Tuesday, July 29, 2014

வங்கிகளின் தலைவர்களை சந்திக்கிறார் அருண் ஜேட்லி




தி இந்து:செவ்வாய், ஜூலை 29, 2014

பொதுத்துறை வங்கிகளின் தலைவர்களை இம்மாதம் 31-ம் தேதி சந்தித்து ஆலோசனை நடத்த உள்ளார் மத்திய நிதி அமைச்சர் அருண் ஜேட்லி, மத்திய நிதி அமைச்சராக பொறுப்பேற்ற பிறகு அனைத்து பொதுத்துறை வங்கிகளின் தலைவர்களை ஜேட்லி சந்திக்க உள்ளது குறிப்பிடத்தக்கது.

வங்கிகள் விதிக்கும் கடனுக் கான வட்டி விகிதத்தை குறைக்க வேண்டியதன் அவசியத்தை இந்தக் கூட்டத்தில் ஜேட்லி வலியுறுத்துவார் எனத் தெரிகிறது. 

அனைத்து குடும்பத்துக்கும் வங்கிச் சேவை என்ற புதிய திட்டத்தை ஆகஸ்ட் 15-ம் தேதி பிரதமர் நரேந்திர மோடி அறிவிக்க உள்ளார். 

அதற்கான ஏற்பாடுகள் குறித்தும் இக்கூட்டத்தில் ஆராயப்படும் என நிதி அமைச்சக அதிகாரிகள் தெரிவித்தனர்.

