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ANOVA results reveal that there is a significant difference O Political leaders should not be allowed to interfere in
between different categories of default (reasons for the working of the bank and the sanction of loans in
default) and between canal and non-canal region. particular. The bank officials must be left free to grant
loans only to the deserving applications and to take
5. Measures to Curb NPAs suitable action against the defaulters.

In the present study six major reasons are identified for O The realization of bank dues through the court,
default in repayment. The following suggestions are made besides being lengthy procedure, and is quite
to curb the malady of default and to improve the recovery expensive. Hence special tribunals, should be set up
performance. for the recovery of agricultural loans.
O Loan should not be sanctioned to any one in a hurry or
O A common cause for NPAs in the study area is the
under political pressure. Every application for loan incidence of cyclones and floods in the canal area and
should be properly and thoroughly scrutinized. drought in the non-canal area. Heavy default in
repayment of loans is often caused by these natural
O Bank officials should strictly monitor the utilization of calamities. Through the introduction of crop insurance
the loan by frequent visits to the villages, so that the scheme in both the regions, the farmers will be
loans are used by the borrowers for the purpose for benefited.
which they are sanctioned.
References
O Crop insurance scheme should be extended to the
entire district and adequate supply of agricultural 1. Nirmal Sande Rathne, An Analytical approach to Loan
inputs should be made available at reasonable prices defaulters by small farmers in rural Financial Markets
to the farmers. in Developing Countries, J. D. Vonpischke, John Hopkins
University, London, 1983, p.188.
O Bank officials should convincingly explain to the
borrowers about the importance of prompt and 2. Co-operative Perspective, Vaikunta Mehta National
timely repayment of loans for recycling of funds and Institute of Co-operative Management (VAMNICOM),
also to sanction new and additional loans. Pune, Vol.30, No.3, Oct-Dec. 1995, p.49.

O Proper procedure with a suitable repayment schedule 3. Von Pischke, J. D. et al. Rural Financial Markets in
should be adopted for the recovery of loans at the Developing Countries: Their Use and Abuse, The John
time when the farmers sell their produce. Efforts Hopkins University Press, London, 1983.
should be made well in advance to recover the loan
installments by sending timely reminders and notices 4. RBI, Report of the agricultural credit review committee
to the borrowers. (ACRC), a review of the agricultural credit system in
India, Bombay, 1989, p.635.

SAIL snubbed in arbitration case

The Delhi high court last had dismissed the writ petition of Steel Authority of India in an arbitration case against
Great Eastern Shipping Ltd, commenting that the public sector steel major had tried to obstruct arbitration proceed-
ings and its conduct was "less than fair and an abuse of process of this court." According to the charter party agree-
ment between the two, the shipping company was to transport coking coal from Australia to three ports in India.
Disputes arose over discharge of cargo at Vizag port.

The matter was referred to arbitration in which the award went against the shipping company. It moved the high
court that held the tribunal had gone wrong. Thereafter, the shipping company wrote to Indian Council of Arbitration
to start the process of arbitration according to its Maritime Arbitration Rules. SAIL delayed replies to the letters seek-
ing arbitration and contended that the disputes have already been decided once by arbitration.

The council then constituted an arbitration tribunal on its own. SAIL therefore moved the high court against the coun-
cil. The court held that under the scheme of the Arbitration and Conciliation Act, it would not interfere in arbitration.
The objection should be raised before the tribunal, the judgment said.

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