

Abstract

Product innovation is the dynamic marketing practice which helps the business firm to compete in the market. Every product needs innovation to fulfill the requirements of the customers time to time. India is having the third largest market in the world in case of selling the smart phones. The country holds second largest market after China in this area. Now a smartphone user can perform various operations along with calling through its phone such as the function of remote control of the television set and even various medical tests are also available in many smartphones. Product innovation is enabling the smartphone firms to do business with the interest and confidence in the market.

Key words: Smartphone, Product Life Cycle (PLC), International Data Corporation (IDC).

 

Introduction

A business organization survives on its product or service. Every manufacturing enterprise sells its products to the customers for attaining the growth as well as goodwill. Customers purchase the products as per their requirements. Requirements of the customers change as per their aspirations. Every product needs innovation as time passes to fulfill the requirements of the customers. Every product has its life cycle which is called Product Life Cycle (PLC).PLC of any product includes five stages namely, Product development, Introduction, Growth, Maturity and Decline. In the development stage the firm develops the new product with the latest idea. In this stage the business firm suffers investment costs and there are no sales in this stage. In the second stage product is introduces the market. The rate of sales is very slow which results in lower profits. Heavy expenditure is incurred on product promotion. Growth stage includes market acceptance of the product among the customers. A high sale yields high profits. Sales starts to be slow in the maturity stage of the product. Customers prefer some new features in the product in this stage to fulfill their needs in the competitive environment. In the decline stage product has no sale. Hence maturity stage requires product innovation.

Product innovation has the great importance in this modern competitive era. The main reason of the product innovation is the dynamic market. Product innovation is essential to compete in the market. Various changes are performed by the manufacturer in the product under this process. When existing product looks entirely different from its previous look, then this process is termed as innovation. There are various reasons for product innovation like, competition, business growth, market change, maximum utilization of resources, reducing the risk, technological development etc.

Statement of the Problem

Smart phone has brought revolution in the communication world. In this paper, product innovation by the smart phone firms has been analyzed in the context of Indian market. In India communication through mobiles have prominent place. For the purpose of the study, the author has analyzed the innovative practices by the various leading smart phone firms in India. Product innovative practice has the great role to play in the competitive marketing environment. After the technological revolution all over the world, the rate of obsolesce in the smart phone area has increased. Smart phone manufactures have to be alert in the area of product innovation for attaining the fruitful business in the modern environment.

Objectives of the Study

This paper is based the product innovative practices in the area of smart phones. The main objective of this paper is to study the innovative practices by the various smart phone companies in India. Innovative practices lead to enhance the business. An attempt has been made in this study to highlight the impact on smart phone business as the result of product innovation.

Methodology

This paper is based on three main segments describing the introduction of the concept, objectives and methodology in the beginning part, information about the smart phones business and innovative practices by the various firms in India in the body text and discussion in the ending part of the study. The study is based on information obtained from various published and online sources. Secondary data have been used for the purpose of drawing the inferences.

Smart Phone and Product Innovative Practices        

Smart phones have attained the prominent place in the routine life of every person in the modern era. In India smart phone are used at large in the communication process. According to the research firm Canalys, India is having the third largest market in the world in case of selling the smart phones. The country holds second largest market after China in this area. In India, Samsung, Micromax, Motorola, BlackBerry, Karbonn, HTC, Sony, Spice, LG, Huawei and G’Five are the leading smartphones. Manufacturers of these brands are using product innovations for making their phones more competitive.

International Data Corporation (IDC) has depicted in its report that in the second quarter of 2015, India has imported 26.5 million smartphones and this figure is 44 % up for the same period of 2014. This trend shows that the smartphone market is increasing in India day by day

Figure1: Share of Smartphone Vendors in India (2015-Quarer-2)

Source: International Data Corporation AP Quarterly Mobile Phone Tracker, 2015Q2

Samsung is having 23 % share in the Indian market and is leading in the business of smartphones. According to the viewpoint of Mr. Anirbn Banerjee, the Associate Vice President of the Research and Advisory Services Division of CyberMedia Research, Nowadays Indian people giving preference to the characteristic phones which offers high speed and power.

Smartphone firms are focusing on fulfilling the aspirations of the customers by making their smartphone more and more innovative time to time. All the leading companies have launched quad-cores and android phones with high quality cameras. Edge-to-edge display feature has been introduced in the phones for attracting the buyers. Various apps related to various aspects of routine life have been uploaded in the phones. Now a smartphone user can perform multitasks through its phone such as the function of remote control of the television set and even various medical tests are also available in many smartphones.

Many companies has introduced phone cum mini-computers which fulfill the requirements of personal computer. These phone are easy to handle and carry at the workplace and moreover less costly to Desktop and Laptop. This type of revolution has totally changed the market scenario of smart phones in the communication world. This fast changing business environment requires more innovative handsets for the smartphone users.

Discussion        

Product innovative practices have the great importance for competing in the modern business environment. Smart phone market is changing very fast due to technological advances and consumer needs. Smart phones firms are practicing the innovative practices for making their products more useful and attractive for the modern business environment. This marketing practice is enabling the smartphone firms to do business with the interest and confidence in the market.

References

Kotler Philip, Armstrong Gary, Agnihotri Prafulla Y. and Haque Ehsan Ul (2011):Principles of Marketing- A South Asian Perspective, Pearson Prentice Hall, Published by Dorling Kindersley (India) Pvt. Ltd. New Delhi.

Sontakki C.N. (1999): Marketing Management, Kalyani Publishers, New Delhi.

Agarwal S.C. (1996): Marketing Management, Dhanpat Rai & Sons, Delhi.

Vashisht Monica Gupta and Chandhok Anil (2015); “Positioning in the Smartphone Market”, GGGI Management Review-A Bi-Annual Refereed International Journal of Management, Jan-June, Vol 1, issue 1, pp18-21.

http://business.mapsofindia.com/top-brands-india/top-mobile-brands-in-india.html

http://daily.bhaskar.com/news/GAD-10-trends-in-india-smartphone-market-year-2015-4812515-PHO.html

http://www.idc.com/getdoc.jsp?containerId=prSG25827215

 

 

The Relationship between Risk Management Committee Characteristics and Modified Audit Opinion in Malaysia

Suhaimi Ishak

Abstract

The purpose of the study is to examine the relationship between risk management committee (RMC) characteristics and modified audit opinion in Malaysia among the non-banking and financial companies listed in Bursa Malaysia. Data is collected from the annual reports of a sample of 300 companies for a period of 2004 until 2009. Both descriptive and multivariate analyses are employed to address the research objectives. The results indicate that separate RMC is negatively related with acceptance of modified audit opinion. Besides, the larger the size of RMC and the higher number of overlapping status for RMC’s members, it probably will higher the acceptance of modified audit opinion. Further, modified audit opinion that has been received at prior financial year is likely to receive the same opinion at current financial year. However, the status of auditor whether big or small firm is not related to modified audit opinion. The findings provide empirical evidence on the development and importance of RMC and its characteristics for the quality of companies’ financial reporting.

Keywords: risk management committee; risk; modified audit opinion; Malaysia

 

ntroduction

The global economic downturn has exposed the poor risk management practices of many companies and organization (Baker, 2011). At the Corporate Governance Week 2010 and 2011 which jointly hosted by Security Commission (SC) of Malaysia and Bursa Malaysia (BM), the both chairmen of these regulatory bodies stressed about the risk management process and board’s awareness on that process as a key element in the corporate governance practices in a company. The remark was pointed to the board as a key person in establishing and implementing well of risk management process in the company. The remark also is a signal to the board of director (BOD) to give more attention to the company’s risk management profile and the formation of committee at the board level that concentrate on the risk management profile is one of the good initiatives. Again, the deputy executive of SC at the ASEAN Audit Regulators Group Forum 2013 in Kuala Lumpur has stressed about the auditors to consider seriously when assessing the risks surrounding clients’ financial statements. Meanwhile, the objective of the study is to examine the relationship between the risk management committee’s characteristics (separate RMC, RMC size and RMC overlapping) and modified audit opinion issued by the auditors in Malaysia. We seek to ascertain whether RMC enhance the quality of financial reporting particularly on risk profile of the organization. We apply the modified auditor opinion as measure to the quality of financial reporting. In Malaysia, under the best practices in corporate governance of Malaysian Code on Corporate Governance (MCCG) (2007) and (2012) (Revised) clearly stated the board has principle responsibility for “identifying principal risks and ensuring the implementation of appropriate systems to manage these risks”. BOD has the responsibility in setting the strategies and creating the environment for effective risk management system in a company and the existence of RMC is a good step for the effective of the system (Yatim, 2010). The formation of RMC with focusing on the broad areas of risks including internal and external risks will help company in managing those risks without depending only on the audit committee. Some expertise on the company business’s external environmental are needed in RMC rather than depending on audit committee members which have expertise in internal control and accounting transactions. For example, RMC members with expertise on business opportunity and investment will evaluate the company’s viability in future and reducing the risks of going-concern. This situation will reduce the acceptance of modified audit report by the company. The job profile of RMC with focusing on broad areas of risks can reduce the exposure of risks by the company including the external risks such as going-concern risks and competition risks. Consequently, the probability of receiving the modified audit report particularly on risks issue is less due to the effective managing the risks exposure to the company. Theoretically, this situation creates a linkage between RMC and modified audit report and further on the quality of financial reporting.

To be an effective committee, RMC as a board committee should has the strong attributes whether in term of its composition (board size and director’s type), board process (frequency of meetings) and board characteristics (knowledge, skill, experiences, academic qualification, relevant training and multiple directorships). The strong composition of RMC, its process and characteristics is parallel with the argument in resource dependency theory. The theory as proposed by Preffer and Salancik (1978) argued that board (RMC) as a crucial resource to the organization and also acted as a bridge between organization and external link.

The formation of separate RMC is still voluntary in most countries in the world including Malaysia and the function of risk management sometimes is combined with Audit Committee (AC) or directly under the Board of Director (BOD) of the company (Subramaniam, McManus & Zhang, 2009). This study tries to relate whether the existence of separate RMC probably will reduce the issuance of modified audit opinion by auditor. Board size is prominently used in corporate governance studies (Dalton, Daily, Johnson & Ellstrand, 1999) and viewed as an important element of company’s governance quality (Musteen, Datta & Kemmerer, 2010). For the risk issues, the smaller board is expected to gain better oversight function due to the less difference of ideas and approaches. Ong and Wan (2008) argued that larger board may have conflicting in executing and maintaining the board effort norms as the oversight function. They may have conflicting among them for the monitoring and decision made. However, for the company’s business and industry risk oversight function, the vast knowledge and experiences of board’ members are needed (Dalton et al., 1999) and the knowledgeable and experienced directors would be gained through outside as the independent non-executive directors who are not involved with the company’s management function and duty. Some companies have limited members of BOD. The same directors might hold several positions as members of some sub-committee of BOD. The member of RMC might be a member of remuneration or audit committee and the overlapping of directorship by directors is view as the insight to the corporate governance mechanism (Zajac & Westphal, 1996).

The structure of this paper is as follows. The next section provides a brief review of past research and hypotheses development. Followed by research methodology section, analysis of result and discussion. The conclusion and recommendation is presented in last section.

