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Chapter 7

Survey Of Branch Managers

7.0 Introduction

As stated in Chapter 4, the study aims at examining various issues

associated with bank credit and offer suggestions. Accordingly, it was decided

to launch a survey of branch managers to understand perceptions on

various aspects concerning bank credit to the SSI sector. This understanding

would enable the researcher to fill up gap between the expectations of the

SSI borrowers and the bank level preparedness. In this chapter, it is

attempted to discuss findings of the survey. These refer to profile of

branches, profile of branch managers, assistance rendered in project

formulation, filling up of the loan application form for the borrowers, pre-

sanction inspection, time taken for loan sanction, documentation and

disbursement, project implementation, loan recovery, submission of

statements by the borrowers, renewal of limits, industrial sickness, role of

developmental agencies, bank services and other suggestions by the branch

managers. Perceptions of the branch managers in these regards are

discussed as under :

7.1 Survey of Branch Managers

7.1.1 Profile of Branches

In all, 70 branch managers responded to the structured

questionnaire(Appendix). Sixty four of them are from public sector

banks and remaining ones (6) are from a private sector bank. These

are mostly located in major cities like Mumbai, Cuttcuk, New Delhi,

Pune, Mohali, Jammu, Durgapur, Vijayawada, Sivakasi , Satara,

Coimbatore, Mangalore, Kolkata , Dharmatolla , Banglore , Tirupur ,

Belguam , Hyderabad , Hubli, Lucknow , Ludhiana , Noida

Ahmedabad, Hassan and Madhavnagar . Most of them are quite old

i.e. 46 of the total were established before 1990. Size wise, these are

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smaller branches i.e. the total business (deposits and advances)

ranges from Rs. 1 crore to Rs. 5 crores. Most of them are headed by

officers in scale I to III (Tables 1 and 2).

7.1.2 Profile of Branch Managers

Most of the branch managers are in the middle age with operational

experience of 20 years or so. But almost all of them are graduates.

Many of them are even post-graduates with professional qualifications

such as CAIIB, MBA, etc. Their track record seems to be very good

since some of them have come up in their career to reach the level of

scale V. One of the branches is specialized in SSI also. Many of them

are in the present branch for the last two years or so and 23 branches

have a technical officer for appraisal of hi-tech projects (Table 3).

7.1.3 Project Formulation

It is expected that entrepreneurs should consult branch managers at

the time of project formulation. But 23 out of 70 branch managers

informed that, they were not involved in such consultations. (Table 4).

Quite likely, they are not aware of this sort of help being available at

free cost. Whenever they were consulted, the items covered in

consultation include contents of project proposal, details of credit

schemes, preparation of projected statements and others. Those who

did not seek banker’s help, formulated project proposal on their own or

took the required assistance of the local consultants.

7.1.4 Filling up of Loan Application Form for Borrowers

Thirty branch managers indicated that the entrepreneurs filled up loan

application form on their own. Out of remaining, 16 branch managers

were consulted (Table 5).

7.1.5 Counseling Services to Borrowers

According to 36 branch managers, entrepreneurs are aware of the

government schemes, which are specially designed for the SSI sector

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in general and units located in backward areas, women entrepreneurs,

etc. Of the remaining, 9 branch managers are not aware of such

schemes. These branch managers also indicated that they lack in

providing the required guidance for want of details of government

schemes (Table 7).

7.1.6 Pre-sanction Inspection

It is happy to hear from most of the branch managers i.e. 40 out of 70,

that pre-sanction inspection was regularly held and borrowers also

extended co-operation during such inspection (Table 8). Very few i.e.

3 of them did not conduct such inspection. But the quality of inspection

is equally important in order to avoid chances of providing loans to

willful defaulters.

7.1.7 Loan Sanction

Forty six out of 70 branch managers take more than one month to

sanction. Hardly 14 branch managers require less than a month to

offer the sanction. Hence most of the managers (46) receive regular

complaints from the entrepreneurs. Delayed sanctions force the

entrepreneurs to operate at lower capacity or to borrow first from the

money lenders for the timely delivery of the goods to customers and

repay the loan from the same once the bank releases the sanctioned

amount.

7.1.8 Documentation and Disbursement

According to 50 branch managers, there are no difficulties in executing

loan documents. But there is a felt need to reduce the number of

documents. Execution of documents should be done in one sitting

only (Table 10). These observations also hold good in respect of

disbursement (Table 11). Inspection of the factory should be

conducted immediately after the disbursement of loan to ensure the

end-use of bank loans. In respect of construction of building, funds are

expected to be released as per the progress report is submitted.

