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Industry Report: Banking Sector in India Part – I

banking

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.

  • February, 6th, 2017
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The Benefits of a CISI Certification with Imarticus Learning

Education Gets a Virtual Upgrade

The Chartered Institute for Securities and Investments is considered to be the leading professional body, globally, for securities, investment, wealth and financial planning professionals. Founded in the year 1992 by the London Stock Exchange, today, it has taken up the role of a global community, spanning around 116 countries and boasting of about 40,000 members. It was conferred the title of ‘Chartered Institute of Securities and Investment’ in the year 2009 when it was granted a Royal Charter. Headquartered in London, this global professional body has its offices spread over various countries, including Sri Lanka, India, Singapore, Dubai, and Dublin.

This professional body is known to offer close to 40,000 CISI qualifications every year in around 70 countries, to qualify for which candidates have to take the Computer Based Test in the various centres worldwide. Apart from this, it is also the chief examining body in the industry and thereby, offers a number of industry memberships and training to the qualifying candidates. Apart from offering qualifications, the CISI is also known to offer, the CPD scheme, also known as, Continuing Professional Development scheme, which is basically rewarded to the members of, every level of seniority, geographical location, as well as industry specialization. The institute is known to have certain charitable objectives, which are as follows;

“To promote, for the public benefit, the advancement and dissemination of knowledge in the field of securities and investments to develop high ethical standards for practitioners in securities and investments and to promote such standards in the UK and overseas to act as an authoritative body for the purpose of consultation and research in matters of education or public interest concerning investment in securities.”

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Being a member of this prestigious organization, sends out a message to all your clients and colleagues, including the wider public, that you as a professional, are committed to professionalism, integrity, and excellence. Becoming a CISI endorsed member is the most beneficial in terms of networking for a professional. One can easily access the international network of 40,000 financial practitioners.

Apart from this, the CISI body organizes a number of formal mixers, like forums, events, and other social media activities, which involve and encourage their members to build an array of networks and connections, with similar professionals from across the country. Any professional who is affiliated by the designations of CISI can meet up and keep abreast with the current happenings in the financial markets, while at the same time can also discuss them, with the top level delegates from across the world at any given point. The CISI body also offers a number of training courses apart from its social events and conferences. In order to get an entry into this elite bunch of people, one has to acquire the much coveted CISI certification.

International Certification & Placement You will receive the industry endorsed Certified Investment Banking Operations Professional (CIBOP) certification and the optional CISI certified IOC (Investment Operations Certificate). The Imarticus Learning Career Services and Placements team provides you guidance and assistance throughout the program, giving you the best career opportunities in leading international firms.

  • January, 12th, 2017
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Why A Career In Investment Banking Would Be The Best Decision For You?

Career in Investment Banking

A lot of graduates today, decide to pursue higher studies, so as to ensure that they are able to get into the career of their choice. This is the age where just having a generalized degree, does not seemingly cut it. This has given birth to a whole new aspect of specialization in the society, only those who have specific additional degrees, get the opportunity to kick start their career well. As specialization study, becomes the popular choice there are an array of courses to choose from. The same applies to the field of finance. Investment Banking has increasingly become a popular career choice and there are a number of esteemed institutions, Imarticus Learning, offer courses in various branches of finance and ensure that your career choice, is the best decision that you would make. We at Imarticus learning as an institute are instrumental in ensuring that candidates get a slight edge over the other qualified professionals in the field of Investment Banking.

investment banking growth
Investment Banking is known to be a very prestigious, competitive field, where the number of qualified candidates, greatly exceeds the job openings. This is the reason why taking up a specialization course makes more sense, because that way you get trained according to the industry standards, thus ensuring that you get the perfect kind of start in this landscape. Once you have narrowed down on a career and begun your journey towards its, there are a lot of indicators that prove it as the best decision. First of these indicators, would be the fact that you actually possess the perfect combination of academic as well as industry skills. Imarticus Learning ensure, that you develop certain skills, to supplement your academic knowledge, which would serve you at various junctures in your career. Apart from having the right skill set, various other indicators like having the right kind of connections and contacts, being goal oriented, driven and extremely dedicated towards your work, willing to work a more than 100 hour week and closing high value deals, all of these ensure your entry into the very fabled world of investment banking.

