The Transition From The Industrial Revolution - 1777 Words

A century ago, people would have to use typewriters, large machines and carriages to travel, communicate or sell their products. Now, people can quickly snap out their smartphones with ease and exchange information virtually for their individual needs. The transition from the industrial revolution which lasted from 1760 to 1840, to the information age (late 1950s to current time) has transformed US society because internet technology makes people emotionally isolated in real time. Throughout these two ages of immense change, people’s universe of obligation has altered because society has shifted from the focus of specialized communities to a more global environment . These changes in how society communicates has led people to perseverate†¦show more content†¦There wasn t much ability to converse online since there wasn’t access to fast-working phones or rapid, accelerated computers that sent emails in seconds. In February 15, 1946, John Mauchly and J.Presper E ckert invented the first computer. Later, the development of the personal computers like the Commodore PET and Apple II(both in 1977) gave individuals an easier time going to the internet. The internet has captivated people because it easily gives men and women the ability to share . However, the capacity of the internet that allows us to do virtually anything we want has isolated people since we are too focused on how people perceive us on social media. For instance, Essena O’Neill, a model who quit social media said in a youtube video, ‘I’m doing this because it’s a wake up call. I taught myself that when I had heaps of views people would view ME. I will feel valued.I will feel happiness. I don’t even know what is real.I have let myself be defined by something that is so not real. Turn off your phone. Go somewhere. Do something you love and then talk to the people that are also doing that as well.’ However, she realized that her appearance on screen was not the real her. She put makeup on the part of her face that had acne, so, people would view her as beautiful and alluring. However, she now feels that she is

Don t Dwell On The Inner Darkness Of Yourself - 887 Words

â€Å"Get action. Seize the moment. Don t dwell on the inner darkness of yourself† (TR, An American Lion) We mourned the death of President William McKinley in 1901 after being assassinated. It was my fate of becoming the youngest President to take the office. Many people questioned my bold personality some accused me of bigotry. Me? Teddy Roosevelt? I prefer to be known as â€Å"TR†, the President to be known in history (1901-1909) as â€Å"The American Lion.† Our new President brought passion and power to the office, courageously leading the American people and Congress toward progressive reforms in history. Presidency power should be utilized to fight for what’s right, in taking any action necessary for the good of the people. I didn’t once agree with anyone abusing of any power, but I will expand my executive power when necessary. Corruption between government and businesses was about to be reminded of a Presidency’s power. Infuriated by the greed of wealthy businessmen creating an unbalance of power, when I â€Å"TR† am the only person with such power. Our progression movement of reforms in the 19th – 20th century is about to make it way! Empowering the people meant giving individuals a â€Å"square deal† of greater economic opportunity. Our plan to help the public people did nothing but pissed off the wealthy businessmen; they called me â€Å"un-American†. 1902 Coal Strike of Pennsylvania of mine workers demanded higher wages and shorter work hours. â€Å"This strike needed to come to an endShow MoreRelatedSubliminal Advertising and M odern Day Brainwashing6639 Words   |  27 Pagesadvertisers has had no effect in curbing the use of subliminals. In this Information Age, it seems people are no longer in control of the people. The ones in control are the ones with knowledge (as usual). In this case, the advertisers have it; you don t. Until now. Foreword Advertisements bombard every minute of our lives. The advertising industry has penetrated into every aspect our this society. When I wake up in the morning, the first thing I hear is my radio blaring out the latest ad forRead MoreLooking for Richard Transcript11989 Words   |  48 Pages O, he hath kept an evil diet long. You shouldnt have to understand every single word. Why? Do you understand every...? I mean, its not important. It doesn t matter. As long as you get the gist of it. Just trust it. Youll get it. And if he were dead... ...what would betide on me? No other harm butRead MoreIgbo Dictionary129408 Words   |  518 Pagesspeech (occasionally this is carried over into English so that quarter /’kwÉ”:tÉ™/ is pronounced [’xwÉ”ta])9. 4. Alphabetization and arrangement The alphabetical order is as follows: a b ch d e f g gb gh gw h i á »â€¹ j k kp kw l m n nw ny Å‹ o á »  p r s sh t u á » ¥ w y z high tone (unmarked), step tone ( ¯), low tone (`). It will be observed that the order here is strictly alphabetical, in that dotted letters follow their undotted counterparts (e.g. á »â€¹ follows i) and double letters (digraphs) follow single letters

