Friday, May 28, 2010

My exposure to Two B-Schools

After serving in the banking industry jobs for over 25 years and 3 years in a manufacturing cum export company in Hyderabad and elsewhere in various positions, it was a dramatic turn for me to have entered academics in May 1999.  I lived in backward rural areas as also in Mumbai Metro for my banking jobs.  May be my flair for training and long years of experience in management led me to join TAPMI, Manipal. Entering my fortieth year of service, there is enough to look back from so many angles; with almost 50-50 exposure to public and private sector. I feel I have always been learning many things in a hard way and did justice to all the assignments so far.

In the past eleven years itself, during my exposure to two b-schools in Manipal and Bangalore, besides my teaching the MBA students courses like Banking Management, Financial Management, Executive Communication, Accounting, Financial Services, Entrepreneurship, Venture Capital, Retail Banking, Industrial Relations, Business Laws, etc.,  life taught me so many lessons. Quite frequently, my former students keep asking me about the two experiences. It is pretty difficult to pen down but I would scribble some thoughts.

Both are in private sector offering autonomous 2 Years PGDM. That is probably the only similarity.  One is in rural location and other in Metro; one is managed through Faculty Governance and other by a Family Management.  One is over twenty five years old and the other just five years. In one, I was Chairman-Admissions and the other Registrar - rendering my administrative skills besides academic pursuits. They both have different styles of Governing Bodies, Admissions, Curriculum design and delivery, Evaluation Systems, Faculty Recruitment, Service conditions, Placement facility, Student Activities, Alumni Relations, International Exchange mechanism, Web site info management, Focus on Research and Consulting, and so on. Even their approaches to Accreditations with regulators and B-School Rankings are also entirely different.

Interestingly, I had chosen the former even though in a remote location to rejoin and pursue my career further. I keep reminiscing my past in all the Organisations I worked in, and compare them too.  Life is a big leveller and one has to be learning lessons on an ongoing basis with an eye on continuous improvement (KAIZEN).

Wednesday, May 26, 2010

A fulfilling trip to Salem, TN

The Summer Vacation 2010 was different for me. My First Day was at Oracle office in Bannerghatta, Bangalore on 14th May with Dr Simon and Prof Jaims for a valediction program.  Side by side to availing of vacation, I have been also attending to official work at CEE, Koramangala primarily for e-GPX related work.

On 22nd I travelled to Salem / Rasipuram in TN by taxi along with Ganga to address a session on Emotional Intelligence to 35 participants of an AICTE sponsored  two week long (10th to 22nd May) Faculty Development Program conducted by Muthayammal Engineering College.  I was invited by Dr Saravanan Raj, HOD of Management Dept., also to be a Special Guest at the valediction to deliver an address and distribute the Participation Certificates. I had the opportunity of interacting with Dr Prabhakaran of NIT-Calicut.

The second part of the trip was to visit another unique and special Ganesha temple about 10 kms away from Salem on 22nd evening. Next day, we travelled to another special tourist spot - Yercaud, a hill station.  It was really a pleasant morning going round gardens and boating.  TN Tourism Department and Government deserves to be complimented for offering such a wonderful spot to the tourists.  A few photographs have been uploaded in my pages in Face Book and Orkut. We returned home on the evening of 23rd May.

As the vacation is continuing with my personal and official works, with visits, mails and phone calls, I have also completed the evaluation of papers from Sri Satya Sai University, Puttaparthi, AP. There is some progress in my Ph.D. work too.  Some other developments during the period are Air Crash in Mangalore on 22nd,  Alumni meet in Bangalore on 22nd, PM's important Press Meet on 24th, Dr KS Rao's shift to a new B-School in Bangalore, discussions with DNSK, CKR, Mohan, Sowmya, Kavita, et al on various matters.

Tuesday, May 18, 2010

My life, my years

I turned 57 years old on last October 19. And this month, I entered 40th year of my long career. Born in the year 1952, I passed HSC (XI th Standard) in First Division in April 1967 at the age of fourteen and half! Then it was PUC in 1968 (we faced some communal disturbances in the Science College, Saifabad for a month or so) and went on to join 3 Year B.Sc.(with Maths, Physics and Geology) in the same year.  Had there been no disruption of studies during 1969-70 in Telangana / Osmania University, Hyderabad, I would have graduated at the age of eighteen and half! But, sitting idle at home and reading papers, fate took me to look for job advertisements during 1970-71 which led me to get selected and join the Andhra Bank job with merit.  All these incidents had also an indelible mark in my life - achieving something or the other at a very young age. Life is very strange indeed!  Suddenly, I feel I am aging!!

Having started to work at eighteen and half in April 1971 in Head Office of Andhra Bank, Hyderabad, I changed jobs six times since then. I went to SBI (1971-1993), Wonder Granites Ltd-Hyderabad (1993-96), Canaan International Credicorp Ltd-Hyderabad (1993), The Vysya Bank Leasing Ltd - Bangalore (1996-99), TAPMI-Manipal (1999-2006) and Alliance Business School (2006-09). 