career Cibop
This is one of those careers where if you posses the right kind of skills, nothing can stop you from being on top of your game, all the time. It is a field which not only pushes your limits, but also rewards you very generously. Especially when it comes to salary packages, Investment Banking professionals get the best signing bonuses, hikes and other monetary luxuries, as compared to their peers. Professionals here argue that it was their best decision, because their time literally is worth every single paisa that they earn. From working long hours, to having mind numbing deadlines, anything and everything seems fine here, mainly because of the sterling rewards that an Investment Banker receives. It is common knowledge that Investment Bankers, usually make much more than their peers and also receive greater recognition for their hard-work. While some of the professionals here are pure geniuses, others are able to achieve the same through perseverance and the help of esteemed, Imarticus Learning, help ensure they are thoroughly ready to achieve their dreams.

  • December, 9th, 2016
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Investment Banking Operations: The Engine of Growth

Investment Banking

By Zenobia Sethna,

Think Investment Banker, think Gordon Gekko? Well there is no denying the glamour quotient is higher for high rollers who trade and make deals worth millions of dollars. But Gordon Gekko and his ilk would never be as successful or efficient if he didn’t have a trusty Operations team in the Back Office, managing transactions, ensuring processes are followed and well, just getting things done.

The Operations division of an investment bank or investment management firm is commonly referred to as the Back Office in I-Banking jargon. This is also the ‘engine room’ of an investment bank, working tirelessly to keep the vast quantities of information, money and products flowing correctly, to ensure millions of transactions are processed every day.

Investment Banking Operations
Playing a Hidden But Critical Function

Banking operations make sure banks’ processes and transactions are executed correctly, which minimizes risk and maximizes quality of service. The operations function also acts as a watchdog for the bank and oversees the regulatory requirements of the banks. Although this is a non-revenue generating function, this function is highly critical to the profitable functioning of a bank. Stream-lined banking operations can save billions of dollars to a bank. The more efficient a bank is at conducting its day-to-day business, the greater the percentage of revenues that will feed into the bottom line.

Starting Out? What to Expect

Firstly know that there is a HUGE variety of roles within the Operations team, and you will never have to do it all. Owing to the specialized knowledge one requires for these tasks, Operations roles usually focus on a particular function, for instance clearing or settling transactions, managing documentation, customer servicing, compliance, accounting and risk management. For example, you could be responsible for working on initiatives to enhance settlement processes, or ensuring that the information in an organisation’s P&L accounts is accurate or that risks are being reported accurately.

Most new entrants into an Ops role will have the opportunity to work in several different areas of Operations. This will allow you to gain an overview of the various types of work available, eg process-driven or project management roles.

 

Interested in pursuing a career in Investment Banking Operations? Imarticus Learning offers a comprehensive Investment Banking Operations certification (CIBOP) which offers a power-packed 180 hours of hands-on learning into the inner workings of an Investment Bank. Sign up today!

 

  • September, 26th, 2016
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Introduction to Investment Management

Investment Managemnet

By Alex Harrison.

What is Investment Management? What does the investment management industry constitute?

The world of finance can be a complicated. In order to simplify for the sake of understanding, let us consider the financial world as broadly constituting of banks – (retail, commercial and investment), insurance companies and investment managers.

Banking: Retail and commercial banks are the ones most people are familiar with and are most straight forward. They take in money through deposits from customers, other banks and shareholders. They then distribute this money through credit cards and loans to individuals, companies and other banks. Retail and commercial banks make money on the interest charged on these loans. Investment banks on the other hand are more complicated. They allow their clients, which include investment managers, to trade on the financial markets. They also deal with IPO, mergers and acquisitions.

Insurance: Insurance companies take in money by charging for private and corporate insurance policies, in return for providing protection against the unexpected. They in turn are protected from being unable to payout on policy claims by moving money to a reinsurance company and therefor reducing exposure to risk.

