Friday, December 31, 2010

Dawn of a New Year & Decade of the Twenty First Century

Year 2010 ended with a bang.  The year was hot in news for many reasons in India and abroad too.  Most memorable events were the 9/11 of 2001 and Global Recession of 2008.  Terrorism has been at its peak in all parts of the world.  Nevertheless, the countries and economies have been smart enough to recover very fast and Life goes on and on. 

In India too, there were mixed events and developments in political, economic and sports arena.  It was so unfortunate that as many as fifteen types of Scams in almost all the fields like Sports, Judiciary, Defence, Banking, Telecommunication, Religion, etc took place.  At the same time in just an year there were twenty five Heads of States from different countries including USA, UK, France, China, Russia, etc visited India for exchange and business.

We all hope that the new year 2011 and the second decade would usher in much more in every walk of life.

Thursday, December 30, 2010

my bank, my career

I have today read the ‘Books of Account’ review on SBI story with the title “Tale of how a behemoth changed trajectory” by Shri D Murali . My sincere appreciation to Mr Murali for a detailed column summarizing the book “GRIT, GUTS and GUMPTION” by Rajesh Chakrabarti.


SBI being a giant PSB, has always played a responsible role since inception even as IBI when RBI was non-existent. The first mandate to SBI was to go rural and it did. Today, the industry has a variety of players in public, old and new private, foreign, cooperative, RRBs and Local Area Banks. And there are NBFCs, Financial Institutions and Micro Finance Institutions too.

SBI should, in fact, be designated as a Maha Nava Ratna Bank for its contributions to the nation, economy and industry for nearly two centuries. But unfortunately, many tend to blame the bank while “Best Banks Surveys” always undervalue SBI. How sad! For example, in a recent survey published by Business Today (Dec 26, 2010) issue, the list of top-10 Best Banks for over seventeen years since 1993 SBI appears only once at no. 10 level in 2002. 

In the early years of economic and financial sector reforms, the list was dominated by foreign banks like BoA, Bank of Tokyo, ABN Amro, Amex, Citi, etc.  No wonder.  Over the years, India's private sector banks and public sector banks also found their place.  By 2009, the top ten list had six PSBs, 2 new Private (Axis and HDFC Bank), 1 old private (Federal) and one foreign bank (Citi) were listed.  Again in 2010, the list is headed by Axis Bank (new private). Some times economies of scale appear to be going against the public sector banks who are burdened with rural banking which is not cost-effective; and size is a hindrance.

New Private Sector Banks and foreign banks are not loaded with old legacies, non-performing assets, not so well qualified or trained staff and so on.  SBI, hence is far above all these factors and a front runner.  RBI looks to its support, experience, exposure and guidance in making many policies (IBI was its predecessor, after all).  Under these conditions, if the bank had transforted into a modern bank of world standards, I compliment the author Mr R Chakrabarti and reviewer Mr Murali of Business Line for their factual story.

Wednesday, December 29, 2010

Kabhi Kabhi climex1



How does one feel when meeting an old girl/boy friend from college after a gap of 20 plus years? It can only be experienced but not expressed. Each dialogue, scene and song is so powerful. Lovely.

Good Bye to 2010 - the infamous year of scams!

Year 2010 is coming to close in next two days.  It is also the last of the years for the first decade of the new millenneum.  We experienced many good developments and events during not only the decade but the year too.  The decade witnessed the Dot Com Crash, 9/11 in USA, Change of guard in New Delhi, 26/11 in Mumbai, Election of an Afro-American, Mr Obama as President of USA, Global Meltdown all over the world (and a quick recovery too), display of strength by China in hosting the Olympics, the Satyam saga in India, introduction if i-pads and so on.

Unfortunately, in India we witnessed nearly fifteen scams of all types committed by a variety of individuals through out the year. The latest in the news are PF Scam, allegations of scam by ex-CJI and the last being Citi Bank employee in Gurgaon embezzling about Rs. 400 crores.  Most shameful scandal was that of 2G resulting in a loss of Rs. 1,76,000 crores to the exchequer and that of Ashirvad Apartments affecting the Kargil War victims (by Defence Personnel).  At this rate, Bankers, Administrators (IAS) or Bureaucrats, Businessmen, Sanyasis (Nityananda), Judges, Defence Personnel, MCI Chairperson, Politicians (BSY and his ministers), Micro Finance Institutions and promoters (Vikram Akula), IPL organiser Modi, are all involved directly or indirectly in these shameful incidents.  All these are done at whose cost? AAM AADMI.

SBI in News

I was watching NDTV 24x7 yesterday morning and seen a news item on GOI working for appointment of a successor to the incumbent Chairman of SBI.  Shri OP Bhatt would be retiring in March 2011 after about five years successful tenure as Chairman of the Bank leading the bank to greater heights with several innovative reforms and maintaining the market leadership.  Interestingly, a recent survey of best banks in India conducted by Business Today does not reckon SBI as one among the top-10 (if not the top most).  In the last seventeen years, only once that too at no. 10 its name appeared while in all other years / positions there have been several Public, Private (Old or New) and Foreign Banks finding their place.  I expressed my view to the Editor in a mail that 'looks like to be the biggest is a curse; while small seems to be beautiful'.  After all, it is a game of numbers and averages and so the smaller banks could throw up high averages!

Coming back to the Organisational structure of SBI, it is the only bank in our country with a Chairman, 2 Managing Directors and over a dozen of Deputy Managing Directors at the top.  All these are positions at least more superior to CMDs of different public / private banks.  GOI seems to be considering adding two more Managing Directors in order to handle large size business of the bank.  Of the lot of DyMDs, five of them are heading the Associate Banks in Bikaner & Jaipur, Hyderabad, Mysore, Patiala and Travancore (Saurashtra and Indore were already merged with SBI).  The news is that even though there are two MDs in service, because they have less than two more years of service ahead of them, GOI shortlisted a few names of senior Dy MDs like Pratik Chaudhary, Hemant Contractor and others for the post of Chairman.  The exact name would be finalised before March 2011 so that the giant bank continues to have its leader in place.