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Generally speaking, branch managers do not experience any problem

in this regard.

7.1.9 Project Implementation

Delays in project implementation are commonly observed by the

branch managers due to several reasons which include non-availability

of power, delayed supply of machines, non-availability of raw-materials

and non-availability of skilled labor, lack of working capital, etc. (Table

12) The borrowers extend co-operation in conducting factory

inspection and holding regular meetings till the project is implemented.

It is disheartening to note that consultants who are involved in project

formulation are not engaged in project implementation. Consequently,

there has been a project over-run.

7.1.10 Loan Recovery

According to 26 out of 70 branch managers, the loan repayment has

not been regular. They indicated several reasons for loan default

which include effect of slow-down in the economy, non-availability of

raw-materials, lack of funds, machinery repairs, poor marketing,

power-cut, unfavorable Government. policies, diversion of funds, delay

in the realization of the receivables etc. (Table 13).

7.1.11 Submission of Statements by the Borrowers

Sixteen out of 70 managers pointed out that they do not receive stock

statements regularly from the borrowers. Similarly, delays are also

observed in receiving balance-sheet. This, in turn, affects credit

decisions (Table 14). With the computerization of book-keeping, there

should not be any difficulty for the borrower to submit the required

statements to the banks on timely basis. It calls for proper counseling.

7.1.12 Renewal of Limits

According to 30 out of 70 branch managers, the papers required for

renewal of cash credit limits are not submitted on timely basis. On

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further enquiry, it was understood that such delays arise due to their

failure to write the books of accounts regularly, non-availability of the

auditor as soon as books are closed and lack of understanding of the

requirements of the banks for renewal of credit limits (Table 15).

7.1.13 Industrial Sickness

Twenty out of 70 branch managers have sick units in their loan

portfolio. The main reasons for the units becoming sick include

managerial deficiencies, delayed payments from customers, slow-

down in the economy, power-cut, delayed bank sanctions, non-

availability of raw materials, adverse impact of the changes in the

government policy, stiff competition, poor marketing, natural calamities,

etc. (Table 16).

According to the branch managers, once the units become sick, it is

difficult to get the required information from them. Many of the units

take the help of the consultants, friends and relatives and co-

entrepreneurs, etc. for preparing rehabilitation proposal. Bank

managers are mostly consulted in this regard. But, the experience of

branch managers in rehabilitation of sick units has not been

satisfactory. More importantly, co-ordination between bank and

financial institution is very much lacking in respect of rehabilitation of

sick units. This observation holds good in normal sanctions also

(Table 17).

Further, entrepreneurs are not aware of concessions granted by the

government to sick units (Table 18). Normally, the period considered

for sanctioning the rehabilitation proposal is longer. The period

exceeds three months. To cut down such period, it is suggested to

rationalize systems and procedures besides using computers for

project appraisal (Table 19).

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Delays are also experienced in implementation of the rehabilitation

plan. This is mainly due to lack of co-operation from the borrowers. In

particular, borrowers do not come forth in depositing their contribution

as specified in the rehabilitation plan. (Table 20).

In general, the success rate in rehabilitation of sick units is very low

due to poor marketing, shortage of funds, lack of co-ordination

between bank and state finance corporation, lack of co-operation from

the government in releasing concessions, project over-run and lack of

seriousness on the part of entrepreneurs (Tables 21 & 22).

7.1.14 Role of Development Agencies

Nearly half of the branch managers assist the SSI units to get

assistance from the development agencies. According to 14 of the

branch managers, SIDBI needs to strengthen its efforts in promoting

and developing the SSI sector. Most of the branch managers i.e. 35

out of 70, are not involved in organizing / participating in Entrepreneur

Development Programme (EDP). In their view, EDP has not helped

much in promoting a new cadre of entrepreneurs because the

entrepreneurs are not serious in taking up the ventures (Table 23).

Forty four branch managers are ready to counsel the borrowers on

various matters of business development. These include preparation

of project proposal, filling up of loan application form, arranging to get

clearance certificate, formation of partnership firm, marketing of

products, etc. (Table 24).

7.1.15 Bank Services

15 out of 70 branch managers organize a ‘Borrowers’ Meet’ every

year. But the overall response to such Meet is not encouraging. But it

is a good opportunity to explain various schemes of the banks therein.