Thanks to my late father's encouragement, I joined Vivek Vardhini Evening College, Hyderabad in B.Com first year classes in June 1972.  Interestingly, in the same year I cleared the CAIIB first part with hard work. Pursuing graduate and Post Graduate studies for next five years was a herculian task I experienced while working and attending evening colleges.  Fortunately, I passed out both with University level ranks - 4th in B.Com in 1975 and 6th in M.Com in 1977. This and other academic pursuits on an ongoing basis helped me to build my professional career on fast track. Quitting graduate studies almost in the fag-end did not stop me pursuing my studies further like Diplomas in Training & Development, in Merchant Banking, in Industrial Relations, Computer Programming, Industrial Finance, etc in later years. I do not know how and when I would be completing my Ph.D. which is a requisite for any good academic.  My fingures are crossed!

SBI gave me everything.  My acquiring B.Com and CAIIB Part-I well in time, made me eligible to appear for Trainee Officers competitive exam in 1976, which is considered to be tough and prestigeous for promotions.  I succeeded in my first attempt only thanks for the motivation from my father.  I achieved my Post Graduation and TO selection in 1977.  After working in various branches for two years as a Trainee and on confirmation in 1979 again at different branches as Accountant, Field Officer and Branch Manager (mostly in rural Telangana branches), I moved to RO, Hyderabad in mid-1984 and to Central Office, Mumbai in November, 1984.  In the two years 1984 and 1985, I completed the qualifications with IIB - viz., Certificate in Industrial Finance and CAIIB (Part II). These added to my CV and I was promoted in merit channel from Junior Management to Middle Management Grades II and III in 1984 and 1985.  While continuing in Mumbai up to 1992, I was also promoted to Senior Management Grade IV in 1990.

I got married to Ganga on 23rd March 1983 while I was working as a Branch Manager, SBI, Agricultural Development Branch, Wardhannapet in Warangal Dist, Andhra Pradesh.  My daughter Sravanthi was born on 10th July, 1985 in Vizag, AP while we were in Mumbai.  Life in Mumbai for about 9 years is memorable.

Working life has taught me so many things; so also the places where I worked and people with whom I was associated. On date, I had twenty one years of public and eighteen years of private sector experience. Shift from my successful banking and administrative career to Aademics in 1999 was a very big challenge to me. Sharing of my banking experience in rural and urban centres, in administration and branches, with students of MBA 2nd year offering MBFI as an elective course was the beginning in 1999.

The next term of course, I added value to another course titled Financial Services drawing from my three years stint as Vice President in The Vysya Bank Leasing Ltd, Bangalore. My banking and administrative experience gave me success for four consecutive years as Chairman-Admissions in TAPMI with multiple positive results.But then, fate again played its role to take me to Alliance Business School in Bangalore for less than three years 2006-09 as a Professor of Finance and Registrar. And then, I re-joined TAPMI as a Professor in June 2009.  I was given responsibilities of Area Chair - Finance & Economics as also Chairman of Branding, Promotion and Consulting Committee.  I had to reestablish myself in TAPMI and Manipal.

By now, I am an accomplished person, if not an excellent Academician.  I taught courses, handled assignments, wrote research papers, chapters in books, delivered lectures, led committees and struggling to complete my Ph.D. which is a necessity in this field. I also teach a course on Business Laws online for a tech agency called 24x7 Learning. I spend long hours in either reading auto-biographies of successful entrepreneurs from India or abroad or hook to computer to fiddle with the Internet and Social Networks which has become my latest fad. Today, one an find me in google, bing, scribd, twitter, facebook, orkut, linkedin, wiziq,, etc.  Let me see what is in store for me in the rest of my (working) life.

Wednesday, May 12, 2010

Foreign Banks in India : Study

Business World latest issue carries the study.
Prof Chowdari Prasad
TAPMI, Manipal-576104
Karnataka, India
Off: 91-820-2701045

Tuesday, May 11, 2010

MPLAD and recent Supreme Court ruling!

News is that the salaries of Members of Parliament are to be revised.  The Hindu (daily) in its Editorial on May 11. 2010 wrote "All Pay, No Work" - MPs don't deserve a five-fold salary hike.  The Editorial also has A THOUGHT FOR TODAY : India is the only democracy in the world where MPs decide their own salaries - Somnath Chatterjee, Former Lok Sabha Speaker. What an irony? Mera Bharat Mahan!

It says that a Joint Parliamentary Committee has recommended that an MP's salary be hiked from the existing Rs. 16,000 to Rs. 80,000, which would be at par with that of a Secretary to the Government. Remember, they have handsome perks of all sorts too........... taxable or otherwise! It amounts to Rs 38 lakhs per year!!

It is a big debate, never ending, that if these so called People's Representatives have made all sacrifices to enter public life to serve the Aam Aadmi, why they should be paid 'salaries'?  Do they come under any of the Industrial Relations legislations? They are not full time employees with a set of service conditions, timings, duties and responsibilities. Do they observe any Code of Conduct? Is their annual performance reviewed by any one (the employer)?  The Speaker of Lok Sabha has been struggling and pleading with them to submit their Assets & Liabilities data recently.

