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COVER
STORY
Banking
on the Budget - - Katuri Nageswara Raoo
Chidambaram's
budget has not caused much cheer among bankers. The budget
is silent on disinvestment in PSBs. It does not have anything
new to mention about the consolidation of PSBs either. There
are, however, new guidelines for foreign banks with regard
to their entry and expansion, in consonance with the WTO provisions.
PSBs have to be more actively involved in social lending.
The cash withdrawal tax will prove to be a vexatious levy
from the bankers' viewpoint.
© 2005 IUP. All Rights Reserved
STRATEGY
`Banking'
on CRM - - V V Gopal
Competition
and globalization of banking services are forcing banks to
be productive and profitable. To retain high net worth individuals,
banks should focus strongly on relationship management with
customers. Innovative Customer Relationship Management (CRM)
strategies and cutting edge software can help, to a great
extent, in achieving the desired results. To provide customized
services, banks are opening Personal Boutiques which provide
all the required financial needs of a customer.
© 2005 IUP. All Rights Reserved
STRATEGY
Foreign
Exchange Flows, Reserves and Management - - S Harikrishnan
According
to IMF, many countries keep reserves to meet external obligations,
limit external vulnerabilities, provide a level of confidence
to markets, etc. The level of reserves in any country will
depend on that country's needs and desires. While many countries
keep higher than required level of reserves, excess reserves
can also pose many risks. Most countries keep their reserves
with the Bank for International Settlements (BIS) for safety
though the returns are low.
© 2005 IUP. All Rights Reserved
RISK
MANAGEMENT
Indian
Banks-Falling Back on the Second Tier - - D Satish
The
last few months of the financial year 2004-2005 have witnessed
a number of banks raising the Tier II capital. This capital,
apart from improving the capital base of the banks, is also
being used to cater to the sharp increase in the credit offtake.
© 2005 IUP. All Rights Reserved
RISK
MANAGEMENT
Scoring:
The Next Breakthrough in Microcredit? - - Nidhi Mulik
Scoring
- A method to judge the risk of a borrower, especially a small
borrower, may help the banks to reduce its credit risk. A
large scale microlending will be possible for banks with the
help of scoring. The chief obstacle to effectively implement
this method is large scale data requirement about the borrowers.
© 2005 IUP. All Rights Reserved
RISK
MANAGEMENT
Bank
Failures, Systemic Risk and Public Policy - - Vinod Sharma
In
the US, bank failure rate has increased after putting in place
safety net policies. Economists argue that poor design of
safety net policies, political compulsion and inaccurate judgment
about the environment are the major culprits. Economists are
also worried whether Basel II will be able to strengthen the
system because discretionary powers in the Internal Ratings
Based (IRB) approach of credit risk may increase the appetite
of banks for risk. There is need for a public policy which
focuses on the causes of problems and enhances the macroeconomy
stability.
© 2005 IUP. All Rights Reserved
SCENARIO
Banks
Becoming Financial Supermarkets-Problems and Prospects in
India - - Mahendra Pratap Singh
The
use of technology and liberalization and the deregulation
process initiated by the Indian government in the early 1990s
has completely changed the traditional way of banking. Now,
in India banks are moving towards the concept of financial
supermarkets, where the customer can get the full range of
financial services. This article attempts to address the problems
and prospects of banks becoming financial supermarkets in
India. The prospects are very bright, especially in the insurance,
personal credit and agriculture business, but banks still
need to develop their technology and penetrate into the retail
segment before they can make the concept successful.
© 2005 IUP. All Rights Reserved
PRODUCTS
Retail
Banking in India: A Paradigm Shift - - AG Varughese
Retail
products and services are making banks' bottom line robust,
besides reducing the risk level. Banks should offer those
retail products that satisfy customers' desires and need to
look for new delivery channels. Banks are adopting innovative
technology, which is helping them to offer customized products
in a cost efficient manner.
© 2005 IUP. All Rights Reserved
REGULATION
Electronic
Cheques and Evidentiary Value - - V Gopala Krishna and C Vidya
The
advancement in technology has led to the creation of electronic
cheques, particularly in a business to business environment.
Different countries have a choice of cheque systems, which
are governed by the laws applicable to each country's jurisdiction.
The authentication of these electronic instruments is proposed
to be endorsed by digital signatures. In India, the enactment
of the Information Technology Act, 2000 obligated amendments
to The Negotiable Instruments Act, 1881 in order to impart
legal validity to such electronic instruments. The authors
in this article elucidate the amended provisions and examine
the evidentiary value of such electronic instruments.
© 2005 IUP. All Rights Reserved
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