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COVER STORY
Indian Banking Sector: Signs of Resilience
-- Amit Singh Sisodiya and Ramana Pemmaraju
The Indian banking sector has shown remarkable resilience even amidst the worst ever
financial catastrophe that hit the global economy about a year ago and caused the collapse of several
financial giants. Now, with the effects of the carnage in the global banking sector subsiding and (financial)
numbers being out, all eyes are on the performance of the domestic banking sector. Against this backdrop, The Analyst Banking Special brings insights into the performances of Indian banks during FY2009. While
it would not be correct to expect a repetition of the solid performances that banks delivered in the past
3-4 fiscal years, their performances for the fiscal just gone by are not disappointing either. Read on for
more insights.
BANKING SPECIAL
Financial Inclusion: Taking Banking to the Poor
-- KC Chakrabarty
As India engages with the world, it is time to commit to financial inclusion which will enable us to
build safety nets for the poor and also bring them from the margin to the mainstream of economic activity.
BANKING SPECIAL
Public Sector Banks: Coming of Age
-- M D Mallya
The PSBs have not only shaken off the old mentality and years of inward looking working
environment, they have also proved that they can compete successfully with their private sector peers.
BANKING SPECIAL
Competition in Banking Sector: Changing Dynamics
-- Satish Chander Gupta
The banking industry has undergone a sea change in recent times. While the banking system has
done fairly well in adjusting to the new market dynamics, greater challenges and competition lie ahead.
BANKING SPECIAL
Interest Rate Scenario in India: What's in Store?
-- Renu Challu
Even though lowering of interest rate results in good treasury profits, banks generally prefer a
rising interest rate scenario, since it gives them a chance to improve the yield on advances and Net
Interest Margin.
BANKING SPECIAL
Healthy Capitalization: Cushioning the Crisis
-- Tarun Bhatia
India's banks have maintained healthy capitalization levels in the past decade. They seem to have
emerged largely unscathed from the global financial crisis and will remain adequately capitalized to manage
growth plans and asset quality-related risks.
BANKING SPECIAL
Globalization of Indian Banks: Emerging Issues
-- Latika Tandon
While the global financial crisis has brought forth
adver-sities and challenges, it has also offered a
silver lining to emer-ging countries like India and China to come out as
strong contenders in the pecking order of world economic powers. But for this to happen, Indian banks have to work diligently
to-wards that direction.
BANKING SPECIAL
Consolidation of Banks: Challenges Ahead
-- R Vaidyanathan
Globalizing the Indian financial sector without domestic integration of the financial markets may lead to
a situation of cherry picking by the global players and to linkages created only at the creamy layer level.
BANKING SPECIAL
IFRS: Impact on Banks
-- Dolphy D'souza
If there is one industry that IFRS will have maximum
impact on, it will have to be the banking
industry. This fact has come as a wake-up call to many
banks, which will now have to consider the IFRS conversion process seriously.
BANKING SPECIAL
Embracing IFRS by 2011: How Geared Are Indian Banks?
-- K Ramakrishnan
Convergence to IFRS is likely to pose significant challenges for banks. A move to IFRS can be
compared to reaching a mountain peak, which can certainly be scaled, if well planned and appropriately executed.
BANKING SPECIAL
IT-Based Banking Services: Unlocking the Business Potential
-- K V S Manian
Banks must keep their businesses on a par with the cutting-edge developments in technology that
can have a transformational impact on their business.
BANKING SPECIAL
Securitization and Indian Banking: An Opportunity for Capital Adequacy Management
-- Rajesh Mokashi
Securitization offers Indian banks an opportunity to free capital, generate liquidity and manage assets
and liabilities.
BANKING SPECIAL
Public Sector Banks: The Road Ahead
-- AC Mahajan
While the relative strength and resilience of Indian PSBs is indisputable, issues like sustaining profits
and profitability, enhancing capital strength and asset quality, increasing operational efficiency
and productivity, and emphasizing financial deepening and financial inclusion remain.
BANKING SPECIAL
Role of Banks in Rural Development: A Case for Public-Private Partnerships
-- Tushar Pandey
There is a need for developing a vision and implementation framework for public-private partnership
in Indian agriculture for achieving holistic and all-inclusive growth of rural India.
BANKING SPECIAL
IndiaPay: An Emerging Financial Payment Gateway
-- Sanjay Sharma
The initiative of IndiaPay would match the best in technical and infrastructure standards. IndiaPay would
offer secure payment card processing, providing secure
end-to-end infrastructure to authorize, capture and settle
all transactions made through the various types of
cards.
BANKING SPECIAL
Globalization of Indian Banks: The Road Ahead
-- Pradeep Kumar Mishra
One of the important fallouts of the current banking crisis has been the erosion of customer confidence in
most of the banks which were visible so far. This provides the Indian banks a valuable opportunity to fill in this gap
and make a permanent visible presence in the respective markets.
BANKING SPECIAL
Banking Sector : Future Perfect
-- N Janardhan Rao
Indian banks have not only withstood the financial turbulence from western markets but also
improved significantly during the crisis. Important financial parameters indicate that the domestic banking sector
has remained healthy and profitable despite the worst of times.
BANKING SPECIAL
Methodology
The Analyst Banking Special presents
its sixth consecutive report on the functioning
of Indian Banks. These banks
have been categorized into Public, Private
and Foreign sectors. The Analyst
has adopted the world-renowned
CAMEL methodology which evaluates
each and every component that are of
prime importance from the functioning
of the Bank’s perspective. The model examines
the efficiency of banks among
these important parameters like Capital
Adequacy, Asset Quality, Management,
Earnings Quality and Liquidity.
MONETARY MUSINGS
Inflation Turns Positive: For Better or Worse?
-- GRK Murty
Much against the predictions of the pundits that as the impact of the base effect on inflation remains in force till end October, the year-on-year inflation shall continue to be in the negative zone till end September—the wholesale price index-based inflation turned positive, that too, well before the base effect wore off.
PERSPECTIVE
Lehman's Fall: Lessons to be Learned
-- GRK Murty
Markets may know better than regulators, but regulation of market behavior through
effective supervision alone can preempt financial
crises.
APOLITICAL
Ben S Bernanke: Wins a Second Chance as Fed Chairman
-- grk
Bernanke, the man who "approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic free fall," has been nominated by Barack Obama for a second four-year term as Chairman of the Federal Reserve.
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