The Hindu, on May 07, 2010 (p 12) carried an article with a caption "Nothing unconstitutional about MPLAD Scheme, rules Supreme Court" - mere allegation of misuse by some MPs in itself may not be a ground for scrapping it.  Members of Parliament Local Area Development Scheme.  Strange are the rulings of the highest seat of judgement - Supreme Court, in some cases.  Recently, SC ruled that pre-marital sex and Living In arrangements are okay in Indian society!  Similarly, the MPLAD Scheme which is in operation for about twenty years is ruled to be okay.  Supreme Court judgement on MPLAD Scheme

This innovative and interesting scheme was introduced by the then Prime Minister Mr PV Narasimha Rao in early nineties.  The objectives may be sincere but the motive must be to keep the MPs in good humour.  It is the tax payer's money that is doled out at Rs. 2 crore per MP per year.  If I do the maths, the amount spent (if at all), would run to billions in last twenty years.  If only the amounts were spent / invested judiciously, wonders if not miracles should have taken place all over the country in infrastructure, drinking water facility, education, electricity, health and sanitation, family welfare, irrigation, non-conventional source of energy, community centres, public libraries, bus stands, roads, pathways, bridges and sports infrastructure. But......?

Where is the local area development?  Who is accountable?  What is the Comptroller or Auditor General of India doing?  Is there any study to substantiate the outcome of this Scheme in any part of the country.  Like they say, Courts have no eyes but only ears (no mention about mind, heart, soul, etc, of course).  Seeing is always believing.  Let a senior Parliamentary Committee go into the working of the scheme, study the fruits it had borne, and review.  There ought to be misuse, misappropriation, fraud, cheating, etc in a majority cases.

Let not the politician and bureaucrat take shelter under the so-called judgement of the Supreme Court and continue to enjoy the funds and amass wealth at the cost of the ex-chequer and tax payer's money.  The ruling and opposition parties  and their members should be honest and committed to rural development rather than collude to continue to operate such schemes for ever without audit, review, revision and disclosures. Instead, if the judiciary joins hands with polity and bureaucracy to say "All Is Well", the poverty sticken, debt-burdened poor and hungry farmers continue to commit suicides without any remedy. 

Similarly, the foul cry and recent buzz word like Financial Inclusion - would never achieve total revolution in the country.  All the schemes and slogans will remain on paper only.  PMs and Governments will continue to come and go; Five Year Plans would go on and on;  Today, we have fortunately an honest and sincere Prime Minister and also an erudite and efficient/committed Deputy Chairman of Planning Commission.  They should be ever remembered for all the contributions to the people of the country towards development, growth and total change in quality of life - thanks to economic and other reforms.  No more populist measures please.

Cooperative Banks to merge with Commercial Banks?

Coop Banks to merge with Commercial Banks in India?

This is an unpalatable development and a death blow to the Commercial Banking System in India.  During the early years after Independence, cooperative banks were found to be not serving their purpose, and were not viable to be set right.  Commercial Banks were asked to go rural beginning with Imperial Bank of India nationalised as State Bank of India in 1955.  This was followed by take over of eight State-owned banks - viz., Bikaner, Hyderabad, Indore, Jaipur, Mysore, Patiala, Saurashtra and Travancore to merge as seven subsidiaries (SBBJ being one bank) of State Bank of India in 1957.

Later, in 1969 and 1980, the Indian banking system witnessed two major nationalisations of fourteen and six private banks to be brought under the public-sector fold.  The State Bank Group and Public Sector Banks were handed over the agenda of opening rural branches, spread banking at village level, take up agricultural finance in a big way and follow the Lead Bank Scheme introduced in 1969.  No doubt, it affected their bottom lines as initially they were not cut to handle such business while cooperative system was co-existing and had burnt their fingers too.  The new banks had no choice of their business, pricing, customers, etc.

Then came year 1975, when on the recommendations of some high power committees (during the Emergency regime), the new concept of low-cost, locally staffed concept of Regional Rural Banks whose capital is contributed by the Central / State Governments and Sponsoring PSBs.  Each such RRB was expected to serve a contiguous area of one or two districts in a State, preferably by the Lead Bank of the District. Initially, the manpower requirement was supported  by the sponsoring bank. As many as 196 RRBs were floated to serve the one or two contiguous districts all over the country, again for rural lending.  All of them have also been consolidated in recent years; they number around 89 or so now.

Enter the era of Financial and Banking Sector Reforms in 1991 (after the Public Sector banking system was in a very bad shape in terms of productivity, profitability, automation, pricing, customer service, etc).  Almost all the PSBs and private banks were also hit by the wave of Harshad Mehta's Stock Market Scam in 1992. Their Balance Sheets went out of shape and needed serious corrections - thanks to the introduction of Basel norms, prudential norms, etc. Concepts like Capital Adequacy Ratio, Prime Lending Rate, Asset Liability Management, Risk Management, etc have entered the banking scene gradually while computerisation came very handy tool to manage the huge business levels and demand for productivity and efficiency.

The concept of Local Area Banks in 1995 (brain child of Mr P Chidambaram) did not take off well.  They were private sector rural banks with a higher capital of Rs. 5 crores covering two to five districts in a State. Today, hardly four such LABs are functioning. RBI took a policy to stop further licencing of LABs.  Islamic Banking was not permitted to be undertaken by banks in India.  Micro Finance has entered the Indian scene slowly and steadily.  Financial Inclusion is the buzz word today.  Non Governmental Organisations, Business Correspondents, etc as also franchising and outsourcing is the order of the day.  Technology has been heavily introduced in the banks in India. 

