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INTRODUCTION
1.1 SMALL SCALE INDUSTRIES
1.1.1 Preview
The development of modern small-scale industries has been
one of the most significant and characteristic features of industrial
development in India. The most significant aspect of small industry
development is that this sector has simulated economic activity of a farreaching magnitude and created sense of confidence among huge number of
small entrepreneurs. Its adaptability semi-urban and rural environment where
infrastructure is under developed and capacity to attract small savings and
direct them to productive channels, the small industries sector has been
recognized, in successive 5 year plans as an effective instrument in the
development of backward and rural areas. Apart from its economic aspects, it
also justifies in generation of large employment opportunity at comparatively
low investment, removal of poverty, attainment of self reliance, reduction in
disparities in income, wealth and consumption standard and regional
imbalance that the country has set out to accomplish.
1.1.2 Small Scale Industries - Definition
Industrial undertaking, in which the investment in fixed assets in
plant and machinery, excluding land and building, whether held on ownershipterms or on lease or on hire purchase, does not exceed Rs.1 Crore (One
crore).
The conventional definition includes cottage and handicraft
industries, which employ traditional labour intensive methods to produce
traditionalproducts, largely in village households. The small-scale sector has
registered an impressive growth in recent years.
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The priority sector includes S.S.I (with sub targets for tiny
units), Retail traders, Professions & Self employed, Government sponsored
programmes for SC/ST, Education, Housing Advances under D.R.I.
1.1.3 Plan outlays
The approved outlays for the schemes of small industries
development organization and allied institutions for the 7 th 5 year plan was
Rs.170 crores excluding the scheme relating to self employment for educated
unemployed youth.
1.1.4 Policy and planning
Policy measures for promoting and strengthening of small
enterprises have been announced on 6th august, 91 in which special
emphasis has been laid on infrastructure facilities, marketing, promotion of
entrepreneurship and simplification of rules and procedures.
1.1.5 ASSET CLASSIFICATION
All the advance account is to be classified into four categories namely,
Standard asset
Substandard asset
Double asset
Loss asset
STANDARD ASSET
An asset which is not an NPA, which carries not more than normal
credit risk attached to a business, is termed as a standard asset.
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SUBSTANDARD ASSET
It is the loan asset which has been classified as NPA for a period not
exceeding two years.
DOUBLE ASSET
At present, a credit facility which has remained as NPA for a period
exceeding two years is to be treated as a doubtful asset. Doubtful assets are
further classified as doubtful I, doubtful II, doubtful III assets depending upontheir age.
LOAN ASSET
A loss asset is one where loss has been identified by the bank or
internal or external auditors or by the RBI inspection but the amount has not
been written off, wholly or partly.
1.1.6 THE TREND IN HOW CREDIT IS SANCTIONED
This deals with how the bank scrutinizes and sanctions the
loan application for an existing small-scale unit. The bank sanctions loan only
after they are satisfied with the firms performance in the following categories.
1. Past Performance:
The firm has to fill in the details of the turnover, net profit and retained
and profit for the past three years. Also to be included is the monthly
turnover for the twelve months of the last financial year.
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2. Arrears in statutory payments:
The firm should have no arrears in payment of income tax, sales tax,
provident fund, employees state Insurance Corporation and any other such
items
3. Details of existing fixed assets
4. Projections of performance, profitability and repayment:
This projection in other words represents the trading upto 5 years. The
bank expects an increasing growth rate in the sales, gross profit and net
profit of the firm.
5. Cash Flow statement:
The cash flow statement shows the various sources and uses of the
cash by the firm. This helps to show the bank the various other sources from
which the firm gets cash inflow and the uses of the cash for various purchase
of fixed and current assets. The cash flow statement helps to show if the
working capital loan has been used for any purpose other than the
acquisition of current assets and meeting current liability. Similar to the
trading and profit and loss account, the projection of cash flow statement
should be shown for 5 years.
6. Projected Balance Sheet:
The balance sheet shows the financial strength and weakness of a
unit as on a particular day. Here also the projection should be made for 5
years. Since the bank has been dealing with the applicant for the past years,
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they are mainly interested in the financial performance of the firms activities.
Apart from the financial performance the bank also checks on the following
factors.
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1.2 NON-PERFORMING ASSETS OVERVIEW
All sales are actually a gift until the proceeds have been collected
Prof. M.Bertoneh
In the year 1991, the Government of India had appointed a high
level committee under the chairmanship of Shri.M.Narasimham, popularly
called Narasimham committee, to examine all aspects relating to thestructures, organization, function and procedures of the financial system. The
committee had, inter alia made recommendation in regard to proper system
of recognition of income, classification of asset and provisioning for bad
debts on a prudential basis.