Previous Research and Hypotheses Development

The study on the association between risk management committee’s characteristics and modified audit opinion remains scant and limited. However, some previous study have examined the relationship between board’s characteristics or audit committee composition and audit opinion (see Carcello & Neal, 2000; Farinha & Viana, 2009; Masyitoh & Adhariani, 2010; Wenyao & Qin, 2007; Pucheta-Martinez & Fuentes, 2007). The role of RMC in risk management is relatively unexplored and the literature on that field is limited and scant. Tufano (1996) added the lack of research in risk management committee was due to the lack of meaningful data on risk management practices. Again, Subramniam and Carey (2011) reported that the establishment of formalized system of risk management in organization is more recent development. The establishment of RMC is seen to be a complement to the oversight function of board of director and might be able to reduce the burden of task by audit committee. Zaman (2001) suggested it is impossible to expect the audit committee to implement more than high level review given their lack of expertise and time. It was also supported by Fields and Keys (2003) that RMCs have gained popularity as an important oversight committee. The argument is parallel with agency theory that RMC as a board committee should acted on behalf of the shareholders at all. Furthermore, Subramaniam et al. (2009) added that the existence of separate RMC with focusing on the risk profile was also able to increase the quality of internal monitoring in relation to risk management. Thus, the probability of the company to receive modified audit opinion is less and the first hypothesis is generated as follow:

H1:      The existence of separate or distinct RMC is negatively associated with the probability that the company will receive modified audit report.

A smaller board size is seem to be better for oversight responsibility to monitor financial reporting and related internal control (Farinha & Viana, 2009). However, in their study, the result showed the insignificant relationship between board size and the company to receive modified audit report. It means a board size seems to have no influence on modified opinion. The result is consistent with the earlier study by Wenyao and Qin (2007) which found insignificant relationship between board size and audit opinion and the characteristic of board size was irrelevant to the determinant of audit opinion issued. However, Xie, Davidson and Dadalt (2003) reported the negative relationship between board size and earning management activities. In term of accounting fraud, Beasley (1996) found a positive relationship between the number of board members and the occurrence of accounting fraud. In resource dependency perspective, Boyd (1990) argued that sometimes the small board size is due to the scarcity of resource or competitive uncertainty. The earlier study by Pucheta-Martinez and Fuentes (2007) found a positive relationship between the audit committee size and the company to receive qualified audit opinion. Therefore, the study suggests that RMC size can influence on the probability that modified audit report will be issued by the auditor. A smaller RMC size is better for directors’ monitoring functions and less probability that the auditor will issue modified audit report. This situation leads to the second hypothesis:

H2:      RMC size is positively associated with the probability that the company will receive modified audit report.

One director might be a member of twice or more boards’ committees. A member in the audit committee might be a member of RMC. The overlapping of directorship by directors is view as the insight to the corporate governance mechanism (Zajac & Westphal, 1996). Bettenhausen and Murnighan (1985) argued that the experience and knowledge from the other board membership can be brought to the other board committees and the focal and change can be performed. While Alderfer (1986) mentioned that the multiple board membership experience leads to the affecting board decision it is consistent with resource dependency perspective that board as resource in organization should has a pool of experiences. Most importantly and in agency view, several board membership experiences increased the board oversight control on behalf of shareholders (Mizruchi, 1992). The overlapping of members among boards’ committees gives advantages to the BOD entirely because all the committees are the board committee and not related to management function (Carcello & Neal, 2000). The result of each of committees is needed each other. The poor performance of a company is caused by the less directorship member of directors (Gilson, 1990) and the argument was supported by Kaplan and Reishus (1990) that the less directorship member by directors contribute to the emergence of financial distress company. Thus, the next hypothesis is as follow:

H3:      RMC overlap is negatively associated with the probability that the company will receive modified audit report.

 

 

Research Methodology

We use the logistic regression analysis to examine the relationship between modified audit opinion and the variables proposed for the characteristics of RMC. The model used to test the hypotheses is as follows:

MA= β0 + β1 SEPRMC + β2 RMCSIZE + β3 RMCOVER + β4 PRAUREP + β5 BIG4 + ε

where :-

 

 

Variable Definition and Measurement

According to Aren et al. (2009) there are five types of audit reports, namely standard unqualified or clean audit report, unqualified with explanatory paragraph or modified wording, qualified, adverse and disclaimer audit report. For the purpose of this study, the unqualified with explanatory paragraph (modified wording), qualified (except for), adverse and disclaimer audit report are classified as modified audit opinion. If a company received modified audit report, the data is valued as ‘1’ in the worksheet and if a company received the audit report other than modified audit report, the value of ‘0’ is coded accordingly.

Researcher considers the existence of separate RMC if the committee has a single committee with title of ‘risk management committee’ without any combination with any other committees including audit committee. Any combination of task and responsibility of risk management with other committees’ task are considered no existence of separate RMC (Combined RMC). For the purpose of this study, if the company has a separate RMC, it is coded as ‘1’ and if a company has not a separate RMC, the value of ‘0’ is coded. This criterion has been used by previous studies such as Subramaniam et al. (2009) and Yatim (2009).

RMC size is the total number of RMC’s members sitting on the committee until the end of financial year. A member will be considered as a RMC’s member if the appointment as member is at least six months and above. If the appointment as RMC’s member is below six months or the resignation is above six months from the financial year end, he or she can not be considered as RMC’s member. (see Farinha & Viana, 2009; Pucheta-Martinez & Fuentes 2007).

RMC overlaps refer to the dual or more functions of RMC’s members on the different board committees. A Member of RMC might be a member of audit committee or other board committees at the same time. For a company, a member of RMC or any other board committees has become a member of other board committees such as remuneration committee and audit committee at the same time but not all the members having such situation. For the measurement purpose, researcher compares the composition of RMC with all the other board committees’ composition to identify the members of RMC with dual or more functions at the same time. Then, the total numbers of RMC’s members with dual or more function are divided by the total number of RMC’s members. The figure is used for this study. This measurement has been applied by Carcello and Neal (2000).

Prior audit report refers to the audit report that a company has received for prior financial year. The researcher has read the independent auditor report that is located at the end of the annual report booklet. The researcher has carefully read the report starting from the first sentence until the last sentence of the report in order to identify the type of the audit report. For the measurement purpose, the researcher coded a dummy of ‘1’ if the company received modified audit opinion for prior financial year audit and a dummy of ‘0’ if the company received clean audit report for prior financial year audit. This measurement has been used by previous study (Pucheta-Martinez & Fuentes, 2007; Carcello & Neal, 2000).

Big 4 refer to the four largest international audit firms in the world. They are PricewaterhouseCooper, Deloitte Touche Tohmatsu, Ernst & Young and KPMG. The researcher looks at the bottom of auditor report sheet to identify the audit firm audited the company. The name of auditor and audit firm stated at that side. If the audit firm is one of the Big 4, the data is coded as ‘1’ and if the other audit firms or not a Big 4 audited the company, the data is as ‘0’. More studies have used this criterion for their researches (Yatim, 2010, Kabir, Sharma, Islam, & Salat, 2011; Farinha & Viana, 2009; Pucheta-Martinez & Fuentes, 2007).

Data Collection and Sampling Procedure

The population frame for this study is all the public-listed companies excluding banking and financial institutions listed in Bursa Malaysia’s website from the period of financial year ended 2004 until 2009. Based on the data gathering through the Bursa Malaysia’s website, there are approximately more than 130 companies with modified audit report for the same period (2004-2009) and there are more than 200 companies which have a separate or a stand-alone RMCs disclosure for the said period (Bursa Malaysia’s website, 2012; Yatim, 2009; 2010). Banking and financial institutions are omitted from the sample as the nature and regulations of these firms are significantly different from non-financial companies. The public-listed companies are chosen for this study. Public-listed companies have published the annual report that publicly available and can be accessed through the Bursa Malaysia’s website.

A match sampling approach is adopted as a control procedure (see Ballesta & Garcia-Meca, 2005; Wenyao & Qin, 2007; Sekaran, 2003). Firstly, the researcher selects the companies with modified audit report for the period of study (2004-2009). Then, they matched to the control samples which have the clean audit report based on the conditions that paired companies are in the same industry, most similar in companies’ size (total assets) and in the same period of financial year (Ballesta & Garcia-Meca, 2005; Wenyao & Qin, 2007). To keep reliable and independence, once a control company has been matched to the corresponding company in the test sample in particular year, it is not allow to be matched again with another company (test sample) in another year (Ballesta & Garcia-Meca, 2005). Besides, any company with never stated of whether separate or combined RMC or risk management matters, it is dismissed as the subject in the sample’s list. Lastly, in this study, there are 150 samples with modified audit opinion are gathered and are matched with 150 samples with clean audit opinion. Therefore, the total number of samples in this study is 300 samples.

 

 

 

 

Analysis of Result and Discussion

Descriptive Statistics for Samples

Table 1 presents the descriptive statistics result for all the companies, modified audit opinion companies and clean audit opinion companies together with the result of t-test. For variable of Separate RMC (SEPRMC), the result shows an average of 13 per cent from the samples have the separate RMC for all companies but in modified audit opinion companies, the result shows only 6 per cent of the samples have separate RMC while for clean audit opinion companies the result shows an average of 20 per cent of the samples have the separate RMC. As expected earlier, the percentage of companies with separate RMC is larger in clean audit opinion companies due to the characteristic of this separate RMC and its function. For the result of Independent t-test, it shows statistically significant for variable of Separate RMC with level of p < 0.01. It is means that there is a significant difference in average for this variable between two different sets of samples (modified and clean audit opinion companies).

Variable Definition:

For RMC Size (RMCSIZE), the result for three categories of companies (all, modified and clean companies) reveals quite similar with average three members. However, in the modified audit opinion companies, two members are recorded in minimum and maximum with seven members of RMC. It is different in clean audit opinion companies, the result states between three and six RMC members. The difference result indicates that in modified audit opinion companies sometimes have very small members of RMC and maximum can be with quite high. Yet, in t-test, the result reveals statistically insignificant for variable of RMC Size.

The result of descriptive analysis also reports for the variable of RMC Overlapping (RMCOVER). All the groups of samples including all companies have minimum with zero per cent of RMC members have overlapping status or do not hold some other board committee members in the same company. While 100 per cent in maximum for the RMC members with overlapping status for all the categories of samples. In average, the modified audit opinion companies recorded with 77 per cent of RMC members with overlapping status and only 72 per cent recorded in group sample of clean audit opinion companies. This difference is statistically significant at weak level (p < 0.1) as showed in the result of t-test.

For the control variable of Prior Audit Report (PRAUREP), the group of all companies recorded 34 per cent in average for the companies received modified audit report for prior year. The descriptive analysis also shows a larger value for the modified audit opinion companies with average of 67 per cent of the samples have received modified audit report for prior year whereas only 0.7 per cent of samples have experienced the said situation for the group of clean audit opinion companies. The huge difference is already expected by the researcher and the result of t-test also reveals the statistically significant at strong level (p < 0.01) for this difference of mean.

Lastly, for Big4 (BIG4), the result of mean for the sample of modified audit opinion companies is at 47 percent whereas for the sample of clean audit opinion companies is at 41 per cent which mean that 41 per cent of the companies in clean audit opinion companies audited by Big 4 audit firms. However, the mean difference for this variable is not statistically

(Pearson Correlation Matrix) for Variables

Table 2 reports the result of correlation among the variables. The correlations are quite low, generally below 0.3 except for a pair of Modified Audit Opinion (MA) and Prior Audit Report (PRAUREP) which are correlated at 70 per cent with significant at level of 0.01. It is means that MA and PRAUREP have strong relationship with assumption of that PRAUREP has major effect on MA. Besides, Separate RMC also has an effect on MA with correlation by 21 per cent and it is significant at 0.01 levels. The other variables that correlated are between Separate RMC and RMC Size, Separate RMC and PRAUREP, RMC Size and RMC Overlap, RMC Size and Big4. The result also reveals that there is no higher correlation with more than 0.85 which means no multicolinearity problem exist in the samples.

