Class Discussion Wills and trusts Essay

What consequences might there be if a will’s custodian fails to turn the will over to the probate court after the decedent’s death? If a will’s custodian fails to turn the will over to the probate court after the decedent’s death, the court may compel the custodian to produce the will this is if requested by the potential beneficiaries of the will, and if the custodian fails to produce the will, he or she may be subject to criminal charges (Herskowitz, 2014). When would a personal representative have to institute an ancillary jurisdiction proceeding? A personal representative would have to institute an ancillary jurisdiction proceeding if the decedent owned, at the time of death, real property in a jurisdiction from the jurisdiction they lived in. This is required because other jurisdictions are not allowed to make distribution decisions about real property outside of their jurisdiction. The purpose is to transfer the title of the real property to the jurisdiction the trustor lived in to keep the estate together. (Herskowitz, 2014). What steps might have to be undertaken to find the will of a decedent? To find the will the steps the family of the deceased should take are: 1. Search the decedents’ home and office first (ie: dresser drawers, file cabinets, desk drawers, closets, the refrigerator, the freezer, books, under mattresses, and the attic) 2. Search the safety deposit box if one exists. 3. The family can also check with all family members, an attorney or family friend that may have the will. (Herskowitz, 2014). What steps are required to prove a lost will? The person contending that the original will was lost must present a copy of the will, a proof of the wills execution and validity, by either, producing witnesses who will authenticate that the copy is a true and correct copy of the will or, a â€Å"self-proving† affidavit at the end of the will to the probate court. (Herskowitz, 2014). Sources Herkowitz, S. D. (2014). Wills, Trusts, and Estates Administration, 4th ed. Upper Saddle River, NJ: Prentice Hall.

Term Paper on Idlc

Term paper on Functions oF credit risk management in non Banking Financial institutions (nBFi) in Bangladesh A study on IDLC Finance Limited Submitted to: Submitted By: Date of Submission: Letter of Transmittal_______________________ 23rd December 2013 Sh University Subject: Submission of term paper of BBA Programme Dear Madam, It is my great pleasure to submit the term paper on â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd † which is a part of BBA Programme to you for your consideration.I made sincere efforts to study related materials, documents, observe operations performed in IDLC Finance Limited and examine relevant records for preparation of the report. Within the time limit, I have tried my best to compile the pertinent information as comprehensively as possible and if you need any further information, I will be glad to assist you. Your most obident pupil, Acknowledgement _______________ _____________At first I would like to thank my honorable internship supervisor from BRAC Business School (BBS), BRAC University, SharminShabnam Rahman for providing me such an opportunity to prepare an Internship Report on â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd â€Å". Without her helpful guidance, the completion of this project was unthinkable. I would like to place my gratitude to the HR of IDLC Finance Limited to enable me to complete my internship in their esteemed organization. Very special thanks goes to Mr.M. Jamal Uddin, Deputy General Manager & Head of Corporate and Structured Finance Division, IDLC Finance Limited & Mr. AlamIftekhar Chowdhury, Manager Corporate Division, IDLC Finance Limited, for helping me in all phase of the internship process. Their overwhelming support for my internship gave me the inspiration to do a better report. During my preparation of the project work I h ave come to very supportive touch of different individuals (respondents from IDLC Finance Limited) & friends who lend their ideas, time & caring guidance to amplify the report’s contents.I want to convey my heartiest gratitude to them for their valuable responses. Executive Summary_______________________ The non-bank financial institutions (NBFIs) constitute a rapidly growing segment of the financial system in Bangladesh. The NBFIs have been contributing toward increasing both the quality and quantity of financial services and thus mitigating the lapses of existing financial intermediation to meet the growing needs of different types of investment in the country. Today all NBFIs are playing a vital role for the growth of the nation’s economy with the best of their ability.During the world recession period NBFIs in Bangladesh act in a stringent manner so that their financial systems as well as the economy do not collapse. 29 NBFIs are now contributing to the growth of n ational economy. IDLC Finance Ltd as a leading and pioneer NBFI started their operation in 1986 and still they are dominating the NBFI sector as well as contributing to the prosper of economic development. Their success in this industry has inspired others to invest their capital in a profitable way.As major business of all NBFIs are providing lease facilities to the business along with various types of loan to individual and organizations therefore risk is associated with each and every product they are offering. To minimize this risk every institution has its own risk management policies. A number of actions are taken so that risk associated to their investment can be minimized. This report is emphasizes credit risk management in NBFIs in Bangladesh. In this regard IDLC Finance Limited has been taken as the sample organization, its, services, rules and regulation, corporate governance is also taken into consideration.Table of Contents_____________________________ Letter of Transmi ttal Acknowledgement Executive Summary 1. 0 Introduction 1. 1 Introduction | | | | | 01 | 1. 2 Origin of the Report | | | | | 02 | 1. 3 Objectives of the Report | | | | | 02 | 1. 4 Methodology | | | | | 03 | 1. 5 Limitations | | | | | 04 | 1. 6 Structure of the Report 2. 0 The Company | | | | | 04 2. 1 IDLC Finance limited | | | | | 06 | 2. 2 Shareholding Structure | | | | | 07-08 | 2. 3 Company chronicle | | | | | 09-10 | 2. 4 Guidance principle | | | | | 11-12 | 2. 5 Organogram | | | | | 13-14 | 2. 6 Products & Service | | | | | 14-19 | 2. 7 Divisions & Department | | | | | 20 | 2. 8 SWOT analysis | | | | | 21-23 | 2. 9 Performance of IDLC Finance Ltd | | | | | 24-25 | 2. 9. 1 CAMEL Rating 3. 0 Credit Risk Management | | | | | 25 | 3. 1 What is Risk? | | | | 27 | 3. Credit Risk | | | | 27-28 | 3. 3 Credit Risk Management Process | | | | 29-38 | 3. 3. 1 Credit Processing/Appraisal | | | | 29-31 | 3. 3. 2 Credit Approval /Sanction | | | | 32 | 3. 3. 3 Credit Documentation | | | | 3 2 | 3. 3. 4 Credit Administration | | | | 33 | 3. 3. 5 Disbursement | | 34 | 3. 3. 6 Monitoring & Control of Individual Credit | | 34-35 | 3. 3. 7 Maintaining the overall Credit Portfolio | | 35 | 3. 3. 8 Classification of Credit | | 36-37 | 3. 3. 9 Managing Problem Credits/Recovery | | 38 | 4. 0 Findings and Analysis— Credit Risk Management by IDLC Finance Ltd. 4. Procedural Work Flow of Lease Marketing 41-44 4. 2 Factors Scrutinized during Appraisal Procedure 45-46 4. 3 Weight assigned to each Risk Factor 47-48 4. 4 Measures Taken for restoration of Default Client 49 4. 5 Functions of Special Asset Management (SAM) 49- 4. 5. 1 Recovery Action Plan by SAM | 50-52 | 4. 5. 1. 1 Regular Accounts | | | 50-51 | 4. 5. 1. 2 Special Accounts | | | 51-52 | 4. 6 Impact of Overdue on Profit Performance of NBFI | | | 52 | 4. 6. 1 Provisioning Policy of Bangladesh Bank | | | 53 | 4. 6. 2 Provisioning Policy of IDLC Finance Ltd. | | 54 | 4. 7 Trend in Provisioning Volume | | | 54 | 4. 8 D efault Client Characteristics Analysis | | | | 55- | 4. 8. 1 Industry Analysis | | | | 57-59 | 4. 8. 2 Cost of projects to sales volume | | | | 60 | 4. 8. 3 Asset size of the Borrower | | | | 61 | 4. 8. 4 Debt/Equity ratio | | | | 62 | 4. 8. 5 Interest rate charge | | | | 63 | 4. 8. 6 Sponsors Business Experience | | | | 64 | 4. 8. 7 Security Ratio | | | | 65 | 4. 8. 8 Relationship with the Client | | | | 66 | 4. 8. 9 Sponsor’s Past Performance 5. 0 Recommendation & Conclusion | | | | 66-68 | 5. 1 Recommendation | | | | 70 | 5. Conclusion | | | | 71 | 1. 1INTRODUCTION The development of financial market has been receiving heightened attention from the policy-makers in recent years. One explanation lies in the fundamental shift of development strategy reflected in the nearly universal embrace of the private sector as an engine of economic growth. The governments in both developed and developing countries, the international financial institutions which exert tremendous influenc e on the policy-making apparatus of developing countries and, to a great extent, the intelligentsia have all joined together as ardent advocates of private entrepreneurship.IDLC Finance Ltd, a leading financial institution of the country achieved significant growth in all areas of business up to 3rd quarter of the year 2009. IDLC began its operation in 1985 as the first leasing company in Bangladesh. In 1995, IDLC was licensed as a Financial Institution by the country's central bank and during the last two decades, the company has grown in tandem with the country's growing economy. The company's wide array of products and services range from retail products, such as home and ar loans, corporate and SME products including lease and term loans, structured finance services ranging from syndications to capital restructuring and capital market services. The company also strengthened its presence in the country's growing stock market with launching a subsidiary-IDLC Securities Limited-whi ch is offering full-fledged brokerage service for retail and institutional clients. . 1. 3 OBJECTIVES OF THE REPORT The main objective of the study is to get a definite idea about how CRM plays a vital role in managing the risk associated with each and every product and services of IDLC Finance Limited.Furthermore, the orientation is very useful to detect whether the theoretical knowledge matches with real life scenario or not. Though the title â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd† very lengthy area, the specific objectives are as follows: 1. To know the necessity of Credit Risk Management. 