Quazi Free Essays

string(38) " to invest and produce more products\." African Journal of Business Management Vol. 5(27), pp. 11005-11010, 9 November, 2011 Available online at http://www. We will write a custom essay sample on Quazi or any similar topic only for you Order Now academicjournals. org/AJBM DOI: 10. 5897/AJBM11. 326 ISSN 1993-8233  ©2011 Academic Journals Full Length Research Paper Impact of working capital on firms’ profitability Hassan Aftab Qazi1*, Syed Muhammad Amir Shah2, Zaheer Abbas3 and Tanzeela Nadeem4 1 University of Central Punjab, Lahore 1-Khayaban-e-Jinnah Road, M. A. Johar Town, Lahore, Pakistan. 2 Illama Iqbal Open University, Islamabad, Pakistan. 3 Islamic International University, Islamabad, Pakistan. Accepted 20 April, 2011 The correlation between working capital and profitability of firms is analyzed for the management of cash cycle management. Working capital is made by the three important factors, debtor, creditor and stock. When we include cash conversion cycle (CCC) to working capital then it becomes working capital management (WCM). Two sectors are selected as a sample size: automobile and oil and gas sector. The time period is from 2004 – 2009. Different variables affecting the profitability of firms are selected. In this study, networking capital, inventory turnover in days, average account receivable and financial asset to total assets (FATA) are taken as independent variables. The result shows positive movement of working capital (WC) on firm’s profitability. R shows the fitness of the model which is 49. 95%. The independent variables explain 49. 95% of the model. Key words: Working capital management (WCM), cash conversion cycle (CCC), account receivable (AR). INTRODUCTION A good number of firms have put sufficient cash in working capital. Working capital management (WCM) is an important factor of financial management (FM). Debtor, creditor and inventory are the major components of working capital (WC). Large stock and trade credit policy can increase the sales volume. Inventory is the main part of the working capital. Increase in the inventory will give decrease in the risk of stock out. Inventory is done for fulfilling the demand of the public. Inventory is the liability of the company to sell it. The other element of working capital (WC) is accounts payable (AP). Firms can check the quality of the products provided by the producer by giving them late payment, whether it is suitable for the firm or not. Late payments create very bad impression of the firm in the market. Accounts receivable is also the major part of the working capital. Delay in the days of receivable creates more complication for the company. Working capital management is still taken lightly by some companies. It works as a key to free the cash from stock, accounts payable (AP) and accounts receivable (AR). To deal with the less important aspects of efficient and effective Working Capital (WC), firms can sharply reduce the out sourcing and they can save the money for future investment or opportunities. This can create more financial flexibility and increase the worth of the firm by reducing capital employed (Buchmann and Jung, 2008). This study basically focuses on the long run financial decisions, future investments and allocations of funds, dividends and valuation of the firm in the stock market. However, balance sheet components assets and liabilities are significant in short term planning and they need to be carefully analyzed by the firm. Short term assets and liabilities are managed carefully by working capital management (WCM) for the growth of the firm’s profitability (Smith, 1980). For creating good worth of the share in front of shareholders, firms have to manage working capital efficiently and effectively. Working capital management process starts from the purchase of raw material up to the sales of the goods. It creates significant impact on the profitability and liquidity of the firms (Shin and Soenen, 1998). Net working capital (NWC) and gross working capital (GWC) are the two major concepts of working capital (WC). The total current assets and *Corresponding author. E-mail: mac_hassan174@hotmail. com. Tel: +92-42-35880007 or +923334604314. 11006 Afr. J. Bus. Manage. orking capital (WC) can be replaced as a Gross working capital of the firm. By subtracting Current Liabi-lities from Current Assets it becomes Net Working Capital. Net working capital (NWC) can also be used to measure the liquidity but it is not useful when firms are compared with each other regarding performance, but useful in measuring the internal control of the firm. The net working capita l helps to compare the liquidity of previous record of the firm performance. The main purpose of the working capital management (WCM) is to make the sustainable level of the working capital (WC) which is favorable for the firm. Net working capital (NWC) is the part of the currents assets which is main-tained through funds having maturity life more than one year. Current assets represent the source of short terms funds. If the firm has less short term funds then it is supported by long term funds and sustains the firm value and market share price. This is very useful for the ana-lysis of trade between profitability and risk in the shares of the firm. Positive working capital (PWC) and Negative Working Capital (NWC) are the two possible signs. Positive working capital (PWC) is the sign of firm healthiness. Positive working capital (PWC) means that firm have the ability to pay the liabilities which maturity date are less than one year of the firm on due date. Positive working capital (PWC) is calculated by comparing Current Assets (CA) by current liabilities (CL). Negative Working Capital is the sign of firm weakness. Negative working capital means that company does not have the ability to pay the short term liabilities. When the Working Capital (WC) shows negative sign, it indicates long term funds support the short term funds and firm can easily pay the obligations on due date and save the value or worth of firm in the market. But in the different case, firm declining means bankruptcy. If declining working capital ratio continues for longer period then it can affect the firm value. If the firm efficiency is more in the operation, the more increase in working capital (WC). It can be analyzed by comparing the operation of working capital (WC) periodically. Working capital is raised from profits or outsourcing. Outsourcing means when there are more sales in the season but the firm is not able to invest and produce more products. You read "Quazi" in category "Papers" From outsourcing, more liabilities arise but on the other way from investing more, revenue will generate from more sales and it will increase the assets of the firm. Working Capital Management (WCM) has its impact on profitability as well as liquidity of the company and the primary goal of a company is to increase the annual revenues. Keeping the company liquid is an extremely main task also. Increase in company profitabiliy by reducing the liquidity of the company can bring some serious problems for it. Goals cannot be ignored at any cost because each individual goal has its own importance. If goal of maximizing the profit is gnored, survival is not possible for a longer time. Similarly, if liquidity objective is ignored, insolvency or bankruptcy could be faced. Because of these bases, proper attention should be given to Working Capital Management (WCM) which affects the companies profits and through this, it will show the effect of the Working Capital (WC) on profitability (PRT). T he research problem of this study is: does working capital have significant impact on profitability of a company? The objective of this reseach is to find out the correlation between working capital and profitability (PRT) through statistical analysis of a sample of listed companies. The purpose of this research is to analyze the impact of traditional working capital policies (WCP) on the profitability (PRT) of the firms, to analyze whether Working Capital Policies (WCP) can become stable over a long run-up and to draw a conclusion about the impact of working capital on the profitability of companies. LITERATURE REVIEW A significant portion of financial research is concerned with the Management of working capital (MWC). This issue has been investigated at both theoretical and empirical levels. Different researchers have worked on working capital from different perspectives and in different economic environment. The environments and perspectives are discussed in detail in this work. This paper is conducted for the association between working capital (WC) and value creation for shareholders. Working capital has three parts. First, account receivable; second, account payable; and third, inventory. Account receivable is a part of balance sheet, placed in the Asset Side (AS) and it is the inflows of firm. Account receivable is maintained when a company makes sales on credit bases. Account payable is also the part of the balance sheet, placed on the liabilities side and also the outflows of the firm. Account payable is maintained when a company do sum expenditures on the credit bases and make a payment on different terms. Inventory is maintained for generating the revenues from sales. The standard measure for working capital management (WCM) is cash conversion cycle (CCC). Cash conversion period reflects the time span between disbursement and collection of cash. Cash Conversion Cycle (CCC) is based on three components: number of days of account receivable, number of day of accounts payable and number of day of inventory. It is measured by the sum of inventory conversion period less payable conversion period. Different researchers use the name like net trade cycle for calculating the Working Capital Management (WCM). In this, every component is calculated in percenttage of sales (Soenen, 1998). Qazi et al. 11007 In Marc’s view most firms invest cash in working capital (WC) and it shows that the management of Working Capital leaves good impression on the Profitability of firms. Similarly, firm’s Working Capital Management (WCM) is a major part of financial positions. It helps the firms in maximizing their wealth and value of the shares. Larger inventory and trade policy can make higher sales for the firm. Large inventory reduces the risk of stock out for fulfilling the demand of the public. By providing credit sales to the customers, suppliers have significant cost advantage over financial institution (Deloof, 2002). Different researchers have different views that they test on the working capital. There is a positive correlation between account receivable and operating income of firm. Because if the good provided on credit bases then the days of the accounts receivable will not be for long period. On the basis of the accounts receivable, firms running their operations can meet the payment on due date. Efficient liquidity management (ELM) is a process which includes planning and controlling of current assets (CA) and current liabilities (CL). Liquidity and profitability of firm have great relation with each other. This relationship can be analyzed by current ratio (CR) and cash gap (CG) (Abdual, 2007). Firms short terms liabilities are directly related to the former while the continuity of liabilities is concerned with the latter. Higher investment blocked in stock and accounts receivable creates problem for operation. Decrease in number of days of account receivable gives increase in early eserves (Padachi, 2006). Financial managers can gain profit by maintaining component of cash conversion cycle (CCC) at a higher level (Nazir and Afza, 2009). If the inventory gets to the minimum level and the number of days account receivable (NDAR) also becomes minimum, then firms can increase their profits and run their project efficiently and effectively (Abdul, 2007). The policies of working capital management can help to measure the WC. If the policies which the firm is going to implement are very strict and helpful for the firm then the firm will not bear losses or stock out or less short term assets. The financing policies mean how to allocate the revenue to different departments and after how many days the firm is going to receive their payments and ability to pay his own payments. The share value can be created by the financial managers if they efficiently manage through conservative approach (Nazir and Afza, 2009). Different researchers use different analysis models. For empirical investigation, the anova and Pearson correlation analysis is applied. From these models, firm size and cash cycle can be measured easily. It is easy to measure the efficiency of working capital management (WCM), performance evaluation and the whole efficiency of the firm by setting up their targets. For calculating the overall efficiency of the firm, the target has to be achieved in limited time period. Researchers use pooled data for the analysis. In the pooled data, different independent variables such as regress combine with the dependent variable (Zariyawati, 2009). The financial leverage and growth in sales are the major factor of firm profitability. Firms have to select the best policy to improve their collection and payment period. Efficient management financing of working capital can increase their operational profitability (Abdul, 2010). After studying the above articles, it is seen that the results of all researchers are the same on working capital management (WCM) and profitability (PRT) regardless of different companies, environments and situations. METHODOLOGY This research is to analyze the impact of working capital (WC) on the profitability (PRT) of oil and gas and automobile industry with reference to Pakistan. Different statistical tools are applied to analyze the significance of the variables. So, the method of coefficient of correlation has been selected. Regression analysis is applied for testing the model reliability and significant relationship between variables. Data set and sample Two sectors are selected from Karachi Stock Exchange. The first is oil and gas and the second is automobile sector. A total of 20 companies are taken as sample for the data collection, which are collected from different sources. They are taken from 2004 – 2009 from the annual report. Some data are collected from the State Bank of Pakistan (SBP). State Bank of Pakistan (SBP) provides an analysis report of different sectors and companies which were listed in Karachi Stock Exchange (KSE). In this study, different variables are taken to measure the working capital (WC). Working Capital is taken as independent variable (WC) while profitability is taken as dependent variable (PRT). In this case, profit after tax is taken as profitability of firms. Working Capital can be measured by different ways. First is net working capital (NWC), which is measured by current assets (CA), divided by current liabilities (CL). Second is inventory turnover in days (ITID), which is calculated by inventory divided by Cost of Goods Sold (CGS) and multiplied by 365. Third is number of day of accounts receivable (AAR), which is calculated by other current assets divided by sale and multiplied by 365. Forth is financial asset to total assets (FATA), which is calculated by adding cash and investment and the whole divided by total assets. In addition, current ratio (CR), debt to equity ratio (DER) and sales natural logarithm (LOS) are taken as control variable in this analysis. All the aforementioned variables are affecting the Working Capital, Working Capital Management (WCM) and it will have negative or positive impact on the profitability of the firms. Hypotheses testing The objective of this research is to examine the impact of Working Capital (WC) on the profitability of firms. Figure 1 shows the impact 11008 Afr. J. Bus. Manage. Figure 1. Impact of Working Capital on Profitability. of working capital on profitability† H1: Working capital has positive effect on the profitability of firms. H0: Working capital has no positive effect on the profitability of firms. Model specification In this study, panel data regression analysis and time series of data are taken. For the regression analysis, pooled data are used. In this pooled data, all variables are combined on the same level and selected variables are grouped as independent and dependent variables. After that, all variables are selected for regression and correlation analysis. Model equation PRT it = ? 0 + ? 1 (AAR it) + ? 2 (ITID it) + ? 3 (CR it) + ? 4 (DER it) + ? 5 (LOS it) + ? 6 (FATA it) + ? 7 (NWC it) + ? PRTi t = Net Profit t; i = 1- 20 firms. ?0 : Beta ? i: Coefficients X it X it: Independent variables i at time t t: Time = 1-5 years. ?: The error term Whereas, AAR = Average Account Receivable ITID = Inventory Turnover in Days CR = Current Ratio LOS = Sales logarithm FATA = Financial Assets to Total Assets NWC = Net Working Capital DER = Debt Equity Ratio Qualitative analyses In this paper, two analyses are applied. First, correlation and statistical tools are applied in these data. We select person correlation model for this study to find out the degree of correlation among dependent and independent variables. In the regression analysis, we gather the data from annual reports and turn it to the same level. This gathering of data is called pooled data. For this analysis, we select E-views software to analyze it correctly in the case of pooled data. DATA ANALYSIS AND REGRESSION RESULTS The correlation and determination coefficients are the measures of the regression model. First, correlation coefficient (49. 95%) and the determination coefficient (26. 12%) show the degree of correlation among working capital and profitability of selected firms from oil and gas and automobile sector over 2004 – 2009. The standard error value is 6. 5926 and F-statistics value is 5. 4213 which is significant at 1% and shows 100% fitness of the model (Table 1). Similarly, the Durbin-Watson statistics is 1. 9991 which clearly defines that there is no serial correlation in this regression model. Table 2 shows the estimation results of the six antecedents for the independent variable of working capital at Qazi et al. 11009 Table 1. Model summary. R R2 Adjusted R-squared Standard Error of Estimate Durbin-Watson statistics F statistics 0. 499599 0. 261211 0. 213029 6. 592679 1. 991426 5. 421362 Table 2. Estimation results. Variable NWC NDAR ITID FATA DER CR Means 23. 58595 129. 4913 75. 80012 0. 217936 17. 96434 18. 85266 SD 8. 415465 351. 7532 143. 2339 0. 191679 3. 368055 0. 597391 T stats 4. 520358 0. 254527 0. 937944 -0. 477942 -0. 554939 0. 096545 Remarks Sig Not Sig Not Sig Not Sig Not Sig Not Sig Table 3. Correlation matrix. PROFIT NWC NDAR ITID FATA DER CR PROFIT 1. 000000 0. 474400 0. 109619 0. 112621 -0. 124623 -0. 201328 -0. 217375 NWC 1. 000000 -0. 086246 -0. 125120 -0. 054646 -0. 308676 -0. 397314 NDAR IITD FATA DER CR 1. 000000 0. 748882 -0. 190807 -0. 095937 -0. 040053 1. 000000 -0. 311687 0. 061122 -0. 118921 1. 000000 0. 078238 0. 396036 1. 000000 0. 008978 1. 000000 1% significance level. The results show that Net Working Capital (NWC) has positive and significant impact on the Profitability (PRT) of firms and the rest of the variables explain the behavior of profitability but have no significant impact on profitability. In the correlation results shown in Table 3, networking capital has strong positive relationship with profitability of firms while number of days of account receivable (NDAR) and Inventory turnover in days (ITD) are positive but have weak correlation power with profitability of firms; financial assets to total assets (FATA), debt equity ratio (DER) and current ratio (CR) are weak and negatively correlate with the Profitability (PRT) of the firms. But the correlation results of independent variables somehow showed positive and strong correlation of inventory turnover in days (ITD) with number of days account receivable (NDAR) and a strong but negative correlation of current ratio with net working capital; the remaining variables correlate but are weak in both the positive and negative sense, thus the concept of colinearity does not exist among the variables as evident by the analysis results. Conclusion This study is the relationship of working capital (WC) and profitability (PRT) of firms. orking capital (WC) is the major portion of the balance sheet. In this paper, data are collected form Annual Reports (AR) and analysis report which is provided from the State Bank of Pakistan (SBP). In this analysis report, the companies which are listed in stock exchange are analyzed and summarized. In this research, oil and gas and automobile sectors are taken 11010 Afr. J. Bus. Manage. as sample. Data are taken from 2004 – 2009. I n this research, R shows the fitness of model which is 49. 95%. The independent variables explain 49. 95% of the model. In the regression results, only net working capital is positive and significant and Number of Days of Account Receivable (NDAR) and Inventory Turnover in Days (ITD) are positive but insignificant; and all other independent variables are negative and insignificant. In the correlation results, networking capital is positively correlated with profitability of the firms. The other two variables are weakly correlated with the profitability of firms and the other three independent variables are negatively correlated with profitability of firms. Hence, the empirical results of the paper show the positive trend of working capital on profitability of the firms. The results are supported by previous studies of Rahman (2007) and Nazir and Afza (2009) and Deloof (2002) on the Working Capital (WC). REFERENCES Abdual RMN (2007). Working Capital Management And Profitability – Case Of. Int. Rev. Bus. Res. Papers, pp. 279-300. Abdul RMN (2007). Working Capital Management And Profitability – Case Of Pakistani Firms. Int. Rev. Bus. Res. Papers, pp. 79-300. Abdul RTA (2010). Working Capital Management and Corporate Performance of Manufacturing Sector in Pakistan. Int. Res. J. Finan. Econ. , 47: 152. Buchmann P, Jung U (2008). Best-practice working capital management: Techniques for optimizing inventories, receivables, and payables. Q. Financ. , pp. 1-7. Deloof M (2002). Does Working Capital Management Affect Profitability of Belgian Firms? investopedia. com. (2010). Working capital : definations; negative working capital, p ositive working capital. Retrieved October 10, 2010, from www. investopedia. com: http://www. investopedia. com/terms/w/workingcapital. asp. Nazir S, Afza T (2009). Impact of Aggressive Working Capital Management Policy on Firms’ Profitability. J. Applied Manage . Padachi K (2006). Trends in Working Capital Management and its Impact on Firms’ Performance: An Analysis of Mauritian Small Manufacturing Firms. Int. Rev. Bus. Res. Papers, pp. 45 -58. Shin HH, Soenen L (1998). Efficiency of working capital management and corporate profitability. Financ. Pract. Educ. , pp. 37-45. Smith K (1980). Profitability versus liquidity tradeoffs in working capital management, in readings on the management of working capital. ST. Pual,New York: West Publishing Company. Soenen S (1998). Liquidity management, operating performance, and corporate value: evidence from Japan and Taiwan. J Multi. Manage. , 159-169. Zariyawati MN (2009). Working capital management and corporate performance:Case of Malaysia. J. Modern Account. Audit. , 5(11): 4754. How to cite Quazi, Papers