5 Things Digital CMOs Do Better


20140729_3
HBR :Jake Sorofman  |   10:00 AM July 28, 2014
If you’re a mid- or late-career marketer, chances are your job today is mostly unrecognizable from what you signed on for. Perhaps no other business function has changed as dramatically over the past decade.
Why? Following a silent coup, the coronation is complete: the customer is king. With an abundance of information and choice, customers now guide their own self-directed decision journey as they traverse connected experiences that blur the lines between physical and virtual and scramble marketers’ signals for targeting.
Many marketers are left behind, simply tuned in to the wrong frequencies. In response, capturing the right data has become the key capability in finding and engaging audiences. But data, alone, isn’t enough; search and social marketing, for example, are content hungry disciplines. Marketers must also become publishers.
For marketing leaders, this has forced some serious soul searching on how to meet these challenges. Last April, I wrote “The Rise of the Digital CMO” to lend some perspective to this exercise. Subsequently, Gartner turned this into an ongoing research series designed to identify the patterns and exemplars behind the chief marketing officer (CMO) transformation — in effect, what digital CMOs do differently and what they look like incarnate. We found that digital CMOs do the following things better than their peers.
1. Shift from finding customers to getting found
The best digital CMOs don’t just shout from the hilltops, demanding attention on their terms. They orchestrate content marketing tactics that situate their brands at the moments that matter to their audiences. They do this by publishing brand-aligned, but audience-centric content that inspires, delights and, most importantly, engages customers on a self-directed decision journey where earnedand owned often trump paid.
Hubspot CMO Mike Volpe is an exemplar of this pattern. He and his team publish a daily diet of blog posts, ebooks, infographics, videos and other content that lend insight to the digital marketing discipline. In doing so, Hubspot has become a go-to destination for insight on this topic. American Express does this, too, with its Open Forum site, which publishes editorial-style content for managers and operators of small and mid-sized businesses. Both of these are examples of brands that look and act like publishers, not carnival barkers.
But, as Hubspot’s Volpe says, it’s rarely just one thing alone that works well — it’s the right blend of activities. Inbound is about grassroots experimentation. Without proper measurement, these varied activities can turn into a fragmented mess.
Today, customers are inundated by pleas for their attention. As a marketer, the onus is on you to meet these customers on their terms with something of extraordinary value. That’s how your brand gets found.
2. Shelve the commercial pitch in favor of authentic storytelling
Digital CMOs have moved well beyond better-faster-cheaper; problem-solution-impact; features, feeds and speeds; and other self-referential brand-forward conceits, which are now rejected by audiences like a foreign body in the bloodstream. Instead, they tell stories — and, most importantly, they find others to tell stories for them.
These stories often follow the traditional narrative arc of expositionrising actionclimaxfalling action and resolution. These stories are told with images, video and data. They inspire. They enlighten. They amuse.
Tami Cannizzaro is a brand storyteller. As IBM’s VP of marketing for social business, Tami leads a team that uses IBM’s celebrated “Smarter Planet” theme as the baseline for selling software. She says, “We’re not selling software, we’re building a smarter planet.” Nike marketing doesn’t sell footwear so much as it sells an aspirational point of view. Nike tells stories that ask audiences to reach for their personal best. National Football League franchise Atlanta Falcons’ CMO Jim Smith asks fans to “Rise Up”—and they do. To sell carbonated beverages, Coca-Cola tells stories designed to inspire nostalgia and happiness. More importantly, they ask consumers to tell their story on their behalf by cultivating user-generated content.
According to IBM’s Cannizzaro, today, people’s perceptions of the IBM brand are more likely to be formed by their community, not the message coming from IBM. The best digital CMOs now get this intuitively.
3. Break through silos to erase seams between channels and experiences
Digital CMOs recognize that customers are channel-blind. Channels, after all, are an artificial construct designed, first, to support corporate goals and organizational structures; and, second, to support the needs of customers. Today, customers expect the inverse: brand interactions that hide the seams between channels, where stories, experiences and services serve their needs first and the brand’s second.
Sharon Osen, SVP of global marketing at Swiss luxury beauty brand La Prairie starts with the customer, developing customer archetypes and personas that guide the design of multichannel experience that deliver on real customer needs. This begins with a deep understanding of customer habits and preferences, and how La Prairie can add value in their daily lives. Beauty retailer Sephora blends in-store and mobile channels to create ensemble experiences that make shopping easier and more engaging.
But La Prairie’s Osen makes it clear that the goal isn’t transformation for its own sake. She says it’s about enhancing brand experiences customers have come to expect with new digital extensions.
4. Use data to target precisely and measure relentlessly
Digital CMOs have learned to “close the loop,” turning their marketing efforts into a data-centric, performance-driven discipline. Here, the goal is to trace the thread from investments to outcomes, directly attributing marketing dollars with business outcomes. These CMOs use first- and third-party data to target contextually relevant offers and experiences guided by predictive analytics and algorithms that learn and adapt as customers traverse a meandering purchase path. These marketers then close the loop by combining this data-driven targeting with a process for continuous measurement. The result is a performance-driven discipline where marketing investments can be optimized to highest yield.
eBay’s CMO Richelle Parham is an example of a performance marketer. Her company collects more than 50 petabytes of data a day that it can use to target offers and experiences. For example, products that were browsed but not purchased become an opportunity for remarketing and the insight for collaborative filters in the form of recommendations that aid — and guide — customers’ decision making.
But, Parham warns, if this sort of personalization is handled clumsily, it can be intrusive. She’s right. Personalization can cross the line to creepy. Her advice is to balance head and heart: “In the end, we’re selling to human beings. To drive behavior change, we need to understand who the customers are and what they care about.”
5. Experiment aggressively, and challenge business model assumptions
Digital CMOs are agile marketers who embrace the mantra “test and fail to learn and scale.” Gartner finds that, today, 83% of enterprise marketing organizations have an innovation budget that reflects, on average, 9.4% of marketing spend. What do they use this for? Exploration. Experimentation. Learning by doing in recognition of the fact that sustainable competitive advantage is a quaint vestige of another time. These CMOs seek to create pipelines of innovations that they test and validate in rapid succession.
Delta Airlines, for example, has applied this technique to its websites, kiosks, in-flight Wi-Fi and entertainment, resulting in what it describes as a holistic set of touchpoints that inform the customers’ opinion about the brand. Here, a series of continuous experiments guide innovations that improve customer experience. The results? A 20-second reduction in kiosk check-in times, a substantial increase in check-ins via digital channels and improvements in overall customer satisfaction and brand sentiment.
But digital CMOs can’t go it alone. Digital CMOs need to hire the right people to lead and execute. As my colleague Laura McLellan and Scott Brinker wrote in their July-August 2014 Harvard Business Review article “The Rise of the Chief Marketing Technologist,” Gartner finds that 81% of enterprises have a chief marketing officer in place today, up from 70% last year. Seventy-seven percent have a chief customer officer as the primary advocate for the customer and final arbiter on customer experience. Forty-eight percent of the time, this role reports into the CMO, which supports yet another finding: the CMO is on the rise in strategic importance.
Other roles to watch: data architects, corporate journalists, data storytellers and chief content officers. They are all emerging to fill the gaps that stand between marketing from a decade ago and marketing for today.
A year later, digital CMOs are still on the rise. Only now, their secrets are coming into focus.