2. To learn about the whole CRM procedure. 3. To know the decision making process of CRM. 4. To know the functions of Special Asset Management part of CRM 5.To know about the probable modification can be done in the whole CRM process 6. 1. 4 METHODOLOGY OF THE STU Analysis has been made on the basi s of the objectives mentioned before in the context of â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd† The paper will be written on the basis of information collected from primary and secondary sources. (i) Primary Data; Discussion with the respective organization's officials. (ii) For the completion of the present study, secondary data has been collected.The main sources of secondary data are: * Annual Report of IDLC Finance Limited. ? Website of IDLC Finance Limited. * Data from published reports of SEC, DSE * Different Books, Journals, Periodicals, News Papers etc. To make a report various aspects and experiences are needed. But I have faced some barriers for making a complete and perfect report. These barriers or limitations, which hinder my work, are as follows: * Difficulty in accessing data of its internal operations. * Non-Availability of some preceding and latest data. * Some informati on was withheld to retain the confidentiality of the organization.I was placed for only around 3 months of time ; working like a regular employee hindered the opportunity to put the effort for the study. The time span was not sufficient enough to learn all the activities of the organization properly. Therefore, it was very difficult to carry out the whole analysis. 1. 6 STRUCTURE OF THE REPORT The report has two main parts: Part One: This is basically introductory part, the objective and scope of the study, limitations, and research methodology has been highlighted. Brief Introduction of IDLC Finance Limited, its product and service, organizational structure, performance, etc are presented.Part Two: Products of NBFIs for which Credit Risk Management has become a key operational tool, how it performs its overall risk analysis and on the basis of the analysis identification of the ways of reducing the risk, thus maintains the core interest of the business. This part also contains the conclusion, reference ; appendix of the report. 2. 0 The Company 2. 1 ILDC FINANCE LIMITED IDLC Finance Ltd commenced its journey, in 1985, as the first leasing company of the country with multinational collaboration and the lead sponsorship of the International Finance Corporation (IFC) of The World Bank Group.Technical assistance was provided by Korean Development Leasing Corporation (KDLC), the largest leasing company of the Republic of South Korea. The unique institutional shareholding structure comprising mostly of financial institutions helps the company to constantly develop through sharing of experience and professional approach at the highest policy making level. IDLC offers a diverse array of financial services and solutions to institutional and individual clients to meet their diverse and unique requirements.The product offerings include Lease Finance, Term Finance, Real Estate Finance, Short Term Finance, Corporate Finance, Merchant Banking, Term Deposit Schemes, Debentu res and Corporate Advisory Services. The company has authorized capital of Taka 1,000,000,000 (10,000,000 shares of Taka 100 each) and paid up capital of Taka 250,000,000 (2,500,000 ordinary shares of Taka 100 each). IDLC has also established two wholly owned subsidiaries, IDLC Securities Limited and I, Cons Limited to provide customers with security brokerage solutions and IT solutions, respectively. 2. SHAREHOLDING STRUCTURE IDLC was incorporated in the year 1985 as a joint venture public limited company among five foreign and three local financial institutions. Now there are no foreign investors the present Shareholding Structure of IDLC Finance Ltd is given bellow: SL. NO. | NAME OF SHAREHOLDERS | % | | Sponsors/Directors:| | 1 | The City Bank Ltd. | 29. 70 | 2 | SadharanBima Corporation | 7. 62 | 3 | IPDC of Bangladesh Ltd. | 0. 0002 | | Sub-Total | 37. 33 | | GENERAL| | 4 | Institutions : | | | Mercantile Bank Ltd. 7. 50 | | Reliance Insurance Co. Ltd. | 7. 00 | | Eskayef Bang ladesh Ltd. | 8. 00 | | BD Lamps | 1. 32 | | Transcraft Ltd. | 4. 01 | | Eastern Bank Limited | 6. 00 | | Phonix Finance | 1. 00 | | PartexBaverage| 0. 86 | | Marina Apparels | 1. 00 | | ICB | 2. 32 | | Dhaka Stock Exchange Ltd. | 0. 95 | | One Bank Ltd. | 0. 5 | | Star Particle Board | 0. 60 | | Bangladesh Finance ; Invest. | 0. 88 | | Other institutions | 6. 92 | | Sub total | 49. 21 | 5 | Individuals : | | | General Public(Individuals) | 13. 45 | | Mr. A. K. M. Shaheed Reza, Director nominated by | | | Mercantile Bank Ltd. | 0. 017 | | Sub total | 13. 47 | | Total Holdings | 100. 00 | 2. 3 COMPANY CHRONICLE May 23,1985 | Incorporation of the Company | February 22,1986 | Commencement of leasing business |October 1, 1990 | Establishment of branch in Chittagong, the main port city | March 20,1993 | Listed in Dhaka Stock Exchange | February 7, 1995 | Licensed as a Non- Banking Financial Institutions under the Financial Institutions Act, 1993 | November 25, 1996 | Listed on the Chitta gong Stock Exchange | May 27, 1997 | Commencement of Home Finance and Short Term Finance Operations | January 22, 1998 | Licensed as a Merchant Banker by the Securities and Exchange Commission | January 15, 1999 | Commencement of Corporate Finance and Merchant Banking Operation | January 29, 2004 | Opening of Gulshan Branch |November 22, 2004 | Launching of Investment Management Services â€Å"Cap Invest† | February 7, 2005 | Issuance of Securitized Zero Coupon Bonds by IDLC Securitization Trust 2005 | September 18, 2005 | Launching of Local Enterprise Investment Centre(LEIC), a centre established for the development of SMEs with the contribution of the | | Canadian International Development Agency (CIDA) of the Government of Canada | January 2, 2006 | Opening of SME focused branch at Bogra| April 6, 2006 | Opening of Branch at Uttara|May18, 2006 | Opening Merchant Banking branch in the port city if Chittagong | July 1, 2006 | Relocation of Company’s Registered and Cor porate Head Office at own premises at 57, Gulshan Avenue | September 18, 2006 | Commencement of operation of IDLC Securities Limited, a wholly owned subsidiary of IDLC | March 14, 2007 | Launching of Discretionary Portfolio Management Services â€Å"Managed Cap Invest† | August 5, 2007 | Company name changed to IDLC Finance Limited, from Industrial Development Leasing Company of Bangladesh Limited | December 3, 2007 | IDLC Securities Limited Chittagong Branch commenced operation | December 18, 2007 | IDLC Securities Limited DOHS Dhaka Branch opened. | January 6, 2009 | IDLC Finance Limited and IDLC Securities Limited open Sylhet branches | August 09, 2009 | Opening of IDLC Securities Limited, Gulshan Branch | August 26, 2009 | Opening of Gazipur SME Booth | September 09, 2009 | Opening of Imamgonj SME Booth | December 2009 | Opening of Narayangonj Branch | December 2009 | Opening of Savar Branch | 2. 4 GUIDING PRINCIPLESIDLC is a multi-product financial institution offering a n array of diverse financial services and solutions to institutional and individual clients to meet their diverse and unique requirements. Following are the guiding principles that shape the organizational practice of IDLC Customer first: IDLC has grown with its customers, who are believed to be the center of all actions. As the crux of IDLC’s corporate philosophy, customer service gets the highest priority. Innovation: IDLC has continuously introduced new financial products for meeting the needs of the entrepreneurs in a complex ; challenging business environment. The concept of innovation is in-built into the working culture.Professional Knowledge: IDLC is staffed with qualified professionals and innovative minds in the country. Years of operational experience, large industrial database and competent workforce have gives them unparalleled advantages. Professional ethics: The professional at IDLC maintain the highest degree of financial and business ethics in all transaction s with the clients. Over the last two decades, IDLC have put in bets efforts to meet the expectations of the clients and investors. One stop solution: Work at IDLC begins with the idea generation, and then goes on into the feasibility study followed by arrangement of financing to implement the project.IDLC advises the clients, finance them and even arrange financing for them via different financing modes, namely: lease financing, term loan, bridge loan, syndication, bridge loan, syndication, ordinary shares, preferred shares and debentures. Vision: Become the best performing and most innovative financial solutions provider in the country Mission: Create maximum possible value of all the stakeholders by adhering to the highest ethical standards For the Company: Relentless pursuit of customer satisfaction through delivery of top quality services For the Shareholders: Maximize shareholders’ wealth through a sustained return on the investment. For the employees: Provide job satis faction by making IDLC a center of excellence with opportunity of career development.For the society: Contribute to the well-being of the society, in general, by acting as a responsible corporate citizen. Goal: Long term maximization of Stakeholders’ value Corporate Philosophy: Discharge the functions with proper accountability for all actions and results and bind to the highest ethical standards 2. 