Dialectical Behavior Therapy free essay sample

Third in priority are quality of life issues and working towards improving ones life generally. During the individual therapy, the therapist and patient work towards improving skill use. Often, a skills group is discussed and obstacles to acting skillfully are addressed. 2. A group component in which the group ordinarily meets once weekly for two to two-and-a-half hours and learns to use specific skills that are broken down into four modules: core mindfulness skills, interpersonal effectiveness skills, emotion regulation skills, and distress tolerance skills.Neither component is used by itself; the individual component is considered necessary to keep suicidal urges or uncontrolled emotional issues from disrupting group sessions, while the group sessions teach the skills unique to DBT, and also provide practice with regulating emotions and behavior in a social context. [edit] The four modules [edit] Mindfulness Mindfulness is one of the core concepts behind all elements of DBT. Mindfulness is the capacity to pay attention, non-judgmentally, to the present moment. We will write a custom essay sample on Dialectical Behavior Therapy or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Mindfulness is all about living in the moment, experiencing ones emotions and senses fully, yet with perspective.It is considered a foundation for the other skills taught in DBT, because it helps individuals accept and tolerate the powerful emotions they may feel when challenging their habits or exposing themselves to upsetting situations. The concept of mindfulness and the meditative exercises used to teach it are derived from traditional Buddhist practice, though the version taught in DBT does not involve any religious or metaphysical concepts. [edit] Skills within the Mindfulness module [edit] The What Skills Observe This is used to non-judgmentally observe one’s environment within or outside oneself.It is helpful in understanding what is going on in any given situation. Describe This is used to express what one has observed with the observe skill. It is to be used without judgmental statements. This helps with letting others know what you have observed. Participate This is used to become fully involved in the activity that one is doing. To be able to fully focus on what one is doing. [edit] The How Skills Non-Judgmentally This is the action of describing the facts, and not thinking about what’s â€Å"good† or â€Å"bad†, â€Å"fair†, or â€Å"unfair. † These are judgments because this is how you feel about the situation but isn’t a factual description.Being non-judgmental helps to get your point across in an effective manner without adding a judgment that someone else might disagree with. One-Mindfully This is used to focus on one thing. One-mindfully is helpful in keeping your mind from straying into emotion mind by a lack of focus. Effectively This is simply doing what works. It is a very broad-ranged skill and can be applied to any other skill to aid in being successful with said skill. [8] [edit] Distress Tolerance Many current approaches to mental health treatment focus on changing distressing events and circumstances[specify].They have paid little attention to accepting, finding meaning for, and tolerating distress. This task has generally been tackled by psychodynamic, psychoanalytic, gestalt, or narrative therapies, along with religious and spiritual communities and leaders. Dialectical behavior therapy emphasizes learning to bear pain skillfully. Distress tolerance skills constitute a natural development from DBT mindfulness skills. They have to do with the ability to accept, in a non-evaluative and nonjudgmental fashion, both oneself and the current situation. Since this is a nonjudgmental stance, this means that it is not one of approval or resignation.The goal is to become capable of calmly recognizing negative situations and their impact, rather than becoming overwhelmed or hiding from them. This allows individuals to make wise decisions about whether and how to take action, rather than falling into the intense, desperate, and often destructive emotional reactions that are part of borderline personality disorder. [edit] Skills within the Distress tolerance module [8] Distract with ACCEPTS This is a skill used to distract oneself temporarily from unpleasant emotions. The acronym breaks into: Activities: Use positive activities that you enjoy.

The Human Brain Essays (2234 words) - Neuroanatomy, Motor System

The Human Brain TABLE OF CONTENTS HEADING PAGE NUMBER 1. Table of Contents 1 2. Table of Illustrations 2 3. Introduction 3 4. Body of work 4 to 8 5. Conclusion 9 6. Illustrations 10 to 12 7. Bibliography 13 8. Glossary 14 to 16 9. Index 17 to 19 TABLE OF ILLUSTRATIONS HEADING PAGE NUMBER 1. Inside the Head 10 2. Inside the Brain 11 3. Areas and Jobs 12 INTRODUCTION NOTE: All words in bold print will be found in the glossary. The human body is divided into many different parts called organs. All of the parts are controlled by an organ called the brain, which is located in the head. The brain weighs about 2.75 pounds, and has a whitish-pink appearance. The brain is made up of many cells, and is the control centre of the body. The brain flashes messages out to all the other parts of the body. The messages travel in very fine threads called nerves. The nerves and the brain make up a system somewhat like telephone poles carrying wires across the city. This is called the nervous system. The nerves in the body don't just send messages from the brain to the organs, but also send messages from the eyes, ears, skin and other organs back to your brain. Some nerves are linked directly to the brain. Others have to reach the brain through a sort of power line down the back, called the spinal cord. The brain and spinal cord make up the central nervous system. The brain doesn't just control your organs, but also can think and remember. That part of the brain is called the mind. PROTECTING THE BRAIN Twenty-eight bones make up the skull. Eight of these bones are interlocking plates. These plates form the cranium. The cranium provides maximum protection with minimum weight, the ideal combination. The other twenty bones make up the face, jaw and other parts of the skull. Another way the brain keeps it self safe is by keeping itself in liquid. Nearly one fifth of the blood pumped by the heart is sent to the brain. The brain then sends the blood through an intricate network of blood vessels to where the blood is needed. Specialized blood vessels called choroid plexuses produce a protective cerebrospinal fluid. This fluid is what the brain literally floats in. A third protective measure taken by the brain is called the blood brain barrier. This barrier consists of a network of unique capillaries. These capillaries are filters for harmful chemicals carried by the blood, but do allow oxygen, water and glucose to enter the brain. THE DIFFERENT SECTIONS OF THE BRAIN The brain is divided into three main sections. The area at the front of the brain is the largest. Most of it is known as the cerebrum. It controls all of the movements that you have to think about, thought and memory. The cerebrum is split in two different sections, the right half and the left half. The outer layer of the cerebrum is called the cortex. It is mainly made up of cell bodies of neurons called grey matter. Most of the work the brain does is done in the cortex. It is very wrinkled and has many folds. The wrinkles and folds give the cortex a large surface area, even though it is squeezed up to fit in the skull. The extra surface area gives the cerebrum more area to work. Inside the cortex, the cerebrum is largely made up of white matter. White matter is tissue made only of nerve fibres. The middle region is deep inside the brain. It's chief purpose is to connect the front and the back of the brain together. It acts as a "switchboard", keeping the parts of your brain in touch with each other. The back area of the brain is divided into three different parts. The pons is a band of nerve fibres which link the back of the brain to the middle. The cerebellum sees to it that all the parts of your body work as a team. It also makes sure you keep your balance. The medulla is low down at the back of your head. It links the brain to the top of the spinal cord. The medulla controls the way your heart pumps blood through your body. It also looks after your breathing and helps you digest food. THE DIFFERENT PARTS OF THE BRAIN THE BRAINSTEM: The brainstem

Abortion10 essays

Abortion10 essays Abortion has always been (and I reckon it will continue to be for quite some time) a very controversial issue not only due to the difficult comparison of rights (does the mother's rights outweigh the child's or vice-versa?) but also because of the many different instances in which the issue of abortion might come up. For instance, one couple who simply wants to plan their family, and be ready for it, is obviously different and less shocking a case as a raped fifteen-year old. Regarding abortion, pro-life and pro-choice are the two sides trying to impose their own points of view, but while one is extremely strict and makes a completely solid statement without taking each case in particular (pro-life), the other (pro-choice) acknowledges the implications of abortion and while not encouraging it in any way, it implies a certain flexibility depending on each case. I, personally, am a pro-choice person, but not taking it to the extreme. I believe a woman should have the right to choose when to have a baby but I agree with creating limitations to this right. The reasons are simple and numerous, health being the most important one, for if abortion would be deemed illegal and immoral, not only would women turn to unsanitary secretive abortions (or even desperate self-induced ones) but the psychological pain and scars would also be considerably more unbearable (I say more because they are already quite unbearable and extremely stressful). Another reason is a biological one it is the woman who carries the baby for nine months, and until the baby is out in the open, being a separate person, until the moment of birth, the baby is simply a part of the womans body. I choose to view childbirth as the moment when the child becomes the human, because it is the most valid turning point in its life -when it starts to live on its own. I consider the pro-choice point of view as being the most rational. However, I also a...