 

 

 

Logistic Regression Analysis

Table 3 reports the logistic regression result. The model consists of independent variables (characteristics of RMC) and control variables with Modified Audit Opinion as dependent variable. The result reports the level of correct classification (the percentage of correct predictions) at 83 per cent while Cox & Snell R Square and Nagelkerke R Square report at 49 per cent and 66 per cent respectively. The Chi-square’s test reports at 203.123 and the model is significant at level of 0.00 (p < 0.01). All the independent variables (characteristics of RMC) are statistically significant while for the control variables, only the variable of PRAUREP is significant.  All the variables are significant at expected direction except for variable of RMCOVER which is significant at positive direction.

 

SEPRMC          = 1, if the existence of separate RMC, otherwise 0

For hypothesis of Separate RMC (SEPRMC), it is statistically significant at level of 5 per cent and following the proposed direction with negative sign. For coefficient, SEPRMC reports at more than 200 per cent and it means that if a company has separate RMC, the probability of the company wills not to receive modified audit opinion is at 200 per cent. The examples of companies that have separate RMC are Opcom Holdings Berhad, Bolton Berhad and Genetec Technology Berhad. The result supported the argument by Subramaniam et al. (2009) that the existence of separate RMC with focusing on the risk profile is also able to increase the quality of internal monitoring and quality of financial reporting in relation to risk management. Consequently, the likelihood of the company to receive modified audit report particularly for risk issues is less. Meanwhile, Harrison (1987) reported that RMC is seen to specifically enhance the accountability of the board as it provides an independent oversight of various board activities especially on the risk issues. Due to the contribution of the RMC, Fields and Keys (2003) argued that RMC has gained popularity as an important oversight committee even though most of the countries in the world are still not to reserve as mandatory requirement to form the separate RMC in a company. The result is supported the proposition of first hypothesis (SEPRMC) that the existence of separate RMC will influence the company not to receive modified audit report. This result is also consistent with the requirement under MCCG 2007 and 2012 which clearly stated that the board has principal responsibility on the risk process including the identification of principal risk until the implementation of appropriateness system to manage those risks. Consequently, the formation of separate RMC as a board committee is able to enhance the effectiveness of risk oversight function by BOD as reported in the result of this study which the existence of separate RMC give impact on the company not to receive modified audit opinion.

For second hypothesis (RMCSIZE), the result also shows a statistically significant at level of 10 per cent with positive direction as expected earlier. For coefficient, the result present at 69 per cent with indication that if a company with higher number of RMC size, the probability it will receive modified audit opinion is at 69 per cent. The result is consistent with the earlier study by Beasley (1996) which found a positive relationship between the number of board members and the occurrence of accounting fraud. However, the result is inconsistent with the finding study done by Xie et al. (2003) that there is a negative relationship between board sizes and earning management activities. While Wenyao and Qin (2007) found insignificant relationship between board size and audit opinion. A big size of committee cause some members ignore their responsibility and assume the other members will look for the duty and responsibility. As a conclusion for this hypothesis, the size of RMC has influence on modified audit opinion.

Besides, there is also a significant (p < 0.05) positive association between RMC Overlapping (proxy by RMCOVER) and modified audit opinion received by the company. The statistical result shows more than 170 per cent for beta coefficient for this variable meaning that if there are RMC members with overlapping status, more than 170 per cent of the company will receive modified audit opinion. However, the expected sign is negative association between RMC overlapping and modified audit opinion. Some reasons would explain the situation and even though the experience and knowledge from the other board membership can be brought to the other board committees and the improvement can be performed as reported by Bettenhausen and Murnighan (1985) but the burden of tasks should be borne by the RMC members. They might not be able to perform well at a board committee (RMC) even they have successful at the other board committees. They also have to spend a lot of time to the several board committees and the concentration on a RMC that focus on risk profiles is at a minimum of time. The other reason might be due to the knowledge gained through multiple board membership that lead to the board oversight control (Mizruchi, 1992) and they have more aware on the risk issues. The highest awareness on risk issues probably gives highest attention by auditor before the modified audit opinion will be issued. As a conclusion, the result provides support to this hypothesis

For control variable, Prior Audit Report (proxy by PRAUREP) is statistically significant (p < 0.01) and with a positive sign as proposed earlier. For coefficient, it is recorded more than 600 per cent and it indicates if a company got modified audit report at prior year, it is 600 per cent likelihood of the company will receive modified audit report in current year. The result is consistent with some previous researches as performed by Pucheta-Martinez and Feuntes (2007) and Mutchler, Hopwood and McKeown (1997). They found that modified audit opinion that has been received at prior year has higher potential to be received at the same in current year. For companies those received modified audit opinion at prior year, they might not be able to solve the issues at current year. Hence, they have probability to receive the same modified audit opinion at current year. This situation leads to the issuance of same modified audit opinion by the auditor which the old issues are concerned by them. As conclusion from this result, Prior Audit Report has a strong association with modified audit opinion that issued by the auditor.

For Big 4 (BIG4), the result states statistically insignificant and there is no relationship between Big 4 audit firms and modified audit opinion. The finding indicates that Big 4 audit firms have no influence on the issuance of modified audit opinion by the auditor. This situation is consistent with study done by Farinha and Viana (2009) that Big 4 audit firms have no significant relationship with modified opinion issued by the auditor.

Conclusion and Limitations

The result from the statistical analysis has shown some significant findings. Firstly, the result documented that the existence of separate risk management committee (RMC) affects the issuance of modified audit opinion by the auditors. The finding contributes to the knowledge and literature that the existence of separate RMC has implication on modified audit opinion specifically for Malaysian environment. The existence of separate RMC probably will reduce the issuance of modified audit opinion. Consequently, the formation of separate RMC as a board committee is able to enhance the effectiveness of risk oversight function by BOD as reported in the result of this study which the existence of separate RMC give impact on the company not to receive modified audit opinion. The regulators and policy makers have to consider for this situation. The formation of separate RMC should be mandatory in future as to perform the risk oversight function at board level.

Secondly, the size of RMC probably affects the issuance of modified audit opinion. The big size of RMC probably the issuance of modified audit opinion is high. The company and regulators have the choice whether to form the big or small RMC since this board committee has influence on modified audit opinion.

The regulators and policy-makers should also be aware on the overlapping status of board members. They have to look at the number of board committees sited by the board members. Some board members sited for more than two or three board committees in the same company at the same time. They also have to spend a lot of time to the several board committees and the concentration on RMC that focus on risk profiles is at a minimum of time. The result of this study shows the higher status of board overlapping will probably higher in acceptance of modified opinion.

Lastly, the acceptance of modified audit opinion by a company at prior accounting year has effect on the acceptance of same modified opinion at current year.  For companies those received modified audit opinion at prior year, they might not be able to solve the issues at current year. Hence, they have probability to receive the same modified audit opinion at current year.

This study is like as the other studies which has the limitations. This study used the secondary data as the samples which the company’s annual reports are used as the main source. May be in the future, the researcher can use the different method in data collection such as interview with auditors and risk officers. Questionnaires also can be used by the researcher in order to collect the primary data. These type of data collection methods are important to the researcher to know some others implicit information that rose up by the auditors or other respondents. The formation of RMC is till voluntary and not mandatory in most countries in the world. The study for the efficiency of this board committee is limited and scant. Future study should be done on its efficiency in term of other indication like the company market share, profit and investment opportunity. The study should also examine the roles played by this board committee for said indication besides the characteristics of RMC. In term of research framework, this study used modified audit opinion as the dependent variable. May be the other researchers will use qualified audit opinion or going-concern opinion as the dependent variable in the framework. The scope is different for qualified or going-concern audit opinion compared to modified audit opinion. The treatment for each type of auditor report is different and some different results would be produced if different type of auditor report is used as dependent variable in the study.

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Human Resources Management in Nigerian Tertiary Institutions: The Obafemi Awolowo University Experience

 

Jegede Charles Temitope 

 

ABSTRACT

Human Resources are the life blood of an organization. They are endowed with discretionary decision-making power and thus have competitive advantages over other resources. This paper examined human resources management in Nigerian tertiary institutions with a view to examining the challenges facing human resources management in Obafemi Awolowo University Ile-Ife of Nigeria. This study was necessitated by the need to ensure improved organizational performance and attainment of objectives as higher institutions of the 21st century. Both primary and secondary sources of data were utilized for the study. Primary sources of data were collected through structured questionnaires. Secondary sources of data were from internet sources, journals, books, unpublished theses among others on the field of human resources management and higher education administration.  A total of 180 questionnaires were distributed to members of staff drawn from all the four unions in Obafemi Awolowo University, Ile-Ife, Nigeria. Data were analysed using descriptive statistics The findings from empirical studies revealed that they are many challenges of human resources management in Nigerian tertiary institutions such as inadequate funding, violent trade unionism among staff, ambiguity in policy interpretations, low productivity, poor quality of work life, poor health and safety at work among others. The study concluded that these challenges of human resources management in higher institutions should be addressed in order for Nigerian tertiary institutions to attain their objectives as institutions of the 21st century.

Keywords: Challenges, Human Resources Management, Organizational Performance, Tertiary Institutions.

INTRODUCTION

Human resources are the life-blood of any enterprise or institution. They combine other resources in the right mix to formulate appropriate strategies for the accomplishment of the desired objectives of the enterprise. This important attribute of HR assist the enterprises to make rightful decisions and respond effectively to the threats and opportunities within the environment of the organization (Farant, 1982: Gerald, 1995; Hanif, 2002). Thus the enterprise depends highly on its HR for success and survival. This dependence continuously   increases the complex and turbulent nature of the business environment of this century (Anyim and Ikemoria 2011).

According to Ogunsaju (2006), human resource management is the effective mobilization of human resources based upon appropriate recruitment, selection, training and placement of appointed staff in order to achieve the organizational set down goals and objectives. Human resources are useful tools employed in harmonizing the needs of the employees with goals and objectives of the organization on a continuous basis (Akintoye et al, 2008).

The success of an organization is not only determined by the quality of personnel available but how well these human resources harnessed and coordinated towards, realizing the goals of the organization (Vance, and Paik, Y. 2006).

It is on this note that the study examined human resources management in Nigeria tertiary institutions with a view to understanding the challenges facing human resources management in Obafemi Awolowo University Ile-Ife, Nigeria.

Objectives of the study

The objectives of the study are to

  1. review literature on human resources management
  2. examine the challenges facing human resources management in Nigeria tertiary institutions; and
  • suggest ameliorative measures to alleviate the challenges of human resources management in Nigeria tertiary institutions.

Literature Review

Nakpodia (2010) defined human resource management as part of management, which is concerned with people at work and with their relationship within the organization. London Institute of personal Management (1963) described human resource management as “the responsibility of those who manage people as well as descriptive specialists in management. This recognition acknowledged that human resource management is a distinction function of management in any public or private organization. The Personnel and Industrial Relations defined human resource management as “the process of developing, applying and evaluating policies, procedures, methods and programmes relating to the individual in an organization.

Human resources are saddled with the responsibility of designing and implementing policies and programmes that will enhance human abilities and improve the organizations overall effectiveness. The human resources practitioners play four critical rules in an organization or institution. They are to

  1. create and implement policies of an organization
  2. offer advice and counsel the employees on matter ordering on productivity, safety at work,

    or career among others.

iii. control of human resources programmes and laid down procedures; and

  1. provide services that assist line managers in performing their job or serving the organizational

     units.

Challenges of Human Resources management in Nigerian Tertiary Institutions

Anyim et al. (2011) identified the major factors militating against effective human resource management in Nigerian higher institutions. They include

  1. Poor productivity of workers in Nigeria
  2. Poor quality of work life
  • Insecurity and hazardous environment
  1. Quota system in employment
  2. Labour dissatisfaction at work
  3. Changing role of government or state in industrial relations
  • Economic recession; and
  • Diversity of workforce

Owojori and Asaolu (2010) maintained that the problems of human resources management in Nigeria higher institutions include inadequate financing, violent trade unionism among staff, disagreement on policy matters, lack of trust and ambiguity in policy interpretations.

