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Industry Report: Banking in India: Initiatives of the Government Part III

Posted on by Imarticus Learning

Read the previous part of the report here.
The chief regulatory body, which is supposed to deal with all the finance and banking related decisions, is the Government of India. In the recent times, this body seems to have taken a considerable amount of decisions in order to strengthen the Indian Banking Sector. Some of which are as follows.
In the month of July 2016, the Government of India reportedly allocated about 3.41 billion USD. This amounts to Rs 22,915 crore, which was allocated in the form of capital infusion to 13 public sector banks. This move is believed to increase the economic growth of the country by improving the liquidity and lending operations of these public sector banks.
The Reserve Bank of India (RBI) has already begun on its move to make all transactions digital in nature and absolutely paper free. Following in the same vein, the RBI has released the Vision 2018 document, which primarily aims at increasing the use of electronic payments through all the divisions of the society. This move will not only increase the usage of digital channels but also boost the customer base for mobile banking.
All the commercial banks which are scheduled will now be allowed to grant non-fund based facilities including partial credit enhancement (PEC), to all customers including those that do not avail any fund based facility from any of the banks present in India.
The Union Budget, which was announced in the year 2016-17 had a provision towards interest subvention. This provision is basically made to help in reducing the burden of loan repayment by the farmers. On account of this, an amount of 15,000 crore INR is being granted by the government.
The Government of India is looking to set up an exclusive fund, which will be a part of the National Investment and Infrastructure Fund (NIIF). This fund will basically be set up for dealing with all the stressed assets of banks. This fund will be taking over all the assets, which although viable do not have any additional fresh equity from promoters to complete the projects.
Post the massive drive that was conducted by the government to open up a number of bank accounts, quite a large number of Indians were financially included in the banking sector. The Reserve Bank of India plans on coming out with guidelines, which will be dealing with the basic know-your-customer norms. These norms would be the primary focus of protecting the consumers.
The government of India is well on a warpath, to provide insurance, pension, and credit facilities to all of those citizens, who were excluded from enjoying the benefits offered by the Pradhan Mantri Jan Dhan Yojana (PMJDY).
In a bid to provide relief to all the state level, electricity providing companies, the government has proposed to its lenders that, about 75% of their loans would soon be converted to state government bonds.
Thus with so many new and effective schemes falling into place, courtesy the government of India, things are looking quite positive for the banking sector. This is great news for those finance enthusiasts who opt for special training programs, offered by Imarticus Learning in the field of Finance and Investment Banking.

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Industry Report: Investments and Developments Part – II

Posted on by Imarticus Learning

[Read Part 1]
This report analysis would be mainly dealing with all the key investments and developments in Indian banking sector.
Starting from the basic, central level, the RBL Bank Limited, a private sector bank in India, has reportedly raised about Rs. 330 crore as a result of their association with CDC Group Plc. This is a UK based financial development institution and will be helping the RBL bank, to strengthen their capital base, in order to meet their future needs.
The World Bank has reportedly signed an agreement with The State Bank of India, which is worth Rs. 4200 crore. This agreement basically deals with connecting all the solar rooftop projects in India, which are also known as GRPV, and will be receiving financing as a part of this agreement.
JP Morgan Chase, which is considered to be the largest bank in America, has been in talks of expanding their operations in India. They have gotten a head start on the same, with three new branches in, Delhi, Bangalore and Chennai which will be an addition to the current branch in Mumbai.
An investment management company, known as the Canada Pension Plan, has reportedly bought a large stake, which it bought away from a Japan based, banking corporation called Sumitro Mitsui. These said stakes were in Kotak Mahindra Bank Ltd.
India’s very first small finance bank, began its operations by launching about ten branches in the state of Punjab. The Capital Small Finance Bank as it is officially known aims at increasing the number of its branches to about twenty nine, in the current financial year of 2016-17.
Taking a step towards making India, as cashless economy, an e-wallet company, Freecharge, has partnered with Yes Bank and Mastercard. This partnership is in order to launch a new concept of Freecharge Go. This would be a virtual card, with the help of which consumers can pay for goods and services, at online shops as well as offline retailers.
This year, the economy of India would be majorly targeting at being self-sufficient and in the lieu of the same, te government of Andhra Pradesh has signed a Memorandum of Understanding (MoU) with Exim Bank of India, in order to promote exports within this state.
Moody’s, a Global Rating Agency, seems to have upgraded its outlook towards the Indian Banking System. This move is to stabilize its negative based on the assessments of about five drivers, which include improvement in operating environment, stable asset risk and capital scenario.
Rockefeller Foundation, a non-profit organization based out of America, has backed a private Equity Investor known as Lok Capital. This investor has a plan of investing up to USD 15 million in a couple of proposed small finance banks in India, over the period of next year.
The RBI, has reportedly given in principal approval, to about 11 applications, which were in favour of establishing payment banks. These banks may accept deposits, but they are to refrain from extending any loans.
With the chances of the economy and the cash inflow looking bright, the banking and investment industry shows great promise for aspirants.