In addition, the common concerns of the borrowers can be taken up for

the discussion (Table 25). In order to provide better services to the

customers, it is essential for branches to obtain the required support

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from their regional office. Such support should be in the form of

constant encouragement for the good work done by the branches,

timely disposal of papers submitted by the branches, guidance to the

branches on recent guidelines of the RBI and the government,

recovery from Non Performing Assets( NPAs), self participation in the

‘Borrowers’ Meet’, and consulting the branch managers before

rejecting any credit proposal (Table 26).

7.1.16 Other Suggestions

There are many suggestions offered by the branch managers. To

mention a few of them, the staff must be well trained and acquire the

required skills in credit appraisal. Efforts should be made to

computerize every branch to offer better quality services. Valued

customers should be given the VIP treatment. Bank procedures

should be simplified to offer quick sanctions. If possible, the branches

should be ready to offer services at the doorstep of the customers.

Branch managers should help the entrepreneurs in marketing their

products. There should be maximum limit for cash-withdrawals.

Entrepreneurs should deposit sale proceeds in the bank account

immediately. District Industries Centers (DICs) should set up a Data

Bank to guide both branch managers and entrepreneurs.

Entrepreneurs should co-operate with the banks in complying with all

the data / information requirements for availing of credit sanctions.

Lastly, every branch manager should aim at maintaining positive

attitude towards the SSI sector. More importantly, the units located in

backward areas and in rural centers should be considered

sympathetically (Table 27).

7.1.17 Inferences

The main cause of concern is inadequacy of credit. According to

nearly half of the branch managers, there is under assessment of

credit. Further enquiry suggests that there has been under assessment

of credit because, branch managers lack in proper understanding of

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business activities of the borrower. Consequently, SSI units borrow

from the money lenders at higher cost or forced to reduce the scale of

business. So, inadequacy of loan amount is more important which

needs a special attention. Even minimum sanction of 20 per cent of

the projected turnover as per the Nayak Committee norm is not

assured.

Reasons for under-assessment of credit were stated by the branch

managers. According to them, there is a lack of transparency on the

part of entrepreneurs in books of accounts. The projected figures are

not far from reality. Hence, they adopt a conservative approach in

assessment of credit. Further, credit risk arising from potential loan

default, is found to be on the higher side by going through the trends in

non performing assets. This calls for education and training so that

they would be able to give the age old conservative approach and also

to fill up skill gaps for assessment of credit on professional basis. Thus,

the survey findings are in line with the study objective. At this juncture,

it is also necessary to seek the perceptions on the entrepreneurs on

the assessment of credit.

7.1.18 Conclusion

From the above discussion, it is possible to develop some

understanding of perceptions of branch managers regarding their

services to SSI borrowers. These are based on their regular

interactions with the borrowers and the experiences gained over the

years. Though it is difficult to verify their perceptions in precise terms,

the outcome of the survey is fairly convincing. This is evident from the

reports of the committees set up by the Reserve Bank of India, which

do discuss the problems as mentioned above. The same are also

mentioned in seminars / conferences organized by Small Industry

Associations. This could be seen from the news paper reports. In the

recent Union Budget 2006-2007, the Finance Minister has shown his

concerns over inadequate credit sanctions to SSI units. Having agreed

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to the views and suggestions of branch managers regarding bank

credit to SSI units, it is appropriate at this juncture to hold interactions

with the Chiefs of SSI department in banks and financial institutions. In

doing so, it is possible to confirm findings of the survey of branch

managers besides collecting additional information relating to bank

policies, systems and procedures with a view to step up credit flow to

the SSI sector. But rehabilitation of sick units also needs a fresh look.

All these expectations call for changes in policies, schemes, systems

and procedures and organizational aspects of credit functions of the

banks. Towards this end, a need is felt to suggest improvement in

credit appraisal, credit monitoring, annual review of borrowal accounts

and loan recovery. All these aspects are analyzed subsequently. To

start with, rehabilitation of sick units is discussed in the next chapter.

