Point of view Essay Example | Topics and Well Written Essays - 500 words

Point of view - Essay Example As the stewardess pushed the food cart along the narrow center-aisle, the plane’s rickety engineering made creaking noises and lead one to consider that it would be worth going without food to avoid the challenge that became distributing food among the passengers. When the food reached the passengers it was stale and hardly edible; it tasted like it had been stored for months and only recently brought out. Many passengers became sick and made their way towards the restroom. This created a commotion in the aircraft that left a pervasive feeling of unease and further annoyance among the passengers. A further cramped feeling occurred as the passengers had to push against the other passengers aside to make their way towards the restroom. This terrible plane ride continued before finally landing in the United Kingdom airport. Wonderful Airplane Ride Across the Atlantic Ocean When the passengers took their seats and reached towards the magazines in front of them they settled into wh at would become a wonderful airplane ride across the Atlantic Ocean. While the airplane wasn’t as large as traditional airliners it had a number of charming elements that made it more enjoyable than other flight methods. The plane had an intimate setting so that conversations carried throughout the flight.

What Is The Bermuda Triangle History Essay

What Is The Bermuda Triangle History Essay The Bermuda Triangle is also known as the Devils Triangle. It is an area located on the north western Atlantic, in the country of International waters, The Bahamas. The Bermuda Triangle is an extremely dangerous area for one to enter. Aircrafts and surface vessels are believed to have vanished in weird ways which are considered human error, piracy, equipment failure, or natural disasters. Important things in society have shown some of these disappearances could have been the laws of physics, paranormal, or actions performed by aliens. I. The Triangle is located between the cities of Fort Lauderdale, Bermuda, and Puerto Rico. A. The Bermuda Triangle is nicknamed the Devils Triangle. B. In this triangle, it is said that a lot of things in weird ways happen. II. One of the most famous disappearances is the Naval Air Flight 19. A. 13 Avenger bombers handled by Lt. Charles Taylor left the Naval Air Station in Fort Lauderdale on routine mission to practice bombing. B. As they all were trying to go back home, Lt. Robert Cox overheard them trying to communicate over the radio. 1. Lt. Taylor informed Lt. Cox that they were in the Florida Keys, but didnt know how to get back to Fort Lauderdale. 2. Lt. Taylor was actually over the Bahamas not the keys and only kept going to go further out into the sea. III. Rescue teams were sent out to find Flight 19. A. A Martin Mariner did not make its schedule and did not answer calls. B. Flight 19 was never found, neither was the Mariner. Conclusion: For years there has been an unsolved mystery of disappearances of boats and planes with no trace of evidence left behind. Could it be human error? Equipment failure? There are a lot of different things that could have happened with every disappearance within this dangerous area, the Bermuda Triangle. Many believe these disappearances are laws of physics, paranormal, or actions performed by aliens. But, nobody knows. All in all, the Bermuda Triangle is left open for everyones own belief. Since there was no proof of piracy, hurricanes, UFOs or any wreckage found, this is a case of mysterious incidents that will forever be unknown. The Bermuda triangle The Bermuda Triangle is also known as the Devils Triangle. It is an area located on the north western Atlantic, in the country of International waters, The Bahamas. The Bermuda Triangle is an extremely dangerous area for one to enter. Aircrafts and surface vessels are believed to have vanished in weird ways which are considered human error, piracy, equipment failure, or natural disasters. Important things in society have shown some of these disappearances could have been the laws of physics, paranormal, or actions performed by aliens. The Bermuda Triangle is at a status of an Urban Legend. Many events that have been reported or witnessed by people, and many administration agencies have put on record as addressing that the amount and nature of vanishes is very much alike to any other part of the ocean, but people that support paranormal phenomena suggest that many events stay unexplained regardless of any huge investigation. The border of the Triangle depends on who found it; some say its shape is like a trapezoid covering the straits of Florida, the Bahamas, and the whole area of the Caribbean Island and the Atlantic east to the Azores; others add it to the Gulf of Mexico. The more well known triangular area in a lot of documents has its parts somewhere on the Atlantic coast of Florida, San Juan, Puerto Rico, and the mid-Atlantic Island of Bermuda, with a lot of the accidents not happening as much along the southern border around the Bahamas and Florida straits. The area is one of the biggest sailing lanes in the world, with ships crossing through it every day for traveling in the Americas, Europe, and the Caribbean Islands. Cruise ships are so big, and comfortable made to go back and forth between Florida and the Islands. It is also a huge flown route for commercial and