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Tag: investment banking training

Main Differences Between ‘Operational Risk’ and ‘Operations Risk’

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The prospect of losing something due to operations or logistics in any business is daunting. However, for those conducting business, the main difference between operational and operations risks need to be understood. Here is how.

One of the biggest challenges that any company faces is its ability to understand and embrace risk. The risk could be associated with various aspects of the business including operation-based or operational risk or risk of changing.  Adapting and evolving to change can be the greatest asset of a company when it comes to dealing with risks. This is a difficult function for many and it is mainly since one does not understand fully what risks are involved when it comes to running a business.

Investment Banking analyst

To start with the basics let us try and understand the main risks in the field of investment banking. If one is pursuing a career in investment banking, they must be able to firstly function in a high risk, high return environment. So innately the job comes with its own set of challenges. Operational risk is defined as the risk of change in value which can cause actual losses which can be due to several factors such as loss of processes, people and systems or external events such as a legal risk. It is linked to good management and quality assurance as well, so it is an important aspect of any business process. Individuals who have investment banking training will be able to assess the operational risk and make appropriate forecasts.

Similarly, operations risk can be the ones associated with decision making and strategy. A plan may be formulated to conduct the business in a certain way and there may be naturally occurring operations risk which adds losses to the business. This can again be planned in such a way that the business minimizes or mitigates the risk associated with conducting the business.

Investment bankers who have completed an investment banking course are highly attuned to understanding the operational risks that come with the business. Hence, they are equipped to deal with the same in a manner that benefits the company in the long-run.

Here are the top ways banks deal with operational risk.

Capital buffer
Operational risks can sometimes have disastrous effects on the company.  It can be due to errors made by employees or processes while dealing with the clients or a function. In order to manage this kind of a risk, companies keep a contingency plan or a capital buffer to ensure that the impact can be managed. This is like a Plan B for the company in case things go wrong. Investment bankers recommend putting away a certain percentage of the capital for such scenarios while assessing the business proposition.

Becoming more Digital
As the world moves towards digital transformation, many organizations are considering artificial intelligence and machine learning to reduce operational risk. This is proving to be effective to a large degree as machines can perform the tasks required in a seamless fashion with zero errors.

Conclusion
While risk is an unavoidable reality of conducting business, when one can distinguish between the various types of risk, they are in a better position to take a decision which will impact the growth and success of the company.

How Much Money Do Investment Bankers Make?

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How Much Money Do Investment Bankers Make?

Investment banking is a lucrative, yet demanding career path which requires hard work, good attitude and excellent communication skills. Read onto find out the biggest perks of this career.
Investment banking is an envied coveted industry that many aspire for.  It holds a status symbol in the society and investment bankers earn the respect of their peers and neighbors.  You may be wondering why this job is so valued. This is mainly since it is a high risk, high return kind of an opportunity. A career in investment banking is lucrative from the start and builds up to ensure that individuals in the field can lead a luxurious lifestyle.
Many companies also provide their employees in finance with an opportunity to learn and understand the field of investment banking better by pursuing investment banking training.  This, in turn, will also help the company evaluate the decisions made by bankers to raise funds for their business. Individuals who work in their field need to have qualities such as charisma, grit and quick thinking.  Investment banking also requires dedication and ability to cope with a high-pressure work environment.

Even beginners who have completed an investment banking course can expect salaries of 50,000 dollars in the U.S. making it a big career for many. On the downside though, there is a huge demand to invest long working hours to achieve success in the field.
While the hours are long, the base fee that investment bankers start at ranges between 25-35$ per hour but it also entirely depends on the firm that they work for on Wall Street. Read onto to find out the different elements of the money that investment bankers make.
In their 20s
If an individual has started their career in investment banking in their early 20s, this is the time that requires the most amount of time and dedication to learning the tricks of the trade. Typically, investment bankers spend between 60-100 hours per week at work and can earn up to 100,000$ annually not counting the bonus depending on their work. The entry level role for an investment banker is that of an analyst and this predominantly deals with a lot of paperwork.
In their 30s 
As they progress, the next role in question for investment bankers in that of an Associate who can earn anywhere between 100,000-120,000$ per annum. A talented young analyst can also aspire for the role of an associate at the beginning of their career and earn a big pay cheque. The salaries are also completely dependent upon the ranking of the firm, the clients and size of the firm.
In their 40s 
Someone who has moved up the ladder in investment banking can aspire to be a Vice President or a Director in their late 30s to early 40s. Their pay cheques can range between 120,000 to 300,000 $ or for someone very senior it can be up to a million dollars. Investment bankers are well paid mainly since they are responsible for making or breaking a company and its business and their skill-set is very niche.
Conclusion
A lucrative career path, investment banking may demand long working hours, quick thinking in a stressful situation and more. However, the results can be deeply rewarding to individuals who pursue the same.