From the foregoing discussion, it can be deduced that the problems militating against effective  of human resources management in Nigeria tertiary institutions include the following:

Inadequate finance: – Lack of finance could be responsible for inadequate facilities such as office furniture and fittings, instructional materials, delay in salary delay/non-payment of allowances etc. which could result in face-off taking a variety such as confrontation and strike.

Violent trade unionism among staff: – Misinformation, misinterpretation or lack of good communication network could cause trade unions to be aggressive and get out of hand. This is one of the hindrances to human resource management in Nigeria higher institutions.

Lack of trust: – There is usually lack of trust between management and members of staff in higher institutions. This could result in poor communication or ambiguity in communication content and selection in our union.

Staff recruitment and selection: – According to Ogunruku (2010), the principle of recruiting the best staffs into higher institutions have been compromised, this has impacted negatively into the human resource management in Nigerian higher institutions.

 Dictation from the political class: – There have been worries over time about this the type of people that are appointed to represent the external community on the governing councils of higher institutions in Nigeria. Often times, they are basically and prepondently politicians without cognate knowledge of the higher institution culture and ethos. This political class could dictate policies to the disinterest staff. This causes internal conflicts in higher institution community.

Disagreement on policy matters:  Policy matters could be source or disagreement. Instances abound when discrepancy in salary/remuneration among staff of different unions (e.g. ASUU and NASU) have created problems for university management.

Methodology

A total of 180 questionnaires were distributed to members of staff drawn from all the four unions in Obafemi Awolowo University, Ile-Ife, Nigeria. Data were analyzed using descriptive statistics. All hand was on deck to ensure that are the accurate number of questionnaires distributed to respondents were collected accordingly.

The results of the findings from general profile of the members or staff and problems of managing human resources are illustrated in table 1 and 2 below.

The results of the findings from Table 2 show that majority of the respondents attest to the fact that human resource management face serious challenges which include inadequate finance, violent trade unionism, lack of trust, politicization of staff recruitment, dictation from the political class, disagreement on policy matters, insecurity and hazardous environment.

Conclusion

The study examined the challenges facing human resources management in Nigerian tertiary institutions. It also reviewed literature on human resources and problems of human resources  management in Nigeria tertiary institutions. Data were analyzed using descriptive statistics.

The study concluded that the problems facing human resources management in higher institution should be addressed in order for them to attain their stipulated objectives as institutions of the 21st century.

 

Recommendations

In the light of the crucial issues discussed, the paper recommends as follows:

  1. The government should provide adequate funding to higher institutions for proper maintenance of equipment, facilities and other expenditures of emergent need.
  2. There should be democratization of administrative processes in the Nigerian higher institutions.
  • Nigerian higher institutions must employ ICT in order to provide better human resource management service to their constituents and stakeholders.
  1. University autonomy on policy making matters should be encouraged and a consistent and effective communication network should actually be maintained.
  2. Staff welfare should be given priority to enhance greater productivity and cooperation.
  3. Management of higher institutions must ensure that there is good rapport and human relation between heads of the various departments, sections, units and their staff.
  • Higher institutions in Nigeria must look inward on ways of generating or improving on its internally generated revenue to complement government efforts.
  • Regular trainings should be organized for head of the various faculties, directorates, units, institutes, departments and sections in the art of personnel management.
  1. Finally, professional administrators should master their areas competently in order for

 higher institutions to have effective and efficient  human resources management.

References

[1] Akintoye, I.R., Adidu, F.I. Owojori, A.A. (2008). “Management and organization: A Book of

Reading” Akure: Tonygay Educational Publishers Ltd.      

[2]Anyim, F. C., Ikemefuma, C. O., Mbah, S. E. (2011) “Human Resource Management Challenges in Nigeria Under Published Economy” International Journal of Economics and

Management Sciences, Vol. 1, pp. 01-11.

[3] Farant, J. S. (1982) “Management or Higher Institutions” Lagos: Macmillan Publishers

[4 ]Gerald, P. B. (1995) ‘‘Administration of Higher Education’’ New York: Harper and Row

 Publishers

[5]Hanif, A. and Saba, K. (2002) “A Study of Effectiveness of Human Resources at Elementary

 Levels: Master Degree Thesis, Unpublished, Lahore: University of the Punjab.

[6] London Institute of Personnel Management, (1963) “Human Resource Management:An

Overview” An Address at Golden Jubilee of Institute of Personnel Management London.

[7]Nakpodia, E. D. (2010) “Human Resource Management in School Administration in Delta State,         Nigeria, Journal of Social Science 23 (3): pp-179-187.

[8] Ogunruku, A. O. (2010) “Excellence in University Administration in the 21st century: Nigerian Universities in Perspective” Birthday Lecture in honour of Chief Deji Adegbite (first

Registrar University of Ado-Ekiti).

[9] Ogunsaju, T. O. (2006) “Human Capital Management for Effective Corporate Governance” Paper      presented at a Workshop titled: Corporate Governance for Sustainable and National Development.

[10]Owojori, A.. A.. and Asaolu T .O. (2010), “Critical Evaluation of Personal Management Problems in the Nigerian School System” International Journal of Education Science, 2(1) pp.1-11.

[11] Vance, C.M. and Paik, Y. (2006) “Managing A Global Workforce: Challenges and Opportunities     in International HRM”. New York: Sharpe Publishers.

The Study on Influence of Psychological and Socio Cultural Factor on the Share Market Operations. Reference to atticaloa District, Eastern Province, Sri Lanka.

A.Andrew

Stock market is an important part of the economy of a country. The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent. That is the reason why, the government, industry and even the central banks of the country keep a close watch on the happenings of the stock market. The stock market is important from both the industry’s point of view as well as the investor’s point of view.

This study focuses the influence of psychological and socio cultural factors to implement on stock market in Batticaloa District in the Eastern part of Sri Lanka. This study was conducted with two research objectives: to find out the degree of psychological characteristics of potential investors regarding the stock exchange and to evaluate the level of support of socio culture environment to implement in share market.Self motivation, perception and attitude is the dimension of identifying the psychological characteristics. Social culture factors are including language skill, brokers support and culture support to mature the socio culture supportive.The study was conducted among the potential investors reside in the various part of the Batticaloa District. The data were collected from the 100 sample of people. The proportionate stratified random sampling method was used to select the sampling units and the structured questionnaire was used to collect the data. The data were analyzed using Univariate Analysis and Bivariate analysis techniques. The unit of analysis was individual person.

Finding of the study revealed that respondents (potential investors) were moderate level supportive to implement the stock exchange as indicated by the degree (measured as mean value) of their psychological characteristics (Self motivation 3.5), perception (3.4), and attitude (3.4). Socio cultural environment (3.17) was moderate level influence. In overall this study was find out moderate level supportive to implement the stock exchange in Batticaloa.

Keywords: Investment, Psychology, Stock Exchange, Investor, and Socio Culture Environment

 

 

  1. INTRODUCTION

An island nation situated at the Southern tip of India, Sri Lanka is often referred to as the Pearl of the Indian Ocean. With the end of a bitter three decade long civil conflict, the country is taking advantage of new found peace and stability and growing economic prosperity to make its mark as a global logistics center.

Increased political stability is laying the way for strong growth on investment as the Government formulates long term robust development plans to drive economy wide sustainable growth.

Our nation is developing nation and agricultural one for hundred years due to our capability of resources, gain knowledge and technology requirements even we greater than some nations. If we want to become leading one we should change our habits of investment.

Eastern province is a one of the nine provinces in Sri Lanka. The Batticaloa is a one of the district in Eastern Province. Our society based on knowledge income and saving has an essential role and making the most valuable effects by using financial system at an economic entity level.

The fundamental factors such as economy, industry and company analysis play a key role in investment decision process. In earlier there are few ways to invest their money for more money such as purchasing land and gold, invest in education and business ,life insurance, bank deposit share market etc.. But now there are twenty sectors for investment in stock exchange. Each and every sector is important to develop the nation.

The word Investment refers to the deployment of surplus funds either in the financial assets or in the physical assets with the expectation of getting an optimum return in future. R.Jayaraman, Dr.G.Vasanthi, M.S.Ramaratnam, (JBM&SSR Volume 3 ,2014).

These are under the stock exchange there are twenty sector to invest the money which is functioning under the capital market. First we understand the capital market. The Financial Market, which is the market for credit and capital, can be divided into the Money Market and the Capital Market. The Money Market is the market for short-term interest- bearing assets with maturities of less than one year, such as Treasury bills, commercial paper, and certificates of deposits. The major task of the Money Market is to facilitate the liquidity management in the economy. The main issuers in the Money Market are the Government, banks and private companies, while the main investors are banks, insurance companies and pension and provident funds. The Capital Market is the market for trading in assets for maturities of greater than one year, such as Treasury bonds, private debt securities (bonds and debentures) and equities (shares). The main purpose of the Capital Market is to facilitate the raising of long-term funds. The main issuers in the Capital Market are the Government, banks and private companies, while the main investors are pension and provident funds and insurance companies.

 The Financial Market can be also be classified according to instruments, such as the debt market and the equity market. The debt market is also known as the Fixed Income Securities Market and its segments are the Government Securities Market (Treasury bills and bonds) and the Private Debt Securities Market (commercial paper, private bonds and debentures). Another distinction can also be drawn between primary and secondary markets. The Primary Market is the market for new issues of shares and debt securities, while the Secondary Market is the market in which existing securities are traded. (http://www.cse.lk/static/introduction

Investment, first of all we will learn here that what Investment is? Is Investment just a money or capital? Is Investment just a part of your salary or Income? We will answer all these questions in a single line that Investment is that part of your money whose nominal value increases along with the inflation or time to increase its real value. We will learn some benefits of investing which you must know before investing in stock market.

The part of money which you park in some avenues like Bank Deposits, Real Estate, Jewellery or Stock Market to get some return on that capital in future is also known as Investing or Investment.

There are many Instruments of Stock Market called Securities like Shares, Bonds, Debentures etc. and this stock market have its own benefits in his own way for every person who invest in stock market. We will discuss here the advantages and the benefits of investing in Stock Market which you must know before Investing in stock market.

Easy Liquidity: It is the very first benefits of investing, In stock market shares and securities are traded in very high volume which make it a volatile market so there is very easy liquidity in stock market, like if you want to turn your investment in stock market into cash then you can do that very easily. Flexibility: Investing in stock market is very flexible like the market has ups and downs in prices at every trade session, price of stock market moves with the rapidity and flexibility of this market.

Regulatory Framework: Stock Market works under some regulatory framework to protect and safeguard all its investors. For example: In Sri Lanka the Securities and Exchange Commission (SEC) works as a Regulatory Framework Body to safeguard all investors. Maximum Returns: According to the long term perspective it is found that Investing in Stock Market gives maximum returns. For example:

Business Taste: Well, According to me it is the best benefits of investing in stock market you can ever have, here from Business Taste I mean that when a person trades or invest in stock market everything is here works like a business a modern style business. Sole Proprietorship: If you invest in stock market then you are starting your own business where your investment is your capital, like the more your trade is in profit the more your business grows and you are the only person to run this business that is why investing in stock market is your sole proprietorship business.

While in the midst of important transformation to an industrialized economy, its traditional stronghold in the service industry is growing with simultaneous speed. The change in the mindset of the investor’s leads to change in the trend of investment ways. The investor’s sentiment may either be optimistic or pessimistic. The people sentiment and socio culture sentiment are complimentary to each other. Any change in social change lead to a substantial change in the investor’s behavior similarly any change in the investors’ sentiment leads to a substantial change for social culture environment.

