● Chapter - 1 : MANAGEMENT

○ Natures of Mgmt. - Science, Art & Profession

■ Science is guided by universally accepted principles, Experimentation &
Observation, Cause & effect, Test of predictability & Validity
■ Art - Practical knowledge, personal skill, result oriented approach,
creativity & improvement through practice
■ Profession - Requires specialized knowledge, academic preparation, and
professional associations
○ Objectives of Mgmt. - Organizational, Social & Personal objectives
○ MBO [Mgmt by Objective] by Peter Drucker: Managers and employees work
towards a common objective - they record and monitor over specified period of
time
○ Advantages - Improved Participation, motivation, ownership, better
communication and clarity of goals across the organization
■ Disadvantage - Sticking to accepted Standard leading to lack of
innovation - more individual focused - ignoring quality of work due to
time-bound
○ MBE [Mgmt by Exception] by Frederick Winslow Taylor: Identification of
deviation from set standards and best practices - can impact organizational
performance - saves time by focusing on core responsibilities and important
deviations - lack of participation and more time and cost taken to find errors
○ Classical Approach (1900-30) - Focuses on output - efficiency and productivity
of workers - Not on differences in their behavior - Applying science, developing
proper mgmt structure and focusing on economic rationality
■ Scientific Mgmt: Focuses on best way to perform a job - to get highest
efficiency & production levels from workers
■ Frederick Taylor - Father of scientific mgmt - Gave 4 principles of
mgmt for identifying one best way of doing a job -- Use of scientific
selection and training methods - Pay for performance - Cooperation
between managers and workers - Equal division of work/responsibilities
between managers and workers
■ Frank & Lillian Gilbreth - Focused on motion studies - It is used to
establish job performance standard
■ Henry Gantt - Project scheduling model to improve worker efficiency -
Introduced bonus system for accomplishing more if done in lesser time
■ Administrative Mgmt/ Mgmt Process: Org efficiency through development
of managerial principles
■ Henri Fayol - 14 principles for managing complex organizations
■ Max Weber theory of Bureaucratic Mgmt - 6 principles - a formal
hierarchical structure, Mgmt by rules, Org by task competency,
Impersonal relationship, focused mission and employment basis tech
qualifications
 ■ Limitations of classical approach - Considered economic motivation - not
other needs like social, security, power needs - treats workers as
machines - Ignores external influence
○ Neo Classical Approach (1920-50) - Inculcating behavioral science into mgmt -
best ways to support and motivate
■ Human Relations Movement - Encouraging better performance -
Improving working conditions - reducing working hours - increasing
interaction time
■ Elton Mayo - Understanding worker’s problems - Fulfillment of social
needs, respect, recognition, participation and other non-monetary benefits
in addition to monetary benefits
■ Hawthrone Studies - Experiments conducted to determine effects of
better physical facilities on worker’s performance - changing working
conditions
■ Behavioral Science Movement - Wide emphasis on interpersonal
relationships and responsibilities - Studying attitudes and behaviors of
individuals and groups
■ Abraham Maslow - Hierarchy of needs - Physiological needs, Safety
Needs, Social Needs, Esteem, Self Actualization
■ Douglas McGregor - Motivational Theory - Theory X and Theory Y -
Theory X: Traditional Carrot and Stick approach - assumes workers are
lazy, unambitious & dislike work - emphasis on control, coercion,
authority, centralization and one-way communication -- Theory Y: Modern
theory considers workers as ambitious, creative and well-aligned to org
goals - workers allowed to exercise discretion and self-control -
decentralization, participation and 2-way communication
■ Herzberg 2 Factor Theory - Hygiene Factors: Essential - not motivate