Citi falls asleep!

The tag line of Citibank was "Citi never sleeps" meaning over the globe, at any point time, branches of Citibank are always functioning and cater to the customer needs.  Wonderful.

What an unfortunate development that a news item hit headlines in print and electronic media in this week that the bank was caught sleeping.  An employee in their Gurgaon branch appeared to have single handedly handled the wealth management accounts of priority customers and indulged in a fraud to the tune of Rs. 400 crores.  After all, all those employed in Foreign Banks are supposed to be smart and highly intelligent when compared to PSB staff.  In the last two decades these PSB staff have been competing with Foreign Banks in order to render first class customer service at door steps. 

Friday, December 24, 2010

Doing Business in India

Last two months, I taught a new course titled "European Business Environment" in the first semester to the batch 2010-12 students of Masters in European Studies & Management (MESM) at the Manipal Centre for European Studies.  This new 2 year post graduate program is being offered by Manipal University in partnership with TAPMI, Manipal, which I have been coordinating from TAPMI's side.

Accidentally or unexpectedly I was asked to handle the course by our Director, although initially the course was designed / structured by another colleague who has subsequently quit TAPMI's services.  Looking at the diverse backgrounds and level of exposure of the students, I went on re-designing the course structure by including the fundas of Doing Business in India (2010), the contents of which were sourced / down-loaded from the net.  I spent about ten sessions familiarising the students on all related aspects of doing business.

The later sessions were even interesting, as I went on delving deep in to the European Union and the different business practices and regulations in the twenty seven countries / members of the Union.  The students were also exposed to the various MNCs of Europe operating in India and the business environment in different parts of the EU viz., Central, North, Southern, Western and Eastern Europe.  It was a rich learning experience for myself first besides making it an interesting learning process for the students through the experiential mode of presentations and assignments.  Overall, I enjoyed delivering the course during which period, I went on downloading and collecting huge information on the related topics.  Now I have comfort.

More interesting to me was an unexpected experience on the 23rd December when being on vacation I went to IIM-B to meet some friends.  My ex-colleague is Manager of MDPs and one of the programs being offered by them is titled "Doing Business in (with) India" scheduled in the second week of January 2011.  The participants appear to be from outside India, for a five day program costing about 5,500 USD (Rupee equivalent to 2,50,000) which is a hopping fee.  I only wonder, if such a program is offered by TAPMI!

RBI's policy of allowing New Private Banks in India

http://www.thehindubusinessline.com/2010/12/24/stories/2010122454210600.htm

It is very interesting that after having allowed twice, RBI is acting choosy and careful in allowing new private banks on the Indian scene.  Immediately after introducing economic and financial reforms in early nineties, RBI went on permitting new private banks while simultaneously reforming the public sector banks and old private banks besides of course inviting new foreign banks for a level playing field in India. 

The industry witnessed founding of HDFC Bank, ICICI Bank, IDBI Bank, Times Bank, Global Trust Bank, UTI Bank, Bank of Punjab, Centurion Bank and Development Credit Bank (converted from a Coop Bank), in the first phase with a minimum capital requirement of Rs. 100 crores.  However, very soon Times, BoP and Centurion got merged into HDFC Bank for some strategic reasons besides ICICI and IDBI went ahead with reverse mergers.  GTB got force-merged with OCB (public sector) while in the second phase, YES Bank and Kotak Mahindra Bank were born with a capital requirement of Rs. 300 crores. 

In as much as about two decades time, almost all the PSBs (including SBI group) got revamped and well capitalised to meet the global standard CAR of 8% and above in a phased manner.  Foreign Banks of course, some how did not take the advantage of the RBI's invitation to expand, may be primarily due to the rigid monetary mechanism and compliances.  And today, in its third phase, RBI is dilly-dallying its well announced policy of allowing more private banks.  The objections raised by the PSBs not to allow too many private banks (conceding some NBFCs and MFIs) with a capital of Rs. 50 crores or promoted by Corporates which is against the basic philosophy of two nationalisations in 1969 and 1980 earlier. 

Thursday, December 16, 2010

India and China open up banking sector to each other

India and China open banking sector to each other

This is certainly a progressive and welcome development for the two Asian giants. India should emulate if not challenge the big brother in international trade, growth in GDP, setting up of more and more MNCs, inviting of FDI in its major industries and other sectors in the years to come.  

TAPMI Campus Inauguration on Dec 09, 2010 by President of India

Monday, December 13, 2010

Saturday, December 4, 2010

The European Union



Very interesting and informative on EU....

EU History



Another clipping on EU from Youtube link. May be I got to study deeper and deeper to understand so as to teach the course "European Business Environment" to the students of Masters in European Studies and Management (MESM) offered by TAPMI-MCES of Manipal University since 2010.

And now Boring Banking!!!

Yesterday, in Business Line I read a small item on Boring  Banking................... as said by the Founder of YES Bank, Mr Rana Kapoor.  Very interesting, of course.  I have been writing now and then on a,b,c,d,.... of banking that I came across, may be the last one was on Visible Banking or Green Banking (I am growing old, hence justified to forget the sequence of items). 

And now, YES Bank CEO spoke about Boring Banking (Two-Three years back, it was Dr Rakesh Mohan, DG of RBI who coined a word Lazy Banking) in the sidelines of BANCON being organised in Mumbai by IBA and Central Bank of India.  I am curious to read more about this new concept.  May be Google would help me!