The Hindu Business Line : Cautious approach to foreign bank entry

The Hindu Business Line : Cautious approach to foreign bank entry

It was in early 2005, that I wrote a paper on Functioning of Foreign Banks in India for a WTO Conference organised by Mangalore University. At that time there was not much literature available to know the working of these banks except an old research paper in eighties and data from RBI / IBA sites. My work then was a mere compilation of inventory of foreign banks in India, which were in operation for over a hundred years.

Later I came across a good research paper by a senior official of RBI in their Occassional Papers. During the same year, RBI announced its policy of opening up and offering a road map for more and more foreign banks to operate in India. Some how I felt that not many foreign banks were keen to open offices or branches in India. I firmly believed that they confine themselves to a few metros like Delhi, Mumbai, Calcutta, Chennai, Bangalore and Hyderabad. Their clientele is always elite and these banks are not so much involved in compliance to developmental financing like priority sector financing which is the obligation for PSBs and Private Banks in India. Foreign Banks either deal with High Networth Individuals or Corporate clients only. Their market share is very negligible that it is less than five per cent - both in number of branches or business. I wrote a research paper in the same year 2005 on the sustainability of foreign banks which was presented at an International Conference on Business & Finance organised by ICFAI in Hyderabad that year. My findings are well substantiated too.

It is interesting to read this news item today, after a gap of over five years that thanks to Financial Sector Reforms during last two decades, that PSBs and Private Sector Banks in India have modernised themselves from all angles in their working to become productive and profitable to extend best customer service. Market share of Foreign Banks remains to be the least after all these years. The roadmap of RBI was not encashed by Foreign Banks even after five years. Certainly, RBI being regulator and big brother to the banking system in India has to be cautious in allowing more and more foreign banks in India in order to ensure a perfect level playing field.

Masters in European Studies & Management

Today, I closed a course "MBFI" - an elective for second year students of TAPMI in the new Campus.  Otherside, I started a new course titled "European Business Environment" for the first term students of MSEM of MCES/MU in old TAPMI Campus. What a strange experience?  There are hardly eleven students in the class.  I had to start everything afresh and require tremendous patience.  Let me see...

Namak Haraam

The second movie with the duo I referred in previous blogs, with Rajesh and Amitabh besides, Rekha, Hangal, Asrani, Raza Murad, Om Shiv Puri, et al. I quoted this movie in many of my IR Classes at Alliance to MBA students on Trade Unionism apart from love, romance, poverty, sacrifice, etc...

Bollywood Songs Of - Anand

Another clipping with 15 minutes of lovely songs. Enjoy!

Zindagi Kaisi Hi Paheli Hain - Hindi Movie Anand (1971)

How can I forget my early days of quitting my College (B.Sc. final year) and starting a career in Andhra Bank, Hyderabad?.  Rajesh Khanna was a super star then with Kati Patang, Aradhana, like movies.  And suddenly, one evening my colleague Mr Kulkarni pulls all of us (the new recruitee gang) to watch this new movie with a different hero - a lambu and called Babu Moshai in the film.  We went and relished this new hero Amitabh Bachchan. Ir was Hrishida's all time hit - AANAND.  I saw it over two dozen times, may be. And rest was history with movies like Mili, Zanjeer, Deewar, Sholay, Trishul, Kabhi Kabhi, etc.... The recent best ones of course are Mohabbatein and Baghbaan followed by of course Paa.  Amitabh, the great.

One story that goes round is that when Hrishikesh Mukherjee was successful with this pair of Rajesh Khanna and Amitabh in Aanand, later he went to produce another hit "Namak Haraam".  Rajesh Khanna did a mis-calcuation and sought the poor man's role to become a trade union leader and a friend of Amitabh the rich man (class-fellow).  Asrani, Hangal, Rekha, Raza Murad also played their best in this film.  Amitabh rose to greater heights and Rajesh Khanna's down fall started thereafter.  Where is Rajesh these days?  And Amitabh is steadily growing in stature and appearing on small and big screen regularly in a variety of roles.