5 ORGANOGRAM THE APEX OF THE ORGANIZATION IS THE BOARD OF DIRECTORS, WITH THE MANAGEMENT COMMITTEE AND MANAGING DIRECTOR IN THE FOLLOWING TIERS. THE BOARD CONSISTS OF THE FOLLOWING DIRECTORS: * Chairman from Reliance Insurance Ltd * Five Directors nominated by The City Bank Limited * One from SadharanBima Corporation (SBC) * One from Transcom Group One From Mercantile Bank Limited * One Independent Director from Monowar Associates ACTIVITIES OF THE BO ARD The Board appoints the Executive Committee (EC), which takes day-to-day decisions on behalf of the company. Every credit propos al has to be approved by the EC for sanction and disbursement. EC is also authorized to observe and review other major day-to-day operational functions including corporate plans, budgets and borrowing activities. The composition of the EC is as follows: a) Four Directors b) Managing Director / Chief Executive Officer and The Company Secretary shall be the Secretary of the Committee ACTIVITIES OF THE MA NAGING DIRECTORThe Managing Director (MD), appointed by Board, manages the overall organizational activities and also plays the role of the figurehead. ACTIVITIES OF THE DEPUTY MANAGING DIRECTOR The DMD establishes the company’s policies and reviews the operational performance of the company including approval of large credit proposals, major fund procurements, budget and planning and diversification decisions. Diagram: Organ gram of IDLC Finance Limited 2. 6 PRODUCTS AND SERVICES To ensure steady and long term growth as well as to sharpen its competitive edge in a changing and challenging business environment, IDLC always endeavors to diversify into other financial services which have long term prospects.In 1997, it expanded its range of services by introducing Housing Finance and Short Term Finance, which have broadened its customer base and have contributed significantly to IDLC’s growth and profitability. In early 1999, after getting license of Merchant Banking from Securities and Exchange Commission, IDLC started its operation of underwriting, issue management, corporate financing and other investment banking related services. The products and services are as follows 1. LEASING Assets are leased to clients on predetermined rental basis for a fixed term with a purchase option at the end. 2. TERM LOAN The customers are offered loan facilities for a determined term at a negotiated rate. 3. EQUITY FINANCINGIDLC invests money into equity of both publicly traded and non-traded companies for dividends and capital gain. 4. INTER CORPORATE DEPO SIT ( I CD ) This disbursement scheme is offered to clients under two variations: a) Non- Revolving ICD which consists of single disbursement of funds b) Revolving ICD where multiple disbursements and collections take place 5. WORK ORDER/ PURCHASE ORDER FINANCING The clients are financed against their work order or purchase order on a revolving basis. 6. FACTORING Under this scheme, IDLC finances receivables of supply of goods or delivery of services on credit to help the clients realize the maximum portion of their payment soon after they have made the delivery to the buyer.The payment is collected from the customers and the balanced amount is re-reimbursed to the clients. 7. SYNDICATION IDLC helps to raise fund for clients with huge financial requirement through syndication and also help them with the documentation, execution and administration of the syndicated finance. 8. SECURITIZATION IDLC sell financial instruments of organizations in local financial market backed by their asset/cash flows such as loan, lease etc. 9. BRIDGE FINANCE: This refers to short-term finance (maturity of not more than 12 months) in anticipation of immediate long term financing such as public issue, private placement, syndication, loan, lease, debenture, etc. 10. CAP INVESTIDLC maintains a non-discretionary portfolio account for clients where they have absolute power to make investment decisions. the portfolio manager provides margin loan to clients and also prepares the list of securities in which they can invest. 11. DEPOSIT SCHEMES IDLC offer different variety of deposit schemes for clients. * Cumulative Term Deposit * Annual Profit Term Deposit * Monthly Earner Deposit * Double Money Deposit 12. CAR LOAN Term loan are offered to clients for acquiring car, brand new or reconditioned, for their personal use and the ownership is transferred on loan repayment. 13. HOME LOAN IDLC offers loans to purchase apartment to individuals for their personal use 14. REAL ESTATE FINANCEIDLC finances clients to construct house, renovate and extend house, for office chamber/space for professionals etc. under two different schemes: * Developer’s Finance Scheme oCorporate Finance Scheme 15. PRIVATE PLA CEMENT IDLC places the shares/debenture with both domestic and overseas investors (institutions or individuals) on private placement basis. 16. UNDERWRITING IDLC makes a univocal and irrevocable commitment with an issuing company to subscribe to the securities of that company when the existing shareholders or the general public do not subscribe to the securities offered to them. The different types of underwriting offered are: * Initial Public offering (IPO) of common stock, preferred stock, debentures etc. Right Issue oUnderwriting of public securities-loan, lease, debenture 17. ISSUE MANAGEMENT Under this activity, IDLC plan, coordinate and control the entire issue activity of clients and direct other agencies for successful marketing of securities. 18. FINANCIAL A DVISORY S ERVICE IDLC help the existing venture or a new venture by providing various advisory services such as corporate counseling, project counseling, capital restructuring, financial engineering etc. 19. MERGERS AND ACQUISIT IO IDLC help clients to search for the right organization, evaluate the concern based on different types of analysis and select the method of m ;a to make it a profitable deal. 20. TRUSTEESHIP MANAGEME NTWe act as trustee for the debenture holders by accepting security created by the company and take action to safeguard their interest and enforce their rights. Table: Product ; Services offered by IDLC Finance Limited 2. 7 DIVISIONS AND DEPARTMENTS The organization includes divisions which mainly deal with the products and services and departments which support in the operating activities. The divisions are the * Corporate * SME * Merchant Banking * Personal Investment * Factoring * Structured Finance * Operations The departments include * Credit Risk Management (CRM) * Treasury * Human Resource * Accounts and Taxation * Administration and PR Operational Risk Management (ORM)/Internal Control Compliance(ICC) * Special Asset Management(SAM) 2. 8 SWOT ANALYSIS The SWOT analysis for IDLC can be described as follows: Strengths 1. Reputation and brand image: IDLC is well-reputed company and has developed a brand image that is recognized by the customers. IDLC is an international joint-venture company and its shareholders have long records of sustainability and reliability in their respective fields. IDLC is one of the esteemed names in financial market of Bangladesh. Since 1985, IDLC has marked its journey through introduction of various innovative products and thus meeting the needs of large corporate clients. 2 .Product portfolio: IDLC has diverse product portfolio for customers which made them second to none in Non-Banking Financial Industry. 3. Quality Customer Portfolio: IDLC has a Credit Risk Management department of Multinational standard which enables the company to maintain a quality customer portfolio. 4. Human Resources: The Company has competent management team. The over all work force of the company is considered as key resources for the organization. IDLC personnel are motivated, competent, energetic and creative. The company provides utmost support in terms of both technical and moral. 5. Operational efficiency: IDLC provides customized solution to their customers to adjust their need.The company processes the loan applications quickly and smoothly. The sanction and disbursement of the loans are hassle-free. 6. Employee Empowerment: At IDLC decision-making is free flowing and transparent. Every appraiser is given ample opportunity to exercise his/her creativity in accommodating a customer. Approvers are open for any discussion and sanction is largely based upon recommendation of the appraisers. The open and free flow of communication ensures clarification of any queries in no time–from any level of hierarch y. Reasonable suggestions are not only welcome but are highly appreciated. Effective suggestions by the employees are immediately set for action.This flexibility has helped IDLC a lot in shaping up its operations into a level of efficiency and to be an excellent performer in case of loan recovery. Weaknesses 1. High Cost of fund: IDLC as any other NBFIs have high cost of fund in comparison to banks. As NBFIs can take deposit for less than one year from any individuals as banks can do, the deposit base of IDLC is not strong enough to reduce the average cost of fund. 2. More Focus on Volume: Although IDLC has department called Credit Risk Management to monitor the asset quality of the company, still the company sometimes for the sake of profit and past relationship provide loans to customers who at the end hamper the portfolio quality of IDLC. 3.Too Much Diversification: Too much diversification of product and services offering hamper the focus on the core services of the organization . 4. Less People in Liability Marketing: IDLC still employs lesser number of workforces for the aggressive liability marketing in comparison to banks and NBFI like DBH. Opportunities 1. Continuity of Liberalization: Government has continued to liberalize the economy towards more market orientation. This encouraged both local and foreign investors to invest in potential sectors. The privatization plan of government is likely to have positive impact on industrialization. 2. Foreign Investment in Prospective Sectors: In recent days foreign investment in the various prospective sectors has increased phenomenally.This creates a good opportunity for all financial institutions to enter in the booming new sector. 3. Local banks inefficiency: One of the major reasons for thriving of leasing company in Bangladesh is local banks inefficiency of providing project loan. This phenomenon still persists. Threats 1. Threat from banks: In recent times banks are also entering into leasing business whi ch is generally considered as functions of Non-Banking Financial Institutions. 2. Regularity control of government: The legal framework of Bangladesh is relatively weak. Lack of effective foreclosure laws and manual land recording system creates possibility of forgery and disputes.This may hinder the loan recovery from the defaulters. 2. 9 PERFORMANCE OF IDLC FINANCE LIMITED 2. 9. 