Career Benefits from Investment Banking Boot Camps And Modeling And Valuation Courses

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Investment banking is one of the hottest careers available right now. It offers high salaries and an exciting career dealing with corporate acquisitions and mergers. Investment bankers help corporations and companies raise funds for different opportunities and walk them through dealings with other companies. Becoming a successful investment banker involves a fundamental and intimate knowledge of financial systems and products, operational challenges, and regulatory requirements.
If you are thinking about making the transition to investment banking, you might be wondering about the value of the multitude of investment banking courses available and their impact on your career. These courses come in all shapes and forms, and you have to check their offerings in order to match it to your expectations. Here are a few things you must keep in mind when going for investment banking training. One of the first things you will want to check is if the course you are interested in is an investment banking certification. Not all investment banking courses give you a certification, and not all of the certified ones are industry recognized. Some of the courses will prepare you to take industry certification exams, but you need to make sure that it is an exam that is valid or recognized in the region you want to work.

Make sure that you research the tutors as they are very important in regards to what you learn. Ideally, they should be industry experts and should provide knowledge that they are familiar with. Once you know the instructor, you will be able to understand the scope and direction of the course. Some courses provide general knowledge about investment banking while other courses focus on exploring concepts in detail.
Now that you know what to look for in investment banking courses, you need to understand how they can help your career. One of the most important things a course will give you is finance related knowledge. Depending on your previous knowledge and the course you pick, you will learn concepts of business valuations, debt securities, capital markets, cash equities, money markets, derivatives markets, and deal structuring.

A good course will incorporate experiential learning through live case studies along with classroom training. This will give you the ability to apply all the concepts you have learned and made you a more valuable employee.
One of the most important things your course should cover is the interview process and how to ace it.   Apart from knowing your concepts, you should also stay up to date with financial news and corporations. A good course will conduct mock interviews and give you valuable feedback on how to improve your interviewing skills. A major hurdle most interested candidates face is the interview portion where they find themselves unable to convey why they are good hires.
The bottom line is that there are plenty of courses and opportunities to improve your knowledge available to those interested in investment banking. It is important that you do your due diligence and research these courses and the companies that offer the course. Do not fall for any claims of 100% placements. These courses are viewed as something that adds value to an already strong CV, and you should focus on your primary education first before looking into a certification course in investment banking.

Investment Banking Business Model and Financial Stability

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Investment banking is the clear winner when it comes to advisory and mediation roles. It takes care of investing from end to end, by assessing the risk and evaluating the flow of credit.
Not only do they cater to private investors, but also to large and small companies alike, and also to governmental organizations. With so much to offer, how does investment banking generate revenue and profit? How does an investment bank thrive? This article attempts to answer these questions by taking a look at the business or financial model of investment banks and their methods for financial stability.
Financial modeling is crucial during decision-making. The prices are decided by the financial model. Previous trends are analyzed, changes are incorporated, and future trends are predicted. These are important data points that aid in making the right decisions. Financial modeling helps investment bankers in equity research and credit ratings. The models are used to analyze the value of a company, thereby deciding whether to go for a merger or an acquisition. Companies use the financial model to assess their standing and growth.