FE-Business Videos

FE-Business Videos

My search on net for more and more business information is yielding results. This link of FE with videos is very useful.

The Hindu Business Line : The boom in housing finance

The Hindu Business Line : The boom in housing finance

Contributions on special topics in The Hindu Business line columns by this duo - Jayati Ghosh and CP Chandra Sekhar are laudable. They are more like collection items rich with data, charts, graphs and authentic data well compiled and analysed.

Here in this article, the authors have dealt with a simple product called 'Housing Finance' with all its historic data during the reforms period. At a time when the whole world is recovering from the 2008 shock of global meltdown, recession, financial crisis or whatever name with which is referred, housing finance in India was carried out systematically. The banking system in India is robust and safe. Due credit goes to the former RBI Governor Dr Y V Reddy, who was cautioning the banking system to go at steady space in 2005 and thereafter. In USA, the number of banks that have collapsed in 2009 were 140 and in the last seven months in 2010 itself numbers to 103. In India, the scenario is entirely different.

Data on Trends in Housing Finance, Personal Loans and Retail Portfolio have been well dealt with by the authors.

India Resource Center

India Resource Center

India Brand Equity Foundation (IBEF), as I wrote a few days back is one site that I would like to visit as frequently as possible to get to know more and more about my country, that is India. This novel initiative by Government of India and CII is laudable to showcase the developments, policies, data, etc on various aspects.

One link I give above is about the Unstoppable Indians operating in India who are to be recognised by the government. NDTV did a great job in compiling of these volunteer social entrepreneurs carrying out yeoman service in the nook and corner of the country. Similarly, the data on Deal Tracking of Mergers & Acquisitions as also Private Equity Lending is well disseminated by this site. Further, I am also impressed and a beneficiary to capture in one shot all about Doing Business in India. This site is an excellent window to those who want to explore more and more about India.

Barclays launches Rs 5.5-cr microfinance initiative

Barclays launches Rs 5.5-cr microfinance initiative

Commendable. Foreign Banks in India have their presence for over a century but their services (like Deposits, Credit Cards, Personal Loans, etc.) were mainly confined to two or three metro cities only. Most of them are located in Mumbai or New Delhi with a single branch presence. The strong and popular ones like Citi Bank, Standard Chartered, HSBC, Amex and Bank of America are steadily functioning discharging their responsibilities and obligations.  In May 2010, I came across an interesting report from PwC titled Foreign Banks in China.  The report covered many aspects like Market Environment, Risk Management, Products and Market Segments, Investments, Liquidity and Funding, Regulation, Performance and Peer Review.  It has given lots of data and finally complimented Foreign Banks in China as Partners in Success.

In 2005, RBI invited more and more foreign banks to open branches in India with a view to encouraging a level playing field and a purpose of introducing competition to PSBs and Private Banks in India. However, not much headway was made by these foreign banks. While PSBs and Private Banks in this country are required to extend 40% of their lending to Priority Sector like Agriculture and SMEs to be financed, Foreign Banks have been given a lower target of 32%. Even this is rarely achieved by the foreign banks but they choose the alternative to invest in the Bonds of NABARD and SIDBI to fulfil their obligation.

Corporate Social Responsibility undertaken by Barclays is interesting. That too partnering with two NGOs and taking the initiative ofoffering microfinance of Rs. 5.5 crore speaks at its willingness to lend to poorer sections and rural customers. I read from the net that earlier ABN-AMRO and HSBC also made attempts to enter Microfinance area in a small way.  I wish more and more Private and Foreign Banks join the PSBs in taking up rural finance projects to live up to their Priority Sector obligations in real sense.

Welcome to Indian School of Microfinance for Women ( ISMW )

Welcome to Indian School of Microfinance for Women ( ISMW )

Very few people know that there is an agency called Indian School of Microfinance for Women. Similarly many do not know the existence of SEWA (Self Employment to Women Association, Ahmedabad) or Women's World Banking who are catering exclusively to women in rural areas as also who want to be self-employed.

