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COVER STORY
Rise in NPAs: A Looming Threat?
-- Y Bala Bharathi and Sanjoy De
High-levels of NPAs erode the profitability of the banks and impair their performance. In recent months,
though the banks have managed to keep NPAs low through vigilance and restructuring norms, analysts warn of
tougher times ahead. According to them, the current economic slowdown, coupled with the global recessionary
trends on liquidity, could lead to the piling of NPAs in the banks.
© 2009 IUP. All Rights Reserved.
RISK MANAGEMENT
Operational Risk and Capital `Punishment'
-- RK Moolchandani
One of the significant additions to the Basel II Accord is in the area of operational risk. Although operational
risk has always been a part of the organizations, it has never been subject to a regulatory capital charge
before. This article argues that the implementation of Basel II will require banks to provide 15% of their three
years' average annual gross income, which is a burden for the banks. It also analyzes the other aspects of the
new Accord and the issues surrounding its implementation.
© 2009 IUP. All Rights Reserved.
RECOVERY MANAGEMENT
The Age of ARCs in India
-- Medha Chintala
The Government of India has decided to open up the Asset Reconstruction Company (ARC) business to
foreign players. As of now, Asset Reconstruction Company of India Limited (ARCIL) dominates the
asset reconstruction scene in the country. Barclays has been the first foreign company to sign an agreement
with ICICI to pick up 10% stake in ARCIL.
© 2009 IUP. All Rights Reserved.
RECOVERY MANAGEMENT
Recessionary Pressures Accelerate NPAs in Banks
-- B Sadananda Rao
It has been predicted that the stimulus packages announced by the RBI, in response to the financial
crisis, would not have a major impact on the investment decisions of India Inc which might resort to frenzied cut
in investments and employment. These developments indicate a possible economic downturn in India that
would spell a liquidity crunch. In the backdrop of depleting liquidity, this article throws light on the possible
increase of NPAs in the banks.
© 2009 IUP. All Rights Reserved.
INTERNATIONAL BANKING
Chinese Banking Sector: In Transition
-- Dr. Keerti Sharma
This article focuses on the various types of banks in China, their role and market share in the economy of
the country. Over the years, there has been a substantial progress in reforming the banking sector in the
People's Republic of China. Though the independence of the central bank in implementing a monetary policy
has increased, the autonomy of state-owned banks in credit management has been enhanced and bank
supervision has been improved, still the Chinese banking sector faces formidable challenges.
© 2009 IUP. All Rights Reserved.
INTERNATIONAL BANKING
International Banking Consolidation: Consequences of Globalization on the Banking Sector
-- Ritu Sinha
The recent upsurge of banking consolidations has attracted the attention of many. The process of
globalization and liberalization brought about major changes in the banking industry and has increased the number of
bank mergers and acquisitions in most countries. This article explores the causes and effects of international
bank mergers in the view of globalization. It also highlights the impediments to cross-border bank mergers
and examines the Indian scenario with respect to banking consolidation.
© 2009 IUP. All Rights Reserved.
FINANCIAL INSTITUTIONS
Exim Bank: Financing Export-Oriented Units in India
-- Dr. Priyanka Gite and Rahul Mishra
Exim Bank of India is an apex financial institution set up for the purpose of financing, promoting and
facilitating India's international trade. The bank, through its schemes, is engaged in financing export of projects,
products and services from India. It is also involved in financing the Export-Oriented Units (EOUs) in India. This
article focuses on the genesis of EOUs and various financing programs conducted by the Exim Bank in the context of
Indian EOUs.
© 2009 IUP. All Rights Reserved.
CREDIT MANAGEMENT
Credit Management in India: Changing Paradigm
--AK Sohani
Credit offtake has been one of the most talked subjects of late. Following liberalization and globalization,
banks have greater freedom with regard to credit allocation and are, not only focusing on increasing their
credit portfolios, but are also identifying new ways to offer credit. New techniques in credit offtake are
being introduced with the adoption of technology. This article discusses the changing paradigm of credit
allocation and credit management in India and the regulatory responses towards the same.
© 2009 IUP. All Rights Reserved.
INSURANCE
Bancassurance: A New Channel of Insurance Business
-- Vissapragada Srinivas
The concept of bancassurance is gaining importance in the growing global insurance industry, expecially in India. Banks,
with their geographical spread and penetration, have emerged as viable channels for distribution of insurance products, paving
the way for spreading the concept of bancassurance. The relationship is symbiotic, benefitting both the banks and the
insurance companies. Its implementation has thrown open a number of opportunities and challenges.
© 2009 IUP. All Rights Reserved.
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