Innholdsfortegnelse for February 2016 i Business Today

The past one and a half years probably saw more changes taking place in the banking industry than the previous decade and a half. Many of those changes were initiated and pushed through by Reserve Bank of India (RBI) Governor Raghuram Rajan. The central bank chief always had a reputation for speaking his mind, and for his fine understanding of the global financial markets. He is also developing a reputation for pulling a fairly reluctant banking system in India to change, though many bankers and bureaucrats are trying to slow down the process. Among the big changes the banking system in the country saw last year was the 10 licences given out to small finance banks and the in-principle approval given to 11 players for setting up payments banks. If…

TYING THE KNOT, AGAIN! Media moghul Rupert Murdoch (84) got engaged to former model Jerry Hall (59). The announcement was made by taking out an advertisement in the Births, Marriages and Deaths section of Murdoch’s Times newspaper. HEARD IN DAVOS “My view of China is that it will have a bumpy landing, not a hard landing” NYU economics professor Nouriel Roubini “Men still run the world and it's not going that well” Facebook COO Sheryl Sandberg “We are in a world where we do not know the fundamental value of any asset” RBI Governor Raghuram Rajan “We can do better. The potential of higher growth of 1-1.5% more than the current 7.5% is definitely there” Finance Minister Arun Jaitley RICH VS POOR $1.76 trillion Combined wealth of the 62 richest…

It’s a given that your business needs to be on social. But if you are still winging it with your social media efforts – maybe you have a wide-eyed intern or an already overworked marketing executive managing your firm’s social accounts – watch out! Numerous brands burn bridges with their digital audiences simply because they have the wrong folks on the job. If social is key to your marketing mix (as it should be), you will have to be picky about who is going to manage your social media presence, and what skills they ought to bring to the table. Before you go handpicking your social media A-Team, a healthy amount of introspection is in order. Do you have goals in place for the social media team? For instance, will…

Oct 2008 Launched mobile banking with a daily cap of `5,000 per customer for fund transfer and `10,000 per customer for transactions involving buying goods and services Dec 2009 Increased daily transaction limit for fund transfer and purchasing goods and services to 50,000 Allowed cash withdrawal at ATMs by recipients, 5,000 per transaction, with a 25,000 cap per month per customer Nov 2010 Introduced IMPS Cash withdrawal limit raised to 10,000 per transaction, and `25,000 per month Nov 2011 Fund transfers from bank account holder to non-bank customers through ATMs Dec 2011 No cap, banks to set their own limit Feb 2013 Payments banks guidelines issued Aug 2105 RBI grants “in-principle” approval to 11 applicants to set up payments banks…

“Things which used to take days or hours now take minutes or seconds. We have stemmed the tide of disrupters” Aditya Puri, 65, often borrows the concept of “C+I+G” from economics to explain the state of affairs at HDFC Bank. The longest-serving CEO of any bank in India says ‘C’, that is, consumption (I is investment and G is government spending) is something his bank depends heavily on, as more than 50 per cent of its book is accounted for by retail and consumer businesses. As part of this, the bank has, of late, been single-mindedly focused on breaking into rural and semi-urban areas, which account for 60 per cent of India’s population. “Our more than 55 per cent branches are in rural and semi-urban geographies,” says Puri, using this…

Kolkata-based United Bank of India came under the RBI scanner two years ago for its deteriorating asset quality but now appears to be on the mend. P. Srinivas, MD and CEO of the PSU bank, is tackling NPAs differently. In 2015, he visited several regions where the bank has a presence and worked out strategies to boost productivity. Weekly review meetings are conducted to spot ‘probable NPAs’. “We are monitoring the situation in such a way to ensure that slippages come down,” says Srinivas. NPAs have already come down to 8.9 per cent in September 2015 from 10.78 per cent in September 2014. The bank reported a net profit of `256 crore in 2014/ 15 as against a loss of `1,213 crore in the previous year. Its cost to income…