The Reserve Bank of India, in tune with the internationally
accepted accounting norms and as per the Narasimham committee
recommendations, introduced new guidelines for Income recognition, asset
classification and provisioning norms operative from the financial year 1992-
93.
With the introduction of the new norms from the year 1992-
93, the concept of performing and Non-performing assets has beenintroduced.
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1.2.1 WHAT IS NPA?
An asset, which ceases to yield income to the bank, is a Non-
performing asset (NPA). Income in any loan account should be recognized
only when there is actual cash recovery and not merely when it is accrued.
Availability of security or net worth of borrower/ guarantor
should not be taken into consideration fro the purpose of treating an advance
as NPA or otherwise. Only the record of recovery as reflected in banks books
should be the criteria.
Non-performing assets cause Double jeopardy to banks
because we cannot book any income by way of interest, exchange, fee,
commission etc. unless there is cash recovery or realization. On the other
hand, we are required to make provision on such NPAs based on their age
and value of security.
For a bank in general, an asset is to be classified as NPA, if the
payments (principal and interest) remain unpaid for more than 90 days. Any
NPA would migrate from substandard to doubtful category after 12 months. It
would get classified as loss asset if it is irrecoverable or only marginally
collectible.
1.2.2 MANAGEMENT OF NPAs
The quality and performance of advances have a direct bearing
on the profitability and viability of banks. Despite an efficient credit appraisal
and disbursement mechanism, problems can still arise due to various factors.
The essential component of sound NPA management system is quick
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identification of Non-performing advances, their containment at minimum
levels and ensuring that their impingement on the financials is minimum.
1.2.3 CAUSES FOR NPA
The issue of Non-performing asset has come to occupy the
centre stage in the discussion on Indias financial sector reforms and the
international rating agencies have added to the concerns of the international
financial community and the multilateral agencies. The high level of NPAs
has exhibited the fundamental weakness of the banks. Some of the causative
factors for the loan accounts turning NPAs are as follows:
1) Often lending is not linked to product sale. The problem is
compounded by directed lending where banks are required to
extend credit to meet targets stipulated by the government, often
disregarding the viability of loans.
2) Diversion of funds for expansion / modernization / setting up of
new projects / helping or promoting associate concerns.
3) External factors like raw materials shortage, raw material price
escalation, power shortage etc.
4) Business failures like product failing to capture market,
inefficient management, strike/ strained labour relations, wrong
technology, technical problems, product obsolescence etc.
5) Changes in the macro environment like recession, infrastructural
bottlenecks, sluggish growth in the economy etc.
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6) Lack of financial autonomy
7) Time / Cost over run while implementing the project
1.3 PROFILE OF UCO BANK
UCO Bank was incorporated on 6 th January 1943 with its head
office at kolkata. UCO Bank has a large network of 1713 branches across
length and breadth of the country. The banks first overseas branch was
opened in Rangoon in 1947, now a prominent presence in 4 overseas
canters. Infact, the domestic branch network of the bank encompasses all
the states and Union territories, except Lakshadweep and is supported by 11
service branches covering all major metros.
The bank has 8 specialized S.S.I. branches, 2 International
banking branches and one industrial finance branch. Out of which more than
845 stand computerized. The bank also has 168 extension counters across
the country. The bank ranks 8 th of total business of nationalized banks as of
March 2003&2004.
UCO Bank, Erode Branch, was established in the year 1976. it
comes under the control of Tiruchirapalli Regional office. 34 employees serve
for this branch with per employee business of 95 lakhs. The net profit of thisbranch as on 31.03.2003 was Rs.435 cr.
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1.3.1STEPS TAKEN BY UCO BANK, ERODE BRANCH
TO RECOVER NPA
The amount of NPA, which stood at Rs.81 lakhs in the year 2000-
01, has been brought down to Rs.38 lakhs as on 31.03.2003. This branch
brought about this spectacular reduction by following the steps described
here under:
1) Incase of substandard assets, borrowers are contacted
personally for recovery of unrealized interest and overdueInstallments and is followed by monthly contact with
Borrowers.
2) Incase of substandard assets, if viability is established, relief
package Within RBI parameter, are undertaken.
3) Serious and tough action, if necessary, including legal
action for recovery initiated without delay.
4) The branch keeps upto date record of assets charged to the
bank indicating their location, so that execution of decree is
not delayed for want of details.