80-Sorofman_Jake

JAKE SOROFMAN

Jake Sorofman is a research director with Gartner for Marketing Leaders, from Gartner, Inc.

Hidden Talents of Gold Smugglers


As long as the restrictions on import of gold remain, there will be no stopping this clandestine flow of the metal, according to authorities.

S Sanandakumar & PK Krishnakumar, ET Bureau | 27 Jul, 2014, 10.22AM IST 

Restrictions on gold import: Smugglers resort to ingenious methods to sneak in the yellow metal 


Spare a thought for the person who tries to sneak in a brick of gold by hiding it in the rectum. You've heard of drug mules, people who clandestinely transport drugs at greatrisk — they have to evade strict laws, including the death penalty in some countries, and fatality as pouches can explode in the stomach. The odds against gold mules are more favourable from these standpoints — the maximum punishment is seven years of jail and there have been no known fatalities — but are equally challenging.

Concealment in body cavities is just one of the many ingenious methods people have adopted to slip in gold through airports in Kerala. In some cases, gold was ground to powder, used as chocolate toppings and carried in sealed chocolate boxes. There was the odd case where gold was brought in liquid form. Camouflage in appliances and in personal products like shoes and belts is another popular method.

"There was also an interesting case in which gold was hidden inside the metallic rod of a trolley bag," says SAS Navas, deputy commissioner, Customs, Kochi International Airport.

Rewarding Task

The task of gold smuggling, despite the risks and requirement of specialization, always had many takers. The reason was simple: rewards trumped risks. That was before 1991. The government's decision to ease gold import policies rendered gold smugglers jobless. As the India growth story unfolded over the next two decades, the "services" of gold smugglers were no longer required.


But that has changed in recent months. The government's decision to hike the duty on imported gold to 10% last year — "to make it a little more expensive", in the words of the then finance minister P Chidambaram — took some sheen off the yellow metal. Indians love gold, so much that demand has always outstripped indigenous production. That means the country has to import its requirement. But thanks to the duty spike, importing became unattractive and consequently restricted supplies, at least the legal shipments.


A spurt in gold smuggling into the country, particularly into Kerala, seen from this context, was inevitable (see Gold smuggling...). Kerala may not top the gold consumption scales in India, but the pervasive infusion of the metal into the social and cultural sphere in the state is unique. In Kerala, gold is synonymous with marriages because dowry is largely made of gold jewellery.

Spurt in Activity

Any discussion on gold smuggling must be seen from this perspective. While the increasing number of seizures at the airports is an indicator of the spike in smuggling, truth is the seizures do not constitute even 10% of the smuggled gold, according to experts. The methods listed are of course the ones authorities are aware of or have stumbled on, but there are plenty of cases that remain clandestine.

"We have found that the gold smugglers of the yesteryears are being recruited again by the smuggling racket," says Navas. According to him, the people who bring gold are experts in concealment. And after all these years it remains a lucrative business. B Girirajan, president of the All Kerala Gold and Silver Merchants' Association, says the hike in duty increased the profitability of the smugglers. For example, on Friday's price of around Rs 2,600 per gm the customs duty would be 10%. "So for 1 kg of smuggled gold the margin would be roughly Rs 2 lakh", he explains. Earlier there was a sharp difference in gold prices between the domestic and the Middle East markets making smuggling a lucrative affair.


The profit margin for 1 kg of imported gold was around Rs 3-3.5 lakh earlier, he says. But now with the supplies improving, prices have seen a decline in the local market. "The price difference has narrowed and the margins have also fallen to Rs 2 lakh", he said. Agents who transport gold receive Rs 50,000- 1 lakh plus flight fare."