After nearly two decades of reforms, there is a highly efficient and transparent level playing field in the Indian banking scene.  Foreign Banks, though permitted to enter the field, are very selective and are very apprehensive of their profitable operations.  At this juncture, when consolidation of PSBs and Private Banks did not receive the nod from different circles, it is interesting that cooperative banks are being attempted to be consolidated to merge with Commercial Banks.  We need to wait and watch for the policy to be announced and to see the outcome as to who would be the real beneficiaries of such a move?  The staff, the depositors or borrowers, the regulators, or the politicians?  God save Indian Banking!

Monday, May 10, 2010

The Unstoppable Indians?

I am not referring to Lalu, Mayawati, Modi (Narendra or Lalit), Jayalalithaa, Mamata, Rahul, Shashi Tharoor or Jayaram Ramesh and Sachin Tendulkar, MS Dhoni or Sania Mirza. Neither I am interested in Shah Rukh Khans, Salman Khans, Katy Mirza or Katrina or Shilpa Shetty, Rakhi Sawant, Priyanka Chopra or Preety Zinta, et al.  All these are Public Servants, Politicians, Film Stars and Sports Persons but making tons of money.  There are this IFS-B Officials like Madhuri Gupta, Ketan Mehta, MCI Chair-person, corrupt bureaucrats and even Defence Personnel in senior positions.  Who is paying them? The gullible, innocent, honest, simple, sincere Tax Payer - the AAm AAdmi.  Either these celebrities get elected or selected initially on the strength of their merit, sincerity, honesty, hard work, intelligence and so on but later turned out to be Heros. There are some fly-by-night operators. Each one of them claim unique achievements which are some times questionable by experts, lawers, etc. They earn name, fame, money, power, positions but never share the success with others.

I am excited about those who toil and serve.  Please see the link here: The Unstoppable Indians.  The TV Channels like NDTV, CNN-IBN, etc are carrying out yeomen service in covering stories of such unsung, unheard, unwept and unknown heroes and heroines.  I wrote about the Social Entrepreneurs in one of my earlier blogs two months back.  They are the ones who care for the society, create new ventures, afford employment avenues and help their unfortunate brethern to eke out some living.  We heard of Mohd Yunus of Bangladesh who created Grameen Bank and won Nobel Prize in 2005-6 for Peace.  In India, we have several Yunuses (!) in SEWA, SKS finance, Basix, Lijjat Papad, Bhagavatula Charitable Trust, AMUL, etc. 

"The Week" of Malayala Manorama Group (Kerala) scouts for and identifies every year a unique person in the service of humanity and declares him or her as Man of the Year. It is going on for over twenty five years. The list of unstoppables by NDTV is very special with names like The Umang Mahila Movement, The Barefoot College, Dalit Businessman, Gulabi Gang, Khabar Laharia, etc.  It is time that Government of India should acknowledge and recognise / reward all such self-less unstoppable Indians instead of encouraging controversial politicians, businessmen, scientists, sportsmen, cinema stars and others who influence and get awarded with Padma Shri, Padma Bhushan, Padma Vibhushan and others.

The Best Bank in India

Yesterday, our Director was enquiring with me as to who is the Best Bank in India?  My obvious answer was State Bank of India - from all angles.  Only some magazines now and then carry out surveys and studies to declare X, Y or Z Bank (in public, private or foreign banks categories) to be the No.1 based on some parameters like growth, customer service, per branch business, per branch profit, per employee productivity and so on.  Balance Sheet Ratios could be used in so many ways to interpret and substantiate such results.

I was surprised three days back that a Lions Clubs International - 1st Multiple District Convention of 324D2 organised in Goa on May 7-8-9, 2010 was sponsored by State Bank of India where none of its Officers were either members or Office Bearers of the Club.  The stall put up by the bank was being manned by a very senior Officer of the rank of AGM and a variety of literature on its products and services were displayed.  A cute literature describing all the features of newly introduced Mobile Banking was distributed.

SBI wins Asian Banker Award

The State Bank has won the prestigious Asian Banker Achievement Award for being the strongest bank in Asia Pacific region, instituted by the Qatar Financial Centre Authority and the Asian Banker magazine.

The award is in recognition to SBI’s combination of financial performance and key business improvements, making it the region’s strongest bank with strong and steady income growth rates of 29 per cent, 14 per cent and 28 per cent for the past three years, the magazine said in the award citation.

Eventhough I left the services of SBI seventeen years back (on 30th April, 1993 ) and being one of the youngest Chief Managers and youngest pensioners of the bank, I keep track of the developments at SBI on a regular basis.  First of all, it is my alma mater with whom I grew up for twenty one years having got four merit based promotions in 1977, 1984, 1985 and 1990.  And then, I need to update myself with the happenings in the Indian banking industry to teach my students at TAPMI on contemporary issues.  I have read that Punjab National Bank and ICICI Bank are contesting with each other for number two status.

Saturday, May 8, 2010

Chillaxing in Goa

Hey every one,  For three days I am off from work and Manipal to Goa along with my friends / family members of Lions Club Manipal to attend the 1st Muliple District Convention of 324D2 in Goa on 7-8-9th May 2010.  I am away from work and Manipal all alone but with Lions, Lionesses and Lion Cubs of Manipal.  Our Club is receiving Awards for the year 2008-09 and we are all on holiday, relaxing, chilling and chillaxing.

