Arthoday 2015, the finance conclave of Institute of Management, Nirma University, was organized by the Finesse, the finance club of IMNU. The conclave commenced at 9:30 AM on 10th October, 2015, with the theme, “Emerging Trends in Finance”. The session was inaugurated by Shri P. C. Sahoo, Regional Director of RBI Ahmedabad. He spoke about financial inclusion, financial literacy, foreign exchange management and effectiveness of the Pradhanmantri Jan Dhan Yojana. He emphasized, how with burgeoning economic growth, the income distribution pattern also should be given equal importance. This is where the RBI plays a crucial role as it has been focusing on furthering inclusive growth. It has developed banking infrastructure to include more and more people, has set up specialized institutions like NABARD, SIDBI etc. The advent of technology helped achieve this goal as with the help of various technological advances people dwelling in far-flung remote places could be easily reached. Shri Sahoo talked about how the ultimate objective of RBI is to make financial inclusion a viable business model by shifting from a cost centric to a revenue generation model. The idea is to create an interactive culture and a sense of healthy competition amongst the various banks operating within the country. The RBI aims at developing flexible delivery channels to achieve financial inclusion which culminated in formation of the Pradhanmantri Jan Dhan Yojana.
The first session of the conclave was headed by Mr. Chetan Shah, Sr. Vice President, HDFC Bank Ltd. Mr. Shah talked about the need for the gradual and continuous technology up gradation in PSU banks. The theme of the session was “Future prospects in Banking Industry”. The evolution, the structure of the banking system and use of technology for digitization was the main focus of the session. He pointed out the difference between the 11 payment banks which have been given grant in-principle and the small banks. He also acknowledged the fact that how HDFC has been ranked 45th and SBI ranked 46th in the list of International banks as against none till last year. Despite all the resources that are at the disposal of the banks the penetration of banks in India is very low. It has been unable to reach the last man at the grass root level. He also talked about the rapid strides that banking sector has taken with the help of mobiles, internet banking and extension of ATM stations. Mr. Chetan Shah also gave an example that how there will be one common account number of 26 digits in coming 2-3 years that will help transaction of money from one place to another place anywhere on the globe with ease. The use of the digital channel helps in increasing the scope for tailored customer satisfaction.
He stressed on the need to improve the reach of banking sector and commented that Indian banking industry is expected to recruit 100000 professional in the banks in the coming 4-5 years.
The second session was presided by Mr. Mukesh Gandhi, Co-founder & Director Finance, Mas Rural Housing and Mortgage Finance Ltd. Mr. Gandhi talked about experimenting with small finance banks to achieve financial inclusion. He started the session by explaining the pivotal role of banks in wealth mobilization and demand creation; which ultimately leads to economic growth. Mr. Gandhi pressured on the importance of financial inclusion, and how over the years, people and governments have contributed to achieve the same. The first step taken up to achieve financial inclusion was the nationalization of banks and creation of branches, back in 1969.This helped a great number of citizens to use banking services. However, these banks faced an issue of viability, as rural sector banks could not thrive. In the subsequent years, priority lending and small loan lending by banks became popular and led to 50 % financial inclusion. However, commercial banks do not find this lending financially viable and hence they resist this option. Mr. Gandhi also commented that apart from the Government and banks, young individuals could also contribute in financial inclusion by microfinancing options. Attempts at microfinancing have been highly successful. This idea of lending small loans to poor and rural borrowers generated another idea, that of small finance banks.
RBI set up certain regulations for such banks; currently around 10 small finance banks have been established in different regions of the country. The Government and RBI are experimenting with small finances, with a view to testing what particular model may succeed to achieve close to 100% financial inclusion.
The third session was addressed by Mr. Prosenjit Kundu, Senior VP and Treasury Head, TEOCO Corporation, USA. The topic for the session was “The Changing face of India’s International Trade”. Mr. Kundu started the session by advising the students to adopt a broader perspective. He spoke about globalization and how it has affected the Indian economy. He emphasized on the importance of resources, both physical and intellectual. He stated his belief that India is blessed with a solid pool of knowledgeable resources and strong, intelligent manpower which needs to be utilized completely. Exports and imports are not limited to materials but also include services. Mr. Kundu’s main point was to focus on trends quoting that in statistics, “Trend is a friend”. He exemplified how even the most trending items dropped down to make losses and that accentuated the fact that one must follow the trends in present to maximize profits. Analyzing the dynamics of international trade, he came to the conclusion that developing countries are where most of our imports come from and also where most of our exports are directed. This implied the fact that developing countries are essential to our trade scenario. He ended by claiming that ideal happiness would have resulted from the total exports being just higher than the total imports.
The last speaker of the session, Mr Rakesh Valecha, Senior Director, Corporate Rating India Ratings and Research Private Limited, spoke about the credit markets in India. He spoke about the sensitivity of sectors to depreciating of rupees. He said that there are two set of corporates – High level, they continue to re finance and are higher on credit curve and low level. He said that the availability of banks is also a challenge. The main factor he highlighted was that dollarization of balance sheets: IMF report on financial stability-emerging economies have foreign currency debt, emerging markets will be difficult and vulnerable. Amongst 50 percent of their crust also depend a lot on foreign currency venture, thus if foreign currency starts depreciating a lot, they have huge risks for these customers.
(Content Courtesy: Media Committe; Photo Courtesy: Pratikriti)