A bank has different types of assets: they include physical assets, such as equipment and land; personal loans including interest from consumer and business loans; reserves, or holdings of deposits of the central bank and vault cash; and investments, or securities.

Asset quality is one of the most critical areas in determining the overall condition of a bank. Loans typically comprise a majority of a bank’s assets and carry the greatest amount of risk to their capital. Securities may also comprise a large portion of the assets and also contain significant risks.

On account of regular usage, the machineries lose their quality and the performance slows down. The output from one machine at the initial stage cannot be the same after ten years. It is a like car or two-wheeler or three-wheeler.  The old adage about how your brand new car instantly plunges in value as soon as you drive off the lot? There is some truth to it. Cars tend to depreciate quickly, similarly electronic items such as gadgets, medical equipments, homes, lathe machines and machineries in factories also lose their value when newer brands and newer models arrive in market.  This is known as deterioration in asset quality. When it comes to value in terms of money, the asset purchased ten years ago may have market value much lower than the original value. For example the car purchased during 2000 for an amount of 10.00 lakhs may have market value up to 2.00 lakhs during 2016. The difference namely 800000 is known as depreciation. Depreciation is known as loss in terms of money when it comes to physical assets.

A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or instalment of principal has remained ‘past due’ for a specified period of time. In simple terms, an asset is tagged as non-performing when it ceases to generate income for the lender. The borrowers are expected to pay the principal amount and interest as per terms and conditions of the contract. When they do not pay on due dates, they are considered to be bad debts or non performing assets.

In the recent past India witnessed Punjab National Bank, IL&FS, IDBI Bank, PMC Bank, Laxmi Vilas Bank, Yes Bank and many others in queue waiting to be shut down. 

In the case of a loan account, the liability may be 10.00 lakhs and when it is considered as non performing asset, the value gets deteriorated. There is no guarantee that the bank may recover the entire principal amount and eligible interest from the borrower.  The chances of recovery sometimes become zero also. In such a case, the bank may be having 100000 crore assets in the books of the bank and in real terms, its value may be 70000 crores and it is known as deterioration in asset quality. The financial problems of Indian companies are now being reflected in the asset quality of banks that have lent them money.

The Reserve Bank of India (RBI) has done a good job in terms of recoveries of loans; it has made stringent guidelines for banks so that they don’t slide their problems under the carpet. When bans hide their serious problems it rebounds badly after some time. The central bank (RBI) has tightened the rules for corporate debt recasts, asking banks to set aside more money for restructured loans as well as making promoters of companies personally liable for loan losses. This has followed to increase provisioning for restructured assets since November 2019.

In the past and even today, Indian insolvencies take longer to resolve than in any other major economy. Overall, India was No. 103 in the World Bank’s 2017 ranking of how nations handle insolvencies, just behind Nicaragua. The finance ministry has mentioned that it has taken steps for improving the insolvency resolution mechanism and said that as per the latest ‘Resolving Insolvency Index’, India’s ranking jumped 56 places to 52 in 2019 from 108 in 2018. India’s recovery rate out of insolvency proceedings has been low at 22 per cent vs developed economies’ average of 60 per cent and Russia’s 40 per cent. Only in Brazilian creditors typically recover less.

The causes: INTERNAL FACTORS:

1. Excess capacity creation: The banks overlook borrower’s excess capacity creation without addressing raw material availability or tying up with customers a few years back due to liberal lending practices and easy availability of equity fund due to encouraging FII flows was one of the key reasons why a lot of loans turned bad.
2. Wrong usage: Funds borrowed for particular purpose are not utilized for the same
3. Defective lending process: There are three principles that are followed by the commercial banks in lending process i.e. principle of safety, principle of liquidity, principles of profitability. Principle of safety means that the borrower is in position to pay back the loan. Therefore the banker should take utmost care in ensuring that the enterprise or business for which a loan is sought is a sound one and the borrower is competent of carrying it out successfully, he should be a person of integrity and good character.
4. Inappropriate technology: Due to improper technology and management information system, market driven decisions on real time basis cannot be taken. So all the branches of the banks should be upgraded with current scenario.
5. Improper SWOT analysis: The inappropriate strength, weakness, opportunity and threat analysis is another reason for increase in NPA’s. So the bank should examine the profitability, viability, long term acceptability of the project while financing.
6. Poor credit appraisal system: Due to poor credit appraisal the bank gives advances to those who are not able to repay it back. As a result the NPA’s of the bank increases. So the bank should maintain proper credit appraisal system.
7. Managerial deficiencies: The banker should always select the borrower very cautiously and should take tangible assets as security to safeguard its interests. The banker should follow the principle of diversification of risks which means that the banker should not grant advances to a few big firms only or to concentrate them in few industries or in few cities.
8. Absence of regular follow up: The irregularities in spot visit also increase the NPA’s, the absence of regular visit of bank officials to the customer point decreases the collection of interest and principal on the loan.
9. Incomplete and faulty documentation: There should thorough verification by the officials on the documents submitted by the borrowers.