City Union Bank, the South India-based old private sector bank, has taken a number of initiatives to digitise operations. These are now paying rich dividends. As part of the plan, it has installed about 300 bulk note acceptors, expanded the ATM network, upgraded internet banking and introduced mobile banking. “Our first agenda is to increase the use of alternative banking channels. Our initiatives are already yielding good results,” says N. Kamakodi, Managing Director and CEO, City Union Bank. In the BT-KPMG study, this small bank has emerged as the winner in productivity and efficiency category. It has the lowest cost-to-income ratio of 0.43 per cent due to improvements in return on assets and operating profits. The bank says that the use of alternative channels may touch 85-86 per cent in…

Chanda Kochhar has created a strong foundation for the future growth of ICICI Bank. She took over as the MD & CEO in 2009 and has subsequently focused on improving the operating parameters of the bank. It seems she has achieved her goals. A bank of the size and scale of ICICI Bank has managed an outstanding cost to income ratio. In fact, it is the best among large banks. It is a creditable task given that the bank competes with the likes of HDFC Bank and Axis Bank, seen as among the well-managed and best run banks in India. ICICI Bank's cost to income ratio at 0.37 is better than the corresponding figures of SBI (0.50), HDFC Bank (0.45) and Axis Bank (0.41). The benefits of efficiencies are also…

“We can expand, but I don’t think it is needed at the moment. Since the commencement of our bank in 2011, we have been adopting the strategy of growing cautiously” Despite the sling strung across his shoulder after a shoulder operation, Mihir Doshi manoeuvres through the Mumbai traffic with ease to reach his destination. Poised, skilful, and focused. Mickey, as he is known to his friends and colleagues, wears the same attitude in his role as the head of Credit Suisse’s business in India. The usual discourse about branch expansion does not interest him; instead, he thinks of strategy to steer the bank on a growth path primarily based on client acquisitions and niche offerings. Today, Credit Suisse AG in India, with a balance sheet of 11,070 crore and just…

Banks are divided between Indian banks (consisting of public and private sector banks) and foreign banks (branches operating in India) for the purpose of determining the categories. The banks in each of the above mentioned categories are further classified based on balance sheet size as on March 31, 2015. We have classified the banks into the following groups: GROUP I: Twelve Indian banks with balance sheet size more than or equal to `3,00,000 crore. GROUP II: Eighteen Indian banks with balance sheet size more than 1,00,000 crore and less than 3,00,000 crore. GROUP III: Thirteen Indian banks with balance sheet size less than or equal to `100,000 crore. GROUP IV: Nine foreign banks with balance sheet size more than 25,000 crore. GROUP V: Thirteen foreign banks with balance sheet size…

1. Always use the incognito tab of your smartphone and web browser to log in to the bank website 2.Make sure your system firewall is up to date 3.Avoid clicking on phishing hyperlinks as it leads to downloading malware on your system 4.If you have installed your mobile banking app on your smartphone, password protect the app. There are third-party apps that adds password locks to apps. They can also come handy in cases of theft 5.Always opt for a onetime password for processing transactions 6.Avoid public WiFi 7. Have a complex password that uses alphabets, numbers and special characters…

The recently held Mail Today Healthcare Conclave brought together the government and healthcare professionals on one podium to deliberate on some of the plans and initiatives of the government. The gala event saw participation from the union minister of chemicals and fertilisers, Ananth Kumar and the minister of science and technology and earth sciences, Dr Harsh Vardhan, among others. The evening also saw the unveiling of the doctors coffee table book, Luminaries of Healthcare, which is a tribute to some of the prominent doctors who have made a significant impact in the field of medicine. Dr Harsh Mahajan The chief radiologist and founder at Mahajan Imaging, Padmashri awardee Dr Harsh Mahajan set up one of India's first private Magnetic Resonance Imaging (MRI) centres at the time when doctors would often…