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Appendix II

SURVEY OF BRANCH MANAGERS Table 1 : Profile of Branch

Table 2 : Profile of Branch Managers

Bank : Public Sector Bank [ 64 ] Private Sector Bank [ 5 ] NR [ 1 ] Branch (Location) : Mumbai [ 24 ], Chennai [12 ], Cuttack [ 2 ],

Mallapur-Kerala [ 2 ], Mohali-Punjab [ 2 ], New Delhi [ 12 ], Pune [ 4 }, Jammu [ 4 ], Durgapur [2 ], Vijaywada [ 4 ], Sivakasi [ 2 ], Satara [ 2 ],Coimbatore [ 6 ], Mangalore [ 12 ], Kolkata [4 ], Dharmatolla [ 2 ], B’lore [14], Tirupur [ 4 ], Belguam [ 2 ], H’bad [4 ], Hubli [ 4 ], Lucknow [ 2 ], Ludhiana [ 2 ], Noida [ 2 ], Ahmedabad [ 2 ], Hassan [ 2 ], Madhavnagar [ 2 ] , NR [ 4 ]

Year of Establishment : Before 1990 [ 11 ]

1991 – 2000 [ 2 ]

2001 – 2002 [ - ]

Age : Up to 35 years [ 20 ] 35 - 50 years [ 39 ] Above 50 years [ 10 ] NR [ 1 ] Educational & Professional Qualifications : Up to Graduation [ 2 ] Graduation [ 36 ] Post Graduation [ 32 ]

Date of joining the present Branch : up to 1 year [ 16 ] 1 – 2 years [ 17 ] 2 – 3 years [ 19 ] Above 3 years [ 13 ] NR [ 5 ] Present Scale : Scale I [ 33 ] Scale II [ 17 ] Scale III [ 13 ] Scale IV, V [ 4 ] NR [ 3 ] Business (Deposit + Advances) : Up to Rs 1 Crore [ 3 ] (Rs in Lakhs) Rs 1 – 2 Crores [ 7 ] Rs 2 – 3 Crores [ 13 ] Rs 3 – 5 Crores [ 5 ] Above Rs 5 Crores [ 11 ] NR [ 31 ]

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Table 3 : Availability of Technical Assistance

Table 4 : Project Formulation

NR = No Response / Not Applicable

Does your branch have technical officer / credit officer ? Yes (23 ) No (37 ) NR (10 ) Total ( 70 ) If yes, have they been trained in SSI advances?

Yes (16 ) No ( 7 ) NR ( - ) Total ( 23 )

Do the entrepreneurs consult you before formulating a project proposal ? Yes ( 23 ) No ( 23 ) NR ( 24 ) Total ( 70 )

If yes, do they expect any help from you ? Yes ( 20 ) No ( 2 ) NR ( 1 ) Total ( 23 ) If yes, what type of help is sought from you ? a) Items to be covered in project proposal ( 16 ) b) Bank schemes ( 19 ) c) Preparation of projected cash flow statement ( 6 ) d) Others ( 6 ) While offering help to entrepreneurs in formulating the project proposed, do you experience any problems? Yes ( 14 ) No ( 9 ) NR ( - ) Total ( 23 )

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Table 5 : Availability of Consultants

Table 6 : Loan Application Form

Table 7 : Counseling

If answer to the question above is negative, do the entrepreneurs prepare a project report on their own (or take help of consultants)?

Yes ( 14 ) No ( 9 ) NR ( - ) Total ( 23 ) If no, are the consultants local ? Yes ( 9 ) No ( - ) NR ( - ) Total ( 9 )

Do the applicants fill-up an application form on their own?

Yes ( 30 ) No ( 16 ) NR ( 24 ) Total ( 70 ) If no, do they take your help?

Yes ( 14 ) No ( 2 ) NR ( - ) Total ( 16 )

Are the entrepreneurs aware of Government Schemes towards margin money, subsidy etc ? Yes ( 36 ) No ( 9 ) NR ( 25 ) Total ( 70 ) If no, do you counsel them on these aspects ? Yes ( 5 ) No ( 4 ) NR ( - ) Total ( 9 )

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Table 8 : Pre-sanction Inspection

Table 9 : Loan Sanction

Table 9 : Loan Sanction

Table 10 : Documentation

Do you hold an interview with the entrepreneurs and conduct pre-sanction inspection?

Yes ( 40 ) No ( 3 ) NR ( 27) Total ( 70 ) Do you get co-operation from the entrepreneurs in conducting the interview and pre-sanction inspection?