individuals but their absence demotivates person - Pay, fringe benefits,
policies, status, security, interpersonal relationships -- Motivation
Factors: Ensure positive satisfaction & motivate employees to perform
better - Rewarding - additional benefit above physiological needs -
recognition, power, growth opportunities
■ Rensis Likert’s system of mgmt (Systems 4 Approach) - 4 mgmt
systems based on involvement, relationship, and roles of managers and
subordinates in org: Exploitative authoritative, Benevolent Authoritative,
Consultative system, Participative system
■ McKinsey 7 S Framework - Strategy, Structure, Systems [Hard], Skills,
Style, Shared Values, & Staff [Soft]- Monitor internal changes - Align
mgmt - No Future plan or guidelines
■ Limitations of Neoclassical - Over emphasis on human variables -
ignoring monetary/economic rewards - Focus on lower level not on senior
or mid-level
 ○ Modern Approach (1960-present) - Equal emphasis on man and technology -
focuses on complexities of org in terms of interaction between workers and env
■ Mathematical Approach/ Mgmt Science Approach/ Quantitative approach/
Operations Approach: Use of Maths & Stats - MIS - Systems mgmt theory
- Transformation of inputs into outputs - implementing feedback loop
mechanism -CPM [Critical Path Method] - PERT [Program Evaluation &
Review Technique] - scheduling & managing complex projects - Use of
probability & flow diagram - Longest path determines the duration of
entire project known as critical path - More time consuming
■ Systems Approach: Chester Barnard - System = Org - Made up of
several subsystems like resources, goods, info that co-exist and interact
to achieve org goals - Complex - Less practicability
■ Contingency Approach - No single best approach - all depends on
situation
■ Operational Approach - Focuses on roles and functions of managers &
clears out the principles to be followed by them
■ TQM - Focus on quality more - quality increases with time & costs decline
- Focus on cost - quality decreases - cost increases
■ Learning Org & Knowledge Mgmt Approach - Use of Intellectual
resources & capitals - to gain competitive advantage - Systems thinking,
shared vision, personal mastery
■ Team Building theory - Brigs-Myer’s MBTI theory (16 types) - X & Y
theory - Maslow’s Hierarchy of needs theory
■ Chaos Theory - sensitive dependence on initial conditions’ - little
changes in initial conditions will affect the system greatly
■ Line Authority - Direct control over subordinates - downward flow of
authority -- Staff Authority - Help line managers - by providing advice,
assistance, and information to them
○ Doing Things effectively (Big org with large resources, Doing Right things) vs
efficiently (Smaller co with less resource, Doing things rightly)
○ Porter’s competitive advantage strategies:
■ Cost, Differentiation, Innovation, Growth, Alliance
○ Dr C Rangarajan - RBI’s comm on computerization in banks
○ Finacle by Infy - BaNCS by TCS - FLEXCUBE by i-flex
○ Technological Dev in Banking Sector:
■ Mechanisation (1980s) - Traditional formats
■ Automation (1990s) - ATMs, EFT, Computerisation
■ Internet (2000s) - RTGS, IMPS, NEFT, Internet Banking
■ 2011+ - BHIM, UPI, Payments Bank, Mobile Banking, Biometrics
■ Challenges - Security Risk, Financial Literacy, Customer Awareness, Fear
Factor, Training
■ Future - BA, AI, Blockchain, AR, Robotics
● Chapter - 2: LEADERSHIP
○ Leadership - Setting vision, influencing employee behavior, motivating them,
guiding them, boosting employee morale
○ Tasks performed by a leader:
■ Communicator - Thinker - Direction Setter - Team Builder - Image Builder
○ Managers are generally authoritative - Leaders are charismatic
○ Leadership Styles:
■ Autocratic - Commanding - leader centric - leaders expect prompt
implementation - Create fear in minds of subordinates - Huge focus on
efficiency
■ Democratic - Participative - Communication is both upward and
downward - entails creativity, transparency, fairness, honesty, courage -