5) Local enquiries are made about the assets of guarantors
and the reports are prepared. Such enquiries create
pressure on the borrowers to settle the dues.
6) Niptan Yojna, a special settlement scheme, was
formulated by the bank and launched on 1999. According to
this scheme, simple interest which is not less than 10%,
alone will be charged on the outstanding amount.
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CHAPTER 2
2.1) REVIEW OF LITERATURE
Literature review is the ability to carry out the previous work in a
particular topic done by others. Generally it is not important to carry out a
literature review; still it is carried out in order to find more details about a
project work.
It helps to place our work in the context of what have
already been done, allowing comparisons to be made and providing a
frame work for further research.
It has been defined as a critical summary and
assessment of the range of existing materials dealing with knowledge and
understanding in a given field
The importance of review for a project work is wider,
since there is no such previous work or any study in this topic, the
researcher cannot be able to apply this method.
Further the present study of management technique for
controlling NPA and its input helps the bank to determine the factors for
causes of NPA and ways and means to control it. It also leads to further
future study for the bank in the same topic and for the researcher for his
academic completion of his project work.
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CHAPTER 3
3.1 OBJECTIVE OF THE STUDY
3.1.1 Primary objective
1) The main objective of this project is to study the
performance appraisal and
Corrective measures to tackle NPA
2) The study will also expose some suggestions to shape
the asset to push it to the
Performing status
3.1.2 Secondary objective
1) This study will also reveal how NPA affect banks
efficiency of operation and of course, their profitability
2) To study the NPA position of UCO Bank, Erode branch
3.2 Scope of the study
The project has the objective of analysing the critical factors relating to
NPA, restructuring strategies and to suggest effective measures to counter
the NPA, in the coming years.
Now-a-days banks face the problem of bad recovery of loans and
advances. Their assets have become Non-performing as they cease to yield
income. This affects their efficiency of operation and their profit. This study
aims to know about the causes and effects of NPA particularly in S.S.I. and
to suggest measures to overcome the level of NPA. The primary purpose of
this project is to reduce and control the NPAs in S.S.I. sector. This study will
able to help the bank for tuning the asset to performing status.
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3.3 LIMITATIONS
The study is done in the face of the following limitations:
Difficulty in procuring adequate number of loan application forms,
hence the sample size being small.
Certain information & data which cannot be accessed or published
Certain financial data has not been furnished by the units in the loan
application form
The drawbacks are faced because the study is done by respecting the
basic policy of any banking institution - maintaining secrecy and honouring
clients trust of the bank.
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SUGGESTIONS
The Asset Reconstruction Company, recommended by theNarasimham Committee, can be set up. The asset reconstruction
company would take over the bad assets from the banks at a
discount; follow up the loans and effect recovery. The banks can
concentrate on productive lending and strengthening of their
overall performance.
Debt Recovery Tribunals were setup by the Government to
facilitate speedy recovery of bank dues. The DRT are to try suits
of the value of over Rs.10 lakhs. However, so far DRT do not
appear to have made much impact on the recovery performance of
the banks. For instance, in the case of the State Bank of India, of
the 4000 pending cases in 6 DRT s in 1996, only 150 cases came
up for hearing, and actual recovery was effected only in 10 to 15
cases. The functioning of the DRT s should be made effective.
The number of DRT s should be increased adequately.
The firms have a good debt repayment track. But some units have
taken extra effort of repaying long term loans without maintaining
any reserves. The need for adequate reserves should be
explained to these units.
Although the firms are gradually reducing their selling and
administration expenses, their exist the need to bring down the
costs to more economical level. This can be done by the firms
using the facilities and infrastructure provided by various small
scale co-operatives and organizations like SIDCO etc.
The Government of India, Ministry of Finance, Ministry of Law and
the industrial heads have to sit together and device war strategies
to combat the NPA problem. The law must be sharpened and
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implementation made more easy & effective to recover the
overdues.
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CHAPTER 4
RESEARCH METHODOLOGY
4.1 RESEARCH DESIGN
The role of research in several fields of applied economics
whether related to business or to the economy as a whole, has greatly increased in
modern times. The increasingly complex nature of business and government has
focused attention on the use of the research in solving operational problems.
Research as an aid to economic policy, has gained added importance, both for
government and business. Research has its special significance in solving various
operational and planning problems of business and industry.
Research methodology involves the way the project study
was carried out. The methodology is the procedure or systematic approach to achieve
the task.
Research methodology may be understood as the science of
studying how research is done scientifically. Here the study involves various steps
that are generally adopted for approaching research problem along with the logic or
reason behind them.