State and Central Governments should encourage such Not-for Profit Organisations, publicise their activities and support them in financial, managerial and operational areas. In the process, these governments would have also worked for the cause of the rural - unemployed - illiterate and destitute women who are less fortunate to get such services in public. They are supplementing the efforts of the government through their five year plans and in a phased manner. But ISMW appears to be involving itself in a range of activities like Agriculture, Renewable Energy, Technology, Education, Electrification, Housing Development, insurance, communication, and allied subjects too.

SBI ties up with OXIGEN to launch web based no frills Kiosk Banking - India Microfinance Business News

SBI ties up with OXIGEN to launch web based no frills Kiosk Banking - India Microfinance Business News

These days, SBI is always in news for several innovative initiatives. Be it Green Banking, Share Issue, new Products like Floating Rate Fixed Deposit Scheme, Teaser Housing Loans, Students Loans, SMS Grievance Redressal System, and so on.

This news item generates curiosity to the reader that in the process of implementing its rural banking initiatives and towards furthering of Financial Inclusion, it has tied up with a technology firm viz., OXIGEN. Amazing!

Spandana Microfinance IPO to raise Rs 1500 Crore - India Microfinance Business News

Spandana Microfinance IPO to raise Rs 1500 Crore - India Microfinance Business News

Hardly less than a month back SKS made a record by inviting the public investors with an IPO. It was well received by the market and all seems to be going well. Only RBI and Govt / SEBI are watching the scene how to regulate the MFIs in India. The proposed Act has been hanging with the Parliamentarians for past three years (if it was a bill to treble their salaries, they do it in 24 hours only).

Spandana, the second largest MFI is now coming forward with another huge IPO. It is time for the regulators to wake up before another mushrooming like NBFCs in mid-nineties. We may have to wait and watch for developments with our fingers crossed.

The Hindu Business Line : Wider choice for fixed-income investors

The Hindu Business Line : Wider choice for fixed-income investors

IFCI is an interesting organisation. It was the earliest of the DFI (Development Financial Institution) set up by Government of India in 1948 ie., immediately after independence, much before the Five Year Plans commenced in 1951 or India's Industrial Policy was finalised. IFCI has seen several ups and downs in the last six decades. In the last few years, there was also a talk that it would be wound up too.

Much later to its formation, we saw the birth of a few more strong industrial financial organisations like ICICI in 1955 which was formed with the assitance of World Bank to cater to foreign currency loans (since reverse merged with ICICI Bank in 2002); IDBI, an off-shoot of RBI for all refinancing activities etc., in 1964 (alongwith UTI), which again was reverse merged with IDBI Bank a few years back. And now, there are host of other important DFIs like LIC, NABARD, SIDBI, EXIM Bank, ECGC, IDFC, IL&FS, IICFL, PFC, REC, et al.

It is heartening to read that IFCI is now offering Tax Saving, Infrastructure Bonds of ten years tenure with different options and at very competitive rates of interest too. There is option for conversion after five years lock-in period too. These are tradeable after five years. Looks like an attractive investment option to individuals too for saving as well as tax-planning purposes, by investing Rs. 20,000 and thereon. So many positive points have been written about IFCI like strong Capital Adequacy Ratio. The last date is August 31, 2010.

Aadhar and Pseudo Swamijis in India

Pseudo Saints in India

It is a very good news in Yahoo India that there are so many Self-styled Saints and Sanyasis in India who are hitting the headlines for wrong reasons.  They preach sacrifice, concentration, purity, celibacy, honesty, sincerity, etc but in real life indulge into sex scandals, land deals, murders, amassing of wealth, cheating, easy life style, executive travel by air, posh cars, huge bank balances, etc. They are under no law, no regulator, no guidelines, and so on.  They need not register with any authority; but simply declare to the world that they are pure and mobilise innocent, gullible and illiterate disciples.  Several names have been mentioned in the write up (pl see link) and I suggest that Nandan Nilekani's Aadhar exercise should also cover these great Godmen.