The Devolution of Greek Economy Dissertation Example | Topics and Well Written Essays - 5000 words

The Devolution of Greek Economy - Dissertation Example The humans have managed to evolve by thinking of new and different things. The ability to innovate had always helped the sons and daughters of Adam to get out of the caves that remained their home for centuries. The human race with the passage of time learned the art and science of building homes and sowing seeds. These activities have assisted the mankind in moving in the direction of industrialization. The industrialization is a trend and is also a force that caused the needs of the masses to be fulfilled over a period of long tenure. The scientific development and growth is done in order to facilitate the achievement of industrialists’ objectives and goals (Oakey, 60). The economy is always known to be controlled by the local corporate sector of the country. There are two significant powers in the world. The first one is called the power of entropy that forces any system to disintegrate over the years and the other one is the strength of evolution that with the help of huma n effort makes things better and better (Peck, 115). The scientific development and the growth in every other field are repeatedly attributed to the people who dared to think differently (Baron and Tang, 55). The different and unique people have always been defined by the ability to see the world in a different way and method. The evolution has its roots in the ability and power of the people who are blessed with the tendency to see, observe and think. The quality of life on the other hand, is directly related with the local entrepreneur’s ability to translate new product and business ideas into commercialized corporate offerings. The offerings are also not the end in themselves but they have to be made better in order to overcome the traditional power of entropy and disintegration. The disintegration is created by the nature itself in order to keep the humans attempting to evolve and inspire. The economic growth is always caused by the force of inspiration that makes people to think and try to become more than what they are in their current state (Fuglsang, Sundbo and Sorensen, 663). The leaders are famous for playing their due hand in the process of evolution as they are primarily responsible for giving direction and purpose to people. The governments are supposed to provide the services of leadership by fueling the process of development and evolution. The Chios Island is the fifth biggest one in the country of Greece and it has a population of 55,000 but the area remained much neglected in the past as the shipping served the country as a major industry in the past years. However, the tide is turning and Chios Island is finally getting all the attention it needed because it is becoming an agricultural hub of the region. The immigrants are building their homes in the Island so that they can take care of the fields while, keeping their families in the newly developing residential areas. Research Question Following is the research questions of the study : - Q.1 Would economic crisis in Greece, be the motive in rehabilitation of abandoned rural areas and its settlements? Significance of the Study The importance, value and significance of the study exist because it is going to discuss the effects of growing population in the rural areas of

Discuss the contribution of HRM in relation to organisational change Essay

Discuss the contribution of HRM in relation to organisational change with particular reference made to the current economic climate - Essay Example improve business performance, organising focused human resource knowledge, through networks or centres, and leaders or experts within business divisions (Kamoche 2001). The experiences of top firms such as DuPont, Johnson & Johnson, United Technologies, Hewlett-Packard, and IBM have been studied and revealed in various reports and studies. What were previously ingenious practices are currently described as contemporary practices and developments in the strategic repositioning and restructuring of the human resource function (Tyson 2006). Business organisations that are unsuccessful in restructuring their human resource function with the changing economic climate end up with disjointed strategies for human management. They are incapable of developing and implementing innovative human-management approaches that acquire competitive leverage (Kraut, Korman & London 1999). They incur greater costs for offering human resource services. Several companies declare they adopt the latest human resource strategy but are not up till now ‘walking the talk’ (Kraut et al. 1999: 62). Reforms in human resources are motivated by the necessities of the changing economic climate. IBM, which is considered as the creator of the ‘new approach’, had as its main goal a decrease in the total costs of offering human resource services by roughly $40 million per annum (Tyson 2006). Otis Elevator, component of United Technologies, looked for means to reinforce its international business strategy and thus cutback costs and drive growth. Sun Microsystems looked for means to improve recruitment, selection and retention of highly skilled employees vital for business expansion (Tyson 2006). Companies are dealing with a challenging and multifaceted variety of stimuli for change in order to predict and maximise opportunities in the competitive economy. Their responses are reconceptualising the framework for human resources management (Sisson & Storey 2000). Companies consider these

A Health Advocacy Campaign for Childhood Obesity Research Paper

A Health Advocacy Campaign for Childhood Obesity - Research Paper Example Aa a form of health prevention and nursing intervention strategy, the health advocacy campaign can be defined as the method of winning political assurance of supporting a particular health care program (Chapman, 2004; Christoffel, 2000). In most cases, the target audiences for a health advocacy campaign include not only the policy makers but also the small group of people who has the power to make decisions and can influence certain actions that can affect positive changes for the people (Hoover, 2012; Wallack, 2000, pp. 337 – 365). Considering the long-term health consequences of childhood obesity, this report will not only discuss the importance of developing effective health advocacy campaign against childhood obsity but also conduct an actual advocay campaign that will assist the nurses in winning the support of the government. Therefore, the actual report will be divided under three (3) major sections known as: (1) health advocacy campaign for obesity; (2) the legal consi derations behind the development of a health advocacy campaign for obesity; and (3) the ethical considerations behind the development of a health advocacy campaign for obesity. ... To help these children avoid the long-term negative physiological and social consequences of childhood obesity, the main goal of the proposed advocacy campaign program is to encourage the political people to support the health promotion campaign against childhood obesity. Description of the Selected Population and Their Health Issues The target population for this particular health advocacy campaign program includes the obese children between the ages of 6 to 19 years old. In general, obesity is considered as a serious health problem because it can lead to negative effects related to a person’s physical health, emotional well-being, and psychosocial functioning (Tuthill et al., 2006; Linde et al., 2004; Goodman & Whitaker, 2002). Obese people can sometimes be strongly discriminated in academic and work environment. As part of not being socially accepted, people who extremely over weight would normally to go through a series of depression, low quality of life, and low levels of self-esteem (Frisco, Houle, & Martin, 2010; Kolotkin et al., 1995). With regards to being socially discriminated in academic and work environment, Viner and Cole (2005) explained that obese children who were able to successfully manage having a normal weight at the time they reach adulthood are less likely to become discriminated at work and in public areas whereas obese children who remained extremely overweight during their adulthood age are the ones who are highly affected by having poorer employment opportunities and negative social relationship outcomes. Aside from experiencing work and healthcare discrimination, the study of Carr and Friedman (2005) revealed that obese individuals are prone to interpersonal mistreatment and lower levels of self-acceptance purely

