This issue comprises three research papers. The first paper, “The Determinants of
Survival of Initial Public Offerings in India: An Empirical Study”, by Garima
Baluja and Balwinder Singh, attempts to examine the survival profile of Indian IPOs for the period 1992-2011. In order to examine the influence of issue-, market- and company-specific variables on the post-issue transition of IPOs into survivors and non-survivors, logistic regression model is estimated. Further, survival analysis methodology is employed to investigate the effect of observable factors on the survival time of the issue. The study reveals that issues with large size, more demand, backed by reputed lead managers and of older firms survive for longer duration. However, issues with high underpricing, high risk, more list delay and during the period of high market level as well as high IPO activity, survive for smaller duration. The survival probability and the duration of IPO is positively affected if it belongs to information and communication, accommodation, construction, wholesale and retail trade, and finance and insurance sectors, and it is negatively affected if IPO is in agriculture and administration sectors.
The second paper, “The Impact of Branch Network on Credit Risk Management Practices in Indian Banking Sector”, by Anju Arora, assesses whether the size of branch network has significant impact on the diverse range of Credit Risk Management (CRM) practices followed by commercial banks in emerging economies. Using primary data from 35 scheduled commercial banks in India, it is observed that there is no significant difference in CRM practices of banks with varying size of branch network. Another important inference is that as the size of branch network increases, commercial banks prefer to follow the approach of higher degree of specialization and centralization of authority in CRM. The study also infers that Indian banks with wide branch network are ahead of other sample banks with regard to the scope of CRM policy, credit risk analytical abilities and credit risk monitoring procedures. The findings indicate that size of branch network or emphasis on bricks-and-mortar branches to deliver financial services in emerging economies, in particular India, has not served as a deterrent in following benchmark CRM practices.
The last paper, “Indian Currency Market Risk Analysis: Value-at-Risk Approach”, by B G Poornima, Y Srujan Reddy and Y V Reddy, attempts to measure and compare the market risk prediction ability of historical simulation, Monte-Carlo simulation, Exponentially Weighted Moving Average (EWMA) and linear parametric Value-at-Risk (VaR) approaches in Indian currency spot and futures market. Using the data from 2008 to 2013, the authors calculate the VaR associated with the three main currencies in the economy, namely, US dollar, euro and UK pound sterling. Conditional and unconditional coverage tests are applied to backtest the results of various VaR approaches. The results indicate that Monte-Carlo simulation is appropriate in predicting market risk. Further, it is also found that risk seems to be higher in the future market as compared to the underlying markets.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