most effective - creates higher productivity, employee morale, better
team-work - Doesn’t work when roles are not clear
■ Laissez-Faire - Abdicative Style or Free-Rein - Employees also get
authority - Subordinates and departments allowed to work according to
style & minimal interference - least satisfying or effective - effective
when followers are highly skilled, educated and experienced
■ First 3 given by Kurt Lewin
■ Strategic Leadership - change mgmt - high performance team -
visionary goals - fill gaps between new possibility and need for
practicability
■ Transformational Leadership - Change in oneself, others, group and
org - Set challenging goals - achieve more
■ Team Leadership (Affiliative leadership) - Common vision and goal -
work for future - take along everyone
■ Cross-cultural leadership - adjust to diff env
■ Facilitative leadership - Revolves around outcomes and measurement -
effectiveness measured through efficacy of process - monitoring,
evaluating, interventions
■ Transactional leadership - Exchange process - immediate rewards for
working according to leader’s orders - Contingent rewards & MBE
■ Coaching leadership - Focus on improvement of operational
performance - skills improved through motivation, encouragement and
inspiration
■ Charismatic leadership - Revolutionary power, transforming beliefs -
values of followers
■ Paternalistic leadership - Father figure
■ Blake-Mouton Managerial grid - People-oriented leadership - supporting
and monitoring -- Task-oriented leadership - getting things done [Concern
for Results ‘X-Axis’, Concern for People ‘Y-Axis’]
● Impoverished Mgmt: (L,L) - Ineffective leaders - low concern for
deadlines and people
 ● Produce or Perish Mgmt or dictatorial or task mgmt: (H,L) -
Centered around McGregor’s X theory
● Middle of the Road: balance it out
● Country Club: (L,H) - Collegial style
● Team Mgmt: (H,H) - McGregor Y Theory - most effective
■ Leadership Style matrix - Flamholtz and Randle - Choosing right
leadership style - based on task and people [X-Axis: Capability for
Autonomy; Y-Axis: Programmability of Task]
● Q1 (L,H) - Autocratic/ Benevolent Autocratic
● Q2 (H,H) - Consultative/ Participative
● Q3 (H,L) - Consensus/ Laissez Faire
● Q4 (L,L) - Consultative/ Participative
○ Leadership Theories:
■ Great Man Theory (1840s) - Thomas Carlyle - Leadership traits are
intrinsic - Leaders are born and not made - Emphasizes charisma - Will
rise when situation demands
■ Trait Theory (1930s to 1940s) - People are either born with certain traits
or they acquire them to be a great leader - Differences on personality,
physique, social or intellectual - don’t distinguish between effective and
ineffective leaders
■ Behavioral Theories (1940s - 1950s) - More focused on behavior of
leaders rather than on traits - Leaders are made not born -- Role Theory
■ Contingency and Situational Theories (1960s) - Deal with additional
effects rather than behavior and traits
● Fiedler Model - Effectiveness of group depends on fit between
leader’s interaction style and degree of influence -- LPC (Least
prefer co-worker questionnaire) - High LPC - task oriented -- Low
LPC - relationship oriented
● Cognitive Resource Theory - Stress has negative impact on any
situation - experience and intelligence helps
● Hersey and Blanchard’s Situational Leadership (SLT) -
Focuses on follower’s response to accept or reject a leader and
their readiness - Willingness and Ability -- Directive Behavior - X --
Supportive Behavior - Y -- (L,L) - S4 - Delegating -- (H,L) -
Directing -- (L,L) - S2 - Coaching -- (L,H) -- S3 Supporting
● Leader Member Exchange Theory (LMX) - Leaders create 2
groups -- in-groups -- close to leader and more attention --
out-groups - formal relationship with leaders and less attention
● House’s Path-Goal Theory - Followers accept leader’s behavior
if they believe it will get them immediate or future satisfaction -- 4
types of leaders - Directive - Supportive - Participative -
Achievement-oriented
 ● Yroom and Yetton’s Leader participation model - Provides a