History and Development of Banks in India

History and Development of Banks in India INTRODUCTION: The banking industry in India seems to be unaffected from the global financial crises which started from U.S in the last quarter of 2008. Despite the fallout and nationalization of banks across developed economies, banks in India seems to be on the strong fundamental base and seems to be well insulated from the financial turbulence emerging from the western economies. The Indian banking industry is well placed as compare to their banking industries western counterparts which are depending upon government bailout and stimulus packages. The strong economic growth in the past, low defaulter ratio, absence of complex financial products, regular intervention by central bank, proactive adjustment of monetary policy and so called close banking culture has favored the banking industry in India in recent global financial turmoil. Although there will no impact on the Indian banking system similar to that in west but the banks in India will adopt for more of defensive approach in credit disburs al in coming period. In order to safe guard their interest, banks will follow stringent norms for credit disbursal. There will be more focus on analyzing borrower financial health . A nation with 1 billion plus, India is the fastest growing country in terms of population and soon to overtake China as worlds largest populated country. The discerning impact on the over-stretched limited resources explains why India always tends to be deficient in infrastructure and opportunity. The largest economy of the world often frustrated researchers, as there was no single predictable pattern of the market; the multiplicity of government regulations and widespread government ownership had always kept investors away from exploring the vast Indian market. However, with India being liberalised today, banking intermediation has been playing a crucial role in economic development through its credit channel. Foreign banks have entered the soil but that has not yet posed a threat to the vast network of public sector banks that still conduct 92% of banking business in India. Banking in India has undergone a major revamp. It has come a long way since its creation which dates back to the British era. The present banking systems has come into place after many transformations from the Older systems. Against this background the present chapter deals with the evolution of the Indian Banking systems, the various reforms that has been made to make banks more effective, the role of private and foreign sector banks and last the challenges the Indian banks faces in the New Millennium . The banking system is central to a nations economy. Banks are special as they not only accept and deploy large amounts of uncollateralised public funds in a fiduciary capacity, but also leverage such funds through credit creation. In India, prior to nationalisation, banking was restricted mainly to the urban areas and neglected in the rural and semi-urban areas. Large industries and big business houses enjoyed major portion of the credit facilities. Agriculture, small-scale industries and exports did not receive the deserved attention. Therefore, inspired by a larger social purpose, 14 major banks were nationalised in 1969 and six more in 1980. Since then the banking system in India has played a pivotal role in the Indian economy, acting as an instrument of social and economic change. The rationale behind bank nationalisation has been succinctly put forth by eminent bankers: Many bank failures and crises over two centuries, and the damage they did under laissez faire conditions; the needs of planned growth and equitable distribution of credit, which in privately owned banks was concentrated mainly on the controlling industrial houses and influential borrowers; the needs of growing small scale industry and farming regarding finance, equipment and inputs; from all these there emerged an inexorable demand for banking legislation, some government control and a central banking authority, adding up, in the final analysis, to social control and nationalisation (Tandon, 1989). Post nationalisation, the Indian banking system registered tremendous growth in volume. Despite the undeniable and multifold gains of bank nationalization, it may be noted that the important financial institutions were all state owned and were subject to central direction and control. Banks enjoyed little autonomy as both lending and deposit rates were controlled until the end of the 1980s. Although nationalisation of banks helped in the spread of banking to the rural and hitherto uncovered areas, the monopoly granted to the public sector and lack of competition led to overall inefficiency and low productivity. By 1991, the countrys financial system was saddled with an inefficient and financially unsound banking sector. Some of the reasons for this were (i) high reserve requirements, (ii) administered interest rates, (iii) directed credit and (iv) lack of competition (v) political interference and corruption. As recommended by the Narasimham Committee Report (1991) several reform mea sures were introduced which included reduction of reserve requirements, de-regulation of interest rates, introduction of prudential norms, strengthening of bank supervision and improving the competitiveness of the system, particularly by allowing entry of private sector banks. With a view to adopting the Basel Committee (1988) framework on capital adequacy norms, the Reserve Bank introduced a risk-weighted asset ratio system for banks in India as a capital adequacy measure in 1992. Banks were asked to maintain risk-weighted capital adequacy ratio initially at the lower level of 4 per cent, which was gradually increased to 9 per cent. Banks were also directed to identify problem loans on their balance sheets and make provisions for bad loans and bring down the burgeoning problem of non-performing assets. The period 1992-97 laid the foundations for reform in the banking system (Rangarajan, 1998). The second Narasimham Committee Report (1998) focussed on issues like strengthening of th e banking system, upgrading of technology and human resource development. The report laid emphasis on two aspects of banking regulation, viz., capital adequacy and asset classification and resolution of NPA-related problems. Commercial banks in India are expected to start implementing Basel II norms with effect from March 31, 2007. They are expected to adopt the standardised approach for credit risk and the basic indicator approach for operational risk initially. After adequate skills are developed, both at the banks and at the supervisory levels, some banks may be allowed to migrate to the internal rating based (IRB) approach (Reddy 2005). At present, banks in India are venturing into non-traditional areas and generating income through diversified activities other than the core banking activities. Strategic mergers and acquisitions are being explored and implemented. With this, the banking sector is currently on the threshold of an exciting phase. Against this backdrop, this paper endeavours to study the important banking indicators for the last 25-year period from 1981 to 2005. These indicators have been broadly grouped into different categories, viz., (i) number of banks and offices (ii) deposits and credit (iii) investments (iv) capital to risk-weighted assets ratio (CRAR) (v) non performing assets (NPAs) (vi) Income composition (vii) Expenditure composition (viii) return on assets (ROAs) and (ix) some select ratios. Accordingly, the paper discusses these banking indicators in nine sections in the same order as listed above. The paper concludes in section X by drawing important inferences from the trends of these di fferent banking parameters. The number of offices of all scheduled commercial banks almost doubledfrom 29,677 in 1980 to 55,537 in 2005. This rapid increase in the number of bank offices is observed in the case of all the bank groups. However, the number of banks in the case of foreign bank group and domestic private sector bank group decreased from 42 in 2000 to 31 in 2005 and from 33 in 2000 to 29 in 2005, respectively. This fall in the number of banks is reflective of the consolidation process and, in particular, the mergers and acquisitions that are the order of the banking system at present (Table 1). BANKING IN THE OLDER DAYS Banking is believed to be a part of Indian society from as early as Vedic age; transition from mere money lending to banking must have happened before Manu, the great Hindu jurist, who had devoted a large section of his work to deposits and advances and also formulated rules for calculating interest on both 1. During the Mogul period indigenous bankers (rich individuals or families) helped foreign trades and commerce by lending money to the business. It was during the East Indian period when agency houses started managing the banking business. The first Joint Stock bank India saw came in 1786 named the General Bank of India followed by the Bank of Hindustan and the Bengal Bank. Only the Bank of Hindustan continued to be in the show until 1906 while the other two disappeared in the meantime. East India Company established three banks in first half of 19th century: the Bank of Bengal in 1809, the Bank of Bombay in 1840, and the Bank of Madras in 1843. Eventually these three banks (which used to be referred to as Presidency Banks) were made independent units and they really did well for almost a century. In 1920, these three were amalgamated and a new Imperial Bank of India was established in 1921. Reserve Bank of India Act was passed in 1934 and finally in 1935, the Central Bank was created and christened as Reserve Bank of India. Imperial Bank was undertaken as State Bank of India after passing the State Bank of India Act in 1955. During the last phase of freedom fighting (Swadeshi Movement) few banks with purely Indian man agement were established like Punjab National bank (PNB), Bank of India (BoI) Ltd, Canara Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the Central Bank of India Ltd, etc.July 19, 1969 was an important day in the history of Indian banking industry. Fourteen major banks of the country were nationalised and on April 15, 1980 six more commercial private banks were taken over by the Indian government. In the wake of liberalisation that started in the last decade a few foreign banks entered the foray of commercial banks. To date there are around 40 banks of foreign origin that are  operating in the market, like ABN AMRO Bank, ANZ Grindlays Bank, American Express Bank, HSBC Bank, Barclays Bank and Citibank groups to name a few major of them. HISTORY OF INDIAN BANKS: We can identify three distinct phases in the history of Indian Banking. Early phase from 1786 to 1969 Nationalisation of Banks and up to 1991 prior to banking sector Reforms New phase of Indian Banking with the advent of Financial Banking Sector Reforms after 1991. The first phase is from 1786 to 1969, the early phase up to the nationalisation of the fourteen largest of Indian scheduled banks. It was also the traditional or conservative phase of Indian Banking. The advent of banking system of India started with the establishment of the first joint stock bank, The General Bank of India in the year 1786. After this first bank, Bank of Hindustan and Bengal Bank came to existence. In the mid of 19th century, East India Company established three banks The Bank of Bengal in 1809, The Bank of Bombay in 1840, and bank of Madras in 1843. These banks were independent units and called Presidency banks. These three banks were amalgamated in 1920 and a new bank, Imperial Bank of India was established. All these institutions started as private shareholders banks and the shareholders were mostly Europeans. The Allahabad Bank was established in 1865. The next bank to be set up was the Punjab National Bank Ltd., which was established with its headquarters at La hore in 1894 for the first time exclusively by Indians. Most of the Indian commercial banks, however, owe their origin to the 20th century. Bank of India, Central Bank of India, Bank of Baroda, the Canara Bank, the Indian Bank, and the Bank of Mysore were established between 1906 and 1913. The last major commercial bank to be set up in this phase was the United Commercial Bank in 1943. Earlier the establishment of Reserve Bank of India in 1935 as the central bank of the country was an important step in the development of commercial banking in India. The history of joint stock banking in this first phase was characterised by slow growth and periodic failures. There were as many as one thousand one hundred banks, mostly small banks, failed during the period from 1913 to 1948. The Government of India concerned by the frequent bank failures in the country causing miseries to innumerable small depositors and others enacted The Banking Companies Act, 1949. The title of the Act was changed as Banking Regulation Act 1949, as per amending Act of 1965 (Act No.23 of 1965). The Act is the first regulatory step undertaken by the Government to streamline the functioning and activities of commercial banks in India. Reserve Bank of India as the Central Banking Authority of the country was vested with extensive powers for banking supervision. Salient features of the Act are discussed in a separate page/article At the time of Independence of the country in 1947, the banking sector in India was relatively small and extremely weak. The banks were largely confined to urban areas, extending loans primarily to trading sector dealing with agricultural produce. There were a large number of commercial banks, but banking services were not available at rural and semi-urban areas. Such services were not extended to different sectors of the economy like agriculture, small industries, professionals and self-employed entrepreneurs, artisans, retail traders etc. DRAW BACK OF INDIAN BANKING SYSTEM BEFORE NATIONALISATION Commercial banks, as they were privately owned, on regional or sectarian basis resulted in development of banking on ethnic and provincial basis with parochial outlook. These Institutions did not play their due role in the planned development of the country. Deposit mobilisation was slow. Public had less confidence in the banks on account of frequent bank failures. The savings bank facility provided by the Postal department was viewed a comparatively safer field of investment of savings by the public. Even the deficient savings thus mobilised by commercial banks were not channeled for the development of the economy of the country. Funds were largely given to traders, who hoarded agricultural produce after harvest, creating an artificial scarcity, to make a good fortune in selling them at a later period, when prices were soaring. The Reserve Bank of India had to step in at these occasions to introduce selective credit controls on several commodities to remedy this situation. Such cont rols were imposed on advances against Rice, Paddy, Wheat, Other foodgrains (like jowar, millets, ragi etc.) pulses, oilseeds etc. When the country attained independence Indian Banking was exclusively in the private sector. In addition to the Imperial Bank, there were five