CAMEL RANKING

Indian Banking Coming of Age

- - D Satish and Y Bala Bharathi

The Indian banking system has come a long way since independence, going through the nationalization phase, the liberalization phase, and is now preparing itself for the very crucial globalization phase.

© 2006 IUP . All Rights Reserved

INDIAN BANKING 2005-2006

Performance Snapshot 2005-06: Methodology

The study is based on CAMEL methodology. It includes an analysis of the performance of 59 banks whose annual results for 2005-06 are available. Banks are classified into Public sector, Private and Foreign. Category-wise ranks are assigned based on aggregate average of ranks under each group of parameters under CAMEL.

© 2006 IUP . All Rights Reserved

BANKING

Indian Banking Sector: The Changing Paradigm

- - VP Shetty

Expanding business arenas, deregulation and globalization of financial activities, emergence of new financial products and increased level of competition have necessitated a need for an effective and structured risk management in Indian banks.

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BANKING

Banking Consolidation:Size Does Matter

- - Amit Singh Sisodiya and Putta Kavith

With competition intensifying and restrictions on MNC banks slated to be relaxed by 2009, the only way for home-grown banks to stay in the race would be through M&As. The United Western Bank (UWB) fiasco once again raises the concern that small may not always be beautiful, at least in the banking arena. The UWB episode comes close on the heels of the merger between Centurion Bank of Punjab Ltd. (which itself is a product of a merger between Centurion Bank and Bank of Punjab) and Lord Krishna Bank (LKB).

© 2006 IUP . All Rights Reserved

BANKING

Retail Banking: Banks Rush In

- - Amit Singh Sisodiya and Kavitha Putta

Retail banking promises to be the next growth hotspot. No doubt, banks, big and small alike, are rushing to cash in on the great "retail" boom. With a growing middle-class, booming job market scenario, and increasing household income, it is not hard to know where the growth lies in. It is this reason that is driving the banks in the country to capitalize on this upcoming trend.

© 2006 IUP . All Rights Reserved

BANKING

Basel II: It's Gearing up Time

- - Amit Singh Sisodiya and Sanjoy De

It's going to be a testing time for the Indian banking sector as it ushers in the new Basel II norms. From March 31, 2007, all commercial banks in India have to adhere to the new international capital adequacy norms, thanks to Basel II. This new Accord, which is an advanced version of Basel I, provides a comprehensive measure and minimum standard for capital adequacy. It aims to align the regulatory capital requirements more closely to the underlying risks that banks face. Moreover, these regulations are intended to promote a more scientific approach to capital supervision, and develop the ability to manage risks as well as encourage enhanced market discipline.

© 2006 IUP . All Rights Reserved

BANKING

Globalization: Impact on Indian Banking

- - Rohit Tandon

The growing international influence offers Indian banks threefold benefits: The opportunity to service the cross-border needs of Indian companies, service the multinationals for their local banking needs and create footprints globally.

© 2006 IUP . All Rights Reserved

BANKING

Risk Management : The Emerging Dynamics

- - MS Islam

The future risk professional will have become a "knowledge engineer" and the discipline of risk management will be restricted only by the limitations of imagination, knowledge and the wisdom for using that knowledge effectively.

© 2006 IUP . All Rights Reserved

BANKING

Private Banking in India : Millionaires Calling

- - Amit Singh Sisodiya and Sanjoy De

A sharp spurt in the number of millionaires is transforming India into a private banking hotspot. Private banking unlike retail banking is the means of managing private clients' money by providing various services like efficient wealth management, savings, inheritance and tax planning. These banks promise to maximize returns and minimize risk along with the tax burden of the clients through careful allocation of their money.

©2006 IUP . All Rights Reserved

BANKING

Globalization: Beyond Boundaries

- - Amit Singh Sisodiya and Sanghamitra Dhara

Globalization has played vital role in shaping the Indian banking system to a great extent, liberating the high performing part of the system from insulated government control. The flourishing stock markets, fast-growing mutual funds and capable private banks hold witness to the country's strengthened financial system.

© 2006 IUP . All Rights Reserved

BANKING

CRM @ Banking

- - Zia Shiekh

While CRM can help improve operations and customer service capabilities for banks and financial services companies, they also bring additional complexity. It's a well-proven and documented fact that customer retention is a much more efficient and cost-effective mechanism for revenue and profitability growth vis-à-vis new customer acquisition.

© 2006 IUP . All Rights Reserved

BANKING

Technology in Banks : A Strategic Resource

- - Ashok Bhattacharya

Technology is a strategic resource available at a cost albeit with an altered risk-benefit matrix. Technology has become the backbone of human civilization. Technology, its concepts, gadgets, and formulations are matters of common use spanning drawing rooms of our residences to board rooms of corporates, to halls of deliberations at the United Nations (UN).

