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Day: September 3, 2021

Impact of Retail Banking on Indian Economy & its Benefits to Banks in 2021

Posted on by Imarticus

Retail banking is a financial institution’s direct interaction with consumers. Typical services: savings and transaction accounts; mortgages; personal loans; debit and credit cards, among others. Working mechanism: The Law of Large Numbers Aids in determining the success of multi-level marketing operations due to its wide appeal among customers. Distribution – branch, channels Branding Customer service

The phrase is most often used to distinguish consumer-facing financial services from investment banking, commercial banking, and wholesale banking. It may also be used to refer to a bank’s section that handles personal customers.

The Impact of Retail Banking In Indian Economy

In India, retail banking has long been a reality. It has always been present in India in one form or another. For many lenders, the most recent years have seen it become synonymous with traditional banking. Housing loans, durable goods consumption loans, automobile loans, credit cards, and educational loans are among the typical services offered by Indian retail banks.

To promote their products, different banks offer attractive brand names to distinguish the goods provided by various lenders. According to the Report on Trend and Progress of India, 2003-04, loan values of these retail lending are typically below Rs.20,000 to Rs.100. The loans are generally for five to seven years with housing loans available for a longer term.

In the realm of e-commerce, credit cards are also a fast-growing subsector. With retail portfolio accounting for 21.5% of total outstanding loans as of March 2004, retail lending has become a key profit source for banks. The overall loan impairment ratio was lower than the gross NPA ratio for the entire loan portfolio in recent years.

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Benefits of Retail Banking for Banks

Banks have access to benefits in retail banking that fintechs do not, namely the ability to cross-sell products and services based on existing customer lending behavior and demographics.

“Retail banks rely primarily on cross-selling products to their customers for growth; while third party providers must acquire a new clientele through marketing.”

This is particularly true if we consider that one of the main advantages of using financial technology solutions is their cost reduction compared with traditional banking fees. And yet, many of these solutions will always want to act as an intermediary between a bank and its clients (and their data). It’s no wonder why today’s top ten tech companies are also investing in developing innovative financial services.

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Entrepreneurial Finance & Investment Decisions in Seed-Stage Ventures: An Overview

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Startups and Typical Funding Path 

There are many ways to finance a new startup, and finance is one of the most important aspects to consider when launching a business. There are several sources of finance available for startup ventures, which include public finance, private equity finance, venture capital finance, and self-funding (called bootstrapping).

Public finance is very broad in scope and typically includes funds raised by companies from government agencies or government programs designed specifically for entrepreneurial purposes.

Much of this activity takes place at the local level, where city governments work with entrepreneurs through various programs to help launch new businesses within their communities. These programs can vary widely from location to location; however, they generally offer technical assistance on all stages of company creation as well as financial support such as low loans or seed money grants.

What is Seed Financing?

Seed financing (also known as seed money, or seed funding) is the first stage of a startup’s capital-raising process. Seed financing is a form of equity-based finance. In other words, investors give money in exchange for an ownership stake in a firm. This is generally done in a looser formal setting when compared to other types of equity-based capital investment.

How is Seed Capital Used?

Seed capital is typically used to cover the company’s initial operations. Proceeds from seed financing might be spent on market research or early-stage product development (e.g., the formation of a prototype), as well as on essential operating expenditures such as legal fees.

The majority of the funding comes from family, friends, and angel investors. Angel investors are the most important participants in seed investment since they might supply a large quantity of money.

Seed Financing as an Investment Vehicle

The riskiest type of investment is seed financing. It entails putting money into a firm that has just begun to generate revenue or profits. Venture capitalists and banks, for example, typically avoid seed financing because of these reasons.

Seed investment, on the other hand, is one of the most complicated types of financing. This is due to a lack of information on the part of a potential investor. Because it’s crucial for determining whether or not your company has a viable concept and strong management that can implement it, you’ll have to do some research yourself.

The executive’s soft skills, as well as the company’s management abilities, also have an impact. Management expertise isn’t always crucial, however. Many internet giants like Facebook and Google were created by people with virtually no prior business administration experience.

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What are the Features & Benefits of Security Lending & Borrowing?