EXTERNAL FACTORS:

1. Ineffective recovery tribunal: The government has a set of number of recovery tribunals which work for recovery of loans and advances, due to their carelessness and ineffectiveness in their work the bank suffers the consequence of non-recovery, thereby reducing their profitability and liquidity.
2. Wilful Defaulters: The Indian Public Sector Banks are worst hit by these defaults. It is a default in repayment obligation. Big examples are Kingfisher Airlines Ltd. Is one among many of those wilful defaulters; others include Spanco Ltd, Calyx chemicals & amp; Pharmaceuticals Ltd, Beta, Napthol, Winsome Diamonds & Jewellery Ltd., Rank Industries Ltd., XL Energy Ltd. etc.
3. Natural calamities: This is the measure factor, which is creating alarming increase in NPA’s of the PSBs. Basically our farmers depend on rainfall for cropping; due to irregularities of rainfall the farmers are unable to attain the production level and thus they are unable to repay the loans. Therefore, the banks have to make large amount of provisions in order to pay those loans
4. Industrial sickness: Inappropriate project handling, ineffective management, lack of adequate resources, lack of advanced technology, day to day change in government policies produce industrial sickness therefore the banks that finance those industries end up with a low recovery of their loans, by reducing their profit and liquidity.
5. Lack of demand: Entrepreneurs in India need to understand the demand and supply cycle clearly. They must predict their product demand and start production accordingly; otherwise ultimately the inventory piles up. Thus, making them unable to pay back the money they borrow to operate these activities. Therefore the banks record the non recovered part as NPA’s and has to make provision for it.

Conclusion: Indian banking system needs complete and thorough overhauling, new set of policies for working, functioning, along with RBI’S functions to make the banking system robust and secured.

The Equator Principles (EPs) is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in project financing and is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making prior to lending for projects. The Equator principles were formally launched in Washington DC on 4^th June 2003.

They were formed as guideline to financial institutions before lending to infrastructure projects. Since the inception of the Equator Principles in 2003, the energy and extractives industry has been a major focus of the environmental and social risk reviews conducted by nearly 80 member banks. For example, Bank of Tokyo-Mitsubishi, a leader in project finance, put 225 projects through its Equator Principles review process between 2006 and 2012. Of these, 60 percent were in the mining, oil, gas and energy sectors.

Financial institutions are accountable to screen whether lending to projects which are hazardous environmentally and socially. Their Investment decisions increasingly include an assessment of E&S risks and impacts. This rule is not applicable only to MDBs (Multilateral Development Banks) and international financial institutions, but also to commercial banks and private equity funds. In many developing countries international players require compliance with both national laws and international E&S standards developed by MDBs, which are sometimes more stringent than those inscribed in national legislation.

In 1980s the Sardar Sarovar Project, which involved construction of dam on the Narmada River in Gujrat, India, got harshly criticized worldwide for its adverse environmental and social impacts. It was built in order to provide electricity and irrigation water to downstream regions, the construction of this dam resulted in the forced dislocation of more than 200,000 native people living along the upstream districts, without provision of sufficient compensation or means of livelihood reinstatement. To ensure justice to the people displaced, international NGOs undertook Narmada relief campaign, due to which financial assistance to the project, provided by the World Bank and Official Development Assistance (ODA) of the Japanese government got terminated.