set of rules - stating the amount and form of participative decision
making in different situation - decision imp as well as what the
decision is
● Chapter - 3: HRD:
○ It can be both formal & informal - concerned with behavioral knowledge
○ Differences between HRM & HRD - HRM is maintenance oriented - focuses on
improving employees’ efficiency - Motivation done through monetary rewards or
incentives -- HRD is dev oriented - focuses on employees and org’s efficiency -
Motivation done through satisfying higher order needs
○ Major Responsibilities of HR Manager - Workforce planning - Recruitment and
selection - Induction - succession planning - employee engagement & dev -
Performance mgmt - compensation mgmt - competency dev
○ During mid 80s - HRM was coined in USA
○ Adam Smith - specialization and division of labor
○ Robert Owens [Social Responsibility]- pioneer of HRM - appraisal and pay for
performance - reduced working hours - housing facility
○ Frederick Taylor [Scientific Mgmt] - Systematic analysis of job and placing
workers in best suited tasks
○ Human Behavior and Relations - Hawthorne studies - happy workers are most
productive ones
○ Behavioral Science - Systems Approach - Contingency Approach
○ HR outsourcing
● Chapter - 4: PERFORMANCE APPRAISAL:
○ Traditional methods of PA:
■ Ranking Method - highest to lowest ranking comparison
■ Paired Comparison - Above two are called Comparative evaluation
method - n(n-1)/2
■ Grading Method -
■ Forced Distribution method - Performance conforms to normal distribution
- rater distributes employees on all points of scale
■ Forced-Choice method - J P Guilford - Series of statements - Yes or No
- each statement carries weight
■ Checklist Method - Checklist of individual’s characteristics in form of
Yes/No
■ Critical Incident Method - Focused on critical behaviors - involves 3
major steps - list of specific incidents is prepared - weight is assigned on
basis of criticality
■ Graphic Rating Scale Method - Linear rating scale - range of job
performance characteristics and traits of employees
■ Essay Method - Rater writes narratives description of employees’
strength, weakness, performance, potential, scope
■ Field Review Method - HR team reviews raters ratings
○ Modern/ Future-Oriented Methods:
■ MBO - Disadvantages - Setting un-measurable objectives - Time
consuming - Unrealistic goals - Lack of trust
■ BARS [Behaviorally Anchored Rating Scales] - Describes various
degrees of demonstrated behaviors w.r.t a specific performance
dimension - Involves 5 steps - Generating Critical Incidents - Dev
Performing Incidents - Reallocating Incidents - Scaling Incidents - Dev
final BARS incidents
■ Assessment Centers - Used for identifying high potential employees -
involves lot of exercises
■ 360 degree Appraisal - Used for judging training and dev needs rather
than for promotion or pay increases
■ Psychological Appraisal - Focuses on employees’ future performance
rather than past one - Emphasizes more on employee’s emotional,
motivational, intellectual and other personal characteristics
○ Procedures of Job Analysis - Task-oriented - Worker-oriented [Knowledge, Skills,
Abilities, Other chars]
○ Job Design - Defined as the process of deciding job contents, methods of
carrying out the jobs, and deciding existing relationships in the org - Techniques -
Job Rotation - Job Enlargement - Job Enrichment
○ Job Evaluation - Ranking Method - Grading Method (Classification method) -
Point Method (Factor Comparison Method)
○ PA Biases:
■ Primacy Effect (First Impression) - Some particular traits
■ Halo Effect - based on perception of a positive quality or trait
■ Horn Effect - Judging individual’s performance on basis of a negative
trait or quality
■ Excessive Stiffness or Lenience - Rating on the basis of assessor’s
mood, values, standards or physical makeup
■ Central Tendency - Attitude to mark as average i.e neither high nor low
■ Personal Biases - Supervisor’s perception of individual as a whole
■ Spillover effect - Taking past as a measure of rating present