private aircraft going towards Florida, the Caribbean, and South America from points north. When the Legend of the Triangle showed up in newspapers by E.V.W. Jones on September 16, 1950 through the Associated Press, it was the first article of any kind. Two years after that, Fate Magazine published Sea Mystery At Our Back Door, a small article by George X. Sand that covered a lot of things from the loss of a few planes and ships, the loss of Flight 19, and a group of five U.S. Navy TBM Avenger bombers on a training mission. The familiar triangular area was where the losses happened and Sands article was the first to tell all about it. American Legion Magazine would cover Flight 19 in the April 1962 issue. The issue stated that the flight leader was heard saying, We are entering white water, nothing seems right. We dont know where we are, the water is green, no white. Also, the officials at the Navy board said that the planes flew off to mars. This was the first article to have people curious about Flight 19, but it would take another author, Vincent Gaddis, to write about i t in the February 1964 Argosy Magazine to take Flight 19 and put it together with other disappearances and put it under a new different name, The Deadly Bermuda Triangle, he would write more on that article with a better detailed book, Invisible Horizons, the next year. Others would go on with their own books, like, John Wallace Spencer (Limbo of the Lost, 1969-1973), Charles Berlitz (The Bermuda Triangle, 1974), Richard Winer (The Devils Triangle, 1974), and a lot of others, which they were all staying on the same topics made by Eckert. A research librarian, Lawrence David Kusche, from Arizona State University and author of The Bermuda Triangle Mystery: Solved (1975) has learned a lot more about how he has been writing. His research gave out a lot of errors and disagreements between statements from eyewitnesses and Berlitzs stories, victims, and other people involved in incidents. He stated cases where very important information did not get reported, like the disappearance of round-the-world yachtsman Donald Crowhurst, which Berlitz had showed it as a mystery, besides the good evidence he had. Another example was the story that Berlitz told as lost without a trace three days out of an Atlantic port when it had been lost three days out of port with the same name in the Pacific Ocean. There has also been a lot of incidents far outside of the area, which makes this area a lot more mysterious. The research that he would do was simple and easy. He would read newspapers and reports talking about the weather that was not m entioned in the stories. Kusche came up with some endings of what he had been researching. One, was that with all the ships and aircrafts that had gone missing was not much higher than in any other part of the ocean. Second, tropical storms that had happened in that area were not unlikely or mysterious, which Berlitz and other writers would usually not be able to talk about those storms. Last, was that some disappearances really did not happen. One plane crash was said to be seen by hundreds of witnesses off Daytona Beach, Florida. But, checking the local newspaper, nothing was said about it. Kusche believes that the Legend of the Bermuda Triangle is surely, a mystery. Other people have their own opinions and have done research as much as Kusche has. While the UK Channel 4 television program The Bermuda Triangle was being made by John Simmons of Geofilms for the Equinox Programme, the marine insurer Lloyds of London was asked if a lot of ships had sunk in the Bermuda Triangle area. Lloyds of London replied that the information he had received was not true and no ships had sunk there. The United Coast Guard have found their ending. The disappearances that have happened are close to as many ships and aircrafts that pass through and make it through the Triangle. The Coast Guard is still unsure about the Triangle, even though they get information and publish it, a lot of documents are filed with a lot of the events written by Triangle authors. One event involving the 1972 explosion and sinking of the tanker V.A. Fogg in the Gulf of Mexico, the Coast Guard took pictures of the wreck and found a few bodies. One of the Triangle authors stated that all the bodies had vanished, with the captains permission, who was found sitting in his cabin at his desk, holding a coffee cup. Curious researchers, like Ernest Taves and Barry Singer, have stated how mysteries and the paranormal are very popular and make good money. It started getting a lot of material on topics like the Bermuda Triangle. They were able to show that some of the pro-paranormal material is usually wrong or will not work, but its makers keep marketing it. They have claimed that the market is loaded with books, TV specials, etc. that help the Triangle mystery, and good researched material if people are curious about it. Finally, if the Triangle is thought of to cross land, like parts of Puerto Rico, the Bahamas, or Bermuda itself, there is no evidence for the disappearance of any land-based vehicles or people. The city of Freeport, found inside the Triangle, works a big shipyard and an airport which usually handles 50,000 flights, and is visited by over a million tourists a year. There are mysterious explanations of the incidents that have happened. Triangle writers have used a lot of weird ways to explain the incidents. One