Thursday, May 6, 2010

Kabhi Khushi, Kabhi Gham!

Non Banking Financing Companies in India

Ever since India has embarked on the Economic Reforms and Banking Sector Reforms in 1991/1998 (thanks to Mr Narasimham, ex-Governor of RBI who headed two important Committees), there have been encouraging news in the media about working of banks and improvement of health of the financial system.  Inspite of several changes in Governments / Political Parties in Power, introduction of several reforms in various fields simultaneous with removal of licence-raj scenario, Banks and Non-Banking Financial Companies (NBFCs) have been facing the brunt.  Much can be said about the phenomenal changes in the working of banking system - be it in Balance Sheet Management, Technology like ATMs, e-Banking, Dematerialisation, Core Banking Solution, SWIFT, Asset Liability Management (ALM) or Risk Management, Prudential Norms (like changes in CRR, SLR, introduction of CAR) and so on. 

The country cousin of banks (Public, Private - Old & New, Foreign, Cooperative, Regional Rural and Local Area Banks) are the Non Banking Financing Companies (NBFCs) popularly known as private finance companies.  No doubt they are ancient and have been playing a very responsible role in the Financial System by offering para-banking facilities.  Unfortunately, during the period when Commercial Banks were undergoing health-check up, there was an unhealthy mushrooming of NBFCs in early nineties. These could be listed as Companies engaged in Chit Funds, Nidhis, Investment, Leasing, Hire Purchase, Housing Finance, Credit Cards, Locker Facilities, Mutual Funds and Asset Management, Venture Capital and Private Equity, Merchant or Investment Banking, Asset Reconstruction, Credit Rating, Credit Information Bureaus and so on. 

But, for some interesting reasons and thanks to the Grand Scam by Mr CR Bhansali in late nineties, RBI and Government of India had appointed Vasudev Committee to enquire into their working and streamline the system to clean up the mess.  Around that time NBFC became a dirty word.  A clear picture emerged then as to registration, credit rating and regulation of NBFCs by RBI and SEBI.  Prudential Norms and guidelines similar to Commercial Banks were also prescribed for NBFCs.  With such a move, the large number of over 45,000 NBFCs got checked both by RBI and SEBI in respective zones of control and the number now is around one thousand.  Of course, lakhs of gullible and innocent investors got cheated in the decade of nineties by investing their hard-earned savings in high-interest bearing fixed deposits or pseudo or junk-stocks.  It is interesting to read in the news that RBI has withdrawn licences to 5 NBFCs in Bangalore, Chennai and Mumbai.  Investing public should note these developments and be cautioned to deal with them.

BSE, NSE and now USE?

Regional Stock Exchanges in India

During the interviews for Admissions 2010 for TAPMI's 27th PGP, a question was asked by me to many candidates about the Regional Stock Exchanges.   Most of them are aware of only Bombay (interestingly not Mumbai) Stock Exchange and National Stock Exchange - both located in Mumbai.  (Unfortunately, before NSE could shape up, the Big Bull - Mr Harshad Mehta played with all the Brokers, Investors, Bankers, with a huge Stock Market Scam in 1991-92.) The daily newspapers, TV Channels like CNBC-TV18 or NDTV Profit or Bloomberg and Internet sites also prominently quote about the movements in these two exchanges only.  They also quote the trading in Dow Jones, Hang Seng, FTSE, etc. One more reason could be that they have terminals for these two exchanges all over the country with the local brokers or their outlets. 

But, why do people forget the other three metros - Delhi, Kolkata (Calcutta) and Chennai (Madras)?  And what about Ahmedabad, Hyderabad, Bangalore, Baroda, Coimbatore, Cochin, Magadh, Mangalore, and other regional stock exchanges?  All these are also actively working.  And there was a OCTEI (Over The Counter Exchange of India) for small companies as also Inter-Connected Stock Exchange  ( ICSE for all the regional exchanges). SEBI is the regulator for all these exchanges.  Please visit :SEBI for details.  And then, SAT (Securities Appellate Tribunal) is the appellate authority for redressal of any grievances.

I give here a link to Business Line (daily of Hindu group) net page on Regional Stock Exchanges. A simple question was asked by a reader and it was replied saying that these Regional Exchanges are continuing to operate to cater to the requirements of those investors and players who are not so net-savvy.  In fact, Bombay Stock Exchange is over 130 years old but only during the early nineties (post economic reforms) the new National Stock Exchange was born - totally electronic simultaneous with the Dematerialisation and birth of NSDL / CDSL.

And now we are hearing about United Stock Exchange of India Ltd (USE).  Please click here to read: United Stock Exchange of India Ltd.  This exchange is the newest on board to cater to the trading in currency derivatives. There are other exchanges in India for commodities trading... like MCX.SX, etc. Thanks to reforms, transparency in operations, and concepts like Corporate Social Responsibility and Corporate Governance, almost all the corporates and regulators like RBI, IRDA, SEBI, and others are regularly resorting to Investor Guidance through print media, seminars and Ombudsman scheme, etc.  Here is an example of what SEBI has done recently :

Foreign Banks in China - 2010

Foreign Banks in China : 2010

Five Years back, in 2005, I did work on a Paper to study "Functioing of Foreign Banks in India" which was presented at a National Conference on WTO held by the Mangalore University.  It was a great learning about these banks present in India during British period for over a hundred years.  It was a fulfilling task.