1 CAMEL RATING Rating type | Base | At 31. 12. 08 | Rating | 1. Capital sufficiency C | Reserve should be 25. 00 crore by the end of 30. 06. 06 | 16. 113 Crore| 1(Strong) | 2. Asset Quality A | (Classified loan/lease and other assets)/overdue amount*100 | 6089. 04/153384. 93*100=3. 97% | 2(Satisfactory) | 3. Management M | Average of C,A,E ; L ratios | (1+2+1+1)/4=1. 25 | 1(Strong) | 4. Earning Ratio E | (NPAT/TA)*100% (NPAT/TE)*100% | (4063. 72/167085. 65)*100%=2. 43% (4063. 72/16113. 12)*100%=25. 22% | 1(Strong) | 5. Liquidity Ratio L | 1. CRR ; SLR reserve 2.Interbank dependency 3. Profit | -Reserved -L ess dependent -Strong | 1(Strong) | CAMEL | Sum of 5 Ratios/5 | (1+2+1+1+1)/5=1. 20 | 1(Strong) | CAMEL rating has improved to 1 comparing to the last year 2(Satisfactory) 3. 0 Credit Risk Management 3. 1 WHAT IS RISK? In general Risk can be define as the â€Å" Probability or threat of a damage, injury, liability, loss, or other negative occurrence, caused by external or internal vulnerabilities, and which may be neutralized through pre-mediated action. † But in Finance risk is defined concerning some special factors of market and other externalities which can affect an individual or organization’s decision.In Finance risk is defined as â€Å"Probability that an actual return on an investment will be lower than the expected return. † Financial risk is divided into the following general categories: (1) Basis risk: Changes in interest rates will cause interest-bearing liabilities (deposits) to re-price at a rate higher than that of the interest-bearing assets (lo ans). (2) Capital risk: Losses from unrecovered loans will affect the financial institution's capital base and may necessitate floating of a new stock (share) issue. Therefore to reduce this risk Banks, NBFIs, and other organizations take various types of measures so that it can be reduced in a minimal affordable limit. In Banks and NBFIs the core risk is credit risk.As Banks, NBFIs performs there major operations on providing loan, lease (for NBFIs) therefore there is a chance of default at time of repayment. So to reduce this default risk so that number of default payment does not increase and to forecast this probability with appropriate tools Banks, NBFIs always work on managing their Credit Risk. Several Guideline and standards are prepared so that Credit Risk for individual banks and NBFIs can be reduced. 3. 2 CREDIT RISK Credit risk is the possibility that a borrower or counter party will fail to meet agreed obligations. Globally, more than 50% of total risk elements in banks and FIs are Credit Risk alone. Thus managing credit risk for efficient management of a FI has gradually become the most crucial task.Credit risk may take the following forms: * In direct lease/term finance: rentals/principal/and or interest amount may not be repaid * In issuance of guarantees: applicant may fail to build up fund for settling claim, if any; * In documentary credits: applicant may fail to retire import documents and many others * In factoring: the bills receivables against which payments were made, may fail to be paid * In treasury operations: the payment or series of payments due from the counter parties under the respective contracts may not be forthcoming or ceases * In securities trading businesses: funds/ securities settlement may not be effected * In cross-border exposure: the availability and free transfer of foreign currency funds may either cease or restrictions may be imposed by the sovereign Credit risk management encompasses identification, measurement, m atching mitigations, monitoring and control of the credit risk exposures to ensure hat: * The individuals who take or manage risks clearly understand it * The organization’s Risk exposure is within the limits established by Board of Risk taking Decisions are in line with the business strategy and objectives set by BOD * The expected payoffs compensate the risks taken * Risk taking decisions are explicit and clear * Sufficient capital as a buffer is available to take risk * Directors with respect to sector, group and country’s prevailing situation * Risk taking Decisions are in line with the business strategy and objectives set by BOD 3. 3 CREDIT RISK MANAGEMENT PROCESS Credit risk management process should cover the entire credit cycle starting from the origination of the credit in a financial institution’s books to the point the credit is extinguished from the books. It should provide for sound practices in: 1. Credit processing/appraisal; 2. Credit approval/sa nction; 3.Credit documentation; 4. Credit administration; 5. Disbursement; 6. Monitoring and control of individual credits; 7. Monitoring the overall credit portfolio (stress testing) 8. Credit classification; and 9. Managing problem credits/recovery 3. 3. 1 . CREDIT PORCES SING/APPRAISAL : Credit processing is the stage where all required information on credit is gathered and applications are screened. Credit application forms should be sufficiently detailed to permit gathering of all information needed for credit assessment at the outset. In this connection, NBFIs should have a checklist to ensure that all required information is, in fact, collected.NBFIs should set out pre-qualification screening criteria, which would act as a guide for their officers to determine the types of credit that are acceptable. For instance, the criteria may include rejecting applications from blacklisted customers. These criteria would help institutions avoid processing and screening applications that would be later rejected. Moreover, all credits should be for legitimate purposes and adequate processes should be established to ensure that financial institutions are not used for fraudulent activities or activities that are prohibited by law or are of such nature that if permitted would contravene the provisions of law. Institutions must not expose themselves to reputational risk associated with granting credit to customers of questionable repute and integrity.The next stage to credit screening is credit appraisal where the financial institution assesses the customer’s ability to meet his obligations. Institutions should establish well designed credit appraisal criteria to ensure that facilities are granted only to creditworthy customers who can make repayments from reasonably determinable sources of cash flow on a timely basis. Financial institutions usually require collateral or guarantees in support of a credit in order to mitigate risk. It must be recognized that collat eral and guarantees are merely instruments of risk mitigation. They are, by no means, substitutes for a customer’s ability to generate sufficient cash flows to honor his contractual repayment obligations.Collateral and guarantees cannot obviate or minimize the need for a comprehensive assessment of the customer’s ability to observe repayment schedule nor should they be allowed to compensate for insufficient information from the customer. Care should be taken that working capital financing is not based entirely on the existence of collateral or guarantees. Such financing must be supported by a proper analysis of projected levels of sales and cost of sales, prudential working capital ratio, past experience of working capital financing, and contributions to such capital by the borrower itself. Financial institutions must have a policy for valuing collateral, taking into account the requirements of the Bangladesh Bank guidelinesdealing with the matter. Such a policy shall, mong other things, provide for acceptability of various forms of collateral, their periodic valuation, process for ensuring their continuing legal enforceability and realization value. In the case of loan syndication, a participating financial institution should have a policy to ensure that it does not place undue reliance on the credit risk analysis carried out by the lead underwriter. The institution must carry out its own due diligence, including credit risk analysis, and an assessment of the terms and conditions of the syndication. The appraisal criteria will of necessity vary between corporate credit applicants and personal credit customers. Corporate credit applicants must provide audited financial statements in support of their applications.As a general rule, the appraisal criteria will focus on: * Amount and purpose of facilities and sources of repayment; * Integrity and reputation of the applicant as well as his legal capacity to assume the credit obligation; * Risk profil e of the borrower and the sensitivity of the applicable industry sector to economic fluctuations; * Performance of the borrower in any credit previously granted by the financial institution, and other institutions, in which case a credit report should be sought from them; * The borrower’s capacity to repay based on his business plan, if relevant, and projected cash flows using different scenarios; * Cumulative exposure of the borrower to different institutions; * Physical inspection of the borrower’s business premises as well as the facility that is the subject of the proposed financing; * Borrower’s business expertise; Adequacy and enforceability of collateral or guarantees, taking into account the existence of any previous charges of other institutions on the collateral; * Current and forecast operating environment of the borrower; * Background information on shareholders, directors and beneficial owners for corporate customers; and * Management capacity of co rporate customers. 3. 3. 2 . CREDIT – APPROVAL/SANCTION A financial institution must have some written guidelines on the credit approval process and the approval authorities of individuals or committees as well as the basis of those decisions. Approval authorities should be sanctioned by the board of directors. Approval authorities will cover new credit approvals, renewals of existing credits, and changes in terms and conditions of previously approved credits, particularly credit restructuring, all of which should be fully documented and recorded.Prudent credit practice requires that persons empowered with the credit approval authority should not also have the customer relationship responsibility. Approval authorities of individuals should be commensurate to their positions within management ranks as well as their expertise. Depending on the nature and size of credit, it would be prudent to require approval of two officers on a credit application, in accordance with the Board ’s policy. 