At presently telecommunication, bank and industry and food & beverage sectors are very popular one in the capital market and several advantages on investing shares even in the Batticaloa district still there is so many traditional ways are following by the people on investment. Here share investment way is infancy investment way. It should be encourage due to globalization and survive in future change.

Therefore, I have intended to study the influence of social and psychological factors on implement in share Market in Batticaloa District.

  1. PROBLEM STATEMENT

The Sri Lankan share market continues to shine as one of the best performing ones. According to Bloomberg news service in 2009.CSE is one of the most modern stock exchange in South Asia a fully automated trading platform and market capitalization of over US$ 23 billion, it has been one of the best performing stock market in the world, with average daily turnover US$ 18 million. http://kenangasl.com/why-sri-lanka/colombo-stock-exchange-cse/

Batticaloa is one of the districts in Sri Lanka, Still now Stock Exchange did not located in Eastern Province. There are huge amount of lands, higher education institutes, big amount of population who are knowledgeable and so many financial institutions.

If the stock exchange will be establish in Batticaloa district, that gives great investment opportunity to public and it will lead to economic development.

Therefore this present study aims to find out the influence of psychological and socio culture environment to establish the stock market in Batticaloa district.

  1. RESEARCH QUESTIONS
  2. What is the degree of psychological characteristic of potential investors in stock exchange?
  3. To what extent the socio culture environment is favorable to implement in the stock exchange?

4.OBJECTIVES OF THE STUDY

  1. To find out the degree of psychological characteristic to implement in Stock Exchange.
  2. To evaluate the level of favorable of Socio Culture environment to implement in stock exchange.
  3. SCOPE OF THE STUDY

This research is possible to study level influence of psychological and Socio culture factors to implement the share market, based on gender, education, ethnic group, designation, monthly income level, and investors’ behavior of particular people who are living in Batticalo district.

Therefore the researchers have scope of this study to the Batticaloa district and also selected 100 people which use in proportionate stratified random sample size in Divisional Secretariat Divisions in Batticaloa district to carry out this research study.

 

 

  1. LITERATURE REVIEW

Psychological Characteristic

Investors are normally assumed to make their financial decisions rationally according to classical economic theories but some novice investors make unsuitable investment decisions based on irrational exuberance (Ricciardi, 2008).

The investor sentiment is primarily based on investor’s psychology. Individual expectation, Individual optimism, individual ability and individual confidence are the four major psychological components of investor sentiments. On other words the investors sentiments are run by individual expectation, individual optimism, individual ability and individual confidence (R.Jayaraman,Dr.G.Vasanthi.M.S.Ramaratnam, JBM&SSR 2014)

Psychological factors operating within individual partly determine people’s general behavior and thus influence their behavior as consumer. Primary psychological influence their behavior as consumer are perception, motives, learning, attitudes and personality and self concept. Even though these psychological factors operate internally, they are also very much affected by social factors outside the individual. (Pride M Ferrell .O. C, 2006)

Emotional development of children and is part of developmental psychology, the study of changes in behavior that occur through the life span. Cognitive psychology deals with how the human mind receives and interprets impressions and ideas. Social psychological looks at how the actions of others influence the behavior of an individual.

(http:/www.medterms.com/script/main/art.asp/articlekey)

The persons buying choices are also influenced by four major psychological factors motivation, perception, learning, and beliefs and attitudes. (Philip Kottel, 2005)

Consumer attitudes are composite of a consumer’s beliefs about feelings ,about behavioral intentions towards some “object “ – within the context of marketing , usually a brand, product category, or retail store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumers will react to the object.

 Consumer attitude are considered by many marketers to be accurate predictors of consumer behavior, making the study of attitude formation and change an important topic. Attitudes are learned tendencies to perceive and act in a consistent way toward a given objective or idea, such as a product, services, brand, company, store or spoke person. This definition emphasizes the impact on attitude of several of other concepts.

The attitude is a person’s enduring favorable or unfavorable evaluation, emotional feeling, and action tendencies toward some object or idea. People have attitudes towards almost everything: religion, politics, clothing, music and foods. Attitudes put people into a frame of mind: liking and disliking an objects, moving towards or away from it (Phillip Kottler

Socio Culture Environment

According to Kottler views culture factors exert the broadest and deepest influences on consumer behavior. Culture, subculture and social class, reference group, family and social roles and particularly important in buying behavior.

  1. METHODOLOGIES

Sample of the Study

 

The total population for the study was in Batticaloa district people. There are 100 people were  selected who are resident of Divisional Secretariat division in Batticaloa District (100%) as sample by using stratified random sampling method.

Data Collection Method

In considering objectives it was a cross – sectional one in the time horizon because data were collected in a one single time from the respondents but the unit of analysis was the people of the selected area in the Batticaloa district.

The questionnaire is a structure technique for data collection. The primary data were collected through questionnaires and interviews from the respondents. The questionnaire developed based on three parts, namely research information, personal information and investor’s behavior. In this research questionnaire is closed ended. In general closed questions are considered as more efficient and reliable than open ended questions. In the research one of the ordinal measures called “Likert’s five points rating scale” is used to require respondents to order their answers.

  1. Methods of Data Analysis

Data Presentation and Analysis

The data were analyzed by using univariate analysis and bivariate analysis techniques. In this case, the unit of analysis was individual person of selected area in Batticaloa district.

Method of Data Evaluation

Each variable is given a scale from 1-5 to show the extent of agreement, based on responses, univariate measures were calculated for each of variables. The mean value is lying in the range of 1-5. The range is explore the particular result of this study the range between 1 and 0.25 is express the low level influence for this study. The range between 2.5 and 3.5 is assumed moderate level influence on this study. The range above 3.5 to 5 is considered high level influence on this study. This decision rule is used to measure the level of influence. It shown in the table.

  1. Implication and conclusion

Psychological characteristic of people on Share Market operations in Batticaloa district.

Psychological Characteristic variable with three dimension including self motivation, perception and attitude are evaluated the influence of Psychological Characteristic of people on the share market operations in Batticaloa. We test through univariate analysis and bivariate analysis techniques. This outcome express the mean value is 3.4733 and standard deviation is 0.4524. It is shown in the table 3

If we want to invest in share market we should wish on the activities. That desire depends on our mind likewise involvement on share market operations also leads by our mind. The society should be support to run the business.

The first objective is obtained through the psychological characteristic variable. It is moderate level supportive on this study.

Extent of Social Cultural Environment Supportive to Invest on Share Market Operations.

Socio Culture variable with three dimensions are knowledge on share market, stock brokers support and cultural support. Those dimensions help to identify the influence of socio culture environment. We test through univariate analysis and bivariate analysis techniques. This outcome express the mean value is 3.1733 and standard deviation is 0.23915.

The second objective is obtained through the socio culture factors. It is moderate level supportive on this study.

Overall Result

 

Eventually when we observe the influence factors for an establishment of the stock exchange in Batticaloa district. Table 4   clearly discloses that influence factors are moderate level to establish the stock exchange in Batticaloa district.

  1. CONCLUTION AND RECOMMENTATION

To examine two variable of research we have used six dimensions. All research variables have been measured due to the nature of measurement and research objectives have been investigated with using of mean and standard deviation that summarized in Tables.

It is commonly believed that the investment decision of the investors is driven by the sentiment of investors. Investor’s psychological characteristic and socio culture trends were carefully indentified with the help of existing review of literature. The study has revealed that image factor has appeared as the most influence factor in determining investors decision making. Similarly individual optimism has become the key factor in influencing the sentiment of the investors.

In Batticaloa district there are many educational institutes those are higher education as university, college of education, teacher’s training college, international school and vocational training center even it is distant from share investment, there are low level of awareness and lack of stock brokers firm and information center on this type of investment. In any type of education should change the people and their society. These institutions can be change through subject of finance and investment. We can revolve the people’s investment pattern through provide psychological training as skill, attitude and knowledge development. This step change social culture environment due to most of them are more believe on educated people so if we change the educational society’s investment pattern other type of society also change into share market. Those are possible; the stock exchange will be established in Batticaloa district because visible services are more invited by the people. Based on this type of investment way some are known well some are unknown therefore, we assume this is a childhood investment way  in Batticaoloa, We state without building we cannot run the business perfectly based on our research.

Finally this study convey people are mostly involved all type of investment even experientially traditional investment is well known by the people than share investment because inadequate resources and deepest knowledge on this field. Psychological and socio cultural motivational factors are motivated the people to invest in share market so implementation is necessary one in Batticaloa district.

Reference 

  1. Alexander William, Gordon. J, Sharpe. F, Feffery v,bailey, Fundamental of investment ,3rd ed
  2. Barnewall,M.M(1987) Psychological characteristic of individual investors.
  3. Bhole L.M, (2004) Financial institution and market, 4th ed, publish by Tata Mcgrow –hill, New   Delhi,    5, 17.2-19.12
  4. Central Bank of Sri Lanka, (2008), Recent Economic Development -Highlight of 2008 and Prospect for 2009, Central Bank Publication
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  8. E,(Oct 2000) Sri Lankas Securities market ,1st ed
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  10. Naresh,k.malhotra,satyabhusan Dash Marketing Research an Applied Orientation, ,5th edition,
  11. M, Ferrell, marketing 10th ed 2000, all Indian publisher & distributors Regd
  12. Peter S.Rose, (1986), Money and Capital Market, Printice Hall, London, pp 330-423
  13. Valarie A,Zeithul mary J Bitner , Ajoy Pandit Dwayne D gremler 2008 Service Jayaraman, Dr.G.Vasanthi, M.S.Ramaratnam, A Study on influence of psychological factors on Investment Behaviour in Equity Investment,Journal of Business Mangement &Social Science Research(JBM&SSR Volume 3 ,2014)
  14. S, saravavel.P, (2005/2006) marketing research and consumer behavior

 

Business of Indian Railway: Strengthening the Economy

Naib Singh

Abstract

All the transport system as roadways, airways and railways exist in India. But Indian rail system has flourished itself in the major way. Indian Railways has large position in the economic development of the nation. Railway is very appropriate for the long journey. The origin of Indian Railway goes back in 1853. First train of India journeyed the distance of 22 miles between the Bombay and Thana. This transport system is providing employment second only to defense. Indian trains transport 90% of the total coal all over India. This sector is supplying the 50% of the power in the country. In 2007, this sector generated the revenue of USD 18.8 billion which has increased in the year 2015 up to USD 26.4 billion. Indian railway is assisting the economic and social development of the country by providing a sound business along with the employment to the large chunk of the population.

Key Words: Indian Railways, Foreign Direct Investment (FDI), Yatri Ticket Sewa Kendras, Suburban Mobile Ticketing System.

 Indian Railway

Indian railway is the third largest network among the various rail networks in the world. It has big role in the economic development of the country. Railway is very suitable for the long journey. The origin of Indian Railway goes back in 1853. First train of India journeyed the distance of 22 miles between the Bombay and Thana. At the time of beginning Railway transport system was operated by the private British companies for the business purpose. Government of India took over the first railway company in 1925. Thereafter in 1950, the Government took over other companies also. Now days Indian Railway has become the biggest nationalized enterprise of the country. For transporting the heavy and bulk commodities any other transport system cannot take place the railway transport. Indian railway network covers 66000 kilometer distance in the country. 21000 passenger and freight trains run daily on these lines. These railway lines are having 7146 stations all over the India.

 

Objective of the Study

This paper highlights the contribution of Indian Railway in the economic development. An analysis of the performance of the Indian Railways has been made in the study for the purpose. In the ending part containing the conclusion, the findings of the study have been pointed out after considering the various literature and data collected by the researcher.