explanation blames it on leftover technology from the mythical lost continent of Atlantis. Sometimes put together with the Atlantis story is the deep rock composition known as the Bimini Road off the island of Bimini in the Bahamas, which is in the Triangle in some areas. Followers of the physic Edgar Cayce believe his prediction that evidence of Atlantis would had been found in 1968 which leads to the discovery of the Bimini Road. Believers describe the composition as a road, wall, or some other structure, even though geologists think it was already part of the land. Other writers think of the incidents as UFOs. The idea came from Steven Spielberg for his science fiction film Close Encounters of the Third Kind, which shows the lost Flight 19 as alien abductions. Then there is Charles Berlitz, the grandson of an amazing specialist in language and author of a lot of information on abnormal experience, has stayed with the same huge description, and thought of the losses in the Triangle to be abnormal or unexplained forces. There are also normal explanations of the events that have happened. Boundary problems are one of the big issues in a lot of Triangle incidents. Even though some people have guessed that unusual local magnetic abnormals can be in that area, like abnormals that have not been shown to even exist. Also boundaries have natural magnetic differences that are like Magnetic poles. For instance, in the United States the only places where magnetic north and geographic north are exactly the same on a line going from Wisconsin to the Gulf of Mexico. Navigators have known this for centuries. But the public is not as informed about it, and think there is something mysterious about a magnetic changing across an area as big as the Triangle, which it will eventually on its own. There are actions of destruction that happen on purpose. Actions of destruction that happen on purpose can be put into two types: acts of war, and acts of piracy. Records in enemy files have been checked for a lot of losses. While a lot of sinkings have been put to surface raiders or submarines during the World Wars and documented in a lot of the command log books, a lot of others that have happened in that type have not been proven. It might not be true that the loss of USS Cyclops in 1918, as well as her sister ships Proteus and Nereus in World War II, were put to submarines, but that information has not been found in the German records. Piracy is the act of taking a ship or small boat on the high seas, which is still happening today. In the western Pacific and Indian oceans, piracy for cargo theft is a lot more common, drug smugglers steal nice boats for smuggling actions, and could have been apart of crew and yacht disappearances in the Caribbean. Piracy in the Caribbean was common from about 1560 to the 1760s, and famous pirates like, Edward Teach (Blackbeard) and Jean Lafitte. Lafitte is sometimes said to be a Triangle victim himself. The Gulf Stream is almost connected to Bermuda itself. The Gulf Stream is an ocean current that is in the Gulf of Mexico, and then through the Straits of Florida, into the North Atlantic. It is a river within an ocean, and like a river, it can and does carry floating objects. It has a surface speed of up to about 5.6 mph. A small plane making water landing or a boat having an engine problem will be carried away from where its at by the current, just like it happened to the cabin cruiser Witchcraft on December 22, 1972, when it reported engine problems by the Miami buoy marker one mile from shore, but was not there when a Coast Guard got there. One of the biggest problems of explanations to the loss of any aircraft or vessel is human error. Whether on purpose or accidental, humans have been known to make mistakes making catastrophe, and losses in the Bermuda Triangle are not acceptable. For instance, the Coast Guard did not see very good training for the cleaning of volatile benzene residue as a reason for the loss of the tanker V.A. Fogg in 1972. Human stubbornness can have caused businessman Harvey Conover to lose his sailing yacht, the Revonoc, as he sailed into the beginning of the storm south of Florida on January 1, 1958. A lot of losses stay uninformed because there is not that much wreckage which could be studied, it has been talked about on a lot of important reports. Many people believe that hurricanes are the reason to every incident that deals with the Triangle. Hurricanes are powerful storms that are made in tropical waters, and have been responsible for thousands of lives lost and billions of dollars in damage. The sinking of Francisco de Bobadillas Spanish fleet in 1502 was the first recorded incident of a destructive hurricane. These storms have in the caused a lot of incidents like the Triangle. An explanation for some of the disappearances has studied on some of the big fields of methane hydrates on the continental borders. Laboratory experiments that have happened in Australia have proven that bubbles can, honestly, sink a scale model ship by lowering the density of the water; any wreckage consistently coming up to the surface would be highly taken away by the Gulf Stream. It has been proven wrong that periodic methane eruptions (sometimes called mud volcanoes) can make spaces of frothy water that can not give adequate buoyancy for ships. If that was true, an area like that making around a ship could cause it to sink very