Financial inclusion is the key...
‘Inclusive Growth’ is perhaps the much touted concept i
n the economic forums, and this can be amicably achieved through ‘financial inclusion.’ The good old days of funding the burgeoning need of credit by means of sale of surplus government bonds & securities (which banks held in excess of the minimum statutory requirements) may be over. Undoubtedly, this presents immense opportunities for the banks, but as statistic suggests, as of March 2007, the commercial banks holding in SLR had declined to 28%, as compared to 42.7% in April 2004; given this fact, banks must move beyond mere selling of securities & bonds. Amidst this scenario, financial inclusion provides a much more viable option. For the uninitiated, financial inclusion implies widening of the deposit base for the banks. The mechanism would necessarily bring in more and more financially excluded people under the gamut of banking services.
“No frill account is a welcome measure targeted at financial inclusion of such a huge base. Such measures are needed, as these will not only help the low income households but will also provide the banks with necessary resources to expand credit,” says Suresh Nanda, Regional CEO, ING Vysya Bank. The credit-GDP ratio, which as of March 2007 stood at 51% (the credit GDP ratio in March 2000 was 30%) apparently seems to be impressive; yet, on grounds of comparison, it remains much lower than major East Asian Economies. Consider the credit GDP ratio of Malaysia (144%), Singapore (71%), Thailand (111%) & China (136%) and it becomes very clear why much ground needs to be covered. Look at it from whichever perspective, the answer is financial inclusion...
For Complete IIPM Article, Click on IIPM Article
‘Inclusive Growth’ is perhaps the much touted concept i
n the economic forums, and this can be amicably achieved through ‘financial inclusion.’ The good old days of funding the burgeoning need of credit by means of sale of surplus government bonds & securities (which banks held in excess of the minimum statutory requirements) may be over. Undoubtedly, this presents immense opportunities for the banks, but as statistic suggests, as of March 2007, the commercial banks holding in SLR had declined to 28%, as compared to 42.7% in April 2004; given this fact, banks must move beyond mere selling of securities & bonds. Amidst this scenario, financial inclusion provides a much more viable option. For the uninitiated, financial inclusion implies widening of the deposit base for the banks. The mechanism would necessarily bring in more and more financially excluded people under the gamut of banking services.“No frill account is a welcome measure targeted at financial inclusion of such a huge base. Such measures are needed, as these will not only help the low income households but will also provide the banks with necessary resources to expand credit,” says Suresh Nanda, Regional CEO, ING Vysya Bank. The credit-GDP ratio, which as of March 2007 stood at 51% (the credit GDP ratio in March 2000 was 30%) apparently seems to be impressive; yet, on grounds of comparison, it remains much lower than major East Asian Economies. Consider the credit GDP ratio of Malaysia (144%), Singapore (71%), Thailand (111%) & China (136%) and it becomes very clear why much ground needs to be covered. Look at it from whichever perspective, the answer is financial inclusion...
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read More:-
The Sunday Indian - Greatest News weekly
IIPM, GURGAON
Maya jaal spreads far & wide!
Another hogwash!
COMMUNALISM
While the mayhem continues!
Billions spent on million light years...
The art of splitting hair?
POTA? Funny!
The army’s fallen behind China
The Man of Steel gets his hands in Oil
HLL ‘Lever’ ages the power of Hindustan
Missed by a mile!
Only the chosen ones to be benefited
First Qualified Institutional Placement (QIP) route and now Fast Track Iss
uance of Securities (FTIs) and perhaps much more later. Acting on the recommendations of Primary Market Advisory Committee, the market regulator Securities and Exchange Board of India (SEBI) has introduced FTIs, which will help the listed companies (satisfying certain criteria) to raise capital in a faster, yet cost effective manner. Companies listed on BSE or NSE for at least three years with more than Rs.100 billion of average free fl oat market capitalization can avail of the relaxed norm, go for public issues under FTI and feed its budding appetite for expansion. The companies complying with the requirements will also be eligible for “rationalized disclosures as well as simplified procedural requirements.” Without an iota of doubt, the mechanism adopted is a welcome sign as it will significantly cut down the follow-on issue time, open the capital market, put the equity float on a fast track and make the market very efficient for fund raising. Analysts are of the view that the move will primarily benefit the blue chip, top tiered companies.