 

Research Methodology

The present paper is based on the performance of the Indian Railways.  For studying and analyzing the present problem, the existing information has been considered from the various published and online sources.  Data for the analysis have been collected from the secondary sources. Main limitation of this study is that it is based on the material and information collected from the secondary sources.

Business of Indian Railway

Indian trains carry 23 million people everyday which is equal to the population of Australia. It transports the freight in the very big size i.e.1097 millions tones in a year. 13 lakh people are employed in the Indian railway. This sector is providing employment second only to defense. Indian trains transport 90% of the total coal all over India. This sector is supplying the 50% of the power in the country.

During the period of ten months i.e. from April 1, 2014 to January 31, 2015, the approximate earnings of the Indian Railways were reported at Rs. 128928.28 crore which were Rs. 114428.52 crore during the same period in the previous year. This sector has attained the increment of 12.67 % in the period of one year. This sector has gained significant growth in the various areas like line doubling, gauge conversion, electrification and lines commissioned.

Indian Railway has achieved big achievement in the area of electrification of routes. In the year 2014-15, 1375 kilometer railway line was electrified which was more than the previous year. The Government has set the target of electrification of 1600 kilometer lines in the coming year.

Expenditure on capacity augmentation of the Indian railway like new lines, doubling, gauge conversion etc., has been increased by 138 % in the year 2015-16. . The outlay for the passenger amenities works have been increased by 67% in the year 2015-16. Government has proposed an investment plan of Rs. 856020 crore in the upcoming five years -2015-2019. For making the railway transport system more competent a big amount has been approved by the Government worth Rs. 96000 crore.

Amenities Provided by the Rail Sector

Indian Railway has launched helpline no. 138 for the passengers for obtaining the various information. Various facilities have been started for the facilities of the passengers like Yatri Ticket Sewa Kendras, Operation Five Minutes, Suburban Mobile Ticketing System, Cashless Transactions through RuPay and Go-India Smart cards. Online facilities are also provided foe the passenger through they can avail the various information and facilities at home. More ticket are made available per minute on the internet for the passengers to avoid last minute rush. SMS alerts for the status of tickets, for destinations and as wake up calls are the mind blowing facilities. Safe drinking water units have been established for making available the hygienic drinking water. More than 9000 Bio-Toilet have been fitted on trains for maintaining the cleanliness in the coaches. Revenue geared by this sector is increasing over the years.

 

In 2007, this sector generated the revenue of USD 18.8 billion which has increased in the year 2015 up to USD 26.4 billion. This transport system is strengthening the Indian business in the significant manner. And it is expected that by the year 2020, Indian railway will touch the revenue of USD 44.5 billion. Government of India has allowed 100 % Foreign Direct Investment (FDI) in this sector for opening the doors for investors in the more advanced projects like high-speed railways, high-powered electrification of lines and high-speed tracks and suburban corridors.

 

Conclusion

Indian Railways is the flourishing transport system of the country. It has become the third largest rail network of the world by occupying the big revenue generator. Revenue generation by this sector is increasing year by year and strengthening the economy in the significant way.  This transport system cannot be ignored when the talk prevails regarding the efficiency of various transport means.  Indian railway is assisting the economic and social development of the country by providing a sound business along with the employment to the large chunk of the population.

References

Daft Ruddar Sundharam K.P.M. (2007): Indian Economy, S. Chand and Company Ltd., New Delhi.

Rail Badhe-Desh Badhe, Report of, Ministry of Railways, Govt. of India

http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing/405/2

http://www.ibef.org/industry/indian-railways.aspx

http://makeinindia.com/sector/railways/

Writing as a Process of Reconstructing and Reforming Fractured Communities

 Pratibha Singh

Abstract


Though India is mounting towards development in varied fields but cast system conversely, till present, situates as an encumbrance in the overall augmentation of the nation, overlooking a substantial amount of inhabitants. The way Dalits are treated in India is similar to the way African-Americans were pressed to the periphery and looked down upon in America. This hierarchy has been apparent not just in the social order but in literature as well. The atrocities of both these marginal groups were not endowed with adequate magnitude or voice and hence, the subaltern was not a component of the literary canon for a very extensive period of time. It is solely through their ceaseless endeavors that they have made their way from the edge towards the core. Progressively the ever hushed and tangential subaltern groups started putting across their unfortunate experience by sharing them with the outside world through writing. These writers, through minority groups chose to share their tribulation through the medium of writing in order to harmonize and to fortify the sufferers with positivity as well as to claim parity and sovereignty. Dalit and African-American communities have had a comparable experience of chronological marginalization which led to their united resentment. However, Literature has the potential to connect the past with present and also, at the same time, assists the country, society and individual to reconsider their concerns. Therefore, I will take up the following texts in my paper and highlight the above mentioned ideas.

In, Autobiography of An Ex-Colored Man (1912), James Weldon Johnson, represents the position of a Mulatto protagonist, residing in America under conditions of white dominance. The narrator-protagonist in the novel illustrates the consequences of racial discrimination and brutality on the protagonist’s subjectivity and worldview. His problematic state further leads to ambivalence of his identification with his (legally) black and (visibly) white societies and his eventual resolution to get ahead as a white in order to escape the disgust of racism.

A similar kind of revelation of discrimination can be noticed in the writings of Bama Faustina Soosairaj, a Dalit writer from Tamil Nadu, who bears a sense of labor and purpose in her writing. She stands as a challenge for the Indian literary canon merely for a few reasons; first of all, she is a woman and second and most importantly she is a Dalit woman. She stimulated the tranquil world with her first piece of writing that was published in 1992, Karukku , followed by Sangathi. She shared her experiences with the whole wide world through writing and has been a notable part of Literature ever since. In Karukku, Bama exemplifies her identity dilemma of being a Dalit and her struggle for survival against patriarchy. Through her writing, she describes the importance of empowerment, education and employment for those who are exploited for various years. She reinforces the fact that for a better living, eradication of untouchability is imperative, so that the victims of Casteism can take pride in their true identities.
These examples make the fact very evident that in order to come out of their trivial state(s), these writers chose to facilitate writing as an expression of their uneven past. Writing was used as a tool by such marginalized and oppressed writers to awaken the consciousness of the population and also to heal themselves through the written word.

My paper, through the chosen texts/writers, will try to explore the importance of writing one’s experiences down and the way it helps in converting a fragmented identity into a complete whole.

KEYWORDS: Dalit, African American, Fractured subaltern communities, Progression.

            Marginalization is an immense impediment faced by a variety of sections of the social order. A number of communities have been pushed to the periphery of the society from a very extensive period of time. These sections have had experience of enormous containment and inequity. The focus of such communities is greatly upon declaration of human rights, individuality, mutiny against inequality and desire for a new-fangled society; devoid of favoritism. Literature of the marginalized confers such two dissimilar Diasporas but one general idea of humanity in Black Americans and Dalit Indians.
Dalits and African-American communities have had an analogous experience of chronological marginalization, which further escorted to their cohesive resentment. However, Literature has tried to incorporate and support these marginalized sectors, it has given tone of expression and prospective to these sections to amalgamate past with present and also, at the same time, aided the nation, civilization and individual to reassess their apprehension. Both these literatures have a facet of remonstration and to rummage for identity. They have elevated plenteous voices to emphasize their tribulations. This paper shall discuss the significance laid by the marginalized writers on the act of writing and recording their brutal experiences. For such writers, the act of sharing and unfolding the bruised history of neglected communities becomes an act which proves to be a therapeutic process for both the writers and the readers of Dalit and Black communities.

            The term Dalit, is a Marathi word, which means devastated. In the current circumstances the word Dalit does not symbolize merely untouchables; the term in fact, is an extensively germane word to all subsidiary, indigenous, subaltern in addition to other groups like Muslims, Christians, Neo Buddhists and also to upper caste women in India, who are distinguished against physically, economically and socially (Negotiating Margins: African American and Dalit writings). Indian Dalit writers like Mulk Raj Anand, Mahashweta Devi, Faustina Bama have instituted a distinctiveness and brought about a colossal uprising in Dalit literature in India. These writers believed in the notion that writing is essential in communities that have been debarred from didactic prospect; in communities with lower literacy rates. Although for those in the boundaries, admittance to value edification and encouragement for writing is not easily accessible. In the midst of poor literacy rates along with monetary complexity, a lot of marginalized inhabitants locate writing itself as opulence. The act of writing becomes exceedingly crucial for them to demonstrate their individuality and also to make others aware and acknowledge their predicament. Writing for such writers bears out to be a form of “catharsis” (Jane Schukoske), through writing, an individual can articulate her/his self and is able to comprehend excruciating distress better and also, can share them with others at the similar moment in time. Writing, therefore, legitimates one’s story/reality which can be used to make one’s affliction accredited. This can be better understood with collaboration to Faustina Bama’s Karukku (1992) along with James Weldon Johnson’s The Autobiography of An Ex- Colored Man (1912).

Faustina Bama began to be distinguished as a writer with the publication of Karukku (1992). Her novel demonstrates the appearance of Dalit writings and made her one of the foremost Dalit woman writers in India. The narration moves from past to present, exploring a variety of events, that she had experienced during her life. Her work has been called an influential representation of Dalit suppression by numerous critics and readers. Karukku illustrates not just her individual sufferings but the exploitation and suppression of the entire Dalit community. Bama, in one of her interviews stated that “Dalit life is excruciatingly painful, charred by experiences; experiences that did not manage to find room in literary creations”. Therefore, through her novel, she is sharing her agony with her community as well as with inhabitants belonging to further superior classes.

            One of the most significant aspects presented in the novel is the oppression of Dalit Christians in the hands of the church. Karukku gives a picture of how Dalits were discriminated against of which Bama provides a variety of accounts; they were not allowed to sing in the church choir, there were different schools for the affluent, elitist upper caste Christians and for poor Dalit non Christians. In her works, she depicts how she and her community have been deceived by the assurance of autonomy and distinction by the convent, the church and by humanity as a whole. Bama outlines her religious growth as a Catholic and her realization of herself as a Dalit: for instance, her portrayal of her exclusion from the rituals of which she was initially a participant, but later was debarred from the same for being an ‘untouchable’. Bama wrote in the preface of her novel: “The driving forces that shaped this book are many: events that occurred during many stages of my life, cutting me like Karukku and making me bleed; unjust social structures that plunged me into ignorance and left me trapped and suffocating: my own desperate urge to break, throw away and destroy these bonds; and when the chains were shattered into fragments, the blood that was split then; all these, taken together.”, providing her readers with an idea of her aspirations to write this novel, that is, to empathize and heave alertness amid her readers regarding the ghastly state of Dalits.

            In the novel, Bama is introduced to the structure of untouchability when she was a student of third standard. While returning from school, she witnessed an upsetting incident of a Dalit handing over a small package to an upper caste man, but without touching it. He had tied the small package to a thread in order to make sure that the small package is not ‘polluted’ by his contact. This disturbing episode made Bama question the society, and leaves her wondering “what did it mean when they call us ‘Paraiya’?” “We too are human beings” (13). Incidents like these stimulated her to search for ways to fortify herself and her community from the compressed state. Bama’s elder brother, however, makes her realize the importance of education for her emancipation. Her brother makes her comprehend that she can never be endowed with dignity or revere, as she is a part of ‘paraiya jati’ unless she educates herself and thus leaving a profound impact upon her. After completing her education, Bama takes up a job of a teacher at a convent but soon becomes conscious that the circumstances there are not much different. She observes the various ways with which Dalit children and teachers are exploited by the upper class nuns. Thus, revealing the hypocrisy that lies inside the sacred walls of educational institution and church. Bama, through her novel takes an exceptionally courageous action of penetrating an area where no other Dalit woman had ever stridden.