In late 1990s when the world started thinking seriously about safeguarding environment and social welfare above all, multilateral development financial organizations such as the World Bank and Export Credit Agencies of OECD member countries (Organization for Economic Co-operation and Development) came up with environmental and social guidelines to properly manage environmental and social risks associated with large scale projects. But, only a handful of private financial institutions in the world were implementing environmental and social reviews before lending for projects. Therefore, environmental NGOs started demanding that the private financial institutions must be held responsible for neglecting environmental and social risks; attention must be given to CSR in terms of environmental issues.

To address these demands and concerns, in October 2002, ABN AMRO and the International Financial Corporation Organization which is in charge of private projects for the World Bank Group, invited major international financial institutions engaged in project finance activities, to assemble in London with the intention to come up with environmental and social risks management guidelines for private financial institutions. As a result of this meeting, Citigroup, ABN AMRO, Barclays, and West LB in collaboration with IFC, created a framework of managing environmental and social risks. The Equator Principles (EPs) were thus formulated in June 2003.

The initial founders of the Equator Principles (EPs) wanted the adoption of the EPs to be a globally applicable to financial institutions in the northern and southern hemispheres and the equator seemed to represent that balance perfectly, hence it was named as Equator Principles.

EPs were first revised in July 2006, to align it with the IFC Performance Standards. Further revision of IFC Performance Standards took place in 2012 and the need to strengthen environmental and social risks management, resulted in the launch of third version of the EPs in June 2013. The fourth round of revision is under review and will be finalized till August 2019.

The key thematic areas of this round include social impact and human rights, climate change, designated countries and applicable standards and scope of applicability of each principle. So far ninety four financial institutions from thirty seven countries have officially adopted the Equator Principles which covers the majority of international Project Finance debt in emerging and developed markets.

Pursuant to the finalization of principles of an EPFI’s (Equator Principles Financial Institutions) the lender needs to categorize a new project according to its level of probable environmental and social risks based on the screening criteria of the International Financial Corporation. The three categories are as follows:

Category A — projects with potential significant adverse social and environmental impacts those are diverse, permanent and exceptional; Category B — projects with potential limited adverse social or environmental impacts, largely reversible and addressable through mitigation measures; Category C — projects with minimal or no social or environmental impacts. The standards have consequently been periodically updated into what is commonly known as the International Finance Corporation Performance Standards on social and environmental sustainability and on the World Bank Group Environmental, Health, and Safety Guidelines.

Benefits of Equator Principles:  borrowers don’t like banks telling them how to behave, they want their loans to be sanctioned and that’s about it. With so many monitory scams and money laundering taking place, the credibility of global financial institutions is under heavy scrutiny today; especially in markets where social and environmental standards for business are less stringent. Another fact is that companies with little or no experience in applying mitigation measures often require additional support and advice from their lenders. Implementing the Equator Principles has enhanced the role of project financing; sustainable development has become key issue.

Ease of doing business is an index devised by World Bank.  It is based upon 10 parameters stating how easy it is to start and run a business in a nation. The top rankings indicate that the regulatory environment in those nations is conducive for business operations. The index averages a country’s percentile ranking on its component ease of doing business. The nations are ranked from 1 to 189. The 10 parameters for doing business are:

 1. Starting a business. 2. Dealing with construction permits 3. Getting electricity   4. Registering property  5. Getting credit   6. Protecting investors   7. Paying taxes 8. Trading across borders   9. Enforcing contracts 10. Resolving insolvency

Nations will progress only if they create conducive atmosphere for starting and running businesses. The entrepreneurial growth is a must for a healthy economy to compete effectively in the modern global marketplace and for providing economic security for both people and places. New ideas and new products are always welcome by people across the globe. An effective economic development strategy will require two broad elements. First is cultivation of the fundamentals of a strong business climate that can support and drive a vibrant economy. Second is a well educated workforce and uncongested infrastructure that can support both commerce and recreation. Also, the tax burdens that are carefully balanced against the benefits received by the state as well as the entrepreneurs are equally important. Along the way, the nation must protect natural environment, as well as our cultural values. Amenities and quality of life considerations have become increasingly important to where people want to live and where good jobs are grown.

World Bank’s index of doing business with ease gives clarifications to the entrepreneurial world as to which countries are encouraging for starting or expanding their ventures across borders.