Earlier, non-resident Indians (NRIs) who had spent six months abroad could bring 1 kg of gold after paying duty in foreign exchange. This led to many people who returned to the country turning couriers. It did not last long.

Tough Restrictions

The government notified that the couriers should reveal their sources of forex, resulting in a decline in gold imports. The government also brought in restrictions, insisting that 20% of the imported gold should be exported before further imports can be made.

The new rules have further tightened supplies, giving gold smuggling a major boost. For instance, gold imports through legal channel at the Kozhikode airport rose from 25 kg in 2012-13 to 4,561 kg in 2013-14. But imports have since dropped to negligible quantities. Smuggling typically increases when restrictions are imposed on imports. MK Saveen, customs superintendent, Kozhikode airport says it is actually valid passport holders who turn out to be couriers. They are usually offered free tickets and commissions for their services, according to him.

Girirajan says the smuggled gold usually finds its way to the unregistered jewellers in Kerala. But there is a detour of sorts. A large part of the gold that arrives is taken to Chennai or Bangalore because prices (the per gram rate) are higher in these cities compared with Kerala. It is the recycled gold that comes back to Kerala.


According to officials at the Kozhikode airport, the seizure of smuggled gold has crossed 20 kg in the current fiscal. The seizure is worth Rs 5.8 crore. In one case, the airport authorities found that gold has been brought in after turning it into thin foils. There were also attempts to bring it in the form of ribbons and hide it in marker pens. Gold wires have been found taped in suitcases. Attempts to bring in gold after mixing it with grease were also detected by Customs officials.

Though the main source of smuggled gold is still Dubai, of late, large shipments are also arriving from Singapore and Malaysia. The smugglers hail from Kerala, Tamil Nadu and Sri Lanka. Until the 1990s, there were only four international airports in India (the fifth opened in Thiruvananthapuram). The commissioning of new international airports at different parts of the country has given the smugglers a fillip, according to authorities.

Huge Network

A higher vigil by Customs department officials does not mean that imports will drop, says Navas. On the contrary, gold smuggling will rise substantially to cover the losses. "It is a huge network of suppliers, couriers and hawala money dealers," he says. When authorities turn the heat on one entry point, smugglers simply turn to another, according to him.


To cite an example, look at the airports in Kochi and Kozhikode. Customs officials have stepped up vigilance against illegal transit of gold in these airports. This has forced smugglers to try their luck at neighbouring airports.

A case in point is the Hyderabad airport. A year ago, there were hardly any incidents of gold smuggling in that airport. Today, the situation couldn't be more different. "Last month, we caught around 25 kg of gold which was being smuggled. Some involve even petty cases — small quantities — which invite a penalty in the form of duty,'' says A Dhileepan, assistant commissioner of Customs, Rajiv Gandhi International Airport in Hyderabad. The majority of the people involved in the gold smuggling racket hail from neighbouring states.

That is not to suggest that illegal gold shipments into Kerala are on the wane. Customs officials seized 7 kg of gold from smugglers last month at the Thiruvananthapuram International Airport. A senior Customs officer says this may represent only about 20-30% of what is being smuggled through the airport. Nevertheless, compared with seizures in the previous months, this represented a huge increase. The recoveries from smugglers used to be around 1 kg of gold a month earlier.

Imaginative Lot

The stepped-up vigil at airports has only forced the smugglers to resort to become more resourceful. "Recently, we caught a man carrying several padded brassieres with gold coated linings, hooks and rings that were painted black. Around 450 gm of gold was recovered from the undergarments,'' says a senior Customs officer at the Thiruvananthapuram airport.

In another incident, a man tried to smuggle gold through this teeth. He extracted two molars and fitted two gold teeth, each with 220 gm of gold. The popular means of clandestine transport are trolley bags, buckles, juice makers, big cartons and the like.

As long as the restrictions on import of gold remain, there will be no stopping this clandestine flow of the metal, according to authorities. Until then, airports in the country will remain a hotbed of illegal transport of gold, even if it means the inconvenience of having to carry gold in the rectum. Now, spare a thought for the airport official who has to search for gold in the unlikeliest of places.