Pichai: The Future of Google By Jagmohan S. Bhanver Hachette India Price: 195 The book throws light on Sundar Pichai's childhood and education, his entry into the tech world and quick rise up the ranks in Google BUSINESS BESTSELLERS* Thinking, Fast and Slow By Daniel Kahneman Penguin Books Price: 499 Elon Musk By Ashlee Vance Virgin Books Price: 699 Arise, Awake By Rashmi Bansal Westland Books Private Limited Price: 200 Steve Jobs By Walter Isaacson Little, Brown Book Group Price: 550 The Mastery Manual By Robin Sharma Jaico Publishing House Price: 199 *Top books by sales for Jan3 - Dec 16, 2016; Includes only books released after January 1, 2015; Information provided by amazan.in…

You are young and healthy. You do not worry about the future. You like splurging and partying. You want to spend today than save for tomorrow. After all, who knows what future has in store for us. It’s all fine until you realise one day that retirement is not far and you need to start saving for it. You sit with your financial planner. He discusses your goals and advises you to start saving at least 80 per cent of your salary to maintain your current lifestyle after retirement. You are in for a shock. Saving 80 per cent salary looks impossible at this stage as you also have to pay your children’s college fees. You realise how saving even small amounts during earlier years could have made your future…

A PLOT OF LAND MAY NOT BE CONSIDERED AS HOUSE PROPERTY AND, THEREFORE, NOT ELIGIBLE FOR TAX BENEFITS So, you are set to hang your boots and enjoy life after retirement. But have you planned your financial well-being for the next 20-25 years apart from thinking vaguely about where you will invest your retirement corpus? One of the major challenges after retirement is ensuring a sustainable flow of inflation-beating income to maintain one’s standard of living. Also, at this stage, the capacity to take risk with one’s investments is low. That’s why retirement planning has become synonymous with investing in avenues with guaranteed and secure returns. Financial planner Hemant Rustagi of Wiseinvest Advisors says retirees often make the mistake of looking at absolute safety of capital. However, they must realise…

Online Grocery: Will It Attract Crowds for Long? This refers to your cover story on grocery wars (The Perishable Business, January 31). It is a very interesting read. No doubt, there is a lot of hype around online grocery shopping in India. But will it attract huge crowds for a long time? Will it face the same fate as dotcoms some years ago? For me, the hype won’t last long, because, in the long run, certainly there is no fun of shopping from home. In a broader sense, I will say online grocery shopping is boring, it creates complexity in your lifestyle, it’s quite expensive and also not competitive. In fact, if I have access to good consumer markets, what’s the need for going online shopping? Let’s wait and watch.…

27 ETHICAL CHOICE WHAT: Going Beyond Compliance—Code of Conduct for Ethics WHEN: January 27, CII-Gurgaon WHAT TO LOOK FOR: While companies have already documented Code of Conduct and Ethics Policies, are they being complied with? Are these being effectively adopted and used by the various stakeholders? That’s where it’s essential to hear about best practices from companies that have gone beyond compliance. 28-30 LEADERSHIP LESSONS WHAT: Board Leadership Programme WHEN: January 28-30, 2016, ISB Hyderabad WHAT TO LOOK FOR: The three-day residential programme is an in-campus initiative. Besides a structured programme, participants can expect best practices and experience sharing, apart from valuable interaction with board members, both from family enterprises as well as independent professionals. 25-27-29 NEXT-GEN FARMING WHAT: Sustainable Agriculture: Harnessing Technologies—Harvesting Prosperity WHEN: January 25, 27, 29; Hyderabad,…

Digital Interpreter Microsoft-owned Skype has rolled out its translator service for Windows desktop users. Though the company had launched a translator app called Skype Translator about a year ago, the service can now be availed by Windows machine users too. “This takes Skype one step closer to our mission of empowering people to do more, even across languages. We hope that our customers can achieve their goals through relationships that would have previously been impossible,” a blog post on Skype reads. The service, for now, is available in Mandarin, English, French, German, Italian, Portuguese and Spanish. “With the continued adoption of Skype Translator, we are working on rolling out new languages and platforms – bringing the translation feature to more Skype apps,” the blog post says. To avail the service,…