Starting a business: This parameter records all procedures officially required for starting a commercial or industrial business; it studies the time and cost to complete these procedures and the paid-in minimum capital requirement. This point studies all procedures for obtaining necessary licenses and permits and notifications, verifications or writings for the company and employees with relevant authorities. The ranking of ease of starting a business is the simple average of the percentile rankings on its component indicator. The law of the country, detailed list of procedures, time and cost for completion of procedure, paid-in minimum capital required, support from local government bodies, legalities, and notaries to complete and verify data each of these points are checked.  It’s been observed the easier the procedures, the faster the growth. Too much of governance, too much of paper work complicates and frustrates the budding entrepreneurs in an economy.

Dealing with construction permits: These procedures include obtaining and submitting all relevant project-specific documents such as building plans, site maps and certificates of urbanism to the competent authorities; hiring external third-party supervisors, engineers or inspectors if necessary; obtaining all necessary clearances, licenses, permits and certificates, submitting all required notifications; and requesting and receiving all necessary inspections. Additional procedures include time and cost related to obtaining an electricity connection in the preconstruction stage, procedures necessary to register the property so that it can be used as collateral or transferred to another entity, time and cost to complete each procedure. The ranking on the ease of dealing with construction permits is the simple average of the percentile rankings on its component indicators.

Getting electricity: This topic tracks the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed factory, office, premise or warehouse. These procedures include applications and contracts with electricity utilities, all necessary inspections and clearances from the utility and other agencies and the external and final connection works. This topic checks the process of getting an electricity connection along with the time and cost to complete each procedure. The ranking on the ease of getting electricity is the simple average of the percentile rankings on its component indicators such as time, cost, deposit, site and inspection.

Registering property:This theme examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. The process starts with obtaining the necessary documents, such as a copy of the seller’s title, and ends when the buyer is registered as the new owner of the property. Every procedure required by law or necessary in practice is included, whether it is the responsibility of the seller or the buyer and even if it must be completed by a third party on their behalf. This parameter records the full sequence of procedures necessary for a business (buyer) to purchase a property from the seller and to transfer the property title to the buyer’s name so that the buyer can use the property for expanding its business, use the property as collateral in taking new loans or, if necessary, sell the property to another business. The process starts with obtaining the necessary documents, such as a copy of the seller’s title if necessary, and conducting due diligence if required. The transaction is considered complete when it can be used as collateral for a bank loan or resell it. The ranking on the ease of registering property is the simple average of the percentile rankings on its component indicators.

Getting credit: This indicator measures the legal rights of borrowers and lenders with respect to secured transactions through one set of pointers and the sharing of credit information through another. The first set of indicators measure whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. The second set measures the coverage, scope and accessibility of credit information available through public credit registries and private credit bureaus. The ranking is based on the percentile rankings on the sum of its component indicators such as legal rights of borrowers and lenders, analysis of laws and regulations as well as public sources of information on collateral and bankruptcy laws.

It checks whether the law allows a business to grant a no possessory security right in substantially all its movable assets, without requiring a specific description of the collateral. It also checks what security rights are given in future or after-acquired assets and may extend automatically to the products, proceeds or replacements of the original assets.

Protecting investors: this indicator checks the strength of minority shareholders in protection against directors’ misuse of corporate assets for personal gain. The indicators distinguish 3 dimensions of investor protections: transparency of related-party transactions (extent of disclosure index), liability for self-dealing (extent of director liability index) and shareholders’ ability to sue officers and directors for misconduct (ease of shareholder suits index). The ranking of the strength of investor protection index is the simple average of the percentile rankings on its component indicators.

It also checks whether a publicly traded corporation is listed on the nation’s most important stock exchange. If the number of publicly traded companies listed on that exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple shareholders. It also checks whether a company has board of directors and a chief executive officer (CEO) who may legally act on behalf of shareholders; whether this is permitted, even if this is not specifically required by law. Further, this indicator studies whether a company has a supervisory board (applicable to economies with 2-tier board system) on which 60% of the shareholder-elected members have been appointed and whether it is a manufacturing company and has its own distribution network.