The Most Bizarre Questions That Investment Banks Asked This Year

Posted on by Imarticus Learning

We are all aware about the road to a great career in Investment Banking isn’t complete without the biggest roadblock, which is the interviews. For any freshly minted candidate, there always is a string of common run of the mill questions revolving mainly around their weaknesses, the 5 year plans that they intend to work on and so on. But, what usually catches the candidate off guard, is the list of weird questions. While these questions may be weird and a tad bit scary, they are the absolute crucial determinants, of whether you get that coveted position, or not.
Here’s a list of freakishly weird questions, which some of the top-notch banks asked in the year of 2016:
1. “How would you value a cow using a discounted cash flow (DCF) analysis?”
The above question, as out of the blue as they come, was asked to a potential candidate in an interview round, in London Based Firm last year. While any DCF question, is extremely inevitable in corporate finance interviews, there are those Bovine DCF questions, which are not.
2. “How many pairs of shoes do you expect to wear over your lifetime?”
An interview is absolutely incomplete, without any brain teaser questions, which ensure that your analytical skills undergo a rigorous jog. This was most expectantly one of them. While the internet service engine, Google, might deem such questions as a tad bit irrelevant, all the to banks out there just cannot get enough of these. The above question was reportedly asked in an interview for risk management at Nomura.
3. “What would you do if we gave you 10,000 Euros now?”
If you are a finance aspirant looking to get into the field of investment banking, you would surely be expected to know all there is about Investments. Any bank, regardless of its position, expects the candidates to have some very solid investment ideas in response to questions like these. The above question was asked during an interview wit ICAP.
4. “Who is your best friend?”
This question was asked during the final round of an interview, conducted by Credit Suisse. In their attempt to go beyond the technicalities and mundane aspects, many HR managers try to ask unconventional questions. The above question was asked in a similar vein, in order to know about the candidate, through the eyes of someone, who is close to them.
5. “How would you manage the portfolio of an astronaut that will be isolated from earth for the next 10 years?”
This is another question, in the line of most out-of-the-context yet, relevant questions. This one in particular was asked during an interview about securities at Goldman Sachs and the student who was asked all of these questions said it was the best interview of all times.
As the popularity of Investment Banking, as a field grows, the number of professionals wanting to be a part of this field also multiplies. In order to look for the perfect candidates, these top banks usually end up asking very out of the box questions. To become thoroughly industry endorsed, professionals usually pursue certification training programs, Join Imarticus Learning, here we offer proper training to crack such interviews.

Industry Report: Banking Sector in India Part – I

Posted on by Imarticus Learning

This article will be principally dealing with the basic understanding about the banking sector, specifically in India and all the aspects and components of the size of the market. According to the Reserve Bank of India, the banking sector in India is believed to be sufficiently capitalized and well regulated. Recent reports state that the financial and economic conditions in our country, are way better in comparison to the other countries, in the present times. This basically puts the Indian economy, which is considerably stable, against the other alarmingly unstable and equally dysfunctional economies, all over the globe. Studies conducted in various fields like Credit, market and liquidity risk conclude that the banks in India have shown a general tendency, of being resilient and have been able to withstand the global economic turmoil really well.
This may have been a result of the various innovative banking models, for instance, the payments and small finance banks, which have had a positive impact on the Indian banking industry in the recent times. In the financial year of 2015-2016, about 10 small finance banks and around 11 payment banks, have received the principle approval from the central bank. This is a part of the new measures put in place by the Reserve Bank of India, which show great signs of going a long way, in terms of helping in the restructuring of the domestic banking industry. Let’s talk facts and numbers now, in keeping with the same we need to focus on the numeric aspects of the banking units across the country.
Primarily, the Indian banking system is made up of around 26 public sector banks, 25 private sector banks, 43 foreign banks, 56 regional rural banks, 1589 urban cooperative banks and around 93550 rural cooperative banks, in addition to the existing cooperative credit institutions. 80% of the entire market, is supposedly controlled by the public sector banks, thereby evidently a very small share of the market is left in control of the private counterparts. While on the other hand, every bank out there has begun to encourage their customers, in order to manage all of their finances using mobiles phones.
While there have been a number of predictions and assumptions in terms of credit growth, especially with the current banking situation, as well as the Union Budget almost being right around the corner. There are various estimates made, among which the Standard and Poor, have gone on to make the estimates, that the credit growth in the Indian banking sector, is likely to improve to 11-13 per cent in this financial year, that is 2017. This is a great news in terms of growth and progress, from the past three years, when the second half of the year, 2014, showed less than 10 per cent credit growth. As the future prospects of the Indian banking sector seem extremely bright and by extension, so do the job prospects in terms of Corporate Finance, Investment Banking and so on. This is why many finance enthusiasts have begun to turn to professional training institutes like, Imarticus Learning, that help them achieve the perfect career roles.

Banking Domain Primer

Posted on by Imarticus Learning

By Zenobia Sethna
The Banking, Financial Services and Insurance (BFSI) sector is the backbone of the Indian economy employing approximately 4.5 million professionals. If you are looking for a career in Finance, you will see vacancies listing “Banking Domain Knowledge” as a requisite. But what does it mean? Banking itself can be of multiple types based on products and services on offer and the type of customers serviced.
For simplicity, one may define banking domain knowledge as the body of knowledge dealing with how different banking segments operate – across customers, sales & distribution, products & services, people, process and technology. This definition basically covers the end to end functioning of any bank.
Investment Banking Course
Let’s take a closer look at the operating model of a bank.
• Banking Segments – Broadly we have four types of banks: retail banks, corporate banks, investment banks and private banks. These are known as Banking segments.
• Clients – These are the customers who buy the bank’s products or services. These may be individuals looking to open a bank account or Institutions or other Banks looking for more corporate solutions or ways to invest their funds.
• Sales and Distribution Channels – This includes how the bank reaches out to its customers to make sales. This could be through emails, phone calls, on the Internet, TV ads etc.
• Products and Services – Products and services are the things the bank sells to customers for a fee. These would vary according to the banking segment. In retail banks, we would have products like deposit accounts and loans.
• People, process and technology – Finally we have the three components that underpin all of the above. These are people, processes and technology. People includes job roles and responsibilities, organization structures; processes define how customer transactions are fulfilled and what procedures to follow, while technology defines the IT infrastructure and systems that support the business.
Imarticus Learning offers many courses on Investment Banking and Retail Banking covering the multi-faceted functioning of these banks and their products and services. Contact us to know more.