big banks each holding public deposits aggregating Rs.100 Crores and more, viz. the Central Bank of India Ltd., the Punjab National Bank Ltd., the Bank of India Ltd., the Bank of Baroda Ltd. and the United Commercial Bank Ltd. Rest of the banks were exclusively regional in character holding deposits of less than fifty Crores. Government first implemented the exercise of nationalisation of a significant part of the Indian Banking system in the year 1955, when Imperial Bank of India was Nationalised in that year for the stated objective of extension of banking facilities on a large scale, more particularly in the rural and semi-urban areas, and for diverse other public purposes to form State Bank of India. SBI was to act as the principal agent of the RBI and handle banking transactions of the Union State Governments throughout India. The step w as in fact in furtherance of the objectives of supporting a powerful rural credit cooperative movement in India and as recommended by the The All-India Rural Credit Survey Committee Report, 1954. State Bank of India was obliged to open an accepted number of branches within five years in unbanked centres. Government subsidised the bank for opening unremunerative branches in non-urban centres. The seven banks now forming subsidiaries of SBI were nationalised in the year 1960. This brought one-third of the banking segment under the direct control of the Government of India. But the major process of nationalisation was carried out on 19th July 1969, when the then Prime Minister of India, Mrs.Indira Gandhi announced the nationalisation of fourteen major commercial banks in the country. One more phase of nationalisation was carried out in the year 1980, when seven more banks were nationalised. This brought 80% of the banking segment in India under Government ownership. The country entered the second phase, i.e. the phase of Nationalised Banking with emphasis on Social Banking in 1969/70. Chronology of Salient steps by the Government after Independence to Regulate Banking Institutions in the Country 1949: Enactment of Banking Regulation Act. 1955 (Phase I): Nationalisation of State Bank of India 1959 (Phase II): Nationalisation of SBI subsidiaries 1961: Insurance cover extended to deposits 1969 (Phase III): Nationalisation of 14 major banks 1971: Creation of credit guarantee corporation 1975: Creation of regional rural banks 1980 (Phase IV): Nationalisation of seven banks with deposits over 200 crores. Shortcomings in the Functioning of Nationalised Banking Institutions However Nationalised banks in their enthusiasm for development banking, looking exclusively to branch opening, deposit accretion and social banking, neglected prudential norms, profitability criteria, risk-management and building adequate capital as a buffer to counter-balance the ever expanding risk-inherent assets held by them. They failed to recognise the emerging non-performing assets and to build adequate provisions to neutralise the adverse effects of such assets. Basking in the sunshine of Government ownership that gave to the public implicit faith and confidence about the sustainability of Government-owned institutions, they failed to collect before hand whatever is needed for the rainy day. And surfeit blindly indulged is sure to bring the sick hour. In the early Nineties after two decades of lop-sided policies, these banks paid heavily for their misdirected performance in place of pragmatic and balanced policies. The RBI/Government of India has to step in at the crisis-hour to implement remedial steps. Reforms in the financial and banking sectors and liberal re capitalisation of the ailing and weakened public sector banks followed. However it is relevant to mention here that the advent of banking sector reforms brought the era of modern banking of global standards in the history of Indian banking. The emphasis shifted to efficient, and prudential banking linked to better customer care and customer service. The old ideology of social banking was not abandoned, but the responsibility for development banking is blended with the paramount need for complying with norms of prudency and efficiency. Composition of Indian Banking System The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions 2. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks in 1969, the public sector banks or the nationalized banks have acquired a place of prominence and has since then seen tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look into their existing portfolio offering. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting al higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the high revenue niche retail segments. The Indian banking has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. The banking system has three tiers. These are the scheduled commercial banks; the Regional rural banks which operate in rural areas not covered by the scheduled banks; And the cooperative and special purpose rural banks. Under the ambit of the nationalized banks come the specialized banking institutions. These co-operatives, rural banks focus on areas of agriculture, rural development etc., unlike commercial banks these co-operative banks do not lend on the basis of a prime lending rate. They also have various tax sops because of their holding pattern and lending structure and hence have lower overheads. This enables them to give a marginally higher percentage on savings deposits. Many of these cooperative banks diversified into specialized areas (catering to the vast retail audience) like car finance, housing loans, truck finance etc. In order to keep pace with their public sector and private counterparts, the co-operative banks too have invested heavily in information technology to offer high-end computerized banking services to its clients. Given below is the total list of banks operating in India. SCHEDULED AND NON SCHEDULED BANKS There are approximately Eighty scheduled commercial banks, Indian and foreign; almost Two Hundred regional rural banks; more than Three Hundred Fifty central cooperative banks, Twenty land development banks; and a number of primary agricultural credit societies. In terms of business, the public sector banks, namely the State Bank of India and the nationalized banks, dominate the banking sector.India had a fairly well developed commercial banking system in existence at the time of independence in 1947. The Reserve Bank of India (RBI) was established in 1935. While the RBI became a state owned institution from January 1, 1949, the Banking Regulation Act was enacted in 1949 providing a framework for regulation and supervision of commercial banking activity. The first step towards the nationalisation of commercial banks was the result of a report (under the aegis of RBI) by the Committee of Direction of All India Rural Credit Survey (1951) which till today is the locus classicus on the subject. The Committee recommended one strong integrated state partnered commercial banking institution to stimulate banking development in general and rural credit in particular. Thus, the Imperial Bank was taken over by the Government and renamed as the State Bank of India (SBI) on July 1, 1955 with the RBI acquiring overriding substantial holding of shares. A number of erstwhile banks owned by princely states were made subsidiaries of SBI in 1959. Thus, the beginning of the Plan era also saw the emergence of public ownership of one of the most prominent of the commercial banks. The All-India Rural Credit Survey Committee Report, 1954 recommended an integrated approach to cooperative credit and emphasised the need for viable credit cooperative societies by expanding their area of operation, encouraging rural savings and diversifying business. The Committee also recommended for Government participation in the share capital of the cooperatives. The report subsequently paved the way for the present structure and composition of the Cooperative Banks in the country There was a feeling that though the Indian banking system had made considerable progress in the 50s and 60s, it established close links between commercial and industry houses, resulting in cornering of bank credit by these segments to the exclusion of agriculture and small industries. To meet these concerns, in 1967, the Government introduced the concept of social control in the banking industry. The scheme of social control was aimed at bringing some changes in the management and distribution of credit by the commercial banks. The close link between big business houses and big banks was intended to be snapped or at least made ineffective by the reconstitution of the Board of Directors to the effect that 51 per cent of the directors were to have special knowledge or practical experience. Appointment of whole-time Chairman with special knowledge and practical experience of working of commercial banks or financial or economic or business administration was intended to professionalise t he top management. Imposition of restrictions on loans to be granted to the directors concerns was another step towards avoiding undesirable flow of credit to the units in which the directors were interested. The scheme also provided for the take-over of banks under certain circumstances. Political compulsion then partially attributed to inadequacies of the social control, led to the Government of India nationalising, in 1969,fourteen major scheduled commercial banks which had deposits above a cut-off size. The objective was to serve better the needs of development of the economy in conformity with national priorities and objectives. In a somewhat repeat of the same experience, eleven years after nationalisation, the Government announced the nationalisation of seven more scheduled commercial banks above the cut-off size. The second round of nationalisation gave an impression that if a private sector bank grew to the cut-off size it would be under the threat of nationalisation. From the fifties a number of exclusively state-owned development financial institutions (DFIs) were also set up both at the national and state level, with a lone exception of Industrial Credit and Investment Corporation (ICICI) which had a minority private share holding. The mutual fund activity was also a virtual monopoly of Government owned institution, viz., the Unit Trust of India. Refinance institutions in agriculture and industry sectors were also developed, similar in nature to the DFIs. Insurance, both Life and General, also became state monopolies. REFORM MEASURES The major challenge of the reform has been to introduce elements of market incentive as a dominant factor gradually replacing the administratively coordinated planned actions for development. Such a paradigm shift has several dimensions, the corporate governance being one of the important elements. The evolution of corporate governance in banks, particularly, in PSBs, thus reflects changes in monetary policy, regulatory environment, and structural transformations and to some extent, on the character of the self-regulatory organizations functioning in the financial sector. Policy Environment During the reform period, the policy environment enhanced competition and provided greater opportunity for exercise of what may be called genuine corporate element in each bank to replace the elements of coordinated actions of all entities as a joint family to fulfill predetermined Plan priorities. Greater competition has been infused in the banking system by permitting entry of private sector banks (Nine licences since 1993), and liberal licensing of more branches by foreign banks and the entry of new foreign banks. With the development of a multi-institutional structure in the financial sector, emphasis is on efficiency through competition irrespective of ownership. Since non-bank intermediation has increased, banks have had to improve efficiency to ensure survival. REGULATORY ENVIRONMENT Prudential regulation and supervision have formed a critical component of the financial sector reform programme since its inception, and India has endeavored to international prudential norms and practices. These norms have been progressively tightened over the years, particularly against the backdrop of the Asian crisis. Bank exposures to sensitive sectors such as equity and real estate have been curtailed. The Banking Regulation Act 1949 prevents connected lending (i.e. lending by banks to directors or companies in which Directors are interested). Periodical inspection of banks has been the main instrument of supervision, though recently there has been a move toward supplementary on-site inspections with off-site surveillance. The system of Annual Financial Inspection was introduced in 1992, in place of the earlier system of Annual Financial Review/Financial Inspections. The inspection objectives and procedures, have been redefined to evaluate the banks safety and soundness; to appraise the quality of the Board and management; to ensure compliance with banking laws regulation; to provide an appraisal of soundness of the banks assets; to analyse the financial factors which determine banks solvency and to identify areas where corrective action is needed to strengthen the institution and improve its performance. Inspection based upon the new guidelines have started since 1997. SELF REGULATORY ORGANIZATIONS India has had the distinction of experimenting with Self Regulatory Organisations (SROs) in the financial system since the pre-independence days. At present, there are four SROs in the financial system Indian Banks Association (IBA), Foreign Exchange Dealers Association of India (FEDAI), Primary Dealers Association of India (PDAI) and Fixed Income Money Market Dealers Association of India (FIMMDAI). INDIAN BANKS ASSOCIATION The IBA established in 1946 as a voluntary association of banks, strove towards strengthening the banking industry through consensus and co-ordination. Since nationalisation of banks, PSBs tended to dominate IBA and developed close links with Government and RBI. Often, the reactive and consensus and coordinated approach bordered on cartelisation. To illustrate, IBA had worked out a schedule of benchmark service charges for the services rendered by member banks, which were not mandatory in nature, but were being adopted by all banks. The practice of fixing rates for services of banks was consistent with a regime of administered interest rates but not consistent with the principle of competition. Hence, the IBA was directed by the RBI to desist from working out a schedule of benchmark service charges for the services rendered by member banks. Responding to the imperatives caused by the changing scenario in the reform era, the IBA has, over the years, refocused its vision, redefined its role, and modified its operational modalities. FOREIGN EXCHANGE DEALERS ASSOCIATION OF INDIA (FEDAI) In the area of foreign exchange, FEDAI was established in 1958, and banks were required to abide by terms and conditions prescribed by FEDAI for transacting foreign exchange business. In the light of reforms, FEDAI has refocused its role by giving up fixing of rates, but plays a multifarious role covering training of banks personnel, accounting standards, evolving risk measurement models like the VaR