fast and without giving a warning. A white paper was published in 1981 by the United States Geological Survey about the appearance of hydrates in the Blake Ridge area, off the south eastern United States coast. Although, according to a USGS web page, no big releases of gas hydrates are believed to have happened in the Bermuda Triangle for the past 15,000 years. In many oceans around the world, rogue waves have caused ships to sink and oil platforms to go down. Those waves are believed to be a mystery and until just recently were believed to be a myth. Although, rogue waves do not account for the missing aircraft. A lot of incidents have happened throughout years in the Bermuda Triangle. Flight 19 was a training flight of TBM Avenger bombers that went missing on December 5, 1945 while over the Atlantic. The squadrons flight path was planned to take them east for 120 miles, north for 73 miles, and then back over a final 120-mile length that would take them back to the naval base, but they never came back. People believed that the flight happened in an unusual phenomena and usual magnetic readings, and that the flight happened on a nice day while being watched by an experienced pilot, Lt. Charles Carroll Taylor. What made the disappearance worse, was that the Navys report of the accident was said causes or reasons unknown. It is believed that Taylors mother wanted to save her sons reputation, so she made them write reasons unknown when actually Taylor was 50 km NW from where he thought he was. Adding to the whole mystery, a search and rescue Mariner aircraft with a 13-man crew was ordered to help the missing squadron, but the Mariner itself was never heard from again. Later, there was a report from a tanker taking off the coast of Florida of a seen explosion at about the time the Mariner would have been on duty. The basic facts of this description of the story are most likely usable, some important information is missing. The weather was getting stormy by the end of the incident, and naval reports and written recordings of the conversations between Taylor and the other pilots of Flight 19 do not say there were magnetic problems. With that, only Taylor had any good flying time, but he was not familiar with the south Florida area and had a history of getting lost in flight, that was done three times during World War II, he led planes into the water twice. Another incident was the Mary Celeste. The mysterious disappearance in 1872 of the 282-ton brigantine Mary Celeste but is not connected to the Triangle that much, the ship had been abandoned off the coast of Portugal. The incident got people confused with the loss of a ship with a similar name, the Mari Celeste, a 207-ton paddle steamer which hit a reef and sank fast off the coast of Bermuda on September 13,1864. Kusche stated that a lot of the facts about this incident were actually about the Marie Celeste, the fictional ship from Arthur Conan Doyles short story J. Habakuk Jephsons Statement (based on the real Mary Celeste incident, but fictionalized). There is also, the Ellen Austin supposedly came across an abandoned ship, placed on board a prize crew, and tried to sail with it to New York in 1881. According to the stories, it disappeared; others state that it reappeared without the prize crew, then disappeared again with another prize crew on board. A check of Lloyds of London records proved that the Meta existed and was built in 1854; in 1880 the Meta was renamed Ellen Austin. There are no real facts for this vessel, or any vessel at that time, that would have a lot of missing men put on board that later disappeared. Then there is the USS Cyclops. The event ending in one of the biggest loss of life in the history of the US Navy not connecting to combat happened when USS Cyclops, under the order of Lt Cdr G. W. Worley, went missing without a trace with a crew of 309 sometime after March 4, 1918, after leaving the island of Barbados. However, there is no strong evidence for a theory, a lot of independent theories exist, some blaming storms, and some suggesting that wartime enemy action was to blame for the loss. There is another, which is Theodosia Burr Alston. She was the daughter of the United States Vice President Aaron Burr. Her disappearance has been thought of a least once to be connected to the Triangle. She was a passenger on board of the Patriot, which sailed from Charleston, South Carolina to New York City on December 30, 1812, and was never heard from again. Piracy and the War of 1812 have been stated to be explanations, just like a theory putting her in Texas, far outside of the Triangle. Spray, is another incident that has happened. S.V. Spray was a fishing boat made as an ocean cruiser by Joshua Slocum and used by him to finish the first ever single-handed circumnavigation of the world, between 1895 and 1898. In 1909, Slocum set sail from Vineyard Haven heading for Venezuela. Not him or Spray were ever seen again. There is no evidence they were in the Bermuda Triangle when they disappeared, but neither is there any evidence of paranormal action. A five-masted schooner was built in 1919, the Carroll A. Deering was found abandoned at Diamond Shoals, by Cape Hatteras, North Carolina on January 31, 1921. Rumors at the time stated that the Deering was a victim of piracy, maybe connected with the illegal rum-running trade during Prohibition, and maybe involving another ship, S.S. Hewitt, which