Research methodology in common parlance refers to the
search for knowledge. But a statistical survey or research means the research for
knowledge through application of statistical methods.
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CHAPTER 5
DATA ANALYSIS AND INTREPRETATION
5.1 CALCULATION OF PERCENTAGE ANALYSIS
5.1) Percentage analysis for Profit Margin
Particulars No. of Respondents Percentage
Below 10% 25 71Above 10% 10 29
Total 35 100
Interpretation:
It shows 25 of 35 respondents are under Profit margin
ranging 5-10%, 10 of 29 respondents are above 10% Profit margin.
Chart No.5.1
Percentage analysis for Profit
Management
0
10
20
30
40
50
60
70
80
Below 10% Above 10%
No. of
Respondents
Percentage
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5.2) Percentage analysis for Quality Standard & Service
Particulars No. of Respondents Percentage
Excellent 15 43
Good 20 57
Better 0 0
Poor 0 0
Total 35 100
Interpretation:
It shows 15 of 35 respondents are Excellent in Quality and 20 of
35 respondents are Good.
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Chart No.5.2
Percentage analysis for Quality &
Service
0
20
40
60
Excelle
nt Good
Bette
rPo
or
No. of
Respondents
Percentage
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5.3) Percentage analysis for kind of equipments
Particulars No. of Respondents Percentage
Sophisticated 16 46
Latest 19 54
Total 35 100
Interpretation:
It shows 16 of 35 respondents have Sophisticated
equipments and 19 of 35 respondents are Latest Equipments.
Chart No.5.3
Percentage analysis for kind of
Equipment
0
10
20
30
40
50
60
Sophisticated Latest
No. ofRespondents
Percentage
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5.4) Percentage analysis for Professionalism
Particulars No. of Respondents Percentage
Expert 15 43
Trained 20 57
Adequate 0 0
Poor 0 0
Total 35 100
Interpretation:
It shows 15 of 35 respondents have Expert and 20 of 35
respondents are Trained.
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Chart No.5.4
Percentage analysis for
Professionalism
0
10
20
30
40
50
60
Expert
Trained
Adeq
uate
Poor
No. of Respondents
Percentage
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5.5) Percentage analysis for Mode of Payment
Particulars No. of Respondents Percentage
Spot Cash 0 0
Credit 35 100
Total 35 100
Interpretation:
It shows that 35 of 35 respondents allow credit.
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Chart No.5.5
Percentage analysis for Mode of
Payment
0
20
40
60
80
100
120
Spot Cash Credit
No. of Respondents
Percentage
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5.6) Percentage analysis for Credit Period
Particulars No. of Respondents Percentage
1 Month 4 11
1 Months 6 17
2 Months 15 43
3 Months & Above 10 29
Total 35 100
Interpretation:
It shows 4 of 35 respondents allow credit period of 1 month,
6 of 35 respondents within 1 Months, 15 of 35 respondents were
within 2 months and 10 of 35 respondents ensure payment period of 3
months.
Chart No.5.6
Percentage analysis for Credit Period
0
5
10
15
20
25
30
35
40
45
50
1 Month 1 1/2
Months
2 Months 3 Months
& Above
No. of Respondents
Percentage
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5.7) Percentage analysis for need of technical assistance
Particulars No. of Respondents Percentage
Yes 19 54
No 16 46
Total 35 100
Interpretation:
It shows 19 of 35 respondents need technical assistants and
16 of 35 respondents no need technical assistance.
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Chart No.5.7
Percentage analysis for need of
technical assistance
0
10
20
30
40
50
60
Yes No
No. of Respondents
Percentage
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5.8.1) Percentage analysis for Service from Other Company
Particulars No. of Respondents Percentage
Yes 24 69
No 11 31
Total 35 100
Interpretation:
It shows 24 of 35 respondents need services from other
company 11 of 35 respondents are no need services from other company
Chart No.5.8.1
5.8.2) Problem in getting service from other company
Percentage analysis for Service from
Other Company
0
10
20
30
40
50
60
70
80
Yes No
No. of Respondents
Percentage
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Particulars No. of Respondents Percentage
Unavailability 5 21
Improper delivery 10 42Price 9 37
Others 0 0
Total 35 100
Interpretation:
It shows 5 of 35 respondents were getting problem in
Unavailability from other company, 10 of 35 respondents were of
Improper delivery, 9 of 35 respondents were getting problem in price.