Shop smart! Let this online platform get you the best price

Getting a fair deal Sulakshan Kumar (left) and Sitakant Ray, Founders and
Directors, MySmartPrice. PV SIVAKUMAR

Getting a fair deal Sulakshan Kumar (left) and Sitakant Ray, Founders and Directors, 

MySmartPrice. PV SIVAKUMAR 

BL 29 July 2014

MySmartPrice also gives best product options on your mobile
With a laptop each and Internet connection, Sulakshan Kumar and Sitakanta Ray tried what they believed was a smart idea, in 2010. They launched an online portal to get consumers the best price.
In just under four years, the duo is close to realising that the venture – MySmartPrice Web Technology – indeed is living up to its name. The site, mysmartprice.com, compares prices for products across categories and attracts 12 million visitors a month, with the numbers growing.
“We pitch as marketer or lead generator for companies. Users from our site have a higher conversion rate to product buying,” says Sulakshan Kumar. The team is now 40-strong and the venture has sharpened its core engineering. In their mid-30s, the first generation entrepreneurs were batch mates at NIT, Rourkela. They met again during their Oracle days in Hyderabad. During long chats, they narrowed down on the online space to start their entrepreneurial journey. The two did a trial run for a few months after quitting their jobs towards the end of 2010.
“In hindsight, I can say that choosing e-commerce for our entrepreneurship was purely based on a gut feeling that it was the sunrise sector,” recollects Sulakshan. He worked in Oracle and Infosys, while Sitakanta Ray, who handles the engineering side, studied at IIM Bangalore, worked in ICICI Bank, before coming to Oracle.
Products of choice

What does MySmartPrice offer to the customer? Instead of going to 15 stores, a customer can visit the site using a mobile. The site gives options on products of choice. It also provides coupons, offers, free gifts without hiding information.
In the first few years, the focus was on electronics and books categories, but now plans to list almost everything sold in India. “Our efforts have led to creating a separate portal for fashion stuff,” says Sulakshan.
They are buoyed by the ₹6-crore funding they got from Accel Partners and Helion Venture Partners in December 2013. “This has given us the right footing to take off and establish in the market,” he says. The two VC firms had invested ₹2 crore in 2011 in MySmartPrice.
The platform allows users peep into the best products ranging from mobiles, electronics, computers, fashion and lifestyle, cameras, books, appliances and personal care. Its price comparison engine enables users find the best price, deals and offers from major e-commerce stores.
At present 45 per cent of the traffic comes from mobile devices. We provide users access to 10 million products from 100-plus online stores, explains Sulakshan. The prices of products fluctuate a lot on online (sometimes 5-8 times). “Our job is to get the customer the best prices. Therefore, we started the trend of putting out price alerts,” he says.
Revenue model

MySmartPrice’s gets paid for every successful transaction done through the site. With conversion rate going up, revenues are also increasing. It has seen a 100 per cent growth in enquiries and conversion rates. Its earnings have jumped from ₹30 lakh in December to ₹1 crore in June, with over ₹30-crore worth products sold through customer transactions,.

