Law Review

May'21


The IUP Bank Management

ISSN: 0972-6918

A 'peer reviewed' journal indexed on Cabell's Directory,
and also distributed by EBSCO and Proquest Database

Management is a quarterly journal that focuses on risk management, forex markets, retail banking, HRD and leadership, banking, supervision, convergence of financial services and E-Banking.

Privileged access to Online edition for Subscribers.

CheckOut
Article   Price (₹) Buy
Does Higher NIM Cause Cost Complacency and Credit Delinquency?
50
Microcredit-Backed Securitization (MBS): A Win-Win Scenario for MFIs and Investors
50
Inner Workings of Collateral-Based Stablecoins and Its Implications
50
     
Contents : (May 2021)

Does Higher NIM Cause Cost Complacency and Credit Delinquency?
Ashish Srivastava

This paper examines the importance of Net Interest Margin (NIM) for banks' profitability and investigates whether the banks with higher NIM face cost complacency and suffer from adverse selection in their credit decisions and hence, higher Non-Performing Assets (NPAs). It evaluates the relationship of the level of NIM with the banks' wage and non-wage operating expenditure, Cost-Income Ratio (CIR) and gross NPA for scheduled commercial private sector banks and scheduled/non-scheduled Urban Cooperative Banks (UCBs) in India. The analysis shows that NIM has a significant positive impact on the profitability of banks. For scheduled commercial private sector banks, the gross NPA has the most profound negative impact on their profitability. For UCBs, the most significant negative impact comes from wage CIR. For none of the banks, credit delinquency increases with a higher NIM. While operating cost per rupee of assets is seen at an elevated level for banks with a higher NIM, the impact of the higher cost is more than offset by the increased income, and hence, the paper shows that NIM is one of the important determinants of bank's profitability and a higher NIM does not necessarily cause cost complacency and credit delinquency.


© 2021 IUP. All Rights Reserved.

Article Price : Rs.50

Microcredit-Backed Securitization (MBS): A Win-Win Scenario for MFIs and Investors
Anitha, S Galab and Raghunatha Reddy

Securitization is an off-balance sheet tool that facilitates capital relief. However, in India, securitization originated three decades ago, yet, the market is still in its development stage. In this backdrop, this paper examines an innovative existing structured finance model-securitization as an emerging alternative for sourcing funds to tide over the liquidity and funding constraints in MFI sector. Currently, MFIs rely on lumpy cash flows from banks during Q3 or Q4, when banks are trying to fulfil their CAR needs. However, the structured instruments facilitate MFIs to access the capital markets to match their funding and liquidity requirements. The paper outlines the concept of structured finance and emergence of new asset classes, application of structured instruments in the area of microfinance, securitization models-Direct Assignment (DA) and Pass Through Certificate (PTC)-in MFI sector with insights from industry experts. It also examines the advantages to both originators and investors and suggests the prerequisites for MFIs contemplating approaching these markets.


© 2021 IUP. All Rights Reserved.

Article Price : Rs.50

Inner Workings of Collateral-Based Stablecoins and Its Implications
Gongpil Choi

While early cryptoassets such as Bitcoin have reputation for high price fluctuation and limited scalability, stablecoin, a new class of cryptographic token, emerged with the purpose of mitigating price volatility. What distinguishes stablecoin from preexisting cryptocurrency is its use of collateral and use of specific pegging mechanism to mitigate volatility risks. The paper sheds light on the inner workings of stablecoins by analyzing stabilizing property with various aspects of collateral mix as well as pegging mechanism. Specifically, it evaluates initiatives to effectively utilize gold and government bonds as combinatorial collateral.


© 2021 IUP. All Rights Reserved.

Article Price : Rs.50

Upload Articles
Click here to upload your Articles

Journals


Magazines


Articles of the Month
ISBN: 978-81-314-2793-4
Price: ₹250
Payment by D.D. favouring
"ICFAI A/c IUP", Hyderabad

Reach us at
info@iupindia.in
Tel: +91 8498843633