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COVER
STORY
The
Shining Euro
-- Katuri Nageswara Rao
European
Union has strengthened since its inception in the year 1951
with just six member nations to start with. With the recent
introduction of ten more nations, its present strength is
25, accounting for a population of 455 million with around
28% share of world GDP and 20% share of global trade. Euro
has gained in value and has matured into a strong currency
which has the potential to challenge the supremacy of the
dollar in years to come. But there are still many obstacles
to overcome for a true unification of European Union to take
place.
© 2004 IUP. All Rights Reserved.
HRM
IN BANKING
Bank
Manager and His Art of Negotiation
-- GRK Murty
Negotiation
in one form or the other pervades the whole spectrum of banking
services. Every interaction of a manager either with customers
or with his own staff involves some kind of negotiation. Given
the amount of time managers spend on negotiating, they tend
to believe that they are pretty good at it. But it is not
always true. Although some managers are quite adept, others
often lament at the wrong words, wrong tone, wrong expressions,
etc., used after coming away from the negotiation table. And
in the world of banking, the results of miscommunication could
be adverse. Against this backdrop, this article makes an attempt
to map the basic tenets of the art and science of negotiation
and the common mistakes that negotiators are prone to make.
© 2004 IUP. All Rights Reserved.
INTERNATIONAL
BANKING
Expanding
Islamic Banking
-- NS Sekhon
Islamic
banking, which is also known as interest free banking is no
longer limited to Muslim countries alone but has spread to
important finance centers in Europe, England, America and
the Far East. Presently, there are more than 270 Islamic banks
and financial institutions in over 75 countries having total
assets in excess of $230 bn.
© 2004 IUP. All Rights Reserved.
CREDIT
MANAGEMENT
Linking
Commodity Derivatives with Farm Credit: A Win-Win Proposition
-- Sunil Kumar
In
the recent years, there has been a serious concern in the
policy circles regarding high cost and insufficient credit
available in Indian farm sector. Efficient futures market
and a sound warehouse receipts system can stabilize the incomes
of farmers. Higher and stable income of the farmers will lead
to emergence of a sustainable credit market in rural areas
with high demand for credit coupled with high percentage of
repayments of loans.
© 2004 IUP. All Rights Reserved.
BANKING
PRODUCT
Factor:
The Great "Financial Actor"
-- Vinay Dutta
Banks
in India generally prefer financing backed by physical assets.
On the contrary, factoring is an entirely different part of
the financing vehicle, which provides funds against the invoices.
Though this is a useful source of funds for the growth of
small and medium sized firms, it creates risk for factor.
By putting in place a robust risk management system and dispute
and fraud prevention system, a factor can overcome these hurdles.
The major reasons for low volume of factoring in India are
absence of regulatory framework, lack of credit information,
low awareness about product and risk etc.
© 2004 IUP. All Rights Reserved.
RISK
MANAGEMENT
Credit
Derivatives : A Myth and Reality Check
-- Yash Paul Pahuja
For
the success of a bank the effective management of credit risk
is vital. Credit derivatives can play a crucial role and help
to enhance the efficiency of the banks in effective management
of credit risk. While credit derivatives are certainly grabbing
headlines over the past few years with year-on-year volume
statistics illustrating the exponential growth of this market,
there is also an air of frustration.
© 2004 IUP. All Rights Reserved.
RECOVERY
MANAGEMENT
Solving
the NPA Puzzle
-- Ashish Aggarwal
Indian
banking system has NPAs of around Rs. 90000 cr. Recently,
PricewaterhouseCoopers (PwC) has given its recommendation
to recover these loans. The focus of the report was on facilitating
loan transfer to ARCs and creating a favorable environment
for investors. As debts in Indian corporates are fragmented,
here PwC suggests classification i.e. banks to comply with
90 days norms and FIs to comply with 180 days rule. The report
also suggests guidance procedure for valuation in negotiated
deals.
© Businessworld, May 17, 2004. Reprinted with permission.
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