History and Development of Banks in India History and Development of Banks in India INTRODUCTION: The banking industry in India seems to be unaffected from the global financial crises which started from U.S in the last quarter of 2008. Despite the fallout and nationalization of banks across developed economies, banks in India seems to be on the strong fundamental base and seems to be well insulated from the financial turbulence emerging from the western economies. The Indian banking industry is well placed as compare to their banking industries western counterparts which are depending upon government bailout and stimulus packages. The strong economic growth in the past, low defaulter ratio, absence of complex financial products, regular intervention by central bank, proactive adjustment of monetary policy and so called close banking culture has favored the banking industry in India in recent global financial turmoil. Although there will no impact on the Indian banking system similar to that in west but the banks in India will adopt for more of defensive approach in credit disburs al in coming period. In order to safe guard their interest, banks will follow stringent norms for credit disbursal. There will be more focus on analyzing borrower financial health . A nation with 1 billion plus, India is the fastest growing country in terms of population and soon to overtake China as worlds largest populated country. The discerning impact on the over-stretched limited resources explains why India always tends to be deficient in infrastructure and opportunity. The largest economy of the world often frustrated researchers, as there was no single predictable pattern of the market; the multiplicity of government regulations and widespread government ownership had always kept investors away from exploring the vast Indian market. However, with India being liberalised today, banking intermediation has been playing a crucial role in economic development through its credit channel. Foreign banks have entered the soil but that has not yet posed a threat to the vast network of public sector banks that still conduct 92% of banking business in India. Banking in India has undergone a major revamp. It has come a long way since its creation which dates back to the British era. The present banking systems has come into place after many transformations from the Older systems. Against this background the present chapter deals with the evolution of the Indian Banking systems, the various reforms that has been made to make banks more effective, the role of private and foreign sector banks and last the challenges the Indian banks faces in the New Millennium . The banking system is central to a nations economy. Banks are special as they not only accept and deploy large amounts of uncollateralised public funds in a fiduciary capacity, but also leverage such funds through credit creation. In India, prior to nationalisation, banking was restricted mainly to the urban areas and neglected in the rural and semi-urban areas. Large industries and big business houses enjoyed major portion of the credit facilities. Agriculture, small-scale industries and exports did not receive the deserved attention. Therefore, inspired by a larger social purpose, 14 major banks were nationalised in 1969 and six more in 1980. Since then the banking system in India has played a pivotal role in the Indian economy, acting as an instrument of social and economic change. The rationale behind bank nationalisation has been succinctly put forth by eminent bankers: Many bank failures and crises over two centuries, and the damage they did under laissez faire conditions; the needs of planned growth and equitable distribution of credit, which in privately owned banks was concentrated mainly on the controlling industrial houses and influential borrowers; the needs of growing small scale industry and farming regarding finance, equipment and inputs; from all these there emerged an inexorable demand for banking legislation, some government control and a central banking authority, adding up, in the final analysis, to social control and nationalisation (Tandon, 1989). Post nationalisation, the Indian banking system registered tremendous growth in volume. Despite the undeniable and multifold gains of bank nationalization, it may be noted that the important financial institutions were all state owned and were subject to central direction and control. Banks enjoyed little autonomy as both lending and deposit rates were controlled until the end of the 1980s. Although nationalisation of banks helped in the spread of banking to the rural and hitherto uncovered areas, the monopoly granted to the public sector and lack of competition led to overall inefficiency and low productivity. By 1991, the countrys financial system was saddled with an inefficient and financially unsound banking sector. Some of the reasons for this were (i) high reserve requirements, (ii) administered interest rates, (iii) directed credit and (iv) lack of competition (v) political interference and corruption. As recommended by the Narasimham Committee Report (1991) several reform mea sures were introduced which included reduction of reserve requirements, de-regulation of interest rates, introduction of prudential norms, strengthening of bank supervision and improving the competitiveness of the system, particularly by allowing entry of private sector banks. With a view to adopting the Basel Committee (1988) framework on capital adequacy norms, the Reserve Bank introduced a risk-weighted asset ratio system for banks in India as a capital adequacy measure in 1992. Banks were asked to maintain risk-weighted capital adequacy ratio initially at the lower level of 4 per cent, which was gradually increased to 9 per cent. Banks were also directed to identify problem loans on their balance sheets and make provisions for bad loans and bring down the burgeoning problem of non-performing assets. The period 1992-97 laid the foundations for reform in the banking system (Rangarajan, 1998). The second Narasimham Committee Report (1998) focussed on issues like strengthening of th e banking system, upgrading of technology and human resource development. The report laid emphasis on two aspects of banking regulation, viz., capital adequacy and asset classification and resolution of NPA-related problems. Commercial banks in India are expected to start implementing Basel II norms with effect from March 31, 2007. They are expected to adopt the standardised approach for credit risk and the basic indicator approach for operational risk initially. After adequate skills are developed, both at the banks and at the supervisory levels, some banks may be allowed to migrate to the internal rating based (IRB) approach (Reddy 2005). At present, banks in India are venturing into non-traditional areas and generating income through diversified activities other than the core banking activities. Strategic mergers and acquisitions are being explored and implemented. With this, the banking sector is currently on the threshold of an exciting phase. Against this backdrop, this paper endeavours to study the important banking indicators for the last 25-year period from 1981 to 2005. These indicators have been broadly grouped into different categories, viz., (i) number of banks and offices (ii) deposits and credit (iii) investments (iv) capital to risk-weighted assets ratio (CRAR) (v) non performing assets (NPAs) (vi) Income composition (vii) Expenditure composition (viii) return on assets (ROAs) and (ix) some select ratios. Accordingly, the paper discusses these banking indicators in nine sections in the same order as listed above. The paper concludes in section X by drawing important inferences from the trends of these di fferent banking parameters. The number of offices of all scheduled commercial banks almost doubledfrom 29,677 in 1980 to 55,537 in 2005. This rapid increase in the number of bank offices is observed in the case of all the bank groups. However, the number of banks in the case of foreign bank group and domestic private sector bank group decreased from 42 in 2000 to 31 in 2005 and from 33 in 2000 to 29 in 2005, respectively. This fall in the number of banks is reflective of the consolidation process and, in particular, the mergers and acquisitions that are the order of the banking system at present (Table 1). BANKING IN THE OLDER DAYS Banking is believed to be a part of Indian society from as early as Vedic age; transition from mere money lending to banking must have happened before Manu, the great Hindu jurist, who had devoted a large section of his work to deposits and advances and also formulated rules for calculating interest on both 1. During the Mogul period indigenous bankers (rich individuals or families) helped foreign trades and commerce by lending money to the business. It was during the East Indian period when agency houses started managing the banking business. The first Joint Stock bank India saw came in 1786 named the General Bank of India followed by the Bank of Hindustan and the Bengal Bank. Only the Bank of Hindustan continued to be in the show until 1906 while the other two disappeared in the meantime. East India Company established three banks in first half of 19th century: the Bank of Bengal in 1809, the Bank of Bombay in 1840, and the Bank of Madras in 1843. Eventually these three banks (which used to be referred to as Presidency Banks) were made independent units and they really did well for almost a century. In 1920, these three were amalgamated and a new Imperial Bank of India was established in 1921. Reserve Bank of India Act was passed in 1934 and finally in 1935, the Central Bank was created and christened as Reserve Bank of India. Imperial Bank was undertaken as State Bank of India after passing the State Bank of India Act in 1955. During the last phase of freedom fighting (Swadeshi Movement) few banks with purely Indian man agement were established like Punjab National bank (PNB), Bank of India (BoI) Ltd, Canara Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the Central Bank of India Ltd, etc.July 19, 1969 was an important day in the history of Indian banking industry. Fourteen major banks of the country were nationalised and on April 15, 1980 six more commercial private banks were taken over by the Indian government. In the wake of liberalisation that started in the last decade a few foreign banks entered the foray of commercial banks. To date there are around 40 banks of foreign origin that are  operating in the market, like ABN AMRO Bank, ANZ Grindlays Bank, American Express Bank, HSBC Bank, Barclays Bank and Citibank groups to name a few major of them. HISTORY OF INDIAN BANKS: We can identify three distinct phases in the history of Indian Banking. Early phase from 1786 to 1969 Nationalisation of Banks and up to 1991 prior to banking sector Reforms New phase of Indian Banking with the advent of Financial Banking Sector Reforms after 1991. The first phase is from 1786 to 1969, the early phase up to the nationalisation of the fourteen largest of Indian scheduled banks. It was also the traditional or conservative phase of Indian Banking. The advent of banking system of India started with the establishment of the first joint stock bank, The General Bank of India in the year 1786. After this first bank, Bank of Hindustan and Bengal Bank came to existence. In the mid of 19th century, East India Company established three banks The Bank of Bengal in 1809, The Bank of Bombay in 1840, and bank of Madras in 1843. These banks were independent units and called Presidency banks. These three banks were amalgamated in 1920 and a new bank, Imperial Bank of India was established. All these institutions started as private shareholders banks and the shareholders were mostly Europeans. The Allahabad Bank was established in 1865. The next bank to be set up was the Punjab National Bank Ltd., which was established with its headquarters at La hore in 1894 for the first time exclusively by Indians. Most of the Indian commercial banks, however, owe their origin to the 20th century. Bank of India, Central Bank of India, Bank of Baroda, the Canara Bank, the Indian Bank, and the Bank of Mysore were established between 1906 and 1913. The last major commercial bank to be set up in this phase was the United Commercial Bank in 1943. Earlier the establishment of Reserve Bank of India in 1935 as the central bank of the country was an important step in the development of commercial banking in India. The history of joint stock banking in this first phase was characterised by slow growth and periodic failures. There were as many as one thousand one hundred banks, mostly small banks, failed during the period from 1913 to 1948. The Government of India concerned by the frequent bank failures in the country causing miseries to innumerable small depositors and others enacted The Banking Companies Act, 1949. The title of the Act was changed as Banking Regulation Act 1949, as per amending Act of 1965 (Act No.23 of 1965). The Act is the first regulatory step undertaken by the Government to streamline the functioning and activities of commercial banks in India. Reserve Bank of India as the Central Banking Authority of the country was vested with extensive powers for banking supervision. Salient features of the Act are discussed in a separate page/article At the time of Independence of the country in 1947, the banking sector in India was relatively small and extremely weak. The banks were largely confined to urban areas, extending loans primarily to trading sector dealing with agricultural produce. There were a large number of commercial banks, but banking services were not available at rural and semi-urban areas. Such services were not extended to different sectors of the economy like agriculture, small industries, professionals and self-employed entrepreneurs, artisans, retail traders etc. DRAW BACK OF INDIAN BANKING SYSTEM BEFORE NATIONALISATION Commercial banks, as they were privately owned, on regional or sectarian basis resulted in development of banking on ethnic and provincial basis with parochial outlook. These Institutions did not play their due role in the planned development of the country. Deposit mobilisation was slow. Public had less confidence in the banks on account of frequent bank failures. The savings bank facility provided by the Postal department was viewed a comparatively safer field of investment of savings by the public. Even the deficient savings thus mobilised by commercial banks were not channeled for the development of the economy of the country. Funds were largely given to traders, who hoarded agricultural produce after harvest, creating an artificial scarcity, to make a good fortune in selling them at a later period, when prices were soaring. The Reserve Bank of India had to step in at these occasions to introduce selective credit controls on several commodities to remedy this situation. Such cont rols were imposed on advances against Rice, Paddy, Wheat, Other foodgrains (like jowar, millets, ragi etc.) pulses, oilseeds etc. When the country attained independence Indian Banking was exclusively in the private sector. In addition to the Imperial Bank, there were five