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Bond
Yield and Inflation Expectations: A Study of Indian Bond Market
-- Nikhil
Rastogi
Bond
yield is theoretically an aggregate of real rate of interest
and expected inflation. This study verifies this relationship
empirically for the bond markets of USA and India using bond
yield data for long-term securities against the expected inflation
for the period 1996-2002. A linear regression technique is
used to determine the extent of relationship between the variables
of bond yield and expected inflation. The results show that
Indian markets have also started to reflect the expected inflation
dependency which has been the hallmark of developed markets
of USA, Canada, etc. Earlier period data (1991-96) for Indian
bond market does not show any significant relationship between
nominal yields and expected Inflation. The results could lend
credence to the reforms initiated by RBI in that it has led
to expanding the market thereby making it more independent
in determination of yields as per expected economic realities.
©
2004 IUP. All Rights Reserved.
Determinants
of NPAs in the Indian Public Sector Banks: A Critique of Policy
Reforms
-- Dr. Pradip Kumar
Biswas and Ashis Taru Deb
The
paper analyzes the process leading to formation and perpetuation
of high levels of NPAs in Indian Public Sector Banks (PSBs).
It distinguishes between random and non-random reasons of
NPA formation in PSBs. It points out that a high degree of
arbitrariness is involved in defining NPAs as it fails to
capture diversity in terms of the seasonal and cyclical nature
of the economic activities in India. The study conceptualizes
random reasons for default in a simplified framework of a
Poisson process. It then argues that the non-random reasons
go beyond the conventional paradigm of interim, ex-ante and
ex-post information asymmetries and incomplete contracts.
It points out that the financial notion of NPA as a mere risk
phenomenon is inadequate, because a number of reasons leading
to non-random generation of NPA are related to the dimension
of uncertainty. It highlighted that the use of a secondary
asset market may take care of NPA problem, but it requires
a number of conditions for its use, which hardly exist in
India. The study observes a number of reasons for generation
of NPAs which are important and peculiar to India. This is
followed by a critical evaluation of the series of policy
measures that have been adopted to improve the NPA scenario
since liberalization. While one set of policies granting greater
autonomy to the PSBs are proved to be quite effective in restricting
formation of fresh NPAs, the other set of policies designed
to recover loans, after default, have failed to deliver the
goods. Finally, it concludes by making an assessment of the
existing institutions and highlights the fact that the incidence
of NPA is as much due to the malfunctioning of the banking
institutions as due to the external institutional environment.
©
2004 IUP. All Rights Reserved.
Marketing
of Factoring Services with Special Reference to SBI Factors
and Commercial Services Ltd. Mumbai, India
-- Dr.
Teki Surayya
Extending
credit elevates sales of business corporations. Factoring
enables corporations to convert inactive assets into cash.
SBI factors offer 70 to 80% cash on approved debt. It currently
charges 18% and has 15.33% compound growth rate. Co-relation
between turnover and number of SSI clients is + 0.72. Projected
turnover for 2002-03 is around Rs. 700 crores. The product
line is limited and should be extended fully. Company's major
target market, SSI, which is falling, should be heeded. The
percentage of awareness in the relevant market is only 24%.
©
2004 IUP. All Rights Reserved.
The
Effect on Personal Finances Due to Irresponsible Use of Credit
Cards and Compulsive Buying Behavior
-- Anand
Agrawal and Sanjay Fuloria
The
consumer culture has been gripping India and easy access to
credit facility is one of the causes of overspending. This
overspending many a time is the reason for the mismanagement
of the personal finances and thus creates pressure on investment
management of individuals. The primary objective of this study
is to investigate the effect of irresponsible use of credit
card on compulsive buying among Indian consumers on their
personal finances. A survey was conducted to collect the needed
data in the cities of Delhi and Hyderabad. A Sample of 250
shoppers in the shopping malls like Shoppers' Stop, Lifestyle,
Food World, Q-mart and other retail stores was selected for
the study. After a detailed literature survey, the hypotheses
were developed. Scientific scale to measure the compulsive
buying behavior among Indian consumers was used. To measure
the irresponsible use of credit card, another scale was used
which was pre-tested using a pilot survey. The discriminant
analysis using the primary data reveals that use of credit
card is the significant variable that is associated most closely
with compulsive buying behavior followed by anxiety attitude,
income and power and prestige attitude in that order. The
outcome suggests that irresponsible use of credit cards facilitates
the compulsive buying behavior that ultimately is the cause
for the mismanagement of personal finances.
©
2004 IUP. All Rights Reserved.
Reporting
on Internet by Indian Banks
-- Balwinder
Singh and Pooja Malhotra
Worldwide,
corporations are using the Internet to reach customers instantaneously.
Corporates in the western world are known to use internet
services more extensively even for reporting their financial
performance as it provides instant accessibility, besides
being interactive. Thus, there is a shift in the recent past
towards a timelier, readily accessible, interactive web based
financial reporting. However, no such literature is available
on Indian corporates making use of Internet to report their
annual performance. The present paper is an attempt in that
direction. The study revealed that Indian private banks are
more advanced in using Internet for financial reporting than
government-owned banks.
©
2004 IUP. All Rights Reserved.
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