Yes ( 40 ) No ( - ) NR ( - ) Total ( 40 )

Do you receive co-operation from entrepreneurs in executing loan documents ? Yes ( 50 ) No ( 5 ) NR ( 15 ) Total ( 70 )

Are there delays in the executing loan documents ? Yes ( 11 ) No ( 41 ) NR ( 18 ) Total ( 70 ) Would you like to offer suggestions on documents presently executed for loans to SSI ? Simplified documents ( 15 ) In one sitting ( 5 ) *Any others ( 3 )

NR ( 47 ) Total ( 70 ) *(Single set of documents)

How much time you normally take from the date of application for sanctioning credit facility to the entrepreneurs seeking assistance for the first time from you? 1-15 days ( 5 ) 16-30 days ( 9 ) 30-45 days ( 43 ) Above 45 days ( 3 ) NR ( 10 ) Total ( 70 ) Do you receive complaints from the entrepreneurs in regard to time taken in credit sanction ? Yes ( 46 ) No ( 13) NR ( 11 ) Total ( 70 )

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Table 11 : Disbursement

Do you experience problems in disbursing the sanctioned loan amount? Yes ( 24 ) No ( 37 ) NR ( 9 ) Total ( 70 ) If yes, please state your problems In only one disbursement ( 3 )

Installments well suited to us ( 4 )

Early disbursement ( 6 )

Promoters’ contribution in installment ( 2 )

Bills / Progress Rep. not available ( 1 )

License / Permissions not there ( 1 )

Margin / Agreements etc. not produced ( 1 )

Any others, ( 5 )

NR ( 1 )

Total ( 24)

Do you carry out Factory Inspection immediately after disbursement ?

Yes ( 45 ) No ( 10 ) NR ( 15 ) Total ( 70 ) For disbursement of loan in respect of construction of building, do you receive a Progress Report ? Yes ( 42 ) No ( 12 ) NR ( 16 ) Total ( 70 )

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Table 12 : Project Implementation

Are there delays in implementation of project sanctioned by you ? Yes ( 15 ) No ( 19 ) NR ( 36 ) Total ( 70 ) If yes, in how many cases as on this date ? 1 or 2 Cases ( 9 ) NR ( 6 ) Total ( 15 ) What may be the possible reasons for delayed implementation of the project ? Non-availability of power ( 4 )

Machinery supply delayed ( 3 )

Non-availability of material ( 3 )

Non-availability of skilled labor ( 6 )

Non-availability of working capital ( 6 )

Poor projection ( 1 )

Any others ( 14 )

Does the borrower extend co-operation in conducting Factory Inspection and holding regular meeting till the project is implemented ? Yes ( 44 ) No ( 3 ) NR ( 23 ) Total ( 70 ) Do the borrowers involve a consultant in implementation of the project? Yes ( 4 ) No ( 7 ) NR ( 2 ) Total ( 13 )

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Table 13 : Loan Recovery

Table 14 : Submission of Statements from Borrowers

What is your experience with regard to recovery of loans sanctioned to SSI Units? Timely repayment ( 9 ) Repayment with delays ( 7 ) Loan default ( 4 ) Satisfactory ( 17 ) What may be the reasons for low recovery of loans ? Slow down in economy ( 5 ) Machinery break-down ( 2 )

Non-availability of raw Material ( 2 ) Poor marketing ( 7 )

Lack of funds ( 6 ) Any others (Power cut, etc.) ( 4 )

Low NPAs ( 2 ) Follow up not proper ( 1 )

Govt. Policies ( 4 ) Delay in realization of receivables ( 3 )

Diversification of funds ( 3 ) NR ( 31 )

If the poor performance of the entrepreneurs is responsible for low recovery of dues, what may be the reasons for the same (poor performance) ? Recession in economy ( 5 ) Lack of interest of entrepreneurs ( 8 )

Lack of raw materials ( 1 ) Any others (poor quality etc.) ( 6 )

Power cut ( 2 ) Machinery break-down ( 1 )

Saturation ( 1 ) Lack of recovery team ( 1 )

High competition ( 4 ) Diversification of funds ( 1 )

Poor management ( 2 ) Change in mkt. environment ( 4 )

Low demand for product ( 1 ) NR ( 36 )

Do you receive stock statements regularly from the entrepreneurs ? Yes ( 45 ) No ( 10 ) NR ( 15 ) Total ( 70 )

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Table 14 : Submission of Statements from Borrowers

Table 15 : Renewal of Limits

Do you receive co-operation from borrowers for stock inspection ? Yes ( 51 ) No ( 4 ) NR ( 15 ) Total ( 70 ) Do you get financial statements regularly from borrowers ? Yes ( 44 ) No ( 19 ) NR ( 7 ) Total ( 70 ) If yes, are there any delays ? Yes ( 25 ) No ( 19) NR ( - ) Total ( 44 )