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Institutions must ensure that contractual agreements with their borrowers are vetted by their legal advisers.Credit applications mus t be documented regardless of their approval or rejection. For security reasons, financial institutions need to consider keeping the copies of critical documents (i. e. , those of legal value, facility letters, and signed loan agreements) in credit files while retaining the originals in more secure custody. Credit files should also be stored in fire-proof cabinets and should not be removed from the institution's premises. 3. 3. 4 CREDIT ADMINIS TRATION Financial institutions must ensure that their credit portfolio is properly administered, that is, loan agreements are duly prepared, renewal notices are sent systematically and credit files are regularly updated.An institution may allocate its credit administration function to a separate department or to designated individuals in credit operations, depending on the size and complexity of its credit portfolio. 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The duplicate of this letter should be duly signed and returned to the institution by the customer.The facility disbursement process should start only upon receipt of this letter and should involve, inter alia, the completion of formalities regarding documentation, the registration of collateral, insurance cover in the institution’s favor and the vetting of documents by a legal expert. Under no circumstances shall funds be released prior to compliance with pre-disbursement conditions and approval by the relevant authorities in the financial institution. 3. 3. 6 MONITORING ; CONTROL OF INDIVIDUAL CREDITS To safeguard financial institutions against potential losses, problem facilities need to be identified early. 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More frequent reviews (e. g. at least quarterly) should be carried out of large credits, problem credits or when the operating environment of the customer is undergoing significant changes. * Funds advanced are used only for the purpose stated in the customer’s credit application; * Financial condition of a borrower is regularly tracked and management advised in a timely fashion; * Borrowers are complying with contractual covenants; Collateral coverage is regularly assessed and related to the borrower’s financial health; * The institution†™s internal risk ratings reflect the current condition of the customer; * Contractual payment delinquencies are identified and emerging problem credits are classified on a timely basis; and * Problem credits are promptly directed to management for remedial actions. * More specifically, the above monitoring will include a review of up-to-date information on the borrower, encompassing: * Opinions from other financial institutions with whom the customer deals; * Findings of site visits; * Audited financial statements and latest management accounts; * Details of customers' business plans; * Financial budgets and cash flow projections; and * Any relevant board resolutions for corporate customers. 3. 3. 7 MAINTAINING THE OVERALL CREDIT PORTFOLIOAn important element of sound credit risk management is analyzing what could potentially go wrong with individual credits and the overall credit portfolio if conditions/environment in which borrowers operate change significantly. The results of t his analysis should then be factored into the assessment of the adequacy of provisioning and capital of the institution. Such stress analysis can reveal previously undetected areas of potential credit risk exposure that could arise in times of crisis. Possible scenarios that financial institutions should consider in carrying out stress testing include: * Significant economic or industry sector downturns; Adverse market-risk events; and * Unfavorable liquidity conditions. Financial institutions should have industry profiles in respect of all industries where they have significant exposures. Such profiles must be reviewed /updated every year. 3. 3. 8 CLASSIFICATION OF CREDIT Credit classification process grades individual credits in terms of the expected degree of recoverability. Financial institutions must have in place the processes and controls to implement the board approved policies, which will, in turn, be in accord with the proposed guideline. This guideline may also be called as Credit Risk Grading (CRG), is a collective is a collective efinition based on the pre-specified scale and reflects the underlying credit-risk for a given exposure. A Credit Risk Grading deploys a number/ alphabet/ symbol as a primary summary indicator of risks associated with a credit exposure. Credit Risk Grading is the basic module for developing a Credit Risk Management system. Credit risk grading is an important tool for credit risk management as it helps the Financial Institutions to understand various dimensions of risk involved in different credit transactions. The aggregation of such grading across the borrowers, activities and the lines of business can provide better assessment of the quality of credit portfolio of a FI.The credit risk grading system is vital to take decisions both at the pre-sanction stage as well as post-sanction stage. Two- types of factors play vital role in modeling the CRG, they are, 1. Quantitative factors 2. Qualitative factors The chart is given in the following page; Quantitative Financial Ratios Loan Repayment performance Credit Ratings Expected Default Frequencies Qualitative Management Quality Tenure in Business Operations Industry/Niche At the pre-sanction stage, credit grading helps the sanctioning authority to decide whether to lend or not to lend, what should be the lending price, what should be the extent of exposure, what should be the appropriate credit facility, what are the various facilities, on the basis of the above factors.At the post-sanction stage, the FI can decide about the depth of the review or renewal, frequency of review, periodicity of the grading, and other precautions to be taken. Risk grading should be assigned at the inception of lending, and updated at least annually. 3. 3. 9 MANAGING PROBL EM CREDITS/RECOVERY A financial institution’s credit risk policy should clearly set out how problem credits are to be managed. The positioning of this responsibility in the credit department of an i nstitution may depend on the size and complexity of credit operations. It may form part of the credit monitoring section of the credit department or located as an independent unit, called the credit workout unit, within the department.Often it is more prudent and indeed preferable to segregate the workout activity from the area that originated the credit in order to achieve a more detached review of problem credits. The workout unit will follow all aspects of the problem credit, including rehabilitation of the borrower, restructuring of credit, monitoring the value of applicable collateral, scrutiny of legal documents, and dealing with receiver/manager until the recovery matters are finalized. Financial institutions will put in place systems to ensure that management is kept advised on a regular basis on all developments in the recovery process, may that emanate from the credit workout unit or other parts of the credit department.There should be clear evidence on file of the steps t hat have been taken by the financial institution in pursuing its claims against a delinquent customer, including any legal steps initiated to realize on the collateral. Where there is a delay in the liquidation of collateral or other credit recovery processes, the rationale should be properly documented and anticipated actions recorded, taking into account any revised plans submitted by the borrower. The accountability of individuals/committees who sanctioned the credit as well as those who subsequently monitored the credit should be revisited and responsibilities ascribed. Lessons learned from the post mortem should be duly recorded on file. 4. 0 Findings and Analysis — Credit Risk Management by IDLC Finance Ltd To perform the overall CRM process 3 departments are working together at IDLC Finance Ltd.As a leading NBFI in Bangladesh IDLC has always tried to maintain the quality they achieve through 24th year business tenure. These three departments are- Collection of Client i nformation and preparing Appraisal Report CRM Department After getting the approval from the respective authority Internal Control Internal and Compliance (ICC) do all the Control &documentation processes Compliance Collection of installment and managing the overdue rentals as well Special Asset as dealing with the client’s default is Management done by Special Asset Management (SAM) (SAM) * . 4. 1 PROCEDURAL WORK FLOW OF LEASE MARKETING At the initial stage, IDLC concentrated to establish a market and then enlarge the market.The criteria based on which the market for lease financing has been established are as follows: * Diversification of portfolio * Selecting top industrial unit in the respective industry * Financing for Balancing, Modernization, Replacement and Expansion (BMRE) of existing unit * Priority of existing leases * Set up priority based on sector wise performance Primary focus of IDLC till now is in the area of financial leasing of industrial and professional e quipment and vehicles for three to five years term with particular emphasis on BMRE of existing units. 