Their views cannot be totally denied, as analysis show that a mere 30-35 companies listed on BSE & NSE have a free fl oat market capitalization of Rs.100 billion or more (unfortunately DLF, which qualifies on the m-cap criterion, fails on the listing tenure). Prasuna Venkatesh of P.N. Vijay Financial Services, says, “The Rs.10,000 crore cap is very stringent as it will enable only a few companies to avail of the route for fund raising. Companies having m-cap of more then Rs.10,000 crore are cash rich companies, there is nothing for the mid cap and small cap companies who ideally require the funds.” Clearly, the failure of OTC & BSE Indonext raises questions on success of FTIs. The failure of BSE Indonext primarily due to the stringent norms (entry norms, asset base, exclusively listed on regional stock exchanges et al) should act as a reminder for the market watchdog. Unless the regulator offers advantages for smaller companies, there are fears that FTIs will meet the same fate....
For Complete IIPM Article, Click on IIPM Article
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read More:-
The Sunday Indian - Greatest News weekly
IIPM, GURGAON
Maya jaal spreads far & wide!
Another hogwash!
COMMUNALISM
While the mayhem continues!
Billions spent on million light years...
The art of splitting hair?
POTA? Funny!
The army’s fallen behind China
The Man of Steel gets his hands in Oil
HLL ‘Lever’ ages the power of Hindustan
Missed by a mile!
Only the chosen ones to be benefited
First Qualified Institutional Placement (QIP) route and now Fast Track Iss
uance of Securities (FTIs) and perhaps much more later. Acting on the recommendations of Primary Market Advisory Committee, the market regulator Securities and Exchange Board of India (SEBI) has introduced FTIs, which will help the listed companies (satisfying certain criteria) to raise capital in a faster, yet cost effective manner. Companies listed on BSE or NSE for at least three years with more than Rs.100 billion of average free fl oat market capitalization can avail of the relaxed norm, go for public issues under FTI and feed its budding appetite for expansion. The companies complying with the requirements will also be eligible for “rationalized disclosures as well as simplified procedural requirements.” Without an iota of doubt, the mechanism adopted is a welcome sign as it will significantly cut down the follow-on issue time, open the capital market, put the equity float on a fast track and make the market very efficient for fund raising. Analysts are of the view that the move will primarily benefit the blue chip, top tiered companies.Their views cannot be totally denied, as analysis show that a mere 30-35 companies listed on BSE & NSE have a free fl oat market capitalization of Rs.100 billion or more (unfortunately DLF, which qualifies on the m-cap criterion, fails on the listing tenure). Prasuna Venkatesh of P.N. Vijay Financial Services, says, “The Rs.10,000 crore cap is very stringent as it will enable only a few companies to avail of the route for fund raising. Companies having m-cap of more then Rs.10,000 crore are cash rich companies, there is nothing for the mid cap and small cap companies who ideally require the funds.” Clearly, the failure of OTC & BSE Indonext raises questions on success of FTIs. The failure of BSE Indonext primarily due to the stringent norms (entry norms, asset base, exclusively listed on regional stock exchanges et al) should act as a reminder for the market watchdog. Unless the regulator offers advantages for smaller companies, there are fears that FTIs will meet the same fate....
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read More:-
The Sunday Indian - Greatest News weekly
IIPM, GURGAON
Maya jaal spreads far & wide!
Another hogwash!
COMMUNALISM
While the mayhem continues!
Billions spent on million light years...
The art of splitting hair?
POTA? Funny!
The army’s fallen behind China
The Man of Steel gets his hands in Oil
HLL ‘Lever’ ages the power of Hindustan
The Sunday Indian - Greatest News weekly
IIPM, GURGAON
Maya jaal spreads far & wide!
Another hogwash!
COMMUNALISM
While the mayhem continues!
Billions spent on million light years...
The art of splitting hair?
POTA? Funny!
The army’s fallen behind China
The Man of Steel gets his hands in Oil
HLL ‘Lever’ ages the power of Hindustan
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