disappeared at about the same time. Hours later, an unknown steamer sailed by the lightship along the track of the Deering, and ignored all the signals from the lightship. It is thought of that the Hewitt could have been the mystery ship, and maybe involved in the Deering crews disappearance. On December 28, 1948, a Douglas DC-3 aircraft, number NC16002, disappeared while on a flight from San Juan, Puerto Rico, to Miami. No trace of the aircraft or the 32 people on board was ever found. From the documentation put away by the Civil Aeronautics Board investigation, maybe a hint to the planes disappearance was found, but hardly known by the Triangle writers: the planes batteries were looked at and found to be low on charge, but commanded back into the plane without a recharge by the pilot while in San Juan. Whether or not this led to complete electrical failure will never be known. Although, since piston-engine aircrafts depend on magnetos to help spark to their cylinders rather than a battery powered ignition coil system, that theory is not very believable. G-AHNP Star Tiger disappeared on January 30,1948 on a flight from the Azores to Bermuda; G-AGRE Star Ariel disappeared on January 17, 1949, on a flight from Bermuda to Kingston, Jamaica. Both were Avro Tudor IV passenger aircraft worked by British South American Airways. Works Cited Gian J. Quasar (2003). Into the Bermuda Triangle: Pursuing the Truth Behind the Worlds Greatest Mystery (Reprinted in paperback (2005)) Daniel Berg (2000). Bermuda Shipwrecks. Adi-Kent Thomas Jefferey (1975). The Bermuda Triangle. http://www.history.navy.mil/faqs/faq8-1.htm. (June 1974) http://www.unmuseum.org/triangle.htm (1995) Reflection I chose this particular topic on the Bermuda Triangle because I have heard many things about this triangular area. I figured if I did a project on it, I could find out myself and real facts instead of what people think. My family and I have always been interested in learning what the Triangle was and now I will be sure to inform them on what I have learned. I chose to make a map of where the Bermuda Triangle was located because I think people should known instead of trying to figure it out in their head. The visual has helped me also, so I am not trying to picture what it looks like. The three most important things I learned while doing this project was what occurred during the disappearance of Flight 19, Lawrence David Kusches opinion on the incidents, and last, how ships and aircrafts might sink within the Triangle. I never knew anything like what happened to Flight 19 could happen like that and how they could disappear and never be seen again, it amazes me. Kusches opinion on the incidents is that, it is all just a mystery that will never be solved. Finally, I would have never thought ships and aircrafts would able to sink even when flying, but I believe everything is possible. My Mom helped me out with this project, but knowing my Mom, she helps me out with everything and I love her for that. Most of the time, I worked on it myself and my Mom just helped me out with the final draft and the rough draft. I feel no body really influenced me throughout this project, maybe Kusche because he trully did hard work and I respect people who work hard. I do not think anyone will be affected by this project but I am sure they will love to here all the information I have gathered up. I can share this new information all around the community! Especially in my school, I know some people who want to know what the Triangle is all about and what really happens within it. Now, I have the answer. It is a mystery. I will use this information throughout the rest of my high school years and even maybe throughout college. The topic will probably get brought up and I will know a lot more then any body else. There is not three ways my perspective on life has changed from the information I learned but there is one way. To cherish every moment your living and to appreciate every body you have because you never know what the future holds and when people can just disappear. I believe that I could have done a few things different but not a lot. I could have organized my things better to where I would not have lost a lot of my notes but I dealt with it and continued my project. I think I could have managed my time better and maybe gotten the project done a little more faster. But, with all my hard work, I feel like I accomplished something! . CHECKLIST The outline The introduction states the main topic or idea of the outline, and the conclusion summarizes it. Each sub-topic describes the main idea for a paragraph. Supporting information and details for a sub-topic are listed under the sub-topic with each piece of information listed separately. When supporting information is listed under a sub-topic, there are at least two pieces of information listed. If there is only one piece of information to support a sub-topic, the information is included in the sub-topic. The report The report follows the organization of the outline. Each paragraph in the report matches a sub-topic in the outline, and presents the information and details listed under the sub-topic. Each paragraph includes a topic sentence that summarizes the main idea of the paragraph. Every sentence begins with a capital letter. Every sentence ends with a period, question mark, or exclamation mark. All words are spelled correctly. There are no missing words.