            She illustrates the never- ending state of oppression through a variety of instances, out of one is that of her grandmother. Her grandmother was a servant at an upper class family and was commanded over even by the children of the house. She, on the contrary, used to address them as ‘Ayya’, which means master. Her grandmother has accepted her fate as a servant and used to appease Bama by making her understand that: “These (upper caste) people are maharajas who feed us and without them how will we survive?” Bama confers how Dalits were fed with the leftovers of the upper castes; they were unnecessarily insulted and beaten and one such incident is mentioned by the writer when she is falsely charged for “stealing coconut”. She is blamed, rebuked, trodden and suspended in the name of caste, and the validation she received by those in authority for their conduct goes like: “ after all you are from chery, You might have done it. You must have done it.”  Regardless of surpassing in her studies, she is treated with blatant insolence by her teachers and other fellow students. The facts that Dalits are made to toil under upper caste families as bonded laborers; the refusal of upper castes to sit by the those belonging to lower castes in order to keep their ‘purity’ undamaged and how Dalit children at her school were asked to stand for the duration of assembly and were made to do all the menial and personal works of the educators, together act as a reminder to her of the actualities about her caste and eventually agitating her to shriek for parity through her writing, by keeping the  portrayal of repression, untouchability, casteism,  as the focal concerns of Bama throughout the novel. To her the resolution to all the misery lies in education and expression.  According to her, it is merely through education that the subjugated can have a chance to establish their capability as equals. She outlines the atrocity of those in authority by stating the following “It is because of this we are unable to find way to study and to proceed like everyone else. And this is why a wretched lifestyle is all that is left to us.”  She sympathizes with the fellow bearers and exclaims that they are all “dying several deaths within”. For her, the realization and courage to introspect and to revolutionize “is true devotion to God”. Her departure from the religious order and her lenience with superior regions of education and deliverance of the downtrodden is the outcome of her devastating history as a Dalit.

 Hence, in Karukku, Bama portrays lives of the unfortunate section of the society; her portrayal is the representation of excruciating experiences as a Dalit headed for progression of self recognition and liberation. She emphasizes the idea of eradicating disparity at various levels and empowerment through education and consequently for a better survival of Dalits.

Akin to Dalit literature that highlights the caste prejudice of Indian society; African American literature has concentrated on the role of people of African American descent with reference to the superior American society that is highly color prejudiced. The great efforts of African American populace to ascertain themselves as individuals in their own right came to light with the writings of Richard Wright, Alice Walker, Toni Morrison, Richard Waldo Emerson and various other literary giants of African American derivation.

            James Weldon Johnson’s The Autobiography of an Ex-colored man depicts whites’ enthrallment with skin color and the possibility of ‘passing’ as a white. Passing refers to the capability of an individual to be considered as a member of social set other than their own with the intention of gaining societal acceptance. The novel estimated much of the literature of Harlem Renaissance. The novel’s central character is a black who is light enough to pass as a white. When the protagonist realizes that by forcing himself in the white community he can ignore the atrocious and fearful life of Black society, he decides to pass as a member of white culture. Benjamin J. Patterson in Ethnic groups USA, states that the novel illustrates the penalty of racial bigotry and hostility on the protagonist’s subjectivity and worldview; and it results in the oscillation of his conflicting identifications with the black and white cultures and his final decision to pass as white. The circumstances are such that the Ex- colored man realizes that he cannot attain his ambition, a name, recognition and a better future as a Black and therefore decides to spend his life as white. His assessment is based on the intensity of oppression performed through diverse forms of racial favoritism apparent in the realities of segregation and racially motivated violent behavior such as ‘lynching’. The binary system is such that white signifies ‘normalcy’ and ‘superiority’ and black, on the contrary, is associated with ‘other’ and ‘inferior’. While Patterson entitles the achievements of the anonymous protagonist “personal” and “hollow”, the protagonist’s employment of mixed race inheritance to his own advantage depicts the exigency for ways to redefine as well as to secure his position in the society. His denial to name himself becomes a threat to the white society, as they fall short to identify and control him, making him a prospective rebellious force. The powerless section, through the protagonist, overcomes racial prejudice, objectification and detestation by the superior white society. The protagonist ensures his endurance in a hostile milieu through forged identity and anonymity but at the same time, he is torn into fragmented self as he cannot identify to either black or white society. The theme of passing, written by a black author, gives the readers an idea of how the oppression and brutality of whites made an individual disguise his genuine identity and recreated the convention of color partition, policy which demands that one accepts a position within a determined social order. When the protagonist finally decides to wholly get ahead as white at the end of the novel, he has decided to stifle a major part of his identity, thus annihilating his probability to accomplish true contentment and self-awareness.

Correspondingly, the account of Dalit writers contains equivalent themes of exclusion and expression. The works of these marginalized authors include descriptions of the lives of the poor, the inconceivable regulations that were imposed upon untouchables, and Blacks, their atrocities, and the inequality they faced. These writers chose the form of writing to represent their fortitude and documentation of tales of conquerors, tales of righteousness, conquering uncertainties. Genres like that of writing and other ways of expression play key roles in social alteration movements. Autobiography, narrative, theatre and verse grant prospects to identify disparity. For the marginalized, writing is imperative as it advances the sense of identity and offers instants of stimulation that subsequently endow them with valor to ensue. This awakening of united vigilance has the potential to construct confidence to verbalize and articulate for a group of people and in opposition to injustice. In support of the marginalized, writing provides insightful expanses that allow readers to commiserate, to identify a stance that the society may refute or rationalize in daily interactions. An unswerving, opinionated writing is an unswerving call for civilian feat. This stimulation is capable of bringing parity, transparency and accountability among society.

India and America exhibit analogous hegemonic socio-economic- cultural-political structures of oppression that demarcate the identities of the marginalized in the respective civilizations. Dalit writers in India and Black writers in America have formed potent literature in the route of time that can no longer be entitled, Marginalized literature, as it has come to inhabit central phase as Mainstream literature.

Works Cited

Ambhore. Uttam Bhagvan, Rao. Kateswar. Quest for Inntegrity: A reading of Bama’s Karukku.   2009

 B.C. Indu. Silence Speaks: Astudy of Bama’s Karukku. 2013

Bama. Faustina. Karukku. 1992

Cardosa. Maria Luiza. Racial Passing in James Weldon Johnsons The Autobiography of An Ex-             Colored Man. 2011

Duresh. J.G. Towards a New Dawn: Reflections on Bama’s Karukku.2014

Johnson. James Weldon. The Autobiography of An Ex-Colored Man. 1912

Karunaker. A. Negotiating Margins: African American and Dalit Writings. 2012

Nanda. Shaweta. Re-Defining the “margins” Female voice, body and identity in the works of
African American and Dalit women writers and artists.
2012

Oza.Preeti. Literature of Bias: Intercultural and Cross-Border comparisons between Dalit literature and Black American Writing. 2013

  1. Dinesh Babu. The Theme of “Passing” in the novels of James Weldon Johnson. 2014

Patterson. Benjamin A.  Ethnic Groups USA (Xlibris Corporation).2008

Roy. Mantra.“Speaking” Subalterns: A comparative study of African American and Dalit Indian literature. 2010

Sargar. Shivaji D. African American and Dalit Autobiography. 2012

Schukoske.Jane. Identity Writing and Citizen Participation. 2012

Souda .Saveen. From Suppression to Democratic Space.: African American’s struggle for  freedom.

NON PERFORMING ASSETS AND ITS MANAGEMENT (A comparative study between public and private sector)

 

                                                                                                             

Bhanu Uday Somisetti

Dr. P. Raja Babu

                                                      K.Venkateswara Kumar                                                                     

ABSTRACT

Today banking has to play very prominent and crucial role in developing countries like India. In the Indian financial system banks acts as a financial intermediary or institution serves different services to accelerate the economic growth of the country. To improve the financial health of the banks various norms have been introduced at regular intervals. It is quite clear that generally the good health of a bank is reflected in better return on assets. The Non- Performing assets not only reduce the profitability of the banks by writing of the principal amount, as well as the amount of interest on advances and it is also a threat to the stability of the bank. This article mainly focuses on the causes and how a bank manages Non-Performing Assets (NPAs) under the guidelines of RBI.

KEYWORDS: Non-Performing Assets, Financial Institutions, Profitability, Banking Sector, Economic Growth, Reserve Bank of India (RBI).

  1. INTRODUCTION

All assets do not perform uniformly. In some cases, assets perform very well and the recovery of principal and interest happen on time while in other cases there may be delays in recovery or no recovery at all because of one reason or the other. Similarly, an asset may exhibit good quality performance at one point of time and poor performance at some other point of time. NPAs refer to loans which are at risk of default. Reserve Bank of India (RBI) defines “An asset, including a leased asset, becomes non­-performing when it ceases to generate income for the bank. Banks have to classify their assets as performing and non-performing in accordance with RBI’s guidelines. Under these guidelines an asset is classified as non-performing:

  • If any amount of interest or principal installments remains overdue for more than 90 days in respect of term loans.
  • In respect of overdraft or cash-credit an asset is classified as non-performing if the account remains out of order for a period of 90 days and
  • In respect of bills purchased and discounted account, if the bill remains overdue for a period of more than 90 days.
  1. CLASSIFICATION OF NPAs

According to the RBI guidelines banks must classify their assets on an on-going basis into the following four categories:

  • Standard assets: Standard asset service their interest and principal installments on time, although they occasionally default up to a period of 90 days. Standard assets are also called performing assets. They yield regular interest to the banks and return the due principal on time and thereby help the banks earn profit and recycle the repaid part of the loans for further lending. The other three categories (sub-standard assets, doubtful assets and loss assets) are NPAs and are discussed below.
  • Sub-standard assets: Sub-standard assets are those assets which have remained NPAs (i.e., if any amount of interest or principal installments remains overdue for more than 90 days) for a period up to 12 months.
  • Doubtful assets: An asset becomes doubtful if it remains a sub-standard asset for a period of 12 months and recovery of bank dues is of doubtful.
  • Loss assets: Loss assets comprise assets where a loss has been identified by the bank or the RBI. These are generally considered uncollectible. Their realizable value is so low that their continuance as bankable assets is not warranted.

‘If banks do not classify an asset as NPAs, they naturally have more money to earn interest income on their advances. If a large portion of NPAs goes unreported, the bank could reach a situation where it has advanced more money than it has available – a technical bankruptcy’. By giving this leverage ultimately RBI is delaying the inevitable, at some point of time the NPA bubble will burst.

  • KEY RATIOS FOR ASSET QUALITY

There are two key ratios for measuring bank asset quality.

  • Gross Non-Performing Assets (GNPAs): Gross NPAs is the sum of all loan assets that are classified as NPAs as per RBI guidelines. Gross NPA Ratio is the ratio of gross NPA to gross advances (loans) of the bank.
  • Net Non-Performing Assets (NPA) ratio:  Net NPAs are calculated by deducting provisions from gross NPAs. The net NPA to advances (loans) ratio is used as a measure of the overall quality of the bank’s loan book.