Paying taxes: this indicator records the taxes and mandatory contributions that a medium-size company must pay in a given year. It also measures the administrative burden of paying taxes and contributions. The project was developed and implemented in cooperation with PricewaterhouseCoopers (PwC). Taxes and contributions measured include the profit or corporate income tax, social contributions and labor taxes to be paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, and any other small taxes or fees.  The ranking on the ease of paying taxes is the simple average of the percentile rankings on its component indicators, with a threshold being applied to one of the component indicators – the total tax rate. The threshold is defined as the highest total tax rate among the top 15% of economies in the ranking on the total tax rate. It is calculated and adjusted on a yearly basis. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. The threshold is not based on any economic theory of an “optimal tax rate” that minimizes twist or maximizes efficiency in the tax system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied on medium-size enterprises in the manufacturing sector as observed through the paying taxes indicators. This reduces the bias in the indicators toward economies that do not need to levy significant taxes on companies.

Trading across borders:

This indicator is based on importing a standardized cargo based on the time and cost of excluding tariffs associated with exporting and importing of goods by sea transport in a nation. The time and cost essential to complete every official procedure for exporting and importing the goods are recorded; however, the time and cost for sea transport are not included. All documents needed by the trader to export or import the goods across the border are also verified. For exporting goods, procedures range from packing the goods into the container at the warehouse till their departure from the port of exit. For importing goods, procedures range from the vessel’s arrival at the port of entry to the cargo’s delivery at the warehouse. For non-coastal economies, these include procedures at the inland border post, since the port is located in the transit economy. Payment is made by letter of credit, and the time, cost and documents required for the issuance or advising of a letter of credit are taken into account. The ranking on the ease of trading across borders is the simple average of the percentile rankings on its element indicators such as local freight forwarders, shipping lines, customs brokers, port officials and banks. These factors provide information on required documents and cost as well as the time to complete each procedure. To make the data comparable across economies, several assumptions about the business and the traded goods are used.

Enforcing contracts:This indicator measures the efficiency of the judicial system in resolving a commercial dispute. The methodology includes following the step-by-step evolution of a commercial sale dispute before local courts. The data is collected through study of the codes of civil procedure and other court regulations as well as questionnaires completed by local litigation lawyers and by judges. The ranking on the ease of enforcing contracts is the simple average of the percentile rankings on its component indicators. To indicate overall efficiency, one procedure is subtracted from the total number for economies that have specialized commercial courts, and one procedure for economies that allow electronic filing of the initial complaint in court cases. Some procedural steps that are part of others are not counted in the total number of procedures. Time is recorded in calendar days, counted from the moment the plaintiff decides to file the lawsuit in court until final result. Cost is recorded as a percentage of the claim, assumed to be equivalent to 200% of income per capita. No bribes are recorded. Three types of costs are recorded: court costs, enforcement costs and average attorney fees. And, court costs include all court costs that petitioner (Seller) must advance to the court. Enforcement costs are all costs that Seller (plaintiff) must advance to enforce the judgment through a public sale of Buyer’s movable assets, regardless of the final cost to Seller. Average attorney fees are the fees that Seller (plaintiff) must advance to a local attorney to represent Seller in the standardized case.

Resolving insolvency:  This indicator studies the time, cost and outcome of insolvency proceedings involving domestic entities. The data are derived from questionnaire responses by local insolvency practitioners and verified through a study of laws and regulations as well as public information on bankruptcy systems. The ranking on the ease of resolving insolvency is based on the recovery rate time for creditors to recover their credit which is recorded in calendar years. The period of time measured by Doing Business is from the company’s default until the payment of some or all of the money owed to the bank. Potential delay tactics by the parties, such as the filing of negligent appeals or requests for extension, are taken into consideration. The cost of the proceedings is recorded as a percentage of the value of the debtor’s estate. The cost is calculated on the basis of questionnaire responses and includes court fees and government levies; fees of insolvency administrators, auctioneers, assessors and lawyers; and all other fees and costs.