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Securities Lending and Borrowing is a system that allows investors to borrow and lend shares to other market players. For many reasons, the platform is a potential alternative to the derivatives market. Short-sellers are the most common SLB borrowers. On the other hand, Lenders are investors who purchased shares for the long term and have them sitting dormant in their demat accounts.

In most jurisdictions, securities lending and borrowing is an OTC (over-the-counter) commodity where custodians allow borrowing and lending transactions between institutions. SLB, on the other hand, is an exchange-traded product in India.

SLB Features

  • Clearing Corporations guarantee transactions in the SLB section and hence do not include any counter-party risk.
  • Contracts with durations ranging from one month to twelve months are available.
  • Turnover fees from the STT and SEBI are not applicable.
  • The market value of the equities determines the loan amount pledged as security.
  • This SLB allows retail and institutional investors to lend and borrow assets.
  • The securities can be lent by investors who have Ideal Shares in their demat account.
  • This approach allows investors or traders who have short-sold stocks to borrow the securities.
  • National Securities Clearing Corporation Limited ensures that stocks are delivered after the rental period has ended. As a result, there is no chance of the stock being lost.
  • When the borrower returns the stock, any dividends, stock splits, or bonus shares are paid to the lender of the securities.

Benefits 

Both the lender and the borrower benefit from SLB.

For Lender

SLB delivers an extra return on an idle portfolio for Lenders. So, if you have 1000 shares of xyz that you intend to own for a long time, you can lend them out anytime there is a demand. Where NSCCL is the guarantor, the lender receives loan fees.

The potential to make additional money through the fee charged to the borrower to borrow the security is one of the benefits of securities lending from the lender’s perspective. It could also be considered as a way to broaden one’s horizons.

For Borrower

From the borrower’s perspective, it permits them to engage in activities such as short selling. It also provides investors with more perspectives on the market. As previously said, it aids in the increase of liquidity in the market as a whole. As the difference between the bid and the ask narrows, increased market liquidity tends to tighten spreads, which is favorable to all market players.

A borrower is most likely interested in one of the following opportunities: stock price between two exchanges, reverse arbitrage when futures are at a discount to stock, covering short positions to avoid settlement failure, mispricing in options, and other hedging strategies, SLB could be used to borrow stocks from a lender for a fee.

Become an Investment Advisor 

Investment advisors provide advice on a wide range of trade finance topics, including retirement planning, insurance alternatives, and investment techniques. To work as an investment advisor in India, you’ll need a degree in finance or banking as well as a SEBI certificate of registration.

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The program is designed to give you in-depth exposure to essential parts of the trade finance Investment Banking sector,

Such as Master Accounting, Financial Analysis, Principles of Economics and Markets, Investment Banking Operations, and more.

4 Common Mistakes Made by Beginner Stock Investors!

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Stock investing is a highly competitive and risky business. The risk of losing your money in the stock market can be mitigated by learning about treasury management, trade finance, and other related areas. If you are a beginner stock investor, there is no time like the present to learn as much as you can about this exciting field.

There are many mistakes that beginners often make, and those mistakes could cost you dearly in the long term. In this post, we’ll discuss four common mistakes made by beginner traders and offer advice on how to avoid them. 

Common mistakes made by beginner traders and how to avoid these mistakes are:

Purchasing without doing the research: One of the most important parts of trading is understanding what you are buying. This requires some background knowledge and information on your part to make an informed investment decision. You should have all this before making any investments to avoid mistakes like jumping into something just because someone else said it was good or looking at a graph that makes something look more promising than it really is.

Not considering risk management: When people hear about successful traders, they often think that these traders were simply lucky; however, there’s much more behind their success than luck alone. These professional investors know how to manage risks properly, which has helped them navigate through rough patches while maintaining portfolios over time. Risk management also helps know what to sell when things go south and how much of a loss is too big.

Not having an exit strategy: Another common mistake investors make is not having an exit strategy. They often get caught up in the moment when something starts to go well and don’t sell it even though they know that it might come back down. Having a solid plan for exiting trades should include some type of profit-taking or using stop-losses, which are set according to your preferences as they can limit potential losses while still allowing you to take advantage of gains.

Getting caught up on emotions: Investing requires patience more than anything else as it takes time for good investments to pay off—but this doesn’t mean you should be patient all of the time. When new traders make a lot of money, they tend to hold onto those stocks thinking that their luck will continue, which isn’t always true; hence why risk management is so important because if things go south (i.e., there was an unanticipated event like bad news from another company), then these beginner traders may end up losing a lot more than they bargained for.