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The letter generally consists of brief description about the asset to be procured, its price and reason for procurement along with its lease period. * IDLC studies the proposal and sends an offer letter to the client. The offer letter contains acquisition cost, lease period, per month rental and other terms & conditions to be applied if the agreement is done. It is to be noted here that the offer letter is a mere offer and by no means an agreement between the two parties.Thus, the terms & conditions may change upon final agreement. However, it seldom changes as that will hamper the goodwill of the company. * The client accepts the offer and submits an accepted offer letter. If the client agrees to the terms & conditions of the offer letter, they sign & seal the offer letter as accepted and send it back to IDLC. * IDLC collects initial information about the client. The initial i nformation are * CIB Undertaking & Form XII (if a limited company) for that client to be sent to Bangladesh Bank for CIB Report of the applying client (as per rule of Bangladesh Bank) * IDLC looks for banks opinion for that client The designated Relationship Manager prepares the appraisal report and evaluated the client’s proposal. The appraisal report consists of * Background analysis of the company * Management and organization * Cost estimate of equipment/vehicle * Technical and marketing analysis, both from macro and micro level * Financial analysis of the company. i. e. profitability projection, credit report, year wise performance * The appraisal report seeks approval from the appropriate authority. First of all the Relationship Manager places the report to Credit Evaluation Committee (CEC), which consists of representative from Credit Risk Management, Operational Risk Management, General Manager and Deputy Managing Director.After CEC consent, the report is sent to appr oving authority. * After approval, the documentation process starts. A sanction ledger is prepared and a sanction letter is issued in the client’s name. However, depending on the nature of negotiation, the documentation procedure varies. * The client collects the asset. * Proper insurance coverage is done depending upon the asset and procurement of asset from a selected pool of insurance companies. * The lease operation starts i. e. a formal agreement is signed by both IDLC and lessee. The lessee starts to pay the rental and the lease continues. * Generally, just after the last rental is paid on a regular basis, the transfer of ownership takes place.Depending upon the negotiated transfer price at the beginning, IDLC transfers the asset’s ownership to the client and lease expires. However, the lease operation can also be expired early through partial termination or foreclosure. For new clients the following few steps are added: * Identification of client – the id entification of new client is done through relationship management. The main sources of information about new clients are: * Existing client * Word of Mouth * Internal Connection * Client call * Walk-in Client * Prepare extensive appraisal report and seek formal bank & FI opinion. The documentation procedure can differ depending upon the modes of acquisition of asset.According to the guideline provided by Bangladesh Bank, IDLC considers the following factors while appraising a client and its finance proposal: 1. Business Risk Factors: * Industry * Size * Maturity * Production * Distribution * Vulnerability * Competition * Demand- supply situation * Strategic importance for the group and for the country * Concentration * Market reputation 2. Financial Risk Factors: * Profitability * Liquidity * Debt management * Post Balance sheet events * Projections * Sensitivity Analysis * Peer Group Analysis * Other Bank Lines 3. Management Risk Factors: * Experience/relevant background * Track r ecord of management in see through economic cycles * Succession * Reputation 4. Structural Risk Factors: * Identify working capital requirement Relate the requirement with asset conversion cycle * Purpose of the facilities should be clear and thus mode of disbursement should be preferably structured in a manner to make direct payment to the third party through LC, pay order, Bangladesh Bank cheques etc. 5. Security Risk Factors: * Perishablilty * Enforceability /Legal structure * Forced Sale Value (calculations of force sale value should be at least guided by Bangladesh Bank guidelines) ————————————————- 4. 3 WEIGHTS ASSIGNED TO EACH RISK FACTOR CRITERIA WEIGHT | LEVERAGING 20% The ratio of a borrower’s total debt to tangible net worth. LIQUIDITY 20% The ratio of a borrower’s Current Assets to Current Liabilities. | PROFITABILITY 20% The ratio of a borrowerà ¢â‚¬â„¢s Operating Profit to Sales. | ACCOUNT CONDUCT 10% Time length of relationship with the client | BUSINESS OUTLOOK 10% A critical assessment of the medium term prospects of the borrower, taking into account the industry, market share and economic factors. | CRITERIA WEIGHT | MANAGEMENT 5% The quality of management based on the aggregate number of years that the Senior Management Team (top 5 executives) has been in the industry. PERSONAL DEPOSITS 5% The extent to which the bank maintains a personal banking relationship with the key business sponsors/principals. | AGE OF BUSINESS 5% The number of years the borrower has been engaged in the primary line of business. | SIZE OF BUSINESS 5% The size of the borrower’s business measured by the most recent year’s total sales. Preferably based on audited financial statements. | ————————————————- 4. 4 MEASURES TA KEN FOR RESTORATION OF DEFAULT CLIENTS The Special Asset Management Department of IDLC is responsible for mending and improving the repayment pattern of the default clients.Principal Objectives of the SAM department is keeping overdue situation at possible lowest level so that provision for dues can be minimized so that the negative impact of defaults on the reported profit of IDLC can be kept at minimum level. For this the department goes through the following procedures: 1. Monitoring the overdue situation of the financed projects 2. Initiating procedures as appropriate for each case Some clients fail to make payments of rentals/ installments to the lender/ lessor institution. In several cases, the failure is temporary, which is eventually paid within a short time. But in other cases, the client continues to default and the situation worsens since it deteriorates the profitability condition of IDLC, just like any other Financial Institution.So, critical measures are taken on the p art of IDLC and these measures are mainly undertaken by Special Asset Management Department. 4. 5 FUNCTIONS OF SPECIAL ASSET MANAGEMENT (SAM) The Special Asset Management Department performs a number of activities to keep the overdue situation of IDLC within minimum level. These are: 1. Overdue Monitoring- Corporate, SME, Syndication 2. Overdue follow Up- Corporate, SME, Syndication(Phone, Visit, letter) 3. SAM Client Follow Up- (Regular, Difficult, Block, Litigated)- Phone, Visit, Letter, Negotiation 4. Termination, Block & Litigation- Initialization, Follow up, Court Attendance 5. Appointment of Lawyers for different Legal Procedures 6.Recovery Agent Appointment & Follow up 7. Rescheduling- Negotiation, Approval, Follow up 8. 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REPEAT OFFENDERS IN COMMUNITY CORRECTIONS - Research Paper Example Community corrections have their pedigrees in community-based programming adopted by non-governmental organizations. Notably, community corrections are an assortment of numerous reprimands for nonaggressive wrongdoers. Community corrections were adopted three decades ago and have offered residential services in halfway accommodation. Community corrections were introduced for a number of aims, the key one being to instill discipline and hold the offender accountable for their felonious deeds. The other purposes of these corrections comprise protecting public safety and provision of restitution to communities by the felons through restitution programs. Nonetheless, the proportion of wrongdoers has augmented and there have been little changes in strategy on handling the offenders, since all the offenders come from different backgrounds and have different desires. The the system has unceasingly adopted the â€Å"one size fits all† tactic without considering their different circums tances. As a result, the community corrections system grapples to offer useful interventions for the huge number of people who pass through the system annually. It is because of this lack of follow up that the offenders find themselves repeating crimes and ending up in the community corrections again. Recidivism refers to an individual’s reversion into an unlawful deed after an intermediation or sanction for a previous offense. Recidivism is a critical concept in criminal justice that is assessed through criminal acts that lead to re-incarceration and return to prison or correction center for the first three years after discharge. For the past years, the proportion of repeat offenders into correction centers has shot up. The National Institute of Justice (2014) acknowledges that two thirds of the released prisoners indulge in crime activities that get them back to prison or other correction facilities after 3

Social Networks Essay Example | Topics and Well Written Essays - 250 words - 1

Social Networks - Essay Example Since their introduction, the social networks have swept away the market through their presence. All the major activities are seen to be handled by and helped by the social networks. The future will be no different and will provide a similar platform for success. The social networks have allowed for keeping the different stakeholders in contact.Jayson DeMers in her assessment has stated that United States Small to Medium scale enterprises have in majority already equipped themselves with the services of the social networks (Demers, 2014). Consultancy and experts views from different sectors and angles of the private clients is another added function that has been provided for by the social networks. The concept of entrepreneurs as well as the free lancers who are willing to work on different scales and available to provide their expertise to the business organizations make up for another area of modern development as a result of social networks.The social networks have provided a mea ns of advertising and a platform for promotion for the businesses and their products. Many examples can be seen from the American local industry. The Coconut Bliss (Mershon, 2012) is an example that has hit the social networking industry by storm. Through the advertisement on the social networks, the sales grew by multiple proportions. The added features of the free communication and availability of photos and other features of the social networks make it easier for the overall process to be undertaken.