The Doing Business Report started since November 2001. The index is based on the study of laws and regulations, with the input and verification by more than 9,600 government officials, lawyers, business consultants, accountants and other professionals in 185 economies who routinely advise on or administer legal and regulatory requirements. In 2002 Simeon Djankov, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer published a paper on this topic in the Quarterly Journal of Economics titled “The Regulation of Entry”. The paper presented data on the regulation of entry of start-up firms in 85 countries covering the number of procedures, official time and official cost that a start-up must bear before it could operate legally. The main findings of the paper were that: countries with heavier regulation of entry have higher corruption and larger unendorsed economies. Such economies don’t bother about better quality of public or private goods. But, countries with more democratic and limited governments have lighter regulation of entry and these economies foster entrepreneurial culture. The paper got elated publicity because it provided quantitative evidence that entry regulation benefits politicians and bureaucrats without adding value to the private sector, or granting any additional protection.

 In June 2013 India stood at 134^th position out of 189 positions in ranking of economies by World Bank for doing business in a nation. Whereas Singapore ranks in number one position.

Center of Excellence for bigger growth efficiently and effectively 

Center of Excellence helps organizations to transform for bigger growth more efficiently and effectively to accomplish their mission. Centre of Excellence means  a place in an organization which is known for doing particular activities very well, and that involves new developments, new style of working etc. The Centre of Excellence may comprise a functional or cross-functional team looking both inside and outside the organization to capture new knowledge and practices. It may be set up as a physical or virtual team, but it will have a permanent rather than just a project status. The defining feature of a Centre of Excellence is research knowledge management.

For example, if a car dealer has ten servicing centers, then nine may be regular and one might operate as a Centre of Excellence. The one which operates as Centre of Excellence will have senior and experienced engineers and technicians along with researchers who will make diagnosis, technical analysis in developing suitable methods and techniques to establish best practice and disseminate this to the other teams/centers. This does not mean that workers in the non Centre of Excellence are someway less worthy, or are offering a sub-standard level of service.

Center of Excellence in the African continent  

The African continent is far ahead than other emerging economies of the world when it comes to training and developing youth of the nation. African economies are growing much rapidly and employers across the continent are seeking qualified personnel to maintain and pursue their progress. But many young Africans are still turning to northern or western countries for their education and their careers, making it difficult for African employers to hire qualified local workforce. In fact, more than half of African students who study in Europe and America take up employment there, instead of returning home. The African government therefore had to take preventive steps to stop the brain drain. The government and corporate, together are investing in starting centers of excellences to offer internationally recognized curricula and state-of-the-art research facilities. Thus providing a more affordable alternative in a better suited environment where teaching is in tune with the local context. These centers are investing heavily in the quality of education given to the students. These Centre of Excellences are gradually reducing the gap between institutions in the North and those in the South. They are also increasing their capacity to admit more students.

Recently in April, 2014 the World Bank’s Board of Executive Directors has approved US$150 million to finance 19 university-based Centers of Excellence in seven countries in West and Central Africa. These competitively selected centers will receive funding for advanced specialized studies in science, technology, engineering and mathematics (STEM)-related disciplines, as well as in agriculture and health. The landmark African Centers of Excellence (ACE) project, which will equip young Africans with new scientific and technical skills, will be financed through IDA (international Development Association of World Bank) to provide higher education, including short-term training, to students, faculty and civil servants. Hats off to them!!

Future of Center of Excellence 

In a latest news article in Hindu, a few colleges in and around Coimbatore have state-of-the-art centers of excellence set up on their campuses. The model works this way: an organization specialized in any sector like automobile, automation, software development, textile engineering ties up with a college to set up a compact model of its work place in a limited area complete with the latest equipment.

With hand-holding from the industry, some trainers are lent to operate the centre, while at the same time some faculty from the related department are selected to undergo hands-on training on the systems under the ‘train-the-trainer’ mode at the industry. For a while the trainers from the company and the trained faculty train the students. After a while, the company hands over the total operation of the centre to the college. From time to time, the equipment and faculty are updated keeping with the latest in technology. The Centers of Excellence are becoming change agents – biggest change has been the transformation of our ‘demographic burden’ into a ‘demographic dividend’!

The centers of excellence in education should extend demand-driven training, striving for international standards and recognition. It should be granted financial and statutory autonomy, flexibility in management and strategic planning to ensure good governance.

Lastly, Centers of Excellence should have the flexibility to respond to emerging needs, by developing new training programs, adapting salary and recruitment policies, and reshaping strategies according to political, economic and social changes.