Investment Management: Investment managers also known as fund or asset managers do as the name suggests – they manage investments of private investors, corporates, banks or insurance companies. Investment managers make their clients’ money grow by using investment banks to buy and sell investments. Let us consider the funds managed by an investment manager as raw material whether in shares, bonds, commodities or derivatives and an investment manager as a machine that converts this raw material into a product by using a series of processes. The product is a fund. The goal of the fund is make money for the investors. Thus, and investment manager uses an investor’s money to make money. These processes vary greatly and depend on the investment strategy used. E.g.: passive vs. active investment. However, the principle remains the same. The fund aims to make a return by balancing risk and rewards and thus, in a process driven manner ensures effective mobilization / channeling of its resource i.e. money from investors.

Thus, the players in the investment management industry can be classified into just two broad categories – the investment managers and the investors. Investment occurs directly i.e. investment contracts or more commonly via collective investment schemes. Mutual fund is a type of collective investment scheme. They provide an efficient way of pooling funds for investment purposes.

Flow of funds in the asset management industry:

Investment Banking Management

 

*PMS – Portfolio Management Services, AMC – Asset Management Services, WM – Wealth Managers.

What is the Investment Process? What role does the investment manager play? What is the role of portfolio performance measurement in the investment process?

Like any process, the investment process can be broadly classified based on four phases – Plan, Do, Check and Act. Similarly, it is pertinent to note that the investment management process, forming a part of the investment process cannot be improved without performance measurement. The following is an overview of the Investment Process.

investment management
From the above, it is clear that for the investment process to be complete it needs to be measured. This measuring of the portfolio performance should preferably be a part of the investment management process itself. In this case, it will contribute to improving the portfolio management process internally and thus contribute to process improvement. On the other hand, performance measurement can be undertaken by the investor as a part of the larger investment process. In this case, the same measures behave as a stricter audit function rather than a must suited process improvement role.

  • September, 19th, 2016
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What does an Investment Banking Analyst do?

Investment Banking Career

So you’ve seen Wall Street, you’ve read Liar’s poker and you’re all set to do your Diploma in Corporate Finance from Imarticus Learning, one of the best courses to help you become an Investment Banker, but do you know what an Investment Banking analyst actually does?

The Investment Banking Analyst is usually a fresh graduate from a well-known college. More often than not, they have little or no knowledge of finance and have gotten through on the back of their academic performance so far as well as their ability to showcase their analytical and quantitative skills, usually examined via aptitude tests. These days however, many of them take short training courses in Investment Banking from Imarticus Learning to gain an edge in the extremely competitive Interview rounds.

An Investment Banking Analyst’s role comprises the following activities :

  1. Pitch Books – Creating pitch books is what the analyst does day in and day out. A pitch book is a marking document used when an Investment Bank pitches a client to mandate the bank to either buy or sell their asset on their behalf. It usually showcases the firm’s track record as well as provides detailed analysis on why the investment bank will be the best advisor for the job. This will include brief industry and company analysis to showcase their skills as well as a section on valuation to communicate how much they can sell or buy the asset for. Analysts often work on many books at a time for various teams. Pitch books require research and analytical skills as well as presentation and story boarding skills. It’s no surprise that by the time Analysts become Associates, storyboarding and content design become a significant value add.
  2. Financial Models– Creating Financial Models is another key part of an analyst’s job and usually accompany an Information Memorandum prepared by them for a deal. Financial models are multi sheet financial statements with detailed assumption sheets, which model multiple variables. They require a strong understanding of Financial Analysis, business models and revenue and cost drivers as well as the ability to forecast both Industry and company metrics
  3. Research and Analysis– The Analyst is expected to read and research intensively to undertake both company and industry analysis. This means keeping abreast of news and trends rather than just focusing on secondary information.

All of the above require a keen understanding of Corporate Finance, Valuation, Accounting, Economics as well as proficiency in Excel and PowerPoint. This is one of the reasons training courses in Investment Banking like Financial Modelling Valuation Courses and Diploma in Corporate Finance ensure students put the best foot forward while preparing for their careers in Investment Banking.

  • August, 2nd, 2016
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