Investment banks receive a commission for all the successful transactions they make between agreeing parties. The bigger the deal, the more they earn! They earn money through trading by employing traders to invest in shares and derivatives. The banks also receive asset management fees from their clients for evaluating and protecting their assets. For all the advisory and compliance roles, the banks charge the corresponding service fees. Investment banks generate revenue from dividends too. They receive income for underwriting stocks and bonds. Investment banks spend a huge chunk of their resources on research and analysis. Once through research is done and reports are generated, the important data and insights are sold to hedge funds and mutual funds managers.
Some investment banks also generate revenue by performing wealth management roles.
There are a few business models in investment banking that can be used during turbulent times, for higher performance. These are :
Flow Monster: This business model demands competitive pricing, strong sales relationships, high-quality research, and highly efficient technology.
Product Specialist: Holds conviction to a particular product or technology or type of trade. Here, the product managers must be fully knowledgeable about the product and what differentiates them.
Risk Master: This business model tries to ace risk assessment and management. Calculated and intelligent risks are taken. It is not a common model but is quite successful.
To enhance and optimize their business models, investment banks can try to focus on client-centric initiatives. Smooth onboarding and regulatory checks are generally expected. Simplifying the IT infrastructure, reducing overheads helps in reducing operational costs. Investment banks can invest in financial technologies to help overcome technological glitches and improve stability. Often ignored is the organizational structure in investment banks. By changing the internal culture and hierarchy, sometimes a lot can be achieved. Having said that, maintaining standard procedures is equally important.
These are areas where the banks can work on to maximize efficiency and maintain financial stability.
Financial technology plays a major role in investment banking. Currently, there is no unified structure for all the technologies used. They are diverse and heavily layered, which increases the complexity of regulation. Cybersecurity is a major challenge for the banking sector. Commonly suggested, is the two-factor authentication method for verification of identity.
Financial engineering requirements sometimes determine the success of banking. A flexible model that evolves with the ever growing and changing technology, that is more adaptable is the need of the hour for Investment Banking Courses and business models. It is generally suggested that the banks spend considerable resources on strategy and optimization to avoid bad transactions and financial instability. To turn around investment banking, some fundamental, yet simple transformations are required. And finally, investment banks need to address the disruptors and attackers of the economy, so as to adapt to changing ecosystems and maintaining a resilient system.

Investment Banking: All the Stats, Facts, and Data You’ll Ever Need to Know

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So, you are looking to enter into the world of investment banking. Sitting on the fence would make no difference in your life. Making a career in investment banking is lucrative, but it comes with a cost. You have to work hard to understand what role the investment banking experts who deal with carrying out many financial analyses for their companies and work hard on financial models to help groups to make capital. Pursuing investment banking courses and developing expertise in this field can give a whopping salary of 80,000 USD per month or more. If you are interested in making a career in investment banking, check the following investment banking career facts and stats that are worthy of knowing about this domain.
Investment banking is not for people with finance majors 
Of late, a number of investment banks and institutions are hiring people with engineering and computer science background as they have the experience and knowledge of coding. So, if you feel discouraged, then keep in mind that there are companies who hire people from another background as well including the ones with investment banking certification and having backgrounds of literature, science, finance, blockchain, etc.  In other words, one of the investment banking career facts is that you can have any educational background to enter into this field.
Crack the quant interview to find a job
You must have heard about the interviews being conducted for the consulting jobs, these remain specialized. Similar is the case with the people opting for the Investment banking career. Once you complete your investment banking certification, your employer would ask to crack the quant interview.
These are the tests to judge your quantitative aptitude along with checking your knowledge regarding the technical subjects along with valuation or accounting. You may be asked to define certain financial statements along with putting the analysis of the same, while other interviewers would ask you to crack some brain teasers and ask them to solve it under pressure. Remember the investment banking career facts before you go for the interview.
Career in Investment Banking- Losing grounds
Though pursuing the Investment banking career is rewarding one interesting fact is that people are losing their interest in this field. The fact is people these days do not want to take up investment banking training. As per the reports of Harvard Business School in 2015, only 4 percent of students said they are looking for a career in investment banking. In fact a number of people working in investment banking are shifting to the Fintech world considering the bright future of Fintech. This has also reduced the admission in various investment banking courses.
The Revenues are also going down
If you check the latest figures in the domain of investment banking, the picture isn’t that rosy. The biggest investment banks in the world have witnessed a constant decline in revenue, which has started falling since 2016. As per reports, it has gone down from 79 billion USD in the first quarter of 2016 from 94 billion USD. This constitutes to around 15 percent, which is enormous in two years. As per the industry experts, this is regarded as the steepest decline in this sector ever witnessed before after 2009 when the revenue has gone down by 25 percent. So as compared to the other sectors, more and more people are looking out.
Long working hours under constant pressure
One of the vital investment banking career facts is that you have long working hours in this sector, which is not the case with other finance jobs. The work here is more challenging and complex and can give you a tough time working in this domain. As per reports of TransparentCareer, the average working hours of professionals in Investment Banking is around 77 hours, which is 11 hours a day in week.
Wrapping up
There are many more investment banking career facts, which are required to check before you decide upon entering into this career. However, don’t be discouraged if you find any negative thing about this career as there are many more lucrative things to enjoy in this field.

What Is An Investment Bank?

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Believe it or not, even investment bankers find it difficult to describe what exactly investment banks do! This has to do with the sheer complexity and enormity of the financial transactions involved.