Using of rTMS and antidepressant drugs Simultaneously To increase the Essay

Using of rTMS and antidepressant drugs Simultaneously To increase the therapeutic efficacy for patients with psychotic depression - Essay Example Psychotic depression is a fairly common psychiatric condition that has been found to occur in nearly 20% of patients with major depression (Flores et al., 2006). The preferred treatment for psychotic depression so far has consisted of tricyclic antidepressants (TCAs) as also neuroleptic and electroconvulsive therapies (O’Neal et al., 2000). Patients with psychotic depression have a more severely disordered hypothalamic-pituitary-adrenocortical (HPA) axis (Kathol et al., 1989). The psychotic features of psychotic depression have been attributed also to excessive glucocorticoid activity (Schatzberg et al., 1985). Interestingly, HPA axis activity is, to a large extent, regulated by the combination of mineralocorticoid receptors (MR) and glucocorticoid receptors (GR) (Spencer et al., 1998; Young et al., 2003). Any mismatch between them could lead to inappropriate responses to stress, and incidence of major depression (Young et al., 2003). Decreases in MR sensitivity postulated to occur in major depression could result in elevated cortisol levels (Gesing et al., 2001; Young et al., 2003). In contrast, GR gives rise to feedback modifications in response to rising levels of cortisol as, for example, in response to stress or following the circadian rhythm. Hence, a GR antagonist e.g., the anti-progesterone steroid mifepristone (dimethylaminophenyl (17(-hydroxy-11(1(4-dimethylaminophenyl) 17(1- propynyl)estra-4,9-dien-3-one) exerts a powerful effect in the rising section of the HPA axis (Flores et al., 2006). A major effect of mifepristone occurs through obstruction of GR in crucial regions of the brain and in monaminergic nuclei, thereby, directly leading to recovery of symptomatic and cognitive faculties. First observed by Bickford et al.(1987) to trigger transient mood elevation in normal subjects receiving single-pulse stimulations to the motor cortex, the technique of non-invasive repetitive transcranial magnetic stimulation

Early years education Essay Example for Free

Early years education Essay 1.1 Summarise entitlement and provision for early year’s education There are many different types of early year’s provision which has been funded by the government for early years education. All three and four year olds are entitled to 15 hours of free early year’s education entitlement per week across the 38 weeks of the annual year. Theirs are five different settings where Parents can choose to give their child for their Free EY Entitlement they are: †¢Pre-school playgroup-. It is an early childhood program in which children combine learning/education with play and it is an organization that is provided by fully trained and qualified staff †¢Private Day nursery- A facility provided for the care and learning for children from the birth to 5 they are usually run by a business or a private organisation and are not linked with the government. †¢Child-minder (who belongs to a registered child-minder network)-child minders are self-employed providing the care for children in their own homes , they offer full time or part time places or flexible arrangements. Child minders are registered with the Ofsted and are inspected in accordance with the Ofsted procedures and regulations to ensure that he child-minder is providing and safe and suitable environment for the children. †¢Maintained nursery school- is a school for children between the age of 3 and 5. It is run by fully qualified and trained to staff who encourage and supervise education play and learning rather than just providing childcare. It is part of early childhood education. †¢Nursery or reception class in a primary or independent school -Nursery schools provide a more direct and structured education for early years children aged 3 to 5 Some may be part of an independent school for older age groupseg infant and primary schools. Reception classes are run by a qualified teacher. 1.3 Explain the post 16 options for young people and adults.

The London Stock Exchange Information Technology Essay

The London Stock Exchange Information Technology Essay The London Stock Exchange has for over 300 years produced detailed market information for companies and investors. Technological innovations have transformed this service and from a bi-weekly paper publication, the LSE today continuously remit electronic information to all the financial markets across the globe in real time. These innovations, however, suffered a major setback when a new computer system commissioned in 1989 ended up to be one of the decades biggest failures when its implementation was terminated in 1996. Background Information Transfer and Automated Registration of Uncertified Stock, otherwise known as TAURUS, was a system meant to wholly change the way of conducting business at the London Stock Exchange in 1989, by automating the sale and purchase of securities. Had it succeeded, it would have dematerialized stock certificates and instead, ownership of the various stocks would have run through a computer database, this would have saved the London Stock Exchange millions of pounds annually and further reduced the risk of purchasers going bankrupt before settlement. However, the implementation of TAURUS did not go as planned and was terminated four years after being commissioned. This failure gave birth to CREST, a computer system whose implementation was commissioned by the Bank of England after taking lessons on organizational change and project management from the failure of TAURUS. Problems that Contributed to the Failure of TAURUS One of the reasons that led to TAURUS failure as a computer system at the LSE was the fact that it attempted to solve too many mini problems. This was as a result of the design and implementation team attempting to take care of most of the individual interests of the players at the LSE. The LSE has many firms whose individual trading methods vary, and the thought of incorporating their needs while keeping the overall objective of the system was far-fetched. The idea that a system should always aim at solving the overall problem by factoring in common minor concerns was basically overlooked in the case for TAURUS (Ackoff, 1989). It is a project management policy that one objective is set and all efforts in implementation should be geared towards its achievement. It was therefore a failure on the part of the LSEs management to be distracted from this, and instead, prioritized individual stakeholder needs. The other problem was the size and structure of the design team. For efficiency, a change implementation team should have very clear structures for a smooth transition, the TAURUS system design team should have been as slim as possible to avoid coding mistakes given that this was a project that would overhaul transactions at the LSE-this was not the case for TAURUS. TAURUS employed hundreds of people, an action that led to numerous coding mistakes and confusion as there was no clear structure of operations. This happened at a time when the world had not fully embraced technology, which was a recipe for failure. That is exactly what happened when several code mistakes appeared in the system. The other problem against TAURUS was the government interest in the project, which led to the creation of an issue involving a 150-page of document containing complex regulations to be followed. The governments document was so big that it did not give the design team a free hand to make feasible decisions with regards to the system. The government clearly revealed that the political interests in TAURUS were not comprehensively explored and that adequate stakeholders had been overlooked. It would have been proper to know and clearly define the interest and input of the government. Had this happened, it would have led to a simpler regulatory document that would not only be precise with regards to the design teams scope of operations, but also acceptable to all. The design team should have been given the freedom to make realistic alterations in case of a technical difficulty towards the achievement of the overall objective. Having cast on hardline operational regulations, the objective was not easy to realize as every change outside the regulations came with serious legal implications. The strict and complex regulations led to numerous redesigns, causing delays and eventually the project costs went out of control. The design team also made another mistake of choosing the software that needed several modifications to meet the different demands. This meant that they were relying on unproven software, which was very risky. Reasons for the Success of CREST CREST, a system that is still in use today, went live in 1996 and was completed within both the allocated budget and schedule. The reason for its success was that its development and implementation team learnt from the mistakes made in implementing TAURUS. CREST had a small staff of just 20, with four to five experienced members supervising the entire project. It had a minimalist approach with a design to perform only a pair of processes, which made up nearly 90% of all transactions of the LSE, unlike the 21 attempted by TAURUS. This meant that the overall project objective was very clear and all the human and material resources were properly directed towards their achievement. The slim design team also meant that modifications were closely monitored which provided minimal room for mistakes. The project equally made use of tested computer software (TCS). The use of TCS in CREST meant that the implementation was done with just a few problems to be solved, and there was no problem in c oding-solutions were readily available. Organizational Change in TAURUS and CREST An organization must always undergo some kind of change to cope with the dynamic business environment. In the case of the LSE, the need to incorporate technology in its operations was inevitable at the end of the 1980s. However, this change was resisted the end result was the failure to implement the multi million pound TAURUS project for a few reasons. One, there was no proper structure to implement the new system. TAURUS was a mandatory system and needed to accommodate the interests of all stakeholders who severally and individually had an idea of their own inputs. The management of the LSE should have spent time and resources in identifying the common individual needs of these stakeholders to design a system that could have addressed the common needs. If this were the case, TAURUS design team would have worked towards achieving what CREST later achieved. It is by failing to address these common needs that individual players at the LSE insisted on their inputs to be incorporated in to the system and still achieve the overall objective. Two; change will always be resisted in any organization by people who feel that the new order is not in their best interests. The LSE management had no clear structure or definitive planning strategy. The