A new breed of banks is entering the banking and financial services industry with the promise to transform banking transactions. To the unbanked, the move will give access to bank accounts. And to those who longed to get into the banking industry, it will offer the benefits (and prestige) of a bank. Whether these banks will be financially successful or not, however, is another matter. Background He lives in one of the poorer districts where development takes its time. Through his 85 years – since the days he manoeuvred his single-horse tanga (a two-wheeled carriage) from his small village of Bhagur in Devlali, Maharashtra – Baburao Bhomale has seen the world change and he continues to keep track of the changing world. Today tangas are history. His daughter Sindhubai is…

“WE HAVE TO BE OPEN TO THE FACT THAT A LOT OF GOOD WORK IS HAPPENING IN START-UPS”Niti Chugh Country Head, Digital Banking/ HDFC Bank It was a coincidence. As this writer settled down to research HDFC Bank’s digital innovations, a message alert popped up on the screen. It was a promotional mail from the bank: “Every offer you could wish for, will now be yours in one click. PayZapp it!” The ad promised ‘dhamaka discounts’, ‘crazy cashbacks’ and ‘peppy promos’ — more an e-tailing start-up’s vocabulary than that of a two-decade-old bank. The digital disruption, it seems, is leaving nobody untouched. PayZapp, HDFC’s mobile app introduced in June 2015, can be used to pay for everything from beauty products to grocery to flight tickets. Payments and semi-closed digital wallet…

ON THE PROWL Big Acquisitions by Kotak Acquired ING Vysya Bank in an all-stock deal Bought 15 per cent equity stake in Multi Commodity Exchange of India Ltd (MCX) Entered into general insurance space to expand its portfolio Acquired domestic schemes of PineBridge Mutual Fund Agreed to invest 19.9 per cent in Airtel M Commerce Services Ltd to set up a payments bank “We want to experiment. We want to learn. We want to see how the world is moving, and move forward” THE UNIVERSAL BANKING MODEL Kotak Mahindra Prime is the second largest profit generator ( 507 crore in 2014/15) within the Kotak group Kotak Securities is one of the big names in the broking business with income close to `1,000 crore and net profit of 290 crore in…

“We will bring new products, technologies, risk management strategies, etc. Foreign banks are committed to India and will continue investing” The year 2015 was tough for Deutsche Bank. The Frankfurt headquartered bank hogged the limelight for all the wrong reasons – from shutting shop in some countries to announcing job cuts. In fact, both co-CEOS of the bank, India-born Anshu Jain and Juergen Fitschen, made hasty exits. But amidst the gloom, the Indian unit of the bank stood out. It bucked the global trend to report an impressive performance – almost an outlier in Deutsche’s global map. The numbers speak for themselves. A massive 93 per cent jump in profits to `1,406 crore in 2014/15. The loan book increased by 25 per cent to `36,138 crore. It also has the…

Credit Agricole CIB ranks among the major foreign banks in India. With a balance sheet size of `13,032 crore, it is focused on fixed income, trade finance, project and acquisition finance. Last year, the bank grew its advances by 62 per cent, while its net NPAs stood at zero. It’s for this reason that the bank is ranked at the top in terms of quality of assets in the Business Today-KPMG Best Banks in India study.…

NINEBOT SEGWAY ROBOT Ninebot Segway Robot is a combination of a hoverboard and a robot. Powered by Intel Atom Processor, it has multiple cameras with integrated depth-sensing feature attached. It can monitor the house and receive voice commands from anywhere in the room. Arms can be attached to convert it into a personalised robot. FISHER-PRICE THINK & LEARN CODE-A-PILLAR Aimed at children between three and eight years, Code-a-Pillar has been designed to teach the basics of coding, including sequencing and programming. The caterpillar has eight segments with different colours and symbols. When kids assemble them together and press the power button, it scans the assembly and moves accordingly. NIKON KEYMISSION 360 Nikon has stepped into the action camera space with KeyMission 360. The camera is waterproof up to 100 feet,…

DOES HE ASK ABOUT YOUR NEEDS? This is important considering that the maturity of the policy or the tenure of the investment should be linked to your long-term goals DOES HE PREPARE A SOLUTION TO MEET YOUR GOALS? Agents with the right approach identify your financial goals and prepare a way to make you reach those goals ATTITUDE TO INFLATION See if he factors in the effects of inflation in the long-term financial plan. This is because inflation can erode your savings faster than you can imagine DOES HE SUGGEST YOU A PRODUCT IN THE FIRST MEETING? Suggesting a product in the very first meeting without any need analysis is not the right approach FILLING THE FORM Do not ask him to fill the form. Do it yourself so that…