During the same year, RBI and Government of India, announced a policy to invite more and more foreign banks to introduce a highly competitive and level playing scenario.  I wrote another Research Paper on "Sustainability of Foreign Banks in India"  in December 2005 and presented the same at an International Conference on Banking and Finance organised by ICFAI, Hyderabad. It was a revealing experience to me and and my co-author Dr K S Srinivasa Rao that over the years, several Foreign Banks have been appearing and withdrawing from the Indian scene.  The above policy of RBI / GOI was not all that encouraging because these banks were required to meet Capital Adequacy Standards, comply with Branch Licencing policy as also to lend at least 32 per cent of its credit portfolio (as against 40% for Indian Banks) to the Priority Sector lending.  My research findings dealt with their sustainability and their frequency of entering and leaving the Indian banking scenario.

Indian Financial Sector Reforms started in June 1991.  Several policy measures were taken by RBI / GOI on the advice of Narasimham Committee Recommendations then.  Some New Generation Banks like HDFC, UTI (now Axis), ICICI, IDBI, IndusInd, Kotak Mahindra, YES Banks were permitted to start. There have been several mergers and reverse mergers among these new generation banks too. Times, Global Trust, Bank of Punjab and Centurian Bank were merged with their private or public sector counter-parts.

Today, almost all the Public and Private Sector banks have become modern, price and customer conscious and have turned out to be productive and profitable. Simultaneously, Foreign Banks also have been asked to comply with several prudential norms. Interesting fact is that while India took up reforms in 1991, China was already on the path of reforms right from 1978.  Several India-China studies were commissioned to compare their respective performances in post-reforms era. Dr Manmohan Singh and other reformers have been endeavouring at making Mumbai an International Financial Centre on the lines of Shanghai, but there have been several obstacles in this task.

Today, I learnt that from the year 2005, PriceWaterhouse Coopers, China has been studying the working of Foreign Banks in China.  Recently they have released their fifth edition of the same.  Please click on the above link. 

2 States or 2 Tastes?

I wrote a few days back my views on 2 States by Chetan Bhagat after reading the book.  In fact, I have also been sharing my thoughts with some of my colleagues.  Was the novelist aiming at making some money, name and fame or critic people from certain states (north or south) or point out the loope holes in certain systems like academics and administration at IIT-D or IIM-A and similar institutions of high repute as also working of foreign banks like Citi-bank in India, etc. 

An year back or so, I read a book titled "If God was a Banker"  by Mr Subramanian, who is also an IIM Grad and working in Retail Bank area of a Foreign Bank.  This book was dealing with more and more of competition in one's career as also professional approach.  The author chose to pick some dummy names of individuals and banks too, but stated as if the two were from two IIMs - A & B.  Of course, some spicy stuff was written here and there.

But, in the 2 States, there is an overdose of sex, vulgarity, etc.  Mr Krish, the hero had always been after having pre-marital sex at the earliest opportunity.  Be it with an IIT-D Professor's daughter whom he could not or did not marry but settled for a compromise or the heroine Ms Ananya, the intelligent-brahmin-top-ranked Economics Graduate from TN who also made it to IIM-A against stiff competition through CAT.  The story always revolved round the two having met and had sex, food, etc.  If only the relationship was limited to love and romance, it would have been in a high esteem towards all the characters. 

After all, the hero having pre-marital sex with two innocent virgin girls, does not deserve the kind of respect despite his academic and professional back-groiund.  Having indulged in such actvity and playing with the modesty of the two girls, it is but inevitable that he should get married to the heroine.  Any amount of ordeals experienced or hurdles crossed, it does not thrill a prudent reader to get convinced about his intentions.  Infidelity is at stake; because what is the guarantee that either hero or heroine do not indulge in sex again outside their marriage with their colleagues at work place?  Their minds need not be pure, after all.  I may finally call or rename the book title as "2 Tastes" that the hero had with the two girls.

Tuesday, May 4, 2010

Micro Finance and Developments

SKS Microfinance

Micro Credit Ratings International Ltd.

Microfinance is flourishing in India year after year.  In a vast country like ours, with a vast rural predominance, credit continues to be in scarcity inspite of the banking system striving to reach the villages for over four decades.  Lead Bank Scheme was introduced in 1969 and is being pursued by RBI, NABARD and Governments at Centre and States.  Co-existence of public, private, regional rural, cooperative and local area banks endeavouring to go rural has not met the rural needs of assured banking system.  Financial Inclusion is being vigorously adopted by almost all the banks for last four-five years; and Micro Finance has emerged as a necessary substitute in the rural India. Banks are linking up with  Non-Governmental Organisations (NGOs)  and Post Offices in this process. Primary Agricultural Societies (PACs) are to be used as Business Correspondents (BCs) by banks. On the other hand, suicides are continued to be committed by the farming community, particularly in states like Maharashtra, Karnatka, Andhra Pradesh, etc for reasons unknown. 