Chart No.5.8.2
Problem in getting service from other
company
0
5
10
15
20
25
30
35
40
45
Unavailab
ility
Improper
delivery
Price
Othe
rs
No. of Respondents
Percentage
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5.9) Percentage analysis for Marketing Communication
Particulars No. of Respondents Percentage
Sales Promotion 14 40
Advertisement 18 51
Public Relations 2 6
Direct Marketing 1 3
Total 35 100
Interpretation:
It shows 14 of 35 respondents were interested in Sales
Promotion, 18 of 35 respondents were interested in Public relation, 2 of
35 respondents were interested in Advertisement, 1 of 35 respondents
was interested in Direct Marketing.
Chart No.5.9
Percentage analysis for Marketing
Communication
0
10
20
30
40
50
60
Sale
sPromotion
Advertis
ement
Publi
cRelatio
ns
Dire
ctMarketin
g
No. of Respondents
Percentage
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5.10) Percentage analysis for Problem in Selling
Particulars No. of Respondents Percentage
Supply 14 40
Quality 21 60
Very less Margin 0 0
Total 35 100
Interpretation:
It shows 14 of 35 respondents were getting problem
regarding supply, 21 of 35 respondents were getting problem regarding
quality.
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Chart No.5.10
Percentage analysis forProblem in
Selling
0
10
20
30
40
50
60
70
Supply Quality Very less
Margin
No. of Respondents
Percentage
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5.11.1) Percentage level of satisfaction on Price
Particulars No. of Respondents Percentage
Highly Satisfied 3 9
Satisfied 32 91
Dissatisfied 0 0
Highly Dissatisfied 0 0
Total 35 100
Interpretation:
It shows 3 of 35 respondents were Highly Satisfied in the
price, 32 of 35 respondents were satisfied in the price.
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Chart No.5.11.1
Percentage level of satisfacton on
Price
0
10
20
30
40
50
60
70
80
90
100
HighlySatisfie
Satisfie
d
Dissa
tisfie
HighlyDissa
tisfie
No. of Respondents
Percentage
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5.11.2) Percentage level of satisfaction on Service
Particulars No. of Respondents Percentage
Highly Satisfied 22 63
Satisfied 13 37
Dissatisfied 0 0
Highly Dissatisfied 0 0
Total 35 100
Interpretation:
It shows 22 of 35 respondents were Highly Satisfied in
their service, 13 of 35 respondents were satisfied in their service.
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Chart No.5.11.2
Percentage level of satisfacton on
Service
0
10
20
30
40
50
60
70
Highly
Satis
fie
Satis
fied
Dissa
tisfie
d
Highly
Dissa
tisfie
No. of Respondents
Percentage
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5.11.3) Percentage level of satisfaction on Availability
Particulars No. of Respondents Percentage
Highly Satisfied 15 43
Satisfied 20 57
Dissatisfied 0 0
Highly Dissatisfied 0 0
Total 35 100
Interpretation:
It shows 15 of 35 respondents were Highly Satisfied in
availability of product, 20 of 35 respondents were satisfied in availability
of product.
Chart No.5.11.3
Percentage level of satisfacton on
Availability
0
10
20
30
40
50
60
HighlySatisfie
Satisfie
Dissa
tisfie
HighlyDissa
tis
No. of Respondents
Percentage
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5.11.4) Percentage level of satisfaction on Maintenance
Particulars No. of Respondents Percentage
Highly Satisfied 22 63
Satisfied 13 37
Dissatisfied 0 0
Highly Dissatisfied 0 0
Total 35 100
Interpretation:
It shows 22 of 35 respondents were Highly Satisfied in
maintenance, 13 of 35 respondents were satisfied in maintenance.
Chart No.5.11.4
Percentage level of satisfacton on
Maintenance
0
10
20
30
40
50
60
70
1 2 3 4
No. ofRespondents
Percentage
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5.11.5) Percentage level of satisfaction on Transport
Particulars No. of Respondents Percentage
Highly Satisfied 7 20
Satisfied 28 80
Dissatisfied 0 0
Highly Dissatisfied 0 0
Total 35 100
Interpretation:
It shows 7 of 35 respondents were Highly Satisfied in
transporting, 28 of 35 respondents were satisfied in transporting.
Chart No.5.11.5
Percentage level of satisfacton on
Transports
0
10
20
30
40
50
60
70
80
90
Highly
Satisfie
Satis
fied
Dissa
tisfie
HighlyDissa
tisfie
No. of Respondents
Percentage
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5.12.1) Percentage analysis for Line of Management
Particulars No. of Respondents Percentage
Yes 22 63
No 13 27
Total 35 100
Interpretation:
It shows 22 of 35 respondents were satisfied in Line of
Management, 13 of 35 respondents were not satisfied in Line of
Management.
