The present issue comprises three research papers. The first paper, “Volatility
Indices: An International Comparison”, by Maithili S Naik and Y V Reddy,
examines the dynamic linkages among the leading global volatility indices such as US VIX, Germany VDAX, India VIX, South Korea VKOSPI and China VXFXI. Employing VAR model with impulse response function and variance decomposition analysis, the authors examine the dynamic linkages among these indices. The findings suggest that US VIX is the most influential volatility index. Thus, authors recommend that US VIX should be closely observed by overseas regulatory authorities as early warning signal for future turbulence in their domestic markets. Further, the results associated with the Indian VIX reveal that there is a moderate level of influence of the US VIX on it. However, it is also observed that the Indian VIX seems to be integrated minimally with its Asian counterparts.
The second paper, “Application of Unsupervised Feature Selection, Machine Learning and Evolutionary Algorithm in Predicting Stock Returns: A Study of Indian Firms”, by Tamal Datta Chaudhuri, Indranil Ghosh and Shahira Eram, engages a framework for predicting stock returns using three unsupervised feature selection techniques, four predictive modeling techniques such as random forest, bagging, boosting and support vector regression and an ensemble combining the four predictive modeling techniques. In order to assess the results of the study under the said framework, the authors employed four different performance measures, namely, Mean Absolute Error, Mean Squared Error, Nash-Sutcliffe Efficiency and Index of Agreement. The feature selection results indicate that all explanatory variables are not significant for different sets of companies and also for different time periods. Thus, the authors conclude that feature selection technique is not appropriate for stock returns prediction. The findings of the study also reveal that predictive modeling techniques’ forecasting efficiency for large cap and mid-cap firms is better than that of small cap firms. However, out of these four predictive modeling techniques, boosting is the most efficient technique for forecasting the stock returns. The findings of the study also affirm that the proposed ensemble performance and measurement is better in both training and testing phase as compared to the efficiency of the individual predictive modeling techniques.
The last paper, “Evaluating the Financial Soundness of Banks: An Application of Bankometer on Pakistani Listed Banks”, by Aasma Ashraf and Yasir Bin Tariq, employs Bankometer to evaluate the financial soundness of banks listed on Pakistan Stock Exchange for the period 2006-2014. In this paper, financial soundness of each of the selected banks is computed separately to demonstrate the degree of their financial stability or insolvency. Comparing the scores of Bankometer model with those of the Z-score model reveals that the Bank of Punjab’s financial soundness is at a stake and there is need of immediate intervention so as to improve its efficiency and to shift it in the protected zone of soundness.
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.