Micro Finance Institutions (MFIs) commenced their activity a few decades back more as social entrepreneurs to provide financial support to the rural poor and women.  Today, they are very much organised; they have emerged as a full-fledged industry with about 30 large players being registered as Non-Banking Finance Companies (NBFCs).  Recently, they have come together to form the Microfinance Institutions Network (MFIN), an association that will work as Self Regulatory Organisation (SRO) to will towards the development of the industry.  In India, we already have AMBI, AMFI, FIDC, etc as SROs for different financial outfits.  Once MFIN stabilises and be able to oversee the MFIs in the country, a very systematic level-playing field would emerge and the complaint that MFIs charge a very high rate of interest (approx 30% pa) can be tackled.  It is understood that MFIN would be able to cover only 80% of the MFIs and those microfinance companies who function as a trust and do not have profit as their motive are not covered.  We have to wait and watch the progress.

Another noteworthy development is that Credit Information Bureau of India Ltd (CIBIL) has signed an agreement with the 31 registered MFIs in India to start a Microfinance Credit Information Bureau.  This will help prevent Non Performing Assets (NPAs) in the micro finance segment and will also improve credit penetration and quality.  The microfinance sector is estimated at around 120 million households which translates into a credit demand of Rs. 1.2 lakh-crores; but issues such as multiiple lending and overexposure remain a concern. 

It may be worth mentioning here that the facility of credit rating and credit scoring is also available for MFI sector.  M-CRIL is already in place and steadily bringing in standards in the sector.  Researchers at ICRIER have already worked and suggested on  an Index for Financial Inclusion about two years ago.  Now, it is learnt that from June 2010 onwards, the Finance Ministry will be harnessing an index to assess financial inclusion on a quarterly basis.  This is a welcome development.  The new index would help integrate a large section of the population with the formal financial markets.  This would also help the Government and RBI to take timely and area specific measures and policies to drive Financial Inclusion better.

Yet another development is that the Nandan Nilekani's project on Unique Identification Number (UINs) would also help the banks substantially to open accounts in rural India.  Such a facility would ease the problem of Know Your Customer (KYC) compliance by banks. One more interesting development after banks introducing biometric ATMs in recent years is that Indian banks have proposed the installation of micro ATMs in rural India which are cost-effective.  So, the issue of affordability is also being taken care of. 

CRISIL prepared a report last year on India's top 50 Micro Finance Institutions. Here is a link:

Monday, May 3, 2010

SBI again...

State Bank of India

Financial results of several public and private sector banks in India are hitting the headlines every day; some released their Q4 and some others about the full year too.  By and large all the banks are showing encouraging results which is also impacting the share market.  While I am waiting for some more information to pen down my comments / observations on the industry, SBI results are yet to hit news.

In the mean time, I came across some information from the monthly bulletin - April 2010 of SBI Pensioners Association-Hyderabad.  It captured some achievements of SBI in recent past.  These are:-

01. SBI has been chosen as a recipient of High Performance Brand of the Year 2009 by AIMA (All India Management Association - New Delhi) for R.K. Swamy High Performance Award.

02. SBI ranks 7th in "Best Companies to Work For" - Business Today (February 7, 2010)

03. State Bank of India awarded Technology Bank of the Year award in recognition of outstanding achievements in Banking Technology - IBA Banking Technology Awards 2009

04. State Bank of India declared as the winner for Customer & Brand Loyalty in the "Banking Sector" - 3rd Loyalty Awards (part of the 3rd Loyalty Summit)

05. SBI's ranking has improved to 36 (in 2010) from 70 (in 2009) in the Brand Finance Global Banking 500 by Brand Finance Pic.  SBI has become the first Indian Bank to break into the world's Top 50 List.

I am proud to be an SBI-an.  My sincere and hearty greetings and congratulations to all SBI-ans too.

Extra Curricular Activities @ TAPMI

TAPMI Manipal

No doubt, academic rigour is the USP at TAPMI, Manipal.  However, Management Students at Post Graduate level in an autonomous B-School learn many things hands on and outside the class room.  Right from the first day, they are subjected to work in groups under the mentorship of a Faculty Member.  Team Work is a buzz word throughout the two years of they stay on campus.  Academic world may term it as Corporate Social Responsibility (CSR) but TAPMIans indluge in several social activities too like blood donations on the Republic Day (26th Jan) and Independence Day (15th Aug) every year. 

Some students form into a group called OMEGA to associate with the local Micro, Small and Medium Industries and work with them.  While understanding their day to day problems in material handling, product designing, marketing and sales, financial concerns and so on, they also offer some workable solutions too.  Some of the groups are called Welfare Committee or Social Endeavour Group and so on.  These students visit the NGOs, Orphanages, Old age Homes, Villages adopted, etc to render some help.

One of the events last year was visit to a local unit called Balaniketan in Udupi.  Lions Club of Manipal members and their families joined in the endeavour.  Besides donating funds or physical assets these visitors engaged themselves in spending a full day with the in-mates, planted sapplings, played music and dance or games and so on.  It was a thrilling and memorable experience to both sides - the inmates and visitors too.

Sunday, May 2, 2010


About three years ago, published an Interview with Director, TAPMI, Manipal.  Various issues related to Admissions, Placements, Faculty strengths, Electives offered, New Campus, Challenges faced and Discipline at TAPMI were discussed at length in 2007.  Much water has flown in the last three years and several changes have taken place since then. 