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Chart No.5.12.1
Percentage analysis for Line of
Management
0
10
20
30
40
50
60
70
Yes No
No. of Respondents
Percentage
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5.12.2) Percentage analysis for Problem evolved in the concern
Particulars No. of Respondents Percentage
Lack of Discipline 7 54
Strained Labour
relation
6 46
Others 0 0
Total 35 100
Interpretation:
It shows 7 of 13 respondents has lack of discipline, 6 of 13
respondents has strained labour relation.
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Chart No.5.12.2
Percentage analysis for problem
evolved in the Concern
0
10
20
30
40
50
60
Lack of
Discipline
Strained
Labour
relation
Others
No. of Respondents
Percentage
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5.13) Percentage analysis for relationship with customer
Particulars No. of Respondents Percentage
Highly Satisfied 18 51
Satisfied 17 49
Dissatisfied 0 0
Highly Dissatisfied 0 0
Total 35 100
Interpretation:
It shows 18 of 35 respondents were highly satisfied in
cordial relationship with their customer, 17 of 35 respondents were
satisfied in cordial relationship with their customer.
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Chart No.5.13
Percentage analysis for relationship
with customer
0
10
20
30
40
50
60
Highly
Satisfie
Satis
fied
Dissa
tisfie
Highly
Dissa
tisfie
No. of Respondents
Percentage
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5.14) Percentage analysis for Factors that affect the growth of the
business
Particulars No. of Respondents Percentage
Product Obsolescence 6 17
Infrastructural
bottlenecks
9 26
Change in
environment
9 26
Poor Work Culture 11 31
Total 35 100
Interpretation:
It shows 6 of 35 respondents has product obsolescence, 9 of
35 respondents has Infrastructural bottlenecks, 9 of 35 respondents has
change in environment and 11 of 35 respondents has poor work culture.
Chart No.5.14
Percentage analysis for factors that
affect the growth of the business
0
5
10
15
20
25
30
35
Product
Obsolescence
Infrastructural
bottlenecks
Changein
environment
PoorWorkCulture
No. of RespondentsPercentage
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5.15) Percentage analysis for Competition
Particulars No. of Respondents Percentage
Yes 35 100
No 0 0
Total 35 100
Interpretation:
It shows 35 of 35 respondents were threat of perception
about competition.
Chart No.5.15
5.16) Percentage analysis for Financial Stress
Percentage analysis for Competition
0
20
40
60
80
100
120
Yes No
No. of Respondents
Percentage
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Particulars No. of Respondents Percentage
Yes 26 74
No 9 26
Total 35 100
Interpretation:
It shows 26 of 35 respondents were facing financial stress,
9 of 35 respondents were not facing financial stress.
Chart No.5.16
5.17.1) Percentage analysis for Plan Schedule
Percentage analysis for Financial
Stress
0
10
20
30
40
50
60
70
80
Yes No
No. of Respondents
Percentage
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Particulars No. of Respondents Percentage
Yes 19 54
No 16 46Total 35 100
Interpretation:
It shows 19 of 35 respondents were doing their business in
plan schedule, 16 of 35 respondents were not scheduled properly.
Chart No.5.17.1
5.17.2) Percentage analysis for Task identity
Particulars No. of Respondents Percentage
Percentage analysis for Plan Schedule
0
10
20
30
40
50
60
Yes No
No. of Respondents
Percentage
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Fully 1 5
80% & above 7 37
Partially 11 58Often not possible 0 0
Total 35 100
Interpretation:
It shows 1 of 16 respondents was accomplish all their
duties fully, 7 of 16 respondents were accomplish only 80% & above, 11
of 16 respondents were partially accomplish their duties.
Chart No.5.17.2
Percentage analysis for Task identity
0
10
20
30
40
50
60
70
Fully 80% &
above
Partially Often not
possible
No. of Respondents
Percentage
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5.18) Percentage analysis for Operating Cost
Particulars No. of Respondents Percentage
Upto 50000 1 3
50000-1 lakhs 10 29
1-2 lakhs 12 34
2 lakhs & above 12 34
Total 35 100
Interpretation:
It shows 1 of 35 respondent has operating cost upto 50000,
10 of 35 respondents were their operating cost range above 50000 to 1
lakh, 12 of 35 respondents were their operating cost range above 1 lakh
to 2 lakhs, 12 of 35 respondents were their operating cost range above 2
lakhs & above.