■ Recency Effect - Rating based on most recent behavior demonstrated by
employee
○ Methods of Training: On the Job - emphasizes ‘Learning by doing’ - Coaching -
Mentoring - Job Rotation - JIT [Job Instructional Technique] - Apprenticeship --
Off the Job - Lectures & Conferences - Simulation - Transactional Analysis
(Motivation- Reaction) -- ADDIE Model [Analysis, Design, Development,
Implementation, Evaluation]
○ Measures effectiveness of training - Kirkpatrick/ Philips -- Philips model
measures outcome of training at 5 levels:
■ Reaction - Learning - Application - Business impact - ROI
 ■ Philips model include the last stage -- Kirkpatrick Model doesn’t
include ROI stage
○ Different types of Pay plans -
■ Job Based - Pay for the assigned jobs - not for the skills - each position
is given a pay-range basis job responsibilities
■ Person-based structures- Competency based pay -- Skill based pay
[Specialist - depth based; Generalist - breadth based]
● Chapter - 5: MOTIVATION:
○ Motivation 3 dependent & interacting elements: Needs, Drive & Incentives
○ Types of motives:
■ Primary Motives- Unlearned and physiological -- Hunger, Sleep, Thirst
■ Secondary Motives- Cognitive or learned -- Achievement & Learned
■ General Motives- Unlearned but not physiological -- Curiosity,
manipulation
○ Badu - Bartol & Martin - Vroom - Kreitner & Kinicki - Locke & Latham -
Steers - Kim & Lee - Thijs - Kennedy - Schmidt
○ Miller’s grid comparing morale & motivation: (Productivity, Morale)
■ [H,H]
■ [L,H] - No proper guidance, outdated technology etc
■ [H,L] - Strict monitoring, punishments etc
■ [L,L]
○ Performance is tied to motivation - Work Env is tied to morale; Higher
Motivation => Higher morale - vice versa not true -- Motivation individual
concept -- Morale group concept
○ Sources of Motivation - Intrinsic & Extrinsic
○ Theories of Motivation:
■ Behaviorist Theories:
● Classical Conditioning - Stimulus to response- [Respondent or
Pavlovian conditioning] - Ringing bell and food - salivation
● Operant Conditioning - Response to stimulus -
[Reinforcement Theory] - B F Skinner - behavior can be
changed by using punishment, reinforcement and extinction -
Rewards, Punishments, Extinction - Behavior is associated with
outcome
● Incentive - Reward
■ Socio-Cultural Theories:
● Push Motivation - People push themselves to achieve desired
goals like health & fitness -- Pull Motivation - More stronger -
drives come from within
● Drive Reduction Theory - Based on certain biological drives
which increase with time, if not satisfied - After satisfying drive,
strength reduces
 ● Cognitive Dissonance Theory - Differences in feelings about the
world and his own feelings and actions - cause dissonance -
reassurance is needed
■ Content Theories:
● Maslow’s need hierarchy & Herzberg 2-factor theory
● Alderfer’s ERG Theory - 3 groups of needs - existence
[physiological & safety needs], relatedness [social needs] &
growth [intrinsic desires and dev]
● Self-determination theory - Self motivation - 3 innate needs of
an individual are - competence, relatedness and autonomy
■ Temporal motivation Theory:
● Motivation = (Expectancy * value)/1+(Impulsiveness * Delay)
Expectancy = probability of success -- Value - reward --
impulsiveness - urgency to act -- delay = time to realize
● Achievement Theory - Personality components tied to
performance - hence achievement motivation
■ Cognitive or Process Theories:
● Goal Setting: Based on individual’s drive to reach clearly defined
goals - serves as reward - efficiency of a goal is affected by 3
factors - proximity, difficulty & specificity
● Vroom’s Expectancy Theory - Victor Vroom - 1964 -- Reasoning
behind individual’s behavior & choice relation to desired goal - M =
E*I*V; M - motivation by the env or condition, E - expectancy that
effort will lead to performance, I - instrumentality i.e.
performance will be rewarded, V - valence i.e. perceived reward is
resulting from performance
● Attribution Theory (given by Kelley) - description of processes
through - individual explains causes of behavior & events i.e.