Net non-performing assets = Gross NPAs – Provisions

NPA ratio = Net non-performing assets / Advance

  1. CAUSES FOR IMPLICATION OF HIGH NPAS IN THE BANK

Banks with high level of NPAs have lesser funds to give loans and advances, i.e. lesser funds their interest income has to be reduced. Another negative impact of high NPAs:

  1. High level of provisioning (banks are required to keep aside a portion of their operating profit as provisions, higher NPAs will increase the amount of provision thereby impacting the profitability)

Provisioning Norms:

  1. For substandard loans, a general provisioning of 15% on the total outstanding amount is made if the loan is secured, for unsecured loans the total provisioning that needs to be done is 25% of the outstanding balance;
  2. For doubtful assets, provisioning of 100% on the total outstanding amount is made if the loan is unsecured, for secured loans the total provisioning is in the range of 25% to 100 % of the outstanding balance depending upon the period for which the asset has remained doubtful;
  3. Loss assets should be completely written off. If loss assets are permitted to remain on the books for any reason, 100 % of the outstanding amount should be provisioned.
<li>The burden of maintaining the capital adequacy ratio;</li>
<li>Increased pressure on Net Interest Margin (NIM);</li>
<li>Reduce competitive position;</li>
<li>Continuous draining of profits;</li>
<li>Negative impact of goodwill with the bank;</li>
<li>Restricted cash flow by the bank due to the provision of a fund created against the NPA.</li>
  1. OBJECTIVE OF THE STUDY

The main objectives of the study are given below:

  • To study the concept of Non-Performing Assets in the banking sector
  • To analyze the performance of banks under the concept of NPAs
  • To understand how a bank manages its NPAs and
  • To study various channels to recover the NPAs

  1. REVIEW OF LITERATURE
  2. Chandan Chatterjee, Jeet Mukherjee and Dr.Ratan Das, (2012) ‘Management of non-performing assets – a current scenario’ in their study they evident that the NPAs have a negative influence on the achievement of capital adequacy level, funds mobilization and deployment policy, banking system credibility, productivity and overall economy. And they also compare the performance of public, private and foreign banks and they present that the public sector banks are facing more problems with NPAs rather than others.
  3. Amit Kumar Nag, (2015) ‘Appraisal of non-performing assets in the banking sector: An Indian perspective’ the author of this article done a comparative study by taking ten private, public and foreign banks. This article reveals the performance of various banks and he suggested some measures to overcome NPAs difficulty.
  4. Rajeshwari Parmar, (2014) ‘Non-Performing Assets (NPAs): A Comparative Analysis of SBI and ICICI in this study the author takes a comparative study between SBI & ICICI banks and construct a relation between Net profit and Net NPAs. The author found that there is a positive relation. In case of SBI means that as profits increase NPA also increase because of mismanagement on the side of the bank and the other side of the coin ICICI bank got a negative relation which indicates that amount of NPA decreases and Profits will increase more by the amount not becoming NPA. So, they conclude that when compare to SBI (PSB), ICICI (Private bank) manages NPAs efficiently.
  5. Sonia Narula and Monica single, (2014) ‘Empirical Study on Non-Performing Assets of Bank’ in this article the authors conduct a study on private bank i.e., Punjab National Bank (PNB). It is concluded that when PNB Gross and Net NPA compared with total advances we get the result that there is mismanagement on the side of PNB. While analyzing the impact of NPA level on PNB we derived the conclusion that there is a positive relation between Net Profits and NPAs of PNB. It simply means that as profits increases NPA also increases. It is because of the mismanagement on the side of the bank.

  • ANALYSIS AND INTERPRETATION

Table: 01 shows Gross, Net advances and net NPAs of Public and Private Sector banks during the period of 2003-14. It is found that gross, net advances and Net NPAs of public and private sector banks were raised more ten times during the period of 2003-14 whereas the ratio between Net NPAs and Net advances, Total assets have been increasing between 2010 and 2014 for public sector banks whereas private sector banks have been decreasing. It is clearly indicated that when increasing loans and advances as a result Net NPAs also increases.

TABLE: 01 COMPARATIVE ANALYSIS ON GROSS, NET ADVANCES AND NET NPAS BETWEEN PUBLIC AND PRIVATE SECTOR BANKS IN INDIA

 (Amount in Billion)

 

While comparing public and private sector banks with NPAs, public sector banks are back to regulate NPAs and there is a need for proper management of NPAs because to increase the profitability and productivity. Last month, Finance Minister Arun Jaitley had said that though NPAs in the banking sector was a cause of concern, there was no ground to “panic”. Due to NPAs is the challenging for the banking sector and its impact on the economy slowed down. He had said the NPA was mainly in sectors like highways, steel, and textiles.

            Central Bank of India has topped the list of public sector banks with maximum bad loans, including restructured assets as a percentage of total advances. According to the data provided by the RBI to the Finance Ministry, Central Bank of India’s 21.5 per cent assets are either bad or have been restructured to save them turning non-performing assets (NPAs). The other banks, which have significant amounts of gross NPAs and restructured loans include United Bank of India (19.04 per cent), Punjab & Sind Bank (18.25 per cent) and Punjab National Bank by 17.85 per cent as on December 2014. Indian Overseas Bank, State Bank of Patiala, Allahabad Bank and Oriental Bank of Commerce all have bad and restructured loans in excess of 15 per cent. The rising bad loans have become a major concern for the Reserve Bank as well as the government. Most of the restructured loans are from the corporate sector. The top 30 defaulters are sitting on bad loans of Rs 95,122 crore, which is more than one-third of the gross non-performing assets of PSU banks at Rs 2, 60,531 crore as on December 2014.

 

 

  • STRATEGIES FOR RECOVERY
  1. Debt Restructuring

Once a borrower faces difficulty in repaying loans or paying interest, the bank should initially address the problem by trying to verify whether the financed company is viable in the long run. If the company project is viable, then rehabilitation is possible by restructuring the credit facilities. In a restructuring exercise, the bank can change the repayment or interest payment schedule to improve the chances of recovery or even make some sacrifices in terms of waiving interest etc.

The RBI has separate guidelines for restructuring loans. A fully secured standard/sub-standard/ doubtful loan can be restructured by rescheduling of principal repayments and/or the interest element. The amount of sacrifice, if any, in the element of interest, is either written off or provision is made to the extent of the sacrifice involved. The sub-standard accounts/doubtful accounts which have been subjected to restructuring, whether in respect of a principal installment or interest amount are eligible to be upgraded to the standard category only after a specified period.

To create an institutional mechanism for the restructuring of corporate debt the RBI has devised a Corporate Debt Restructuring (CDR) system. The objective of this framework is to ensure a timely and transparent mechanism for the restructuring of corporate debts of viable entities facing problems.

  1. Other recovery options

If rehabilitation of debt through restructuring is not possible, banks themselves make efforts to recover. For example, banks set up special asset recovery branches which concentrate on recovery of bad debts. Private and foreign banks often have a collection unit structured along various product lines and geographical locations, to manage bad loans. Very often, banks engage external recovery agents to collect past due debt, who make phone calls to the customers or make visits to them. For making debt recovery, banks lay down their policy and procedure in conformity with the RBI directives on the recovery of debt. The past due debt collection policy of banks generally emphasizes on the following at the time of recovery:

  • Respect to customers
  • An Appropriate letter authorizing agents to collect
  • Due notice to customers
  • Confidentiality of customers’ dues
  • Use of simple language in communication and maintenance of records of communication

In difficult cases, banks have the option of taking recourse to file cases in courts, Lok Adalats, Debt Recovery Tribunals (DRTs), One Time Settlement (OTS) schemes, etc. DRTs have been established under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for expeditious adjudication and recovery of debts that are owed to banks and financial institutions. Accounts with loan amount of Rs. 10 lakhs and above are eligible for being referred to DRTs. OTS schemes and Lok Adalats are especially useful to NPAs in smaller loans in different segments such as small and marginal farmers, small loan borrowers and SME entrepreneurs. If a bank is unable to recover the amounts due within a reasonable period, the bank may write off the loan. However, even in these cases, efforts should continue to make recoveries.

  • SARFAESI Act, 2002

Banks utilize the Securitization and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002 (SARFAESI) as an effective tool for NPA recovery. It is possible where non-performing assets are backed by securities charged to the Bank by way of hypothecation or mortgage or assignment. Upon loan default, banks can seize the securities (except agricultural land) without intervention of the court. The SARFAESI Act, 2002 gives powers of “seize and desist” to banks. Banks can give a notice in writing to the defaulting borrower requiring it to discharge its liabilities within 60 days. If the borrower fails to comply with the notice, the Bank may take recourse to one or more of the following measures:

  • Take possession of the security for the loan
  • Sale or lease or assign the right over the security
  • Manage the same or appoint any person to manage the same

The SARFAESI Act also provides for the establishment of asset reconstruction companies regulated by the RBI to acquire assets from banks and financial institutions. The Act provides for sale of financial assets by banks and financial institutions to asset reconstruction companies (ARCs). The RBI has issued guidelines to banks on the process to be followed for sales of financial assets to ARCs.

  1. Through website

            The present era is the internet era, RBI provide website like www.NPAsource.com  to sell the mortgaged assets banks and ARCs can conduct an auction through this website in an effective manner.

  1. RECOMMENDATIONS

            In the above study it can be concluded with some proper recommendations to manage NPAs with an efficient and effective manner. Some of the recommendations can be provided by dividing before advancing and after advancing explained as follows:

  • Before advancing
  • The bank should find the proper reasons prior to provide loans and should verify the purpose of loan required by the borrower.
  • The bank should verify the financial strength of the borrower whether he can repay or not.
  • The bank should go for credit analysis, i.e.. Credit execution and administration, Credit appraisals with the help of CIBIL (Credit Information Bureau India Limited). They should concentrate on short term funds rather than long term because chance to repay will high and working capital will be adequate.
  • Diversification of funds is needed means by investing total in one area you can reduce the risk through diversification to various sources.
  • Banks are under the control of RBI nowadays the regulatory authority is easing the norms on PSBs there is chance of easing the more norms to reduce NPAs.
  • Banks should go their policies and procedures strictly.
  • They should go with proper collateral security.
  • After advances:
  • Need to keep an eye on borrower whether he is paying proper payments are not.
  • If proper repayment is not there banks should critically examine and analyze the reasons behind time overrun.
  • Creation of separate department for recovery of loans with a proper officer.
  • Some studies reveal that bank officials are hesitant to sell bad loans because they fear this might be perceived as an admittance of failure to recover the loan. To sell bad loans to ARCs (Asset Reconstruction Companies) leads some recoveries.
  • There is a need to strengthen and fasten the recovery of loans by banks.
  • Bank officials should frequently visit the unit and should verify the physical position of assets and how it manages because if one unit/branch fails affects the total productivity of the entire bank.
  • Banks should go with various recovery strategies and recovery options to manage NPAs in an effective and efficient manner.
  • They should have proper monitor and manage to control NPAs.

REFERENCES

  1. Chakrabarti, d. M. (2015). The role of asset reconstruction companies (arcs) in non-performing assets (NPAs) management in Indian banking sector: an empirical study. Abhinav international monthly refereed journal of research, Volume 4, issue 5, ISSN-2320-0073.
  2. Chatterjee, 1. C., mukherjee, j., & das, d. (2012). Management of non performing assets – current scenario. International journal of social sciences and interdisciplinary research. 1 issue 11, ISSN 2277 3630
  3. Sonia Narula, m. S. (2014). Empirical study of non performing assets of bank. International journal of advanced research in computer science and management science, Vol 2, issue 1, ISSN: 2321-7782.
  4. Nag, a. K. (2015). Appraisal of non performing asset in banking sector: an Indian perspective. Indian journal of accounting Vol. XIVII, ISSN-0972-1479.
  5. Pacha Malyadri, s. S. (2011). A comparative study of non performing assets in Indian banking industry. International journal of economic practices and theories, Vol. 1, no. 2, e-ISSN 2247 – 7225.
  6. Parmar, r. (2013). Nonperforming assets: a comparative analysis of SBI and ICICI banks. International journal for research in management and pharmacy, Vol.3, ISSN: 2320-0901.
  7. rbi.org.in
  8. moneycontrol.com
  9. npasource.com