Monetising innovative solutions

SANJAY DESHPANDE, Founder & CEO, Uniken
SANJAY DESHPANDE, Founder & CEO, Uniken 

BL  29 July 2014

Uniken has developed hack-proof solutions/apps for secure banking
Conversations with his boss at Tata Research Development and Design Centre (TRDDC) where Sanjay Deshpande, a research scientist at the time, learnt about the plight of technology R&D in India, inspired him to become an entrepreneur.
EC Subbarao, who was director at TRDDC, explained to Deshpande that the problem lay in the average Indian research scientist’s inability to commercialise his innovation(s) to provide solutions to the end customer.
Flagship product
Sanjay Deshpande, 43, is the brain behind Uniken, which works with banks and financial institutions to help them interact with their customers on a scalable, secure private network platform called REL-ID, Uniken’s flagship product.
The platform provides enterprises with templates for creating standard business apps, with a secure digital user experience across devices (desktops, tablets, laptops, mobiles) and operating systems (Windows, iOS, Android.)
REL-ID supports multi-factor authentication and provides enterprise users with remote access to all business critical apps, user information and sensitive data through a private, closed network.
“REL-ID ensures that both the bank and its customers involved in online transactions are protected 100 per cent against identity thefts and phishing attacks,” says Deshpande.
A first generation entrepreneur, Deshpande studied B.Tech at Veermata Jijabai Technological Institute and received his Masters in Computer Science from the University of New Brunswick, Canada. He is the founder CEO and Chief Innovation Officer of Uniken, and has a team of 120 people.
He started the company in 2003 as an R&D lab in Pune, and bootstrapped it with ₹20 lakh of his savings and $100,000 in angel funding from Ajay Dubey of Infosys.
“Science is about personal creativity while sales are about understanding the customer,” says Deshpande.
“Customers have plenty of creative reasons not to buy from you, but you need to understand their problems before make your sales pitch.” Dubey’s and Deshpande’s relationship goes back to 1999, when Deshpande’s wife introduced them to each other. Deshpande’s interest in commercialising innovative ideas and marketing technology R&D impressed Dubey, who offered him a job at Infosys.
Deshpande left TRDDC and joined Infosys in 1999 where he led its mobile computing initiative in Europe, and for the first time handled business development of life-sciences in the US. He created a team with 15 new engineering graduates, and worked with them till 2001. He left Infosys that year and worked with Persistent Systems for a year before he decided to start his own venture. “People who have the ability to employ others, should not be employed themselves,” he says.
Turning point
Using the idea of “commercialising science”, Uniken worked with several multinational corporations providing them R&D services in the areas of embedded systems, high-performance computing and security. In 2007, after a meeting with the Director of DRDO, Hyderabad, who told him that the need of the hour is to create a massively scalable, closed private Internet network with military-grade security for India, Deshpande and his team decided it was time to build it.
That was the turning point for Uniken, which transitioned from an R&D services company to a product company with its flagship Internet platform called REL-ID, built over 18 months.
Deshpande was introduced to a former RBI Governor, who directed him to Bank of India. Partnering with HP, Uniken bid for a tender for two-factor authentication for BoI and won it. BoI started using Uniken’s REL-ID platform and apps to conduct secure banking transactions in 2008. Today, three of the top six banks such as State Bank of India and Axis Bank, and various financial institutions such as Birla Sun Life and Reliance Capital, rely on REL-ID, says Deshpande.
Uniken has 1.3 million users across banks and enterprises in India and is targeting a user base of 100 million over the next five years.
The company has offices in Pune, Bangalore, Mumbai, Delhi and Israel. As of 2013, Uniken earned $1.2 million in revenues and acquired two US patents. The company’s revenue has been growing 100 per cent year-on-year.
Global foray
“We want to take REL-ID to global markets starting with the US in November. Therefore, we decided to get a stamp of approval for REL-ID by security experts in Israel. After two months of testing our product and not being able to break into it, Hacktics, which is EY’s international security testing team based in Israel, gave us the thumbs up. Hacktics has agreed to be our customer reference site,” says Deshpande. Uniken has received its first round of investment of $5 million from Nexus Venture Partners to support its global foray.
Deshpande’s advice to aspiring entrepreneurs: “Quit your IT services jobs and experiment more. Although product innovation is a lengthy and painful process, the rewards are very satisfying. “You are helping to build brand India as a hardcore R&D technology hub.”