factors of success and failure affect one’s motivation & emotions
● Equity Theory - Individuals outputs w.r.t his/her efforts fare in
comparison to outcomes w.r.t their inputs
■ Bernard’s Incentive Theory - Subordinates can be convinced either by
tangible benefits or through non-monetary benefits - Incentives - General
[job attractiveness, flexibility of working conditions, opportunity, social
outlook] - Specific [money, work conditions etc] -- Also gave acceptance
theory of authority
■ Mayo
■ McClelland’s theory of need - 3 needs - Need for achievement, Need
for affiliation, Need for Power -- Also called Learned needs theory
■ Equity Theory - Individuals motivated if they see fairness - Adams
proposed higher an individual’s perception of equity - more he is
motivated - 4 referent groups - Self-inside - Self-outside - Others-inside -
Others-outside
 ■ Self-efficacy Theory - Behavior of people dependent on what their
perception is about their self and capabilities rather than actual
capabilities - Proposes 4 major sources of information - Performance
Accomplishments - Vicarious experiences - Social persuasion -
Physiological and emotional states
■ Cognitive Evaluation Theory [CET] - effects of external consequences
on internal motivation - focuses on autonomy and competence -
sub-theory of self-determination theory
■ Goal Setting - linked to task performance -
■ Reinforcement Theory - Operant conditioning
■ ARCS Model - Motivational design - Attention [Perceptual Arousal,
Inquiry Arousal] - Relevance [inc learner’s motivation - Experience,
Present Worth, Future Usefulness, Needs matching, Modelling, Choice] -
Confidence - Satisfaction
● Chapter - 06: COMMUNICATION:
○ Types of communication:
■ Verbal - Written + Oral
■ Visual
■ Non-verbal - Para linguistic (Voice, Tone, vocal cues, pitch) - Proxemics
(Concept of space includes 4 spaces viz. Intimate, personal, social &
public) - Artifactics (personal accessories, fashion, dressing) -
Chronemics (Time aspect i.e. pause, silence) - Kinesics (Body
Language i.e. gestures, postures, hand & leg movement, head nods) -
Haptics (interacting via sense of touch)
■ Selective perception - Filtering what we like to see or hear and making
assumptions about things based on our past experiences
■ Fundamental Attribution Error - Explain individual’s behavior basis
internal factors like personality or character - overlook the influence
caused by external factors
■ Self Serving Bias - Cognitive bias - positive outcomes to their own
character - negative outcomes to external factors
■ Contrast Effect -
■ Formal Comm - Flow of information is vertical - horizontal also
■ Informal Comm -
■ Downward Comm - Top to bottom
■ Upward Comm - Feedback related process
■ Lateral Comm - Sharing ideas, feedback, emotions in your peer group
○ Models of comm-
■ Aristotle Model - Speaker-centric - gauge audience - careful selection of
words
■ Shannon & Weaver - Source to Receiver
■ SMCR Model - (Sender or Source, Message, Channel, Receiver)
 ■ Schramm Model - Centered around major dimensions of comm -
Encoding and decoding two major principles
■ Barnlund Transactional Model of Comm - Individuals are engaging
simultaneously in message sending and receiving
■ Helical Model - Process of comm starts from birth - continues through
entire life of individual
■ Westley and MacLean’s Model - Env has great impact on process of
comm - process begins from receiving and not sending of message
■ Constructionist Model - Focuses on the process of comm - construction
of message from its context forms the base and hence cannot be
separate from packaging/process
■ Linear Model - One-way communication - No feedback system
■ Interactive (Convergence) Model - 2 linear models - encompasses a
feedback system
○ Communication Theories Frameworks:
■ Mechanistic view - Comm is the perfect transaction of info from sender
to receiver
■ Psychological view - Communication involves thoughts and feelings or
receiver after receiving of messages
■ Social Constructionist - (Symbolic Instructionist) View - Depends on
how the comm is done and what is the content of the message
■ Systemic View - New message created when individuals interpret the
messages
■ Critical view - Way of expressing power and authority in a group
○ Grapevine comm - Chit chatting in office cafetaria
○ Theories of organizational comm:
■ Weber’s Theory - Orgs have clear roles, hierarchy, and structures - thus
comm is hierarchical clear and structured
■ Tompkins and Cheney’s org control theory - 4 ways of exercising
