| FOCUS
Changing
Face of Indian Banks
- - Naishadh P Mankad The
latest report of Reserve Bank of India (RBI), on trends and progress in banking,
demonstrates how traditional shibboleths in banking have become more market-oriented.
Briefly speaking, five structural changes typify the evolution of banks in the
last decade and a half. Banking infrastructure looks quite different today as
the ATM has caught up customers. There are 21,000 ATMs as against 55,000 branches,
pegging the ratio of ATMs to branches at 2:6. - Interestingly, around half of
the ATMs are off-site ones, which mean that they double up as branches for basic
services.
© 2007 IUP . All Rights Reserved
COVER
STORY SEZs
: Too Small and Too Many
- - Katuri Nageswara Rao India
has an ambitious plan of commissioning large number of small Special Economic
Zones (SEZs), relying essentially on the Chinese model. But the SEZs in China
are very big, strategically located and fairly successful in attracting substantial
FDI inflows. To follow this success path, Indian model needs a re-examination.
© 2007 IUP . All Rights Reserved
STRATEGY
Financial
Intermediaries in the 21st Century : Facilitators or Change Agents?
- - R Subramanian Most
people do not enter financial markets directly but use intermediaries or middlemen.
Commercial banks are the major Financial Intermediaries (FIs). However, in macroeconomics,
mutual funds, pension funds, credit unions, savings and loan associations and
insurance companies are also important FIs. They provide two important advantages
to savers: less risk and liquidity. FIs need to have an agenda of not only satisfying
the customer needs, but also to foresee the future trend. In this context, the
role of the FIs in the 21st Century is discussed with a research perspective.
© 2007 IUP . All Rights Reserved
STRATEGY
The
Magnets of Product and Alliances in Banking Sector
- - Ajaya Kumar Mohanty The
liberalizations in financial sector led to heavy hammering on the interest rates,
which ultimately, reduced the spread available. This state of affairs resulted
in multifarious churning up of thoughts and led to new horizons of hope. Indian
banking, in the recent years, with high hopes of becoming the Financial Super
Markets and with the sole aim of increasing income and profit has started designing
innovative ideas.
© 2007 IUP . All Rights Reserved
SCENARIO
Social
Banking : The Need of the Hour
- - Amandio FC da Silva
Social
banking has different definitions in different parts of the world, but its main
objective is the upliftment of the poor and downtrodden. The Indian Government
has made efforts to start Regional Rural Banks (RRBs) and rural cooperative banks
to help certain sections of the society by extending financial assistance and
making them self-reliant. However, given the fact that India is the second most
populated country in the world, much more has to be done to achieve the objective.
© 2007 IUP . All Rights Reserved
SCENARIO
Financial
Inclusion and the Indian Banks
- - TN Ramakumar
Financial
inclusion means extending the banking habit among the less privileged in both
urban and rural India. RBI's guidelines, along with its promotion of `no-frills'
savings bank account, are meant to serve the objective of greater financial inclusion.
In a country, as vast as India, access to financial services like banking and
insurance is denied to almost 60-80% of its population. But as Claessens, Professor
of International Finance, University of Amsterdam, points out, access to financial
services is no panacea though there are definite causal links between financial
access, economic growth and poverty reduction.
© 2007 IUP . All Rights Reserved
SCENARIO
Foreign
Direct Investment in Banking Sector : A Boon in Disguise
- - Kunal Badade and Medha Katkar India's
role as an engine for global growth has been limited by the still relatively closed
nature of its economy. As the ceiling rates are not increased, FDI in the financial
sector is not getting a viable environment. But the foreign investment is finding
its own way to enter the Indian economy. FDI plays a vital role in the economy
because it not only provides opportunities to host countries for enhancing their
economic development but also opens new vistas to home countries to optimize their
earnings by employing their ideal resources.
© 2007 IUP . All Rights Reserved
SCENARIO
Social
Banking : An Indian Perspective
- - Meenu Bhatnagar
The
article focuses on the Indian social banking programs, which are designed to meet
the challenge of uplifting the poor people from the depths of abject poverty.
Social banking plays a pivotal role in poverty alleviation through a network of
commercial banks, cooperative banks, Regional Rural Banks(RRBs), microfinance
institutions, primary agriculture credit societies and Self-Help Groups (SHGs).
The article discusses the role of policy interventions through five-year annual
plans, phases of development of social banking, the function of Indian banking
system in the eradication of poverty and the future of social banking.
© 2007 IUP . All Rights Reserved
RISK
MANAGEMENT Residual
Risk : An Onlooker Banking Risk
- - SK Bagchi
`Residual'
implies a subject, an object or an issue which is left over from a total mass,
magnitude or quantity, but possesses an overall significant effect. In banking
risk family, the credit risk dominates, followed by market risk and operational
risk. Residual risk, however, has no place of pride, though, at times such a risk
may create catastrophic effecta sudden fatal misfortune on the well-being of a
bank. Probably, this is why the Basel Committee treats residual risk as an integral
part of Basel Accord II.
© 2007 IUP . All Rights Reserved
TECHNOLOGY
Indian
E-Payment Systems and their Performance
- - B Manoharan The
banking sector could not remain an exception when human life-style is heavily
influenced by electronics. Banking, today, has become more complex with different
products and services stemmed from reliance on automation and technological change.
It has evolved from a manual-intensive industry into a highly automated and technology-dependent
entity. Intense competition has forced banks to rethink the way they operate their
business. They had to reinvent and improve their products and services to make
them beneficial and cost-effective. Technology, in the form of electronic banking,
has made it possible to find alternate banking practices, comparatively, at lower
costs. There is a huge opportunity waiting to be discovered in the Indian E-Payment
arena.
© 2007 IUP . All Rights Reserved
REGULATION
Linkages
between Banks and NBFCs Recent Changes in the Regulatory Framework
- - Reena Ray Non-Banking
Financial Companies (NBFCs) play a crucial role in broadening access to financial
services and enhancing competition and diversification of the financial sector.
They are increasingly being recognized as complementary to the banking system,
capable of absorbing shocks and disperse risks in times of financial distress.
The application of different levels of regulations to the activities of banks
and NBFCs has given rise to some issues. RBI has tried to plug the loopholes in
these issues and has recently modified the regulatory framework.
© 2007 IUP . All Rights Reserved | 
