COVER STORY
Universal Banking
- - Katuri Nageswara Rao
Universal banks are mega financial entities that offer commercial banking, investment banking, securities trading, insurance and other financial services. Different nations have different structures of universal banks. While there could be risk mitigation and economies of scale and scope through diversification of revenue streams, some argue that there could be diseconomies as well. Further, issues like `conflict of interest' and `too-big-to-fail' arise through universal banks.
© 2005 IUP. All Rights Reserved
COVER STORY
India's Universal Banks: ICICI Bank
- - Katuri Nageswara Rao
ICICI Bank is the second largest bank in India and the largest private sector bank in terms of assets size. It has a leadership in retail credit. As a universal bank, it offers a range of banking and financial products. Through its subsidiaries, it offers Life Insurance, General Insurance, Investment Banking, venture capital funding and asset management services.
© 2005 IUP. All Rights Reserved.
COVER STORY
India's Universal Banks: The State Bank Group
- - Katuri Nageswara Rao
SBI group, the largest bank owned by the Government of India, is India's first universal bank. It offers commercial banking, investment banking, and securities trading. Of late, it has also started providing insurance and credit card facilities. It has over 13,600 branches, 5,000 ATMs and a balance sheet footage of Rs. 5 lakh cr.
© 2005 IUP. All Rights Reserved
RISK MANAGEMENT
Credit Risk Measurement: The Impact of Basel II on Measuring Risk in Retail Banking in Emerging Market Economies (EMEs)
- - SK Kar
Implementation of Basel II will help banks in reducing risk in retail loans. Standardized approach to risk in retail lending offers the risk weight of 25% points less than what is prescribed under Basel I. Advanced approach also offers the same benefit but depends upon the composition of portfolio. This will make the retail loans more attractive. The main challenge for banks is to ensure sufficient capital for heightened risk exposure. The treatment of qualifying revolving credit exposure under credit cards is a contentious one and will bring major changes for banks especially those who will use IRB approach.
© 2005 IUP. All Rights Reserved
RISK MANAGEMENT
Managing Credit Risk With Credit Linked Notes
- - Krishna Chaitanya V
Managing credit risk in loans is a challenging task banks across the globe are facing today. Banks need to have cost effective credit risk management models and instruments. Credit Linked Notes is one such instrument. This article also throws light on issues involved in developing the credit derivates market in India besides their structures and features.
© 2005 IUP. All Rights Reserved
CREDIT MANAGEMENT
Inspection of Bank Advances: Dynamics and Strategy
- - SN Ghosal
The principal objective of inspection in banks is to ensure that operating units follow the rules and procedures. Changing environment is demanding and hence the need for radical changes in the methodology and strategy in inspection of bank advances. The new model should be suitable to identify, measure and control risks involved in advances. Remedial steps required to minimize the risk should be addressed quickly and timely. To improve the quality of assets, RBI has recently come up with a risk based inspection and audit model.
© 2005 IUP. All Rights Reserved
CREDIT MANAGEMENT
Securitization: Boon or Bane for Public Sector Banks?
- - S Bhaskaran
Securitization market in India is in its infancy with few players. It will help the banks, particularly the public sector banks, to shore-up the capital adequacy, ease the liquidity and widen the asset base. Reason for banks not grabbing the securitization opportunity is abundant liquidity in the system. Securitization will increase the bank's risk taking capacity.
© 2005 IUP. All Rights Reserved
M&AS
Merger Moves in Indian Banking: Impact on Stakeholders
- - Ajaya Kumar Mohanty
The Financial regulator has recently given the hint that it will consolidate some banks and make four to five bigger banks, with a capacity to compete with international banks like Citi Bank, Bank of America, etc. This move will have many positive and negative impacts on stakeholders. Customers will get innovative and international level products, better inter-personal interface, shareholders will get better returns, employee will be better incentivized for good performance, there will be retrenchment of excess employees, etc.
© 2005 IUP. All Rights Reserved
RURAL LENDING
Rural Banking: Shifting Paradigms
- - Chinmoy Kumar
Banks are now concentrating more on the rural area than before. ICICI bank alone has set up a target of Rs. 2000 cr for micro finance in rural areas. Conducive policies of the government like doubling the agricultural credit within next three years will increase bank finance in rural area. Low default rate, greater opportunities, reducing margins in other sectors, government's commitment to free the farmers from money lenders's clutches are encouraging the banks to lend more in rural areas.
© 2005 IUP. All Rights Reserved
CASE IN FOCUS
Banking Sector in NMS of EU
- - Yash Paul Pahuja
Banking sector in NMS (New Member States) of EU (European Union) has performed better than EU-15 on many parameters, like Net interest margin, capital ratio, intermediation level etc., during 1999- 2003. The presence of foreign banks has been so heavy that around 70% of bank assets are owned by them. On the deposit insurance regulation front, some countries are lagging behind EU-15. The supervision model in some NMS is at par with EU-15.
© 2005 IUP. All Rights Reserved
SPEECH
Crime and money laundering The challenges
- - Tom K Alweendo
Coping with the money laundering menace is a challenge, central banks across the world are facing today. This crime could inflict severe damages like change in the demand for cash, more volatility in interest rates and exchange rates and possibly high inflation for a country. While many laws are available at international level, there is still a need for greater cooperation among the central banks of the world and creation of appropriate laws at national levels.
© 2005 Central Bank of Namibia. Reprinted with permission. Speech by Governor Tom Alweendo. Governor of the Bank of Namibia, at the African Banking Congress, Johannesburg, March 8-10, 2005.
BOOK REVIEW
The Dollar Crisis
- - Richard Duncan
After the collapse of Bretton Woods system in 1973, dollar has emerged as reserve money for the world. The US emerged as growth engine to most economies. Excessive capacity creation due to dollar as reserve money resulted in a crisis in Japan during 1980s and Asian crisis during the mid-1990s. But, present crisis in the dollar is due to higher current deficit of the US, new paradigm bubble in late 1990s in the US, and a growing disequilibrium across the global economy. There is an urgent need to address this situation.
© 2003 John Wiley & Sons (Asia) Pte Ltd.. All Rights Reserved. IUP holds the copyright for the Book Review. |