big banks each holding public deposits aggregating Rs.100 Crores and more, viz. the Central Bank of India Ltd., the Punjab National Bank Ltd., the Bank of India Ltd., the Bank of Baroda Ltd. and the United Commercial Bank Ltd. Rest of the banks were exclusively regional in character holding deposits of less than fifty Crores. Government first implemented the exercise of nationalisation of a significant part of the Indian Banking system in the year 1955, when Imperial Bank of India was Nationalised in that year for the stated objective of extension of banking facilities on a large scale, more particularly in the rural and semi-urban areas, and for diverse other public purposes to form State Bank of India. SBI was to act as the principal agent of the RBI and handle banking transactions of the Union State Governments throughout India. The step w as in fact in furtherance of the objectives of supporting a powerful rural credit cooperative movement in India and as recommended by the The All-India Rural Credit Survey Committee Report, 1954. State Bank of India was obliged to open an accepted number of branches within five years in unbanked centres. Government subsidised the bank for opening unremunerative branches in non-urban centres. The seven banks now forming subsidiaries of SBI were nationalised in the year 1960. This brought one-third of the banking segment under the direct control of the Government of India. But the major process of nationalisation was carried out on 19th July 1969, when the then Prime Minister of India, Mrs.Indira Gandhi announced the nationalisation of fourteen major commercial banks in the country. One more phase of nationalisation was carried out in the year 1980, when seven more banks were nationalised. This brought 80% of the banking segment in India under Government ownership. The country entered the second phase, i.e. the phase of Nationalised Banking with emphasis on Social Banking in 1969/70. Chronology of Salient steps by the Government after Independence to Regulate Banking Institutions in the Country 1949: Enactment of Banking Regulation Act. 1955 (Phase I): Nationalisation of State Bank of India 1959 (Phase II): Nationalisation of SBI subsidiaries 1961: Insurance cover extended to deposits 1969 (Phase III): Nationalisation of 14 major banks 1971: Creation of credit guarantee corporation 1975: Creation of regional rural banks 1980 (Phase IV): Nationalisation of seven banks with deposits over 200 crores. Shortcomings in the Functioning of Nationalised Banking Institutions However Nationalised banks in their enthusiasm for development banking, looking exclusively to branch opening, deposit accretion and social banking, neglected prudential norms, profitability criteria, risk-management and building adequate capital as a buffer to counter-balance the ever expanding risk-inherent assets held by them. They failed to recognise the emerging non-performing assets and to build adequate provisions to neutralise the adverse effects of such assets. Basking in the sunshine of Government ownership that gave to the public implicit faith and confidence about the sustainability of Government-owned institutions, they failed to collect before hand whatever is needed for the rainy day. And surfeit blindly indulged is sure to bring the sick hour. In the early Nineties after two decades of lop-sided policies, these banks paid heavily for their misdirected performance in place of pragmatic and balanced policies. The RBI/Government of India has to step in at the crisis-hour to implement remedial steps. Reforms in the financial and banking sectors and liberal re capitalisation of the ailing and weakened public sector banks followed. However it is relevant to mention here that the advent of banking sector reforms brought the era of modern banking of global standards in the history of Indian banking. The emphasis shifted to efficient, and prudential banking linked to better customer care and customer service. The old ideology of social banking was not abandoned, but the responsibility for development banking is blended with the paramount need for complying with norms of prudency and efficiency. Composition of Indian Banking System The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions 2. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks in 1969, the public sector banks or the nationalized banks have acquired a place of prominence and has since then seen tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look into their existing portfolio offering. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting al higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the high revenue niche retail segments. The Indian banking has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. The banking system has three tiers. These are the scheduled commercial banks; the Regional rural banks which operate in rural areas not covered by the scheduled banks; And the cooperative and special purpose rural banks. Under the ambit of the nationalized banks come the specialized banking institutions. These co-operatives, rural banks focus on areas of agriculture, rural development etc., unlike commercial banks these co-operative banks do not lend on the basis of a prime lending rate. They also have various tax sops because of their holding pattern and lending structure and hence have lower overheads. This enables them to give a marginally higher percentage on savings deposits. Many of these cooperative banks diversified into specialized areas (catering to the vast retail audience) like car finance, housing loans, truck finance etc. In order to keep pace with their public sector and private counterparts, the co-operative banks too have invested heavily in information technology to offer high-end computerized banking services to its clients. Given below is the total list of banks operating in India. SCHEDULED AND NON SCHEDULED BANKS There are approximately Eighty scheduled commercial banks, Indian and foreign; almost Two Hundred regional rural banks; more than Three Hundred Fifty central cooperative banks, Twenty land development banks; and a number of primary agricultural credit societies. In terms of business, the public sector banks, namely the State Bank of India and the nationalized banks, dominate the banking sector.India had a fairly well developed commercial banking system in existence at the time of independence in 1947. The Reserve Bank of India (RBI) was established in 1935. While the RBI became a state owned institution from January 1, 1949, the Banking Regulation Act was enacted in 1949 providing a framework for regulation and supervision of commercial banking activity. The first step towards the nationalisation of commercial banks was the result of a report (under the aegis of RBI) by the Committee of Direction of All India Rural Credit Survey (1951) which till today is the locus classicus on the subject. The Committee recommended one strong integrated state partnered commercial banking institution to stimulate banking development in general and rural credit in particular. Thus, the Imperial Bank was taken over by the Government and renamed as the State Bank of India (SBI) on July 1, 1955 with the RBI acquiring overriding substantial holding of shares. A number of erstwhile banks owned by princely states were made subsidiaries of SBI in 1959. Thus, the beginning of the Plan era also saw the emergence of public ownership of one of the most prominent of the commercial banks. The All-India Rural Credit Survey Committee Report, 1954 recommended an integrated approach to cooperative credit and emphasised the need for viable credit cooperative societies by expanding their area of operation, encouraging rural savings and diversifying business. The Committee also recommended for Government participation in the share capital of the cooperatives. The report subsequently paved the way for the present structure and composition of the Cooperative Banks in the country There was a feeling that though the Indian banking system had made considerable progress in the 50s and 60s, it established close links between commercial and industry houses, resulting in cornering of bank credit by these segments to the exclusion of agriculture and small industries. To meet these concerns, in 1967, the Government introduced the concept of social control in the banking industry. The scheme of social control was aimed at bringing some changes in the management and distribution of credit by the commercial banks. The close link between big business houses and big banks was intended to be snapped or at least made ineffective by the reconstitution of the Board of Directors to the effect that 51 per cent of the directors were to have special knowledge or practical experience. Appointment of whole-time Chairman with special knowledge and practical experience of working of commercial banks or financial or economic or business administration was intended to professionalise t he top management. Imposition of restrictions on loans to be granted to the directors concerns was another step towards avoiding undesirable flow of credit to the units in which the directors were interested. The scheme also provided for the take-over of banks under certain circumstances. Political compulsion then partially attributed to inadequacies of the social control, led to the Government of India nationalising, in 1969,fourteen major scheduled commercial banks which had deposits above a cut-off size. The objective was to serve better the needs of development of the economy in conformity with national priorities and objectives. In a somewhat repeat of the same experience, eleven years after nationalisation, the Government announced the nationalisation of seven more scheduled commercial banks above the cut-off size. The second round of nationalisation gave an impression that if a private sector bank grew to the cut-off size it would be under the threat of nationalisation. From the fifties a number of exclusively state-owned development financial institutions (DFIs) were also set up both at the national and state level, with a lone exception of Industrial Credit and Investment Corporation (ICICI) which had a minority private share holding. The mutual fund activity was also a virtual monopoly of Government owned institution, viz., the Unit Trust of India. Refinance institutions in agriculture and industry sectors were also developed, similar in nature to the DFIs. Insurance, both Life and General, also became state monopolies. REFORM MEASURES The major challenge of the reform has been to introduce elements of market incentive as a dominant factor gradually replacing the administratively coordinated planned actions for development. Such a paradigm shift has several dimensions, the corporate governance being one of the important elements. The evolution of corporate governance in banks, particularly, in PSBs, thus reflects changes in monetary policy, regulatory environment, and structural transformations and to some extent, on the character of the self-regulatory organizations functioning in the financial sector. Policy Environment During the reform period, the policy environment enhanced competition and provided greater opportunity for exercise of what may be called genuine corporate element in each bank to replace the elements of coordinated actions of all entities as a joint family to fulfill predetermined Plan priorities. Greater competition has been infused in the banking system by permitting entry of private sector banks (Nine licences since 1993), and liberal licensing of more branches by foreign banks and the entry of new foreign banks. With the development of a multi-institutional structure in the financial sector, emphasis is on efficiency through competition irrespective of ownership. Since non-bank intermediation has increased, banks have had to improve efficiency to ensure survival. REGULATORY ENVIRONMENT Prudential regulation and supervision have formed a critical component of the financial sector reform programme since its inception, and India has endeavored to international prudential norms and practices. These norms have been progressively tightened over the years, particularly against the backdrop of the Asian crisis. Bank exposures to sensitive sectors such as equity and real estate have been curtailed. The Banking Regulation Act 1949 prevents connected lending (i.e. lending by banks to directors or companies in which Directors are interested). Periodical inspection of banks has been the main instrument of supervision, though recently there has been a move toward supplementary on-site inspections with off-site surveillance. The system of Annual Financial Inspection was introduced in 1992, in place of the earlier system of Annual Financial Review/Financial Inspections. The inspection objectives and procedures, have been redefined to evaluate the banks safety and soundness; to appraise the quality of the Board and management; to ensure compliance with banking laws regulation; to provide an appraisal of soundness of the banks assets; to analyse the financial factors which determine banks solvency and to identify areas where corrective action is needed to strengthen the institution and improve its performance. Inspection based upon the new guidelines have started since 1997. SELF REGULATORY ORGANIZATIONS India has had the distinction of experimenting with Self Regulatory Organisations (SROs) in the financial system since the pre-independence days. At present, there are four SROs in the financial system Indian Banks Association (IBA), Foreign Exchange Dealers Association of India (FEDAI), Primary Dealers Association of India (PDAI) and Fixed Income Money Market Dealers Association of India (FIMMDAI). INDIAN BANKS ASSOCIATION The IBA established in 1946 as a voluntary association of banks, strove towards strengthening the banking industry through consensus and co-ordination. Since nationalisation of banks, PSBs tended to dominate IBA and developed close links with Government and RBI. Often, the reactive and consensus and coordinated approach bordered on cartelisation. To illustrate, IBA had worked out a schedule of benchmark service charges for the services rendered by member banks, which were not mandatory in nature, but were being adopted by all banks. The practice of fixing rates for services of banks was consistent with a regime of administered interest rates but not consistent with the principle of competition. Hence, the IBA was directed by the RBI to desist from working out a schedule of benchmark service charges for the services rendered by member banks. Responding to the imperatives caused by the changing scenario in the reform era, the IBA has, over the years, refocused its vision, redefined its role, and modified its operational modalities. FOREIGN EXCHANGE DEALERS ASSOCIATION OF INDIA (FEDAI) In the area of foreign exchange, FEDAI was established in 1958, and banks were required to abide by terms and conditions prescribed by FEDAI for transacting foreign exchange business. In the light of reforms, FEDAI has refocused its role by giving up fixing of rates, but plays a multifarious role covering training of banks personnel, accounting standards, evolving risk measurement models like the VaR