Cover Story

Banks: Drowned in Liquidity

 -- D Satish

The clouds of recession have set in firmly on the Indian and global markets. These dark billows have brought with them a new challenge to the banking system, which is already in trouble. The banks are trying to stay afloat, fighting the cost of VRS and ever increasing NPA. Now they have noticed that they are becoming heavy with excess liquidity. This has the potential of setting off a whirlpool of effects that would affect the bottomline of the banks and has the power to pull down the financial system deep into the depths of trouble.

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Spotlight

Outsourcing : A success formula

--  N Janardhana Rao

In their quest to achieve strategic focus, businesses worldwide are choosing to develop areas of core competence and outsource the other business process.

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Case Study

Skandia Reporting Model : Accounting for Intangibles

--  Amit Singh Sisodia

In the knowledge-driven economy of today, intellectual capital and other such intangible assets have not got desired presentation in the annual reports of companies.

"Human capital and structural capital are an indication of a company's future value and ability to generate financial results. This is why a more systematic method of reporting on and managing these intangible dimensions is needed."

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International Finance

Dollarization : Boon or bane?

--  Debasis Mallik

The developing and emerging economies are increasingly realizing the inevitable vulnerabilities of having a floating exchange rate system. The other options open are, fixing the currencies with currency boards, currency unions or pegging with the leading regional currency, e.g., the dollar. Among these alternatives, is dollarization a better choice?

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Business Environment

RBI Annual Report : Hope springs eternal

The RBI concedes that the deceleration in the economy is attributable to combination of problems of insufficiency of aggregate demand, low public investments and international economic environment, says Dr. A S Harish, Senior Officer, The Vysya Bank Limited.

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Financial Services

Bancassurance : Big forces together

-- Y Chandra Sekhar and K B S Kumar

Increasing number of players from both banking and insurance sectors are integrating their services to boost their bottomlines and offer wider range of products. This new phenomena is all set to transform the Indian Banking and Insurance environment with the number of joint ventures going up steadily.

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Financial Markets

Wall Street Analysts : Under scrutiny

-- D G Prasuna

The downfall of the stock markets and the accompanying losses, suddenly, have investors opening their eyes to the realities of Wall Street research analysts. The conflicts of interest that had always been existent, have today become the hot topic. There are efforts from many corners to minimize these conflicts and investment banks are under great pressure to restore their credibility.

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Corporate Finance

Corporate Debt Restructuring : Getting into shape

-- D G Prasuna

Making use of debt in the operations of a company is a common practice. But during a downturn it becomes a huge burden to be carried along. In addition, the lower interest rate regime also gives companies' an opportunity to restructure debt, if not reduce it.

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Corporate

HP-Compaq Merger : Monsoon wedding

--Amit Singh Sisodia

Once a force to reckon with in their own rights, the two monoliths are finding it terribly tough to survive in an industry where business@thespeedoflight is a way of life.

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Demerger : Separation and survival

-- Amit Singh Sisodia

It is emerging now, that in today's fiercely competitive global market landscape where factors like business cycles, economics and investment requirements determine the fate of a business entity, demerger makes sense.

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Perspective

Terrorism : Frankenstein's monster

-- Dr. Ajit Kumar

Terrorism is not confined to one country but has spread its tentacles to every corner of the world with some countries, mostly Islamic countries, supporting and encouraging terrorist activities.

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