Comparing Gilgamesh and Odysseus :: Compare Contrast Comparison

Gilgamesh and Odysseus are two heroes from two different time periods that were both in search of the meaning of life. The epics that the two characters are featured in Gilgamesh, was developed from early Mesopotamia and the Odyssey in early Greece. Gilgamesh was a very popular and it was very valuable to the historian of Mesopotamian culture because it reveals much about the religious world, such as their attitudes toward the gods, how a hero was defined and regarded, views about death and friendship. The Odyssey was also very popular in it’s time. It was set in ancient Greece where in its culture; mythology was the heart of everyday life. The Greek Culture turned to mythology to explain different phenomena for which they had no scientific explanation and this was prominent in the epic the Odyssey. While preparing to write this paper, I thought it would be great just to focus on the heroes of these two great epics many differences. Although during the course of my research I found that they also had just as many similarities. In this paper I will focus on the two characters by expressing their differences, as well as their similarities, and I will also give a bit of history about our two heroes. Gilgamesh, the hero from the epic Gilgamesh, was the historical king of Uruk in Babylonia, on the river Euphrates in modern Iraq: he lived about 2700B.C. Odysseus, the hero from the epic the Odysseus, was the ruler of the island kingdom of Ithaca. He was one of the most prominent Greek leaders of the Trojan War. Both of these men were granted certain strengths, Gilgamesh had physical, while Odysseus had mental strengths. Gilgamesh was a very self confident and at times that self confidence led to him to have little compassion for the people of Uruk at he beginning of the story. He was their king, but not their protector; he kills their sons and rapes their daughters. He felt like he was superior to others due to the fact that he was two-thirds god, his mother was a goddess Ninsun and one third human. This fact is the key to all of his actions. This is also what sets him apart from the hero Odysseus. While Gilgamesh was a hero thought to be more beautiful, more courageous, more terrifying than all of the people of Uruk. Even though his desires, attributes, and accomplishments were just as there’s, he was still mortal.

The Fourth Alarm W

In John Speeches short story, â€Å"The Fourth Alarm,† the narrator is perplexed by the recent actions of his rebellious wife. She quit her job, partakes as a nude actor in an amateur theatre, and refuses to listen to her male chauvinist husband. The narrator's wife's abandonment of the Apollonian for the Dionysian serves as a modern day Adam and Eve that, instead of questioning the sinful nature of man, questions the traditional masculine-feminine roles in society.According to Biblical tradition, Adam and Eve lived prosperously in an orderly, Apollonian garden -? Eden. However, once Eve strays from this order and eats the apple of knowledge (while tempting Adam to eat it as well), they both become tainted with original sin. Adam and Eves rejection of tradition, as symbolized by eating the forbidden fruit, results in their ejection from the Garden of Eden and into a more chaotic future. As Eve rejected the Apollonian in an attraction to the Dionysian, the narrator's wife rejec ted her traditional role of mother and teacher and embraced the Dionysian traits of nudity, disorder, and orgy.She disobeys her masculine husband and tempts him to take off his clothes; get rid of his attach, wallet, and keys; and embrace sexual equality. In essence, she is striping off what the narrator considers his identity, â€Å"l held my valuables in my right hand, my literal identification† (Achiever 196). Unlike Adam and Eve, which primary subject matter is original sin, â€Å"The Fourth Alarm† delves into the feminine break from social subjugation. Achiever does not demonic the narrators wife as the Bible demotions Eve. He instead focuses on the husband's reaction to his wife's embracement of a sexual equality that challenges male-female societal roles.The narrator, spite striping, can not let go of his worldly possessions that represent his masculinity. He is comforted by tradition and wishes his wife would be more â€Å"nostalgic† and yearning of the old gender roles like he is. Achiever s portrayal of the narrator and his difficulty in accepting change illustrates society difficulty in leaving traditional female subjugation and moving towards gender equality. The underlying question Achiever asks the reader in â€Å"the Fourth Alarm† is if we are ready to accept change, to put down tradition, and to progress to a society marked by equality where the masculine and feminine are equals.

Non Performing Assets

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