project was carried out in fragments without bringing it together and this was bound to cause delays as merging fragments of the system that may not be fully compatible could lead to further re-writing complications. This gave room for speculation with regards to system mismanagement. Some stakeholders thought that if this system had been successfully implemented then it could have had an effect on power as a way of getting rid of their jobs, and the whole LSE process would be completely changed. This thought created an enemy within, thence implementation could not have been successful. The appropriate mode of action was for the management to conduct education to the stakeholders and familiarize them with the new way of transaction with the aim of letting them know that computerization was a tool that would improve how they did business at the LSE and not an impediment as they thought. This would have helped in the stakeholders embracing and offering support to the implementation of TAURUS. Success of an organizational change is entirely dependent of how much the new way of doing things is accepted by the relevant stakeholders. Principles and Methodologies of Project Management In The Case Of TAURUS and CREST The main principles of project management are purpose, relevance, feasibility, accuracy and accountability (Maylor 2005). The main purpose in the case of TAURUS and CREST was to computerize the LSE, a purpose that was achieved by the implementation of CREST, but not TAURUS. It was very important that all the stakeholders understood and embodied this principle and to do so, the management had the task of conducting a project familiarization campaign whose success would be measured by the stakeholders understanding of the projects significance to the current business operations, its contribution to business policies and production of a document with stakeholder recommendations. These parameters would ensure that all interested parties owned and accepted the project. Worries about job losses, shifts in political influence at the LSE upon its implementation would be minimal and the result would be a successful implementation and transition into the new system. It was equally important that the LSE stakeholders understood the relevance of a computer system to their transaction. One should not be taken by surprise if it emerged that among the stakeholders opposed to the new system were interested groups that did not see the need for TAURUS at the time. It is universally known that change, be it organizational, political or otherwise, will always be resisted by people who cannot see any major differences between the old and proposed new ways of doing things. Having faith in the accuracy accountability of TAURUS would have further facilitated the stakeholders acceptance of the system. Interest groups will always want the assurance that the new order is safe for their businesses to be able to build the needed faith and rule out the possibility of other interests taking advantage of the new system. When a majority of stakeholders do not clearly understand a new idea, they are bound to front an opposition up to a point when they understand the pr os and cons of the new order in totality. These principles and their parameters must always be taken into account for a successful implementation of a project and when ignored or partially considered, failure is always the end product as was in the case at the LSE. There are scientifically acceptable methodologies in project implementation and these include: Critical Path A project can be broken down into a number of tasks that have to be performed and in the preparation of a project schedule, the project manager has to figure out what the tasks are, how long they will take, what resources they require, and in what order they should be done ( Maylor, H. (2005), Project Management). All these elements have a direct correlation to the schedule. Omission of a task would then lead to the projects incompletion, underestimation of the length of time or the amount of resources required for the task would also mean missing the schedule. The schedule can also be blown if a mistake in the sequencing of the tasks is made. TAURUS design team had problems with following the critical path because of the large number of staff involved in its design which created duplication of duties and coding problems. This was however not the case in CREST which had a slim design team and for that, CREST went live not only within its schedule but also within the allocated budget. A project manager should always build the project schedule by listing in order, all the tasks that need to be completed, assigning duration to each task and allocating the required resources. It is always important to determine predecessors-what tasks must be completed before, and successors-tasks that cannot start until after, for each task. This makes project implementation very simple and straightforward. A typical example is to think of a project as getting dressed in the morning. The task of putting on a shirt may have a longer duration if it is a buttoned dress shirt than if it is a pullover, and it does not matter which order one completes the task of putting on right or left shoe as long as he or she completes putting on pants before starting wearing shoes. When a project, however big, is looked in such simple terms, success will always be the end result. However, there is always some difficulty in managing a project schedule in that there are seldom enough resources and enough time to complete the tasks sequentially. In this case, tasks have to be overlapped so that several can happen at the same time. Were it not for this sequential running of coding during CRESTS design, it would not have been live in 1996. A Project Managers key duty is to manage the critical path and this is what separates the success of a manager. Materials The biggest material in the TAURUS and CREST project was the staff. Managing human resources entails having the right people, with the right skills and proper tools, in the right quantity, and at the right time. It also means ensuring that those people know what needs to be done, when, and how-and finally, it means motivating them to take ownership in the project too, something that was perfected in the design and implementation of CREST. The opposite was however the case in TAURUS. There were so many people doing the same thing at the same level resulting into multiple mistakes and ultimately failure. Materials also include operation manuals and hardware, computers in the case of TAURUS and CREST. TAURUS had three volumes of specification manuals each two inches thick. This was a recipe for confusion in a project of this magnitude. This further emphasizes on the fact that, for a successful project implementation, a manager must match the right human resource to the correct tools and materials. Cost Every project task will have a cost, whether it is the cost of the labor hours of a computer programmer or the purchase price of a cubic yard of concrete. In preparing the project budget, each of these costs is estimated and a total figure arrived at. Some of these estimates are likely to be more accurate than others. A company usually knows what it will charge each of its projects for different classifications of labor. Concrete for example, is priced in a very competitive market so prices are fairly predictable. With the numerous modifications to TAURUSs design software which had not been well tested earlier on and a number of coding mistakes, the cost of implementing TAURUS went way beyond the allocated budget. This was not the case in CREST, the project managers managed every task and with the thin and clear structures in place, the allocated budget was never surpassed. It is therefore important to note that the total project cost can only be contained and properly managed by clo sely monitoring individual task costs during the implementation process. Therefore, a project manager should not take his or her sights of the performance and costs of component project tasks. Conclusion The TAURUS and CREST projects present a wonderful example of issues that should not be overlooked in the implementation of projects and in the process of bringing to life organizational change. It is important to take into account several facts before the implementation of a new idea or way of operations. It is also important that everyone involved understands and is in a position to offer prompt answers to the following questions: What are the anticipated benefits of the system? Are there any existing cultural issues that the new order will overhaul? If so, what are they? How can they be overcome? Are all the stakeholders input factored into the new order? To what extent is the government involved and if not, how can it be involved? Do the stakeholders understand how the implementation will alter their operation and are they prepared for the alterations? These are just but a few of the basic questions that the implementation team should be able to confidently give answers to before resources are committed to a project or a new way of doing business. The implementation of TAURUS clearly failed to answer most of the questions and the end result was a totally new computer system known as CREST after several years of wasted man hours, millions of sterling pounds and embarrassment not only to the LSE bur also to the Bank of England. CREST as a computer system answered most if not all the questions that TAURUS failed to provide. It particularly adheres to the basic methodology of sticking the set critical path as a tool in not only getting the job done in time but also within the allocated budget and with minimal avoidable mistakes. The issue of getting the right number of people holding the required qualifications for the work at hand and making use of the relevant tools was well understood and put in practice in CREST. This is a confirmation that scientifically proven ways of project management should always be put to practice and their strict adherence is what makes the difference between success and failure for a project manager and an organization seeking to implement change. The project management policy that a singular or a clear list of set objectives should always be in place and all implementation efforts geared towards their achievement is a lesson that can never be taken for granted. As by the saying too many cooks spoilt the broth so did the many individual interests at the LSE that contributed to the failure of the implementation of TAURUS. Focus shifted to what was not the main reason for the computer system and confusion followed. It should be understood that organizational change is an inevitable part of business and any institution not prepared for change cannot survive the dynamic business environment today. It is therefore important to take lessons from CREST during and after implementation of a new order to not only improve ways of doing business but to also minimize the huge losses that come with the failure to totally implement a new project or to do it the wrong way.