Do you receive papers relating to renewal of limits on timely basis ? Yes ( 23 ) No ( 30 ) NR ( 17 ) Total ( 70 ) If no, what may be the reasons? Books are not balanced ( 17 )

Non-availability of auditor ( 10 )

Lack of computerization of accounting ( - )

No idea on renewal of papers ( 2 )

Any others ( 1 )

Total ( 30 )

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Table 16 : Causes of Sickness

Do you have sick SSI units? Yes ( 20 ) No ( 37 ) NR ( 13 ) Total ( 70 ) What may be the main causes of sickness? Slow down in the economy ( 10 )

Delayed payments from customers ( 11 )

Managerial deficiencies ( 17 )

Power cut ( 5 )

Delayed bank sanctions ( 3 )

Others* ( 9 )

* Supply of raw materials from other states of the country, due to change in

Government policy, stiff competition and poor quality products, closure of

business due to poor marketing, inadequate bank finance, improper

utilization of funds, etc.

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Table 17 : Project Viability of Sick Units

Table 18 : Concessions to Sick Units

In how many cases, viability studies have been conducted? ( 9 ) How many of them are found to be viable? ( 6 ) Do you receive required information and co-operation from borrowers for conducting the viability study? Yes ( 11 ) No ( 5 ) NR ( 4 ) Total ( 20 ) Do the entrepreneurs prepare their proposal for seeking finance for

rehabilitation on their own? Yes ( 9 ) No ( 11 ) NR ( - ) Total ( 20 ) If no, who assists them? Consultant / Auditor ( 8 ) NR ( 2 )

Friends and relatives ( 1 ) Total ( 11 )

Do the entrepreneurs seek your assistance in preparing such proposal? Yes ( 10 ) No ( 5 ) NR ( 5 ) Total ( 20 ) If yes, what is your experience?

Satisfactory ( 5 ) Not Satisfactory ( 2 )

NR ( 3 ) Total ( 10 )

Are the entrepreneurs aware of concessions granted to sick units ? Yes ( 14 ) No ( 4 ) NR ( 2 ) Total ( 20 )

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Table 19 : Time taken for Preparation of Rehabilitation Scheme

Table 20 : Implementation of Rehabilitation Scheme

How much time is presently taken by the bank in preparing the rehabilitation scheme? Upto 1 month ( 2 ) 1-3 months ( 1 )

Above 3 months ( 6 ) NR ( 11 ) Total ( 20 )

Do you find the time presently taken is reasonable? Yes ( 4 ) No ( 5 ) NR ( 11 ) Total ( 20 ) If no, what are your suggestions ? Rationalize systems , procedures ( 3 ) Any others ( - )

Seek help of consultant ( 2 ) NR ( - )

Use Computers ( - ) Total ( 5 )

How much time is presently taken for implementing the scheme ? Upto 1 month ( 2 ) 1-3 months ( 3 )

Above 3 months ( 1 ) NR ( 1 ) Total ( 7 )

Do you experience delays in implementation of scheme? Yes ( 5 ) No ( 4 ) NR ( - ) Total ( 9 ) If yes, would you like to offer suggestions for avoiding such delays?

Yes* ( 2 ) No ( 1 ) NR ( 2 ) Total ( 5 )

Do you receive co-operation from the borrowers in implementing the scheme particularly in regard to the promoter’s contribution ? Yes ( 6 ) No ( 8 ) NR ( 2 ) Total ( 16 ) *Borrower should create confidence in the banker about his capability & commitment, stipulation of friendly terms

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Table 21 : Co-operation from Sick Units

Table 22 : Reasons for Unsuccessful Rehabilitation

Do you receive co-operation from sick units? Yes ( 11 ) No ( 8 ) NR ( 1 ) Total ( 20 )

Are the consultants involved in implementing the scheme? Yes ( 7 ) No ( 6 ) NR ( 7 ) Total ( 20 )

In how many cases, revival exercise is successful? One ( 1 ) All ( 1 ) NR ( - ) Total ( 2 )

If success in rehabilitation of SSI Units is not encouraging, what may be the reasons: Slow down in the economy, poor marketing ( 8 )

Liquidity problems ( 11 )

Lack of co-ordination between bank and SFC ( 6 )

Lack of involvement of Government ( 6 )