TAPMI moved into its new Campus in January 2009.  Dr Saji Gopinath (from NIT-K and IIM-K) assumed charge in March 2009. Finance wing is equally equipped with highly qualified and experienced Faculty members. The campus is a modern, world-class, fully residential, with wi-fi and other tech facilities located in a 42-acre area.  It has a Knowledge Centre (modern Library and IT wings) inaugurated by Dr Montek Singh Ahluwalia.  The Students Centre has all the amenities like Cafetaria, Campus Stores, Yoga Centre, Indoor Games, etc.  10 Guest Rooms are fitted with TV, A/C and Wifi facilities.  Regular transport facility is available to all Staff, Faculty and Students from Tiger Circle. Residential apartments for Faculty & Staff as also Auditorium are under construction in the last phase.

TAPMI is in the growth trajectory.  A new 11-month program e-Governance for Executives (eGPX) was launched in April 2009 in collaboration with NISG-Hyderabad (off shoot of NASSCOM) and supported by Department of IT, Government of India, which was well received by 31 participants from State Governments and private corporate world.  TAPMI is partnering with Manipal University to offer a new program during the year 2010 called Masters in European Studies & Management administered by Manipal Centre for European Studies (MCES) which is funded by European Union.

Efforts are also on to increase the intake in the PGP (the flagship program) and also introduce three new 2-year (fully residential) PG Programs in Health Care Management, Banking & Financial Services and International Business in the current year - all through the normal process of CAT scores followed by GD/PI Selection mechanism.  For this purpose, Faculty Members and Director/Deans of TAPMI travelled to New Delhi, Mumbai, Kolkata, Hyderabad and Bangalore to conduct interviews besides in Manipal during the month of April 2010. 

Faculty - Alumni meets are also being held in a big way at Delhi, Mumbai, Bangalore as part of involving the important stake-holders in TAPMI's efforts of scaling up in the years to come.  Curriculum design / revision takes place on an ongoing basis in consultation with Industry professionals and Alumni to include contemporary topics in the program.  TAPMI has been participating in almost all B-School Rankings since 2009 to increase its visibility to all the MBA aspirants as also the recruiters.

Trend of Securitisation in India


Trend in structured Finance (securitisation) in select categories

Category                         2006  2007   2008   2009   2010

Asset backed securities 17850 23420 31320 13580 20970

loan sale-offs                  2100 11900  31820 36440 14580

Total issuances              24960 36930 63730 54470 42590

Per cent growth (%)                    48       73       -15     -22

Figures in Rs crore at end of March Source: Icra estimates

The above data is from ICRA estimates appeared in an article in The Business Standard of April 27, 2010 (  Securitisation is a product in use in Indian markets for at least twenty years but has not been very popular.  May be due to lack of awareness among finance professionals and decision makers in the commercial banks or guidelines from the regulators. The growth trend in 2006-07-08 has become negative in last two years 2008-09-10 presumably attributed to the global meltdown. 

May be the bankers and other players have become extra cautious during the recessionary period.  But, thanks to the conservative or cautious approach of the Indian Banking system, the meltdown has not affected them so severely as compared to their USA counterparts.  More than 100 commercial banks in US have either closed down or bailed out whereas nothing of that sort happened in India.  Indian banking system has been sound and robust.  Deposit and Credit growth has been on the normal trends in India.

Saturday, May 1, 2010

SBI - its different always

Have you noticed the ads of SBI in recent months.  Three or four tag lines....Pure Banking - Nothing Else; The Banker to Every Indian; With you all the way.  And those creative ads with Great Indians like Rabindra Nath Tagore, et al.    I had written on March 20 in this blog about their accomplishments about ATMs and branches............. The Bank always growing younger and younger with innovations and creations, achieving higher results year after after.  It is a Giant Bank, of course, of India.

Business Line today carries two news items with captions - 1. Massive drop in bank lending to real estate sector and 2. SBI group bucks the trend; real estate loans up 56%  (
That is State Bank.  The details can be read from the link given here.

Why I am still in love with the bank I left in 1993?  Donno why.  I got a call from a Mumbaikar friend last week for an advice to a TAPMIan who got an offer to join SBI in middle management cadre. This candidate passed out from TAPMI in 2008 and hardly knows me.  But my friend Avinash is a high profile academician; he is an Economist, a Fellow in Management from IIM-A, was a senior executive for decades, a Consultant and Director for many companies, a Researcher and highly accomplished Academic too besides a good human being.  He knows my past (in SBI) and present (in TAPMI); he likes me and shares his frank thoughts in general whenever we meet in Manipal or Mumbai.

The candidate has been working in a private sector financial consulting company with a plum compensation.  He is into equity research.  He is now in a dilemma to choose between the lucrative private job and accepting the SBI offer.  He sought Avinash's advice who in turn referred him to me.  Of course, he gave his gyan and suggested the candidate to consider SBI from long term career growth perspective.  In my own style, I sang the song for SBI and host of opportunities ahead of him even up to becoming the Chairman of the bank.  The candidate shared his concerns over phone as also through email, which I responded in favour of SBI job.  Avinash concurred with my views.  It is for the candidate to make up his mind between money and career.