power in orgs - simple, technical, bureaucratic, concertive
■ Deetz’s Managerialism theory - Highlights going beyond classical fixed
notions and taking into account democratic aspirations of people in org
■ 7 C’s of Effective Comm - Completeness, Conciseness, Consideration,
Clarity, Concreteness, Courtesy, Correctness
● Chapter - 07: CORPORATE GOVERNANCE:
○ 2 major factors influencing CG:
■ Regulation & Enforcement
■ Risk Mgmt and Effective Governance
○ Internal CG measures:
■ Monitoring of BoDs
■ Control Procedures and Internal Auditors
■ Balance of power
■ Monitoring of Shareholders/ banks/ creditors
○ External CG measures:
■ External competition
■ Government Regulations
■ Mergers and takeovers
■ Media and Proxy firms
○ Systemic Problems:
■ Demand for Information
■ Monitoring costs
■ Supply of accounting information
○ SEBI Guidelines:
■ Clause 49 - listing agreement - 31 DEC 2005
○ OECD (G20) Principles:
■ Basis of CG - focus on transparent & efficient market - comply with law -
clearly defines roles and responsibilities of authorities
■ Protecting rights of shareholders & key ownership function
■ Equitable treatment of shareholders
■ Recognizing role of stakeholders in CG
■ Disclosure & Transparency
■ Board’s responsibility - monitoring mgmt - accountability to shareholders
■ Forms basis for Basel’s comm
○ Different Committees:
■ Audit - Min 3 directors as members - 2/3rd should be independent diros
■ Cadbury Comm Report - Published in Dec 1992 - Greenbury code
recommended establishing a remuneration comm - comprising entirely of
non-EDs - max of 12 months notice period
■ King Comm - Code of CG in SA - listed on Joburg Stock exchange - 3
reports 1994, 2002, 2009
■ CII (Confederation of Indian Industry Comm) - Voluntary
recommendations for industry to adopt and asks for commitment of a
company to run business ethically, legally and in a transparent way - No
need for 2-tiered board - No dictatorship - single person control in not
more than 10 listed cos
■ K M Birla Comm Report - Apply to listed cos with paid up share capital
of 3 cr and more - Set up remuneration comm - Board should meet at
least 4 times a year - Diro member for not more than 10 comms and
chairman of not more than 5 comms
■ SEBI CG Report - 50% board member comprise of ID - 2 types of mgmt
are envisaged - BoD and MD - Quarterly compliance report - Diros should
be financially literate
■ Narayan Murthy Comm Report - Board members should be trained -
■ Naresh Chandra Comm Report - Auditor-company relationship -
Auditing the auditor - Independent diros
■ Kotak Comm Report - objective of improving CG in listed companies
 ● Reduction in the max number of listed company directorship from
10 to 8 by April 01, 2019 -- 7 by April 01, 2020
● Expanding the eligibility criteria for IDs
● Enhanced role of the Audit Comm, Nomination and Remuneration
& Risk mgmt comm
● Disclosure of utilization of funds from QIP/preferential issue
● Disclosure of expertise of directors, auditor credentials, audit fees,
reason for resignation of auditors
● Mandatory disclosure of consolidated quarterly results with effect
from FY 19-20
● Enhanced disclosure of Related Party Transactions (RTP) and
related parties to be permitted to vote against RPTs
● Secretarial audit to be mandatory for listed entities and their
material unlisted subsidiaries under SEBI listing Obligations and
Disclosure Requirements (LODR) regulations
● Min 6 directors in top 1000 listed cos by 1 April 2019 - Top 2000
by 1 April 2020
● Atleast 1 woman ID in top 500 listed co - 1 April 2019 - Top 1000
by 1 April 2020
● Separation of CEO/MD and chairperson [top 500 co by mkt cap
w.e.f. April 1, 2020]
● Quorum for Board Meetings [1/3rd of the size of the board or 3
members whichever is higher] in the Top 1000 listed co by Mkt cap
by April 1, 2019 -- Top 2000 by April 1, 2020
● Top 100 entities to held AGM within 5 months of end of FY18-19
i.e. by Aug 31, 2019
● Shareholder approval (majority of minority) for royalty/ brand
payments to related party exceeding 2% of consolidated turnover
(instead of the proposed 5%)

● EXTRAS:

➔ Project Sashakt - 5-pronged strategy to resolve bad loans

◆ Project Sashakt was proposed by a panel led by PNB chairman Sunil Mehta
◆ Bad loans of up to ₹50 crore will be managed at the bank level, with a deadline of
90 days
◆ For bad loans of ₹50-500 crore, banks will enter an inter-creditor agreement,
authorizing the lead bank to implement a resolution plan in 180 days, or refer the
asset to NCLT.