ACCORDING TO A SURVEY, FOR 83% PARENTS, CHILDREN’S EDUCATION WAS THE NO. 1 PRIORITY Sample this. According to an Assocham report, the cost of school education has risen by a whopping 150 per cent in the last 10 years. And when it comes to professional education, in the last five years, the average increase in fees of the top three IIMs has been around 242 per cent. Evidently, raising a child in the 21st Century is not an easy job. Bringing up a child is as much about finances as it is about emotions. Even though retail inflation is on a downward trajectory, education inflation is steadily spiking at the rate of over 10 per cent every year. In case of some premier institutions, such as IIMs and IITs, the…

PERSPECTIVES The Day Start-ups Arrived The start-up “revolution” for NaMo’s action plan businesstoday.in/startup-modi A Challenging Year Awaits Indian IT Sector The growth could be a few notches lower than what Nasscom expects the IT industry to cobble up this year businesstoday.in/IT-challenge Wipro’s New CEO Has a Challenge on His Hands Abid Ali Neemuchwala is less than a year old in the company and he needs to quickly put his stamp on the company businesstoday.in/ wipro-neemuchwala NEWS The Bad and the Good for India Behind China’s Slowdown The steep fall in value of the Chinese currency Yuan in recent weeks has once again emboldened the naysayers businesstoday.in/china-slowdown BT COLUMN US Mission Is to Cure Cancer. What Is Ours? In health care, there are several other ailments, too. But all we need…

1) Mounting NPAs is a source of concern for the banking sector... 2) ...with public sector banks being the main culprits The Nifty Bank index, comprising 12 private and public sector bank stocks, hit its 52-week low at 15,532 on January 13, 2016 3) All public sector banks are trading at discounts to their book values 4) Domestic institutional investors are cashing in on the opportunity to buy banks at cheap valuations. Mutual funds' exposure to the banking sector rose to a record high of around 88,000cr. in November 2015…

May you live in interesting times! The Chinese curse aptly explains bankers’ dilemma in a volatile global environment with China throwing up surprises every other day. Besides, the disrupters from non-banking financial companies (NBFCS), telecommunication firms and wallet companies are on the loose, and the lazy banking days of regulated savings rates and reluctance on the part of banks to transmit interest rate cuts to customers are becoming passé. We are also witnessing a lot of action in the `73.88 lakh crore loan book size of the banking industry – something that has stolen the sleep of even seasoned bankers. The Reserve Bank of India (RBI), on its part, is also involved in rewriting the old ways of doing business under celebrated economist Raghuram Rajan. In the midst of all…

HDFC BANK Mobile Banking App 90-plus transactions, including money transfer and FDs Launch date: July 2012 Customer downloads: around 3.6 million Transaction volume: 197 lakh* Transaction value: 53,359 crore* (*April to November 2015; Source RBI ) Chillr An app for sending money to anyone on one's phone book, paying bills, recharges, etc. Launch date: February 2015 Customer downloads: over 1 million Transaction volume: over 11.72 lac (As of December 2015) PayZapp Allows one-touch payment directly through linked credit and debit cards Launch date: June 2015 Customer downloads: over 1 million Transaction volume: over 31 lac (As of December 2015) Axis Bank Axis Mobile App Launch date: April 2012 Customer downloads: over 2.3 million Transaction volume: 347 lakh Transaction value: 34,460 crore (2015/16 till date) Ping Pay Money transfer, for banking…

