Varun Agarwal Student, Amity International School, NOIDA varun747@rediffmail.com varun747@gmail.com
10th March 2007
To, Mr. Deepak Mehta Vice President, Risk Management and Surveillance Systems Trustworthy Securities Ltd. Mumbai
Subject: Suggestions and comments on Capital shortfall.
Dear Mr Mehta
The suggestions by your crack team are good but sadly, not complete. Even though they account for most of the key points, necessary for ending the problem, they are not completely thought over or can be improved upon greatly. Please do read the below mentioned points:
%u2022 Branch manager%u2019s performance appraisal report should mention non-collection. Non-collections should be placed as an important evaluation criterion in these reports. A good way would be too only consider the difference between achieved revenue targets only. %u2022 The total amount of non-collection, if present, could be taken out of the salary of that all the branch members at a percentage that ensures collection of the non-collected money. This will ensure two things, firstly collection of lost money. Secondly, this rule will keep the employees vigilant for wrong doers and non-collection. %u2022 Another method is to introduce a system of prepaid stock options. Just like in case of mobile phones, there could be a system in which a client puts his money into a 6-7% (this percentage could be decided by the company) minimum-yield account held by our company. This money now can be used effectively by the customer to buy stocks and commodities without fear of non-payment and the hassle of cheque collection and fraud detection processes. This method can, or rather should be, introduced with proper incentives and offers to attract clients into using this option. %u2022 With the same purpose as above, net banking and credit card usage should be encouraged and promoted fiercely. Teaming up with a bank on this issue can yield massive long-term benefits. %u2022 RMS system should be strengthened to check and verify each and every amount irrespective of its price. %u2022 The RMS system should be restructured to make it more user friendly, but yet more explicit in stating rules and demanding correct punching of values. %u2022 People responsible for incorrect information should be penalized. %u2022 Branches which represent the few %u2018rotten apples%u2019 should be put under strict scanner and their branch managers put on alert and a warning. %u2022 There should be a grading system to grade branches every second and list all branches with respect to their position on the internet visible only to the employees. The grade should be decided upon money input, trade frequency, and should take strictly into account monetary loss because of non-collection. The purpose of this grading system is to keep managers and employees on alert. According to this data, incentives should be provided to both the branch and its employees of top performing branches. %u2022 When a cheque is issued, its scan should be taken and run on a small program which checks the authenticity of the cheque as well as the signature. Thus the scanner reader software can successfully evaluate cheques and verify details that are punched in. %u2022 Employees and clients whose actions result in unnecessary revenue loss should now be put under a monitor. Their actions monitored and freedom under check for future transactions. %u2022 The RMS department has (or, must have) employees whose single purpose is monitoring the money flow. The RMS system should be such that it monitors the earlier defaulters with much care. If these defaulters (both employee and customer), or a new customer make a transaction which the computer software decides (according to set rules) it gives the power to cancel or with hold the transaction, to the employee in the RMS department. %u2022 Making of the system %u2018remisers%u2019 legal. They could be inducted into the service structure under a commission basis. Thus, this will phenomenally increase the clientele base of your company. With set rules on how these remisers work, the chance of them causing a hitch may be lessened to near-zero proportions, if they are a part of the structure itself. By offering them commission (even, higher) if only and only if, their account is clear, that is there is no non-collection from their side. They will now act as many small branches rather than problem causers. This may also help the company reach into towns and villages where setting up of a branch is too uneconomical. %u2022 There should be a system of monthly low interest loan system. It is just like a when you buy an expensive product like a car you have monthly deposits. Thus in the same way, for customers with low cash rather than them not paying at all your company could charge them a low interest monthly payment option according to the transaction they want to perform. %u2022 We can encourage and fund to have employees whose sole purpose is to pick up cheques and to deliver them. As you make a transaction, in half an hour the cheque is received and confirmed. Thus even when the transaction is made, and the employee goes to receive the cheque and does not receive it. It is only a matter of minutes thus the transaction can be cancelled. For this short a time, this system may confirm a low-risk system of transaction making. %u2022 RMS System should be actively maintained and updated to cope with the latest of problems. An annual report on vulnerability of the RMS and the system as a whole, to new threats and as well as its sterility to old ones, should be made. This report done on a confidential and priority basis and even can be done with the help of external companies. %u2022 Regular and constant- %u2018change%u2019 and %u2018improvement%u2019- in all spheres are essential for the success for any enterprise. Only thing constant in this world is change. So the RMS department should be employed and structured such as to adapt to regular change. The RMS department should always be optimistic and ready for challenges.
I have included what I thought would help your company on this particular issue. Please do tell me of the positive effects of my suggestions if they are implemented. Please do contact me if I could help on any other issue.
RE:POSSIBLE SOLUTIONS
by on Mar 12, 2007 04:04 PM Permalink
Varun, I have been offered a MBA seat in Amity international school Noida. I need your advice since I have heard: 1. Fees is low in first year and very high in second year. 2. No placement offered and encouraged by management 3. AICTE does not recognize the degree/diploma imparted by institute. They have sent me offer letter wihout taking any test. Please advice whether I should take admission? Thanks Arindam Banerjee
RE:RE:POSSIBLE SOLUTIONS
by EDITOR on Mar 12, 2007 05:10 PM Permalink
Hey Arindam,
dont consder admission at AMITY.Ypu neither get a brand name , nor a placement.This place isjust for rich brats who cant make it to a good business school.Because of their parenst influence they will get some or the other job.