In simple words, an investment bank is an intermediary between organizations such as ABC Steel that need money and individuals and institutions that need to invest. Broadly speaking, an investment bank is an institution that:

– Helps organizations or governments to raise money by issuing and selling securities such as stocks and bonds

– Provides a range of advisory services on complex transactions such as mergers and acquisitions

– Offers a range of structured products and services to institutional and individual investors to help them manage their assets and wealth

Role of an Investment Bank

Investment banks could play different roles in a financial transaction. Some of the most common roles played by them are:

– Underwriter
– Principal Trader
– Broker or Agent
– Prime Broker
– Advisor

Underwriter

As an underwriter, an investment bank purchases all new securities of a company and resells them to the public. For example, ABC issues 20,000,000 shares for $10 each. An investment bank directly purchases all these shares from ABC and sells it to the public at a higher price, say $15 each. The investment bank also bears the cost of the sale.

Principal Trader

As a principal trader, an investment bank buys shares from other investment banks and investors and keeps them in its inventory. It may sell these shares at a higher price in the future. The term ‘principal trading’ simply means that the trader of securities is also its owner or principal.
For example, after ABC Steel’s shares are sold to the public, an investment bank may purchase some of these shares from the market. It may sell these shares later when the price rises.

Broker or Agent

As an agent or broker, an investment bank buys and sells securities on behalf of a company. The key here is that the investment bank does not own these securities. It only trades in them for a commission.
The important thing to remember here is that the brokerage or agency represents buyers or sellers who are the principals or owners of the securities.

Prime Broker

A prime broker offers a range of services to professional investors, including:
– Administrative and operational support for trading
– Lending of securities
– Management and safeguarding of securities
– Financing
Without a prime broker, it would be difficult for professional investors to trade with several different brokers and manage their cash and securities from one centralized account.

Advisor

Investment banks provide a range of advisory services on complex transactions such as mergers and acquisitions. They also advise companies on the different options to raise capital. They provide high net-worth individuals with customized wealth management services.
Learn about Careers in Investment Banking by attending one of our complimentary counseling sessions.

Blockchain: The Possible Answer to Trade Finance Modernization

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Recently, a study was conducted by the capital financial technology giant, C2FO, regarding European treasures. Herein, it was found that 75% of these treasurers are supposedly focussing on investing in trade finance technology, in the following year of 2017.
Colin Sharp, who holds the position of senior vice-president, EMEA at C2FO, is of the opinion that the shifts within the microeconomic environment, are resulting in the pressuring of corporates, in order to refocus their efforts to trade finance. He further goes ahead to say, “Treasurers are facing a lot of uncertainty, both from the United States of America and as result of the on goings around Brexit. This is putting immense pressure over the supply chain, and with the demand increasing and decreasing. Treasurers want the ability to use their assets to make returns and give some certainty.”
There have been more and more efforts, which are offering insight into, finding out how blockchain can supposedly be used, in order to benefit small as well as medium size ventures. Any said digital trade chain, supposedly wants to achieve a perfect balance, between identification of opportunities and connecting them with each other and their banking partners. This would be made even simpler, when banks would bring in their own client bases herein, thus eliminating rigorous on-boarding.
Anne Claire Gorge, who holds the position of the head of the product management department, trade services, and finance of Societe Generale, is of the opinion that, treasurers believe that more control over trade finances, can help them greatly in the other areas of business. She says, “Better use of trade finance helps theses treasurers, to have a greater overview of their working capital positions. Offering financial solutions to suppliers, for instance, in order to improve the terms of payments, helps greatly in guaranteeing cash flow.” She is of the firm thought that the deployment of latest technology will definitely end up simplifying the process. In her words, “Trade happens to be very heavy on letters of credit or invoicing solutions, making it complicated to finance receivables and payables. Doing all this, as a part of a digital solution, has great potential of making it easier”.
trade finance marketThe experts believe that a little rocking, cannot cause any harm to the ship, in financial jargon, they are basically hinting at the climate of uncertainty. Especially when it comes to Banks, a little uncertainty does not seem to be a negative thing. This actually makes for a rather encouraging temperature for the requirement of trade finance tools, in order to offer stronger guarantees. The solution for the entire thing can finally come from block chain, is the combined belief of all the trade finance gurus. But for this concept to see the light of the day, there needs to be a rigorous industry wide effort, in the direction of implementation.
As many changes take place, in order to develop and strengthen the field of Trade Finance, the number of aspirants herein also multiplies. This is why professional training institutes like Imarticus Learning seem to be getting popular by the day.

Industry Report: Investments and Developments Part – II

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[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

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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

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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.