◆ For loans above ₹500 crore, the panel recommended an independent AMC,
supported by institutional funding through the AIF. The idea is to help consolidate
stressed assets.
➔ Priority Sector Lending:
◆ Categories: Agri, MSME, Housing, Edu, Export Credit, Social Infra, Renewable
energy, Others
◆ Total PSL - 40% of ANBC - agri 18% - Micro - 7.5% - advances to weaker
sections - 10%
◆ Social Infra - bank loans up to limit of 5cr - Renewable - 15cr - Ind - 10L - Edu -
10L - Housing Ind - Metro - 28L else 20L
◆ Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods
Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment
Scheme for Rehabilitation of Manual Scavengers (SRMS) - Weaker Sections under PSL
➔ MSME:
◆ MSMED 2006
◆ Inv in plant & machinery - Micro <25L - Small - 25L < x < 5 cr - Medium - 5 cr to 10 cr
◆ Inv in equipment - Micro <10L - Small - 10L < x < 2 cr - Medium - 2 cr to 5 cr
◆ banks have been advised to achieve a 20 per cent year-on-year growth in credit to micro
and small enterprises, a 10 per cent annual growth in the number of micro enterprise
accounts and 60 percent of total lending to MSE sector as on corresponding quarter of
the previous year to Micro enterprises.
◆ As reported by Scheduled Commercial Banks (SCBs), on March 2017, there are 2998
specialized MSME branches - MSME general banking branches having 60% or more of
their advances to MSME sector
◆ As per Nayak Committee Report, working capital limits to SSI units is computed on the
basis of minimum 20% of their estimated turnover up to credit limit of Rs.5 crore.
◆ United Nations Industrial Development Organisation (UNIDO) has identified 388 clusters
spread over 21 states in various parts of the country
◆ The Ministry of Micro, Small and Medium Enterprises has also approved a list of clusters
under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) and Micro
and Small Enterprises Cluster Development Programme (MSE-CDP) located in 121
Minority Concentration Districts.
◆ The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund
Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to
the MSE sector without the need for collaterals / third party guarantees.
◆ Guarantee Trust would make good the loss incurred by the lender up to 85 per cent of the
outstanding amount in default - The CGTMSE would provide cover for credit facility up to
Rs. 200 lakh which have been extended by lending institutions without any collateral
security and /or third party guarantees
◆ Special Mention Account (SMA) - SMA 0 - Principal or interest payment not overdue for
more than 30 days but account showing signs of incipient stress - SMA 1 - 31 - 60 days -
SMA 2 - 61 - 90 days
◆ Banking Codes and Standards Board of India (BCSBI)
◆ The objective of TReDS is to create Electronic Bill Factoring Exchanges which could
electronically accept and settle bills so that MSMEs could encash their receivables
without delay. Trade Receivables Discounting System (TReDS)
◆ Certified Credit Counsellors are institutions or individuals registered with SIDBI who shall
assist MSMEs in preparing project reports in a professional manner which would, in turn,
help banks make more informed credit decisions.
➔ RBI as Banker to Govt