The banking industry seems to be heading down the digital road. With the proposed new 11 entrants, the RBI has laid the foundation for a profound change in the banking industry. The underlying objective is to use payments banks to achieve greater financial inclusion. About half of India’s population does not have a bank account, and about 30,000 out of India’s 600,000 villages have a commercial bank branch. This is mainly because banks have not penetrated the hinterland, whereas telecommunications operators have. As first-time users enter the world of technology-enabled banking services, they would need some hand-holding. Consequently, the RBI expects payments banks to have some sort of a physical presence, including business correspondents (BCs), in rural areas. The new entrants have about a year-and-a half to fulfil RBI requirements…

“We have practically ended our innings as the largest medium-sized private sector bank. We are aiming to be in the large bank category by March 2020” In the unforgiving world of banking, Yes Bank has been upping its competitive ante. Till recently, it was focusing on the corporate and commercial lending side of the business that has seen it rake up a balance sheet size of `1.36 lakh crore in merely 11 years of operations. Even as this Mumbai-headquartered bank is rolling out its retail banking products for its next phase of growth, this mid-sized topper in the BT-KPMG Study has also seen an all-round improvement in its financials. Yes Bank’s chief, Rana Kapoor, is quite sanguine about the future as he plans to increase the retail banking pie one…

“It was clear to us that we were building an institution to leave behind some positive legacy” THE BANK HAS A COMFORTABLE CAPITAL ADEQUACY RATIO OF 13.13% AND ONE OF THE LOWEST NET NPAs OF 0.27% Vishwavir Ahuja, the Managing Director and CEO of Kolhapur-based RBL Bank, has big plans for the next few months. The 55-year-old would roll out Vision 2020 for accelerating growth. He is also getting the bank ready for its initial public offering, or IPO, this year. The bank is looking to grow 10 per cent above the industry average. “Our investors expect it,” says the former head of Bank of America in India who has managed to transform the erstwhile Ratnakar Bank into the country’s fastest-growing small bank. Ahuja, with his core team — most…

JP Morgan’s lending philosophy, focused on client selection and cash flow-based underwriting principles, helps it to ensure quality of assets. The lines of businesses take full ownership and are held accountable, as the first line of defence, to the clients they bring to the bank. Any credit underwriting is independently assessed by the credit risk division. “In lending, we look for track record, inherently the intent to pay, coupled with cash flows rather than relying only on the value of security in assets,” says Kalpana Morparia, CEO, JP Morgan India. The bank's cost to income ratio has been kept at a low 0.13. It's a result of strong risk management and a disciplined approach towards expense management. “This approach has helped us keep the NPA at zero level, and expenses…

Mobile wallet is a digital account, which is equivalent to a physical wallet. You can load a certain amount of money and use it to pay your utility bills, recharge mobile and DTH accounts, book train, bus or airline tickets, transfer money to another wallet or bank account, get cash from agents and retailers, apart from online as well as offline shopping. In a nutshell, it is a one-touch payments solution for all your needs. But how is it different from carrying a physical wallet, or making online payments for products and services? Well, besides cashback benefits, mobile wallets make payments hassle-free and help you save time. If you wish to use credit cards or net-banking to load the wallet, the details can be stored for future use. The success…

The author’s last fond hope was that the NITI Aayog would accomplish what the Commission failed to do An Upstart in Government: Journeys of Change and Learning By Arun Maira PAGES: 236 PRICE: 395 Rupa Publications A run Maira’s book, An Upstart in Government, is, above all, highly readable. No wonder, as he mentions in the epilogue, he wrote and rewrote it again and again. If his effort was to ensure the reader should “hear the voice of the writer”, he has succeeded eminently. His narrative is gripping from start to finish. Maira came into the Planning Commission in 2009 and left in 2011. In barely a couple of years or so, he had established himself as a highly successful corporate manager and as a consultant in the years preceding…

“Can’t have just one product in the market” How is Otis faring in a slowing global economy? We do see changes in the global economy. America has been the strongest and there has been spectacular recovery in the past two-three years. We are growing and capturing further market share there. We are moving slowly in Europe but it has been good in South Asia, India and Middle East. We have not seen the impact of oil (prices falling) in the Middle East yet, but it will come. Russia, China and Brazil are the troubled economies. India is a price sensitive market and your latest range is a premium offering ... We have a product line for every segment of the market except manual door, where we have issues on safety.…