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Chart No.5.18
Percentage analysis for Operating
Cost
0
5
10
15
20
25
30
35
40
Upto
50000
50000-1
lakh
1-2 lakh 2 lakhs
& above
No. of Respondents
Percentage
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5.19) Percentage analysis for Net Sales
Particulars No. of Respondents Percentage
Yes 13 37
No 22 63
Total 35 100
Interpretation:
It shows 13 of 35 respondents were exceeds sales over total
production, 22 of 35 respondents were not exceeds sales over total
production.
Chart No.5.19
Percentage analysis for Net Sales
0
10
20
30
40
50
60
70
Yes No
No. of Respondents
Percentage
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CROSS TABULATIONS:
Table No.5.20
Credit * Profit Margin Cross tabulation
PROFIT MARGIN TOTAL
Below
10%
Above
10%
CREDIT 1.0 Count
% within
Profit Margin
4
16.0%
0 4
11.4%
2.0 Count
% within
Profit Margin
4
16.0%
2
20.0%
6
17.1%
3.0 Count
% within
Profit Margin
11
44.0%
4
40.0%
15
42.9%
4.0 Count
% within
Profit Margin
6
24.0%
4
40.0%
10
28.6%
Total Count
% within
Profit Margin
25
100.0%
10
100.0%
35
100.0%
From the above table it is observed that 44.0% of below 10%
profit margin respondents gives credit period upto 2 months and 40.0%
of above 10% profit margin respondents gives credit period
Table No.5.21
Equipment * Profit Margin Cross tabulation
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PROFIT MARGIN TOTAL
Below
10%
Above
10%
EQUIPMENT 1.0 Count
% within
Profit Margin
13
52.0%
3
30.0%
16
45.7%
2.0 Count
% within
Profit Margin
12
48.0%
7
70.0%
19
54.3%
Total Count
% within
Profit Margin
25
100.0%
10
100.0%
35
100.0%
From the above table it is observed that 52.0% of below 10%
Profit Margin respondents says that the Company used for process are
Sophiscated Equipments and 70.0% of above 10% profit margin
respondents says that Company used for process are latest Equipments.
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Table No.5.22
Technical Assistance * Profit Margin Cross tabulation
PROFIT MARGIN TOTAL
Below
10%
Above
10%
TECH 1.0 Count
% within
Profit Margin
11
44.0%
8
80.0%
19
54.3%
2.0 Count
% within
Profit Margin
14
56.0%
2
20.0%
16
45.7%
Total Count
% within
Profit Margin
25
100.0%
10
100.0%
35
100.0%
It is identified that the above table 56.0% of below 10% Profit
Margin respondents that they need not technical assistance and 80.0% of
above 10% Profit Martin respondents that they need technical assistance.
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CHAPTER 6
6.1 FINDINGS
Most of the Companies having Profit Margin of below 10%.
By using Cross tabulation it was found that Companies using
latest equipments receives profit margin above 10%.
By Using Cross tabulation it was found that Companies need
technical assistance.
Every Company prefers only credit for mode of payment.
By using Cross tabulation it was found that credit period allowed
to customer should extended to 2 months.
Many Companies needed Technical assistance.
Many Companies need Advertisement for MarketingCommunication.
Most of the Company was over capitalized.
Most of the Company was satisfactory in the line of management.
Most of the Company was satisfied in relationship with their
customer.
Many Companies Face the Financial Stress in the business.
Many Companies do not follow the plan schedule.
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6.2 SUGGESTION
The Asset Reconstruction Company, recommended by the
Narasimham Committee, can be set up. The asset
reconstruction company would take over the bad assets from
the banks at a discount; follow up the loans and effect
recovery. The banks can concentrate on productive lending
and strengthening of their overall performance.
Debt Recovery Tribunals were setup by the Government to
facilitate speedy recovery of bank dues. The DRT are to try
suits of the value of over Rs.10 lakhs. However, so far DRT do
not appear to have made much impact on the recovery
performance of the banks. For instance, in the case of the State
Bank of India, of the 4000 pending cases in 6 DRT s in 1996,
only 150 cases came up for hearing, and actual recovery was
effected only in 10 to 15 cases. The functioning of the DRT s
should be made effective. The number of DRT s should be
increased adequately.
The firms have a good debt repayment track. But some units
have taken extra effort of repaying long term loans without
maintaining any reserves. The need for adequate reserves
should be explained to these units.
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Although the firms are gradually reducing their selling and
administration expenses, they exists the need to bring down the
costs to more economical level. This can be done by the firms
using the facilities and infrastructure provided by various small
scale co-operatives and organizations like SIDCO etc.