Project over-run ( 4 )

Lack of seriousness on the part of entrepreneurs ( 10 )

Others ( Management disputes ) ( 4 )

Would you like to offer suggestions for effective rehabilitation of sick units? Yes ( 3 ) No ( 10 ) NR ( 7 ) Total ( 20 ) If Yes, give suggestions

The rehabilitation proposal must be based on ground realities and adequate resources are available with the promoter

We should take up genuine sick units for rehabilitation, otherwise sickness will be spread

More seriousness on the part of the promoters

Concessions from the government should be made available on timely basis

If the borrower is really willing to repay the loan and the prospects to rehabilitate the unit are bright, the process should be completed at the earliest

The causes of sickness to be studied and if it is due to inadequate finance, need based finance to be extended on softer terms and funding of interest etc.

Comprehensive techno economic study before effecting / implementing the scheme.

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Table 23 : Role of Developmental Agencies

Table 24 : Non-financial Help

Do you provide any help to SSI units to get assistance from state level developmental organizations ? Yes ( 19 ) No ( 18 ) NR ( 33 ) Total ( 70 ) How do you visualize the role of SIDBI? Effective ( 18 ) Ineffective ( 14 )

NR ( 38 ) Total ( 70 )

Have you been involved in organizing/participating in Entrepreneur Development Programme (EDP)? Yes ( 4 ) No ( 35 ) NR ( 31 ) Total ( 70 )

If yes, what has been your experience ? Satisfactory ( 2 ) Unsatisfactory* ( 2 ) NR ( - ) Total ( 4 )

* 1. The trained entrepreneurs are not taking up ventures seriously. 2. One of the branches of a bank in New Delhi, conducted EDP for ladies

recently. The response was very good. There were 30 participants and two have subsequently taken loans from the branch of Rs 2 lakh each.

3. Very few possess risk bearing capabilities.

If small entrepreneurs want non-financial help in the form of counseling services, would you like to offer them?

Yes ( 44 ) No ( 8 ) NR ( 18 ) Total ( 70 ) If yes, what could be such non-financial services? Preparation of project proposal on the basis of ( 31 ) entrepreneur’s information Filling-up of loan application form ( 30 ) Obtaining clearance certificates ( 4 ) Awareness of government schemes ( 5 )

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Table 25 : Quality of Bank Services

Table 26 : Support from Regional Office

Table 26 : Support from Regional Office

What kind of support you expect from your regional office ? Moral support ( 5 )

Timely disposal of papers ( 31 )

To know about the latest policies of the Government ( 24 )

Recovery from NPAs ( 22 )

Participation in Borrowers’ meet ( 22 )

Others* ( 6 )

* Interaction with the branch officers before rejecting proposals, to provide adequate staff in credit dept & for recovery of NPAs. Bankers should be trained properly, etc.

Have you organized “Borrowers’ Meet” to discuss their problems? Yes ( 15 ) No ( 42 ) NR ( 13 ) Total ( 70) If yes, what has been your experience ? Satisfactory* ( 15 ) Unsatisfactory ( - )

NR ( - ) Total ( 15 )

*Most of the borrowers are not aware of various schemes. In the meet, the same are discussed. Many problems of the borrowers are also discussed in the meet & in genuine cases, enhancement of Working Capital limits & additional term loans were considered. Concessions in service charges were examined.

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Table 27 : Suggestions to Improve Service Quality

Staff must be well trained and equipped

Full computerization of branches is called for

Providing VIP treatment to customers

Timely support for taking quick decision

Simplification of procedures

Serving at their door step of customers

Assistance at lower rate of interest and marketing assistance through a good branch network

Discourage cash sales / cash payment of high valued transactions. Creation of data-bank to promote information on performance of various industries

Timely decisions by the regional office on credit proposals recommended by the branch managers

Margin money should be deposited as specified

Presence of counseling officers in the Bank in the Borrower’s Meet

Professionalism : Specialists to cater to special needs of the borrower i.e. they will come to know the ins and outs of the particular borrower

Stock statements should not be demanded on monthly basis. Once in six months may be feasible

Audited Balance Sheet should not be mandatory for small borrowers

Elaborate note for credit proposal to be independently

Accountability norms to be liberalized and only fraudulent / corrupt employees to be punished. Heavy workload and accountability fear is driving away officers from opting to work in credit dept. Officers working in other depts. Are relaxed and enjoy when compared to credit officers staging day in and day out.