© 2006 IUP . All Rights Reserved

BANKING

Technology in Banking : A Strategic Differentiator

- - -KNC Nair

Banks will continue to find newer and innovative ways of using technology to serve their customers better. Technology advances like Data Mining and Business Intelligence will enable and empower branch personnel to realize higher customer life cycle value.

© 2006 IUP . All Rights Reserved

BANKING

Supply Chain Finance : A Win-Win Situation

- - Sameer Sawhney

Amidst growing international trade, companies are looking to their bankers to provide alternative financing solutions that will align with the way they manage their supply chain.

© 2006 IUP . All Rights Reserved

BANKING

Asset Quality in Banking Sector : Better than Ever Before

- - Krishnan Sitaraman

Over the past decade, India's banking sector has recorded a consistent improvement in asset quality levels. It is displaying better asset quality than those of other emerging Asian economies like China, Malaysia and Indonesia, and is far more resilient than it was 10 years ago.

© 2006 IUP . All Rights Reserved

BANKING

Managing NPAs : Sustainability Challenges

- - Dharmalingam Venugopal

The success achieved in the management of NPAs should lead to a gradual improvement in the asset quality of banks. Asset quality holds the key to sustainable NPA management.

© 2006 IUP . All Rights Reserved

ARTS AND ARTISTS

The Khan of Kashi : The Shehnai Lost its Breath

- - GRK Murty

Khan Sahib's music dissolves, defuses and dissipates in front of Gods to get recreated everyday. Dhvani - sound - makes even a child to jump into ananda more than the "form" - roop. It is the raga rather than the "colors" that enthralls us more - sways us in rasanubhuti - aesthetic pleasure. That could be one reason why we, while watching nature in all its splendor, dream how beautiful it would be if only all that we watch—the colors, the forms, the lights and shades, the images and their reflections—all these metamorphose into sound that we can listen.

© 2006 IUP . All Rights Reserved

APOLITICAL

United Western Bank: To the Brink and Back?

- - grk

Reserve Bank, though deserves kudos for the alacrity with which it merged United Western Bank with IDBI, cannot escape from the nagging question of effectiveness of supervision.

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APOLITICAL

Managing Non-performing Assets : An Uphill Task?

- - Mario Castelino

While NPAs of the corporate sector have come down drastically in the recent past, there is a concern over issues of frauds in case of mortgage loans and increase in NPAs from the retail sector in the recent past. While NPAs of the corporate sector have come down drastically in the recent past, there is a concern over issues of frauds in case of mortgage loans and increase in NPAs from the retail sector in the recent past.

©2006 IUP . All Rights Reserved

APOLITICAL

Risk Management in the Indian Banking : Need for a New Paradigm

- - Sankarshan Basu

Risk management in banks is an ever-changing field and what is going to work today may not necessarily work tomorrow. Risk is not something new to the banking and financial services industry the world over, and the Indian scenario is no exception. In fact, the very essence of the banking and financial services industry is based on the principle of taking risks. However, for prudent business management, the entities have to ensure that the risks they take on to themselves are acceptable in terms of the level and the possible loss that they could wreak in the event of an adverse market event.

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APOLITICAL

Role of Credit Information in Retail Banking : A Business Catalyst

- - S Santhanakrishnan

Credit information is a catalyst that facilitates the development of economies and improves the standard of living in all income segments. In recent years, India has emerged as an increasingly industrialized and fast growing economy. Liberalization of the economy coupled with a young population has led to increased incomes and purchasing power, aspirations for a better lifestyle and expectations of higher quality products and services (a result of increasing influence of international trends and preference for international brands).

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APOLITICAL

Credit Derivatives : A Great Potential for Indian Banking

- - - N R Parasuraman

Apart from the general uses for credit risk management, credit derivatives can be a useful tool for Asset Liability Management (ALM) of banks. In recent years, banking literature in India has been concentrating on op-erational risk of banks and the impact of the Basel II norms. While there can be no doubt that these are crucial features of bank management, the development of credit derivatives which is becoming increasingly popular abroad does not seem to have captured the imagination of the Indian banker to a great extent.

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APOLITICAL

The Indian Banking : On the Growth Path

- - -Rajesh Chakrabarti

Indian banking is stronger and healthier today than it was a decade ago. The recent focus of some of the banks on microfinance and lending to SME firms are welcome changes both for the banking sector as well as the economy and society as a whole.

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MONETARY MUSINGS

China and India: Different Approaches to CAC

- - GRK Murty

Is India dabbling all around while China stays focused on its economic pursuits? It's not difficult to see why China is where it is today. Nor is it a surprise if Hank Paulson, the new US Treasury secretary, were to say that he won't engage in China-bashing but press for its reforming the currency policy.

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