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COVER
STORY
Swiss
Bank: Veil of Secrecy - - Katuri Nageswara Rao
Swiss
banks are known for banking secrecy laws. While there are
no numbered accounts any more, Switzerland is finding it difficult
to bear the pressure from the international community to totally
lift the secrecy laws. However, it is now levying a withholding
tax on investment returns, besides putting in place laws to
combat financing of terrorism , money laundering and tax frauds,
but not tax evasion. Switzerland continues to thrive as an
excellent offshore banking center with top class customer
service and talented investment personnel. The strong macroeconomic
fundamentals and socio-political stability also help the banks
to prosper.
© 2005 IUP. All Rights Reserved
BANK
PRODUCTS
Banking
on the Rich - - Raghu Mohan
Wealth
Management and Private banking business is growing by leaps
and bounds in India. IBM's survey says that it will grow by
25 to 100% over the next two years. Foreign banks like Citibank
are leveraging their international expertise and gaining business.
They are providing a wide array of products to the customers,
according to their requirements. ICICI Bank and HDFC Bank
are the major Indian players in this business. Goldman Sachs
says, India will be the third largest economy in the next
30 years. So there is immense scope for Indian banks to enrich
their bottom line, through wealth management services.
© Business India, November 8-21, 2004. Reprinted with permission.
BANK
PRODUCTS
Retail
Loans: Is a Bubble in the Making? - - Vinod Sharma
Retail
lending in India has been rising very rapidly. RBI has raised
the risk weightage for housing loans and other retail loans
to avert huge NPAs in this segment. In India, the ratio of
retail lending to GDP is far below other Asian countries,
which shows that the retail loans portfolio has not reached
the peak. Bad debts in the retail portfolio are at 2.5% compared
to the 7.4% of the industry level. This confirms that retail
loans are safer, as of now.To avoid a bubble burst, banks
should adopt best risk management strategies and conduct due
diligence while sanctioning retail loans.
© 2005 IUP. All Rights Reserved
BANKING
SCENARIO
Customer
Service in Banks: An Overview - - Ajaya Kumar Mohanty
The
Entry of new generation private sector banks and evolving
technology has been changing the face of the Indian banking
industry. It is necessary for PSBs to adopt a standardized
customer services code to remain competitive and profitable.
The Goiporia committee set up by the RBI in 1990 to study
customer services in PSBs, has made 97 suggestions to improve
customer services. The PSBs are still reluctant to adopt some
of these suggestions, while private banks are making every
effort to delight their customers. PSBs should learn to retain
the customers to remain in business.
© 2005 IUP. All Rights Reserved
BANKING
SCENARIO
OBC
GTB Merger-Whither Corporate Governance? - - BV Rama Rao and YG Sivaram
The
GTB-OBC merger was a hasty one with no due diligence exercise
conducted. Analysts say that OBC has benefited from the merger
rather disproportionately. To conduct the due diligence exercise,
RBI appointed M P Chitale & Co. on the date of the merger.
It seems that the era of good corporate governance and effective
regulation by the regulator has not really dawned in the Indian
banking industry.
© 2005 IUP. All Rights Reserved
BANK
STRATEGY
The
Rise of the Financial Conglomerates - - Niranjan Rajadhyaksha
Today,
Indian banks are providing an array of services like insurance,
mutual fund, wealth management, etc., to their customers.
They are hurtling towards the financial conglomerates. The
principal drivers of the integration are: growth of financial
markets and products, blurring of product boundaries, and
new network technology. Ownership, risk management and regulation
of the conglomerates are major concerns because of the existence
of different regulators. These conglomerates are demanding
for single regulator of financial services like FSA in the
UK so that they can come up from the existing complexities.
© Businessworld, November 29, 2004. Reprinted with permission.
BANK
REGULATION
Countermanding
of Postdated ChecksAdvancing Remedy by Presumption - - V Gopala Krishna and KKSR Murthy
In
the past five years several litigations were attempted to
exclude the penal liability under Section 138 of the NI Act
in respect of dishonored postdated checks. The Supreme Court
assertively intervened to clear the legal position regarding
the strict application of Section 138 to dishonor postdated
checks. The present article looks at the impact of the Supreme
Court judgments with a focus on the statutory presumption
that can be applied to advance the remedy for countermanded
postdated checks.
© 2005 IUP. All Rights Reserved
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