Learn treasury management by joining MBA course at Imarticus Learning Institute

Avoiding these mistakes is the primary step towards becoming a successful trader. The second and equally important part of learning to trade profitably is good risk management skills as well as understanding various compliances in the market. Learn risk and treasury management in banking & finance with Imarticus Learning.

Imarticus Learning offers MBA courses in finance in collaboration with Jain University. This course will enable you to gain in-depth knowledge & understanding of the various treasury operations and also help you understand risk management.

For more information, connect with us through the Live Chat Support system or visit any of our training centers based in – Chennai, Mumbai, Thane, Pune, Bengaluru, Hyderabad, Delhi, and Gurgaon.

Most Essential Asset for Professionals: Data Analytics Tools!

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To perform data analysis, professionals use tools & software that ensure the best results. There are many of them in the market, but a few are on the top list for data analysts that need to be chosen wisely to extract the best benefit. 

This article discovers the best data analyst tools and highlights key features of each based on different types of analysis processes. But first, here’s a basic definition & introduction.

What Are Data Analyst Tools?

Data analyst tools are applications & software that data analysts develop & perform analytical processes to make better, informed business decisions while keeping costs low & profits high.

Top Tools Used by Data Analysts?

1. Business Intelligence Tools

BI tools are the most represented means to perform data analysis. Specialized in business analytics, they prove beneficial for every data analyst to monitor, analyze, and report essential findings. Self-service, advanced SQL modes, and predictive analytics make them easily adjustable to every level of knowledge without immense IT involvement. 

DATAPINE covers most requirements from beginners & advanced users.

Key Features:

  • Visual drag-&-drop interface
  • Powerful predictive analytics & interactive charts & dashboards
  • Intelligent alarms triggered for anomaly

2. Statistical Analysis Tools

There exist multiple programming languages that make work easier & effective. With the expansion of languages, some rules and scenarios need special attention for statistical data analysis & modeling.

R PROGRAMMING is the most popular tool for data analysts.

Key Features:

  • An ecosystem of more than 10k packages & extensions for data analysis
  • Statistical analysis, modeling, & hypothesis testing
  • Active community of researchers, statisticians, & scientists

3. General-Purpose Programming Languages

Programming languages help to resolve a variety of data problems. Tools like C#, Java, PHP, Julia, Ruby, and Python are many reliable solutions.

PYTHON is the most trusted tool.

Key Features:

  • Open-source solution with simple coding processes
  • Easy integration with other languages
  • Advanced analysis processes through ML & text mining

4. SQL Consoles

SQL is a programming language used to manage data held in relational databases, effectively handling structured data for analysts. Highly popular in the data science community, these tools are used in various business cases & data scenarios. 

MYSQL WORKBENCH is the most popular one.

Key Features:

  • Unified visual tool for data modeling, administration, SQL development, backup, etc.
  • Instant access to the database via Object Browser
  • SQL Editor offers color syntax highlighting, reuse of SQL snippets, & execution history

5. Unique Predictive Analytics Tools

Predictive analytics is an advanced technique to combine data mining, AI/ML, and predictive modeling to predict future events. It is an essential data analysis tool as it simplifies predictive analytics processes. 

SAS FORECASTING is an analysis software helpful for predictive analytics processes & helps analysts to predict future scenarios.

Key Features:

  • Automatic forecasting for entities or products, including hierarchical forecasting
  • Scalability & modeling to create an ensemble
  • An unlimited model repository including time-series & casual methods

Apart from the tools mentioned above, there are industry-specific analytics tools & data science platforms that assist professionals. A business analytics course can help you better understand what data analytics is!

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data analytics coursesImarticus Learning offers Data Science Courses, the most extensive, industry-approved experiential learning program ideal for Data Analysts. 

Industry experts have developed the programs to help students learn real-world applications of Data Science from scratch & build robust models to generate valuable business insights and predictions.

Take a giant career leap with this analytics program.

For more details, contact us through the Live Chat Support system or visit our training centers in Mumbai, Thane, Pune, Chennai, Bengaluru, Hyderabad, Delhi, and Gurgaon.