The Government of India, Ministry of Finance, Ministry of
Law and the industrial heads have to sit together and device
war strategies to combat the NPA problem. The law must be
sharpened and implementation made more easy & effective to
recover the overdue.
It is imperative that awareness about NPA and how it affects
the bank from recycling of fund and the problems in the case of
non-performing asset to be created among the investors.
Number of articles could be published by the bank on
management of NPA
Borrowers can be contacted personally for recovery of
unrealized interest and overdue installments.
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6.3 CONCLUSION
The bank has been able to maintain a successful, investmentprogramme in SSI units, by ensuring that their portfolio of SSI units has
a good financial management record and their ratios being above the set
standards in management. It is observed as a result of the study that
most of the firms are overcapitalized and ways for reducing these cost
and it should be suggested.
This study also contains NPAS & the ways and means to prevent
an account falling into substandard category. The acceptability of new
clients is done after proper scrutiny of their economic, industrial and
other factors as a corrective measure to improve the system.
The researcher earnestly hopes that the study will help the banks
to reduce the NPA in SSI sector in forth coming years.
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APPENDIX 1
EVOLUTION OF MANAGEMENT TECHNIQUE FOR CONTROLLING NPA
OF SSI UNITS
INTERVIEW SCHEDULE
1) Name of the Industry :
2) Name of the respondent:
3) Total experience ___________ Years
4) Turnover in Rs.________ (Roundoff to nearest value)
5) Growth ________ % p.a. (Over last 3 years)
6) What is your profit margin?a) Below 5% b) 5-10% c) Above 10%\
7) Application of quality standards at prompt service __________
a) Excellent b) Good c) Better d) Poor
8) Equipments used for process are ___________
a) Sophisticated b) Latest c) Unsophisticated
9) How do you rate the professional competence and knowledge?
a) Expert b) Trained c) Adequate d) Poor
RECEIVABLES
10) What mode will you prefer for payment?
a) Spot cash b) Credit
11) If credit, credit period you prefer?
a) 1 month b) 1 Months
c) 2 months d) 6 months & above
AVAILABILITY OF TECHNICAL ASSISTANCE
12) Do you need technical assistances?
a) Yes b) No
13) If Yes, Please mention in which area ___________
14) Are you getting services of any other Company?
a) Yes b) No
15) If Yes, problem in getting service from other Company?
a) Unavailability b) Improper delivery
c) Price d) Others
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MARKETING
16) What kind of marketing communication do you believe?
a) Sales Promotion b) Public relation
c) Advertisement d) Others
17) What are the problems in selling?
a) Problem regarding supply b) Problem regarding quality
c) Very less margin
18) Please choose your satisfaction with your industry in following factors
Factors Highly
Satisfied
Satisfied Dissatisfied Highly dissatisfied
Price
Service
Availability
Maintenance
Transport
LINE OF MANAGEMENT
19) Are the line of management in your concern is satisfactory?
a) Yes b) No
20) If No, what kind of problem evolved in your concern?
a) Lack of discipline b) Strained labour relation
c) Others
21) Whether the cordial relationship with your customer is
a) Highly satisfactory b) Satisfactory
c) Dissatisfactory d) Highly dissatisfied
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GROWTH OF BUSINESS
22) The factors that affect the growth of your business
a) Product obsolescence b) Infrastructural bottlenecks
c) Change in environment d) Poor work culture
23) Whether there is threat of perception about competition?
a) Yes b) No
24) Is there any financial stress that you face currently?
a) Yes b) No
25) If Yes, Please mention the reason for lack of financial autonomy
TASK IDENTITY
26) Do you go by Plan Schedule?
a) Yes b) No
27) If Yes, do you accomplish all your duties
a) Fully b) 80% & above
c) Partially d) Often not possible
28) Operating Cost
a) Upto 50,000 b) 50,000- 1 Lakh
c) 1- 2 Lakhs d) 2 Lakhs & above
29) Is the net sale of your concern exceeds Total Production?
a) Yes b) No
30) Mention any shortcomings observed or encountered in your concern?
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BIBLIOGRAPHY
REPORTS
RBI BULLETINS 2002, 2003,2004
ANNUAL REPORT OF UCO BANK
WEBSITES
www.ucobank.com
www.ssiunits.com
www.rbiindia.org
www.ucoindia.com
BOOKS
C.R.KOTHARI (2002) Second edition Research Methodology methods
techniques
http://www.ucobank.com/http://www.ssiunits.com/http://www.rbiindia.org/http://www.ucoindia.com/http://www.ucobank.com/http://www.ssiunits.com/http://www.rbiindia.org/http://www.ucoindia.com/