No proposal for merger of United Bank with IDBI Bank: Officials

PTI :NEW DELHI, JULY 28:2014
State-owned IDBI Bank today said it is not considering any proposal to merge Kolkata-based United Bank of India with itself.
“We confirm that so far no proposal for merger of United Bank of India with IDBI Bank has been discussed at IDBI Bank’s board meeting and also no communication from Government of India in respect of the above has been received by the bank,” IDBI Bank said in a statement.
Meanwhile in a separate statement, United Bank of India said that there are no negotiations taking place for merger of the bank.
“No negotiations are taking place for the merger of the bank with any other bank,” United Bank of India said.
Shares of United Bank of India were trading at ₹51.35, up 4.80 per cent on the BSE, while IDBI Bank was trading at ₹90.30 per unit, up 0.10 per cent.
Both the banks are public sector entities with government of India having 76.50 per cent and 89.47 per cent stake in IDBI Bank and United Bank of India respectively.
“As soon as any communication from Government of India is received by IDBI Bank or any such proposal is discussed at IDBI Bank’s board meeting, necessary disclosure under clause 36 of the Listing Agreement shall be made by the bank,” it said.
Saddled with over 10 per cent gross non-performing assets, United Bank of India scripted a turnaround in the fourth quarter of 2013-14 by reporting an over 15-fold jump in net profit to ₹469 crore on the back of cash recovery and upgradation of accounts.
In the January-March 2013 quarter, the bank had posted a profit of ₹31 crore.
The bank’s gross NPAs had jumped by ₹4,001 crore in six months till December largely on account of a change in accounting practices.
At the end of March 2014, the bank’s gross bad loans were at ₹7,118.01 crore, compared with ₹8,545.5 crore in the three months earlier

Banks' gross NPAs rise to 3.85%, PSBs lag: CARE

Banks' gross NPAs rise to 3.85%, PSBs lag: CARE
Jul 28, 2014, 09.44 PM IST | Source: PTI

Its estimate is based on the study of the 26 state-owned banks as well as 13 from the private sector, including all the big banks.
With lenders continuing to be under pressure on asset quality, CARE Ratings today said the gross non-performing assets of banks increased to 3.85 percent as on March 2014 and will deteriorate further to 4 percent by the end of March 2015.
Its estimate is based on the study of the 26 state-owned banks as well as 13 from the private sector, including all the big banks.
"Overall Gross NPA Ratio has risen from 3.26 per cent as on March 31, 2013 to 3.85 per cent as on March 31, 2014," CARE said in a report.
The 3.85 percent number would have been higher by 0.30 percent, but for the sale of over Rs 10,000 crore of assets by the banks to the asset reconstruction companies in the latter part of the recently concluded fiscal, it said.
A December 2014 report by the Reserve Bank had pegged the overall system's gross NPA at 4.2 percent in September 2013, and estimated that it will grow to 4.6 percent in September 2014 and recover to 4.4 per cent by March 2015.
The slack economic growth (the country has witnessed two consecutive years of sub-5 per cent growth), high interest rates due to the pressure on the inflation front and trouble on projects both due to clearances and judicial interventions have been blamed for the high NPAs.
With a new pro-reforms government taking charge, analysts have been saying that there will be a surge in the growth. "However, the improvement (on NPAs) would be gradual and would reflect in the second half of FY15. The Gross NPA ratio is estimated to be marginally higher at around 4 per cent by end of FY15," the domestic agency said.

Private banks continue to outperform the state-run ones on the asset quality front. "The gross NPAs of public sector banks increased by 38.2 per cent, while that of the private sector banks was comparatively lower at 13.6 per cent. The gross NPA of the state-run banks stood at 4.33 per cent as on March 2014 as against the 1.82 per cent for the private sector ones," it said.

The NDA’s ambitious financial inclusion plan



The NDA’s ambitious financial inclusion plan
In his budget speech, finance minister Arun Jaitley announced the NDA government’s intention to launch a financial inclusion mission on 15 August that would provide banking services to all households in the country. Photo: Pradeep Gaur/Mint
Mumbai/New Delhi:Live Mint 29 July 14
Bank accounts for every Indian and banking services within 5km of every town and village, and all by March 2016—that’s the ambitious financial inclusion plan Prime Minister Narendra Modi will likely detail in his Independence Day speech.
Named Sampoorn Vittiyea Samaveshan (SVS), the scheme has been sketched out in a paper prepared by the department of financial services. Minthas reviewed a copy.
In his budget speech, finance minister Arun Jaitley announced the National Democratic Alliance (NDA) government’s intention to launch a financial inclusion mission on 15 August that would provide banking services to all households in the country, and especially focus on women, small and marginal farmers and labourers.
According to Census 2011, 59% of the 246.7 million households in India have access to banking services; 54% of the 167.8 million rural households in India have access to banking services, and 67% of the 78.9 million urban ones do.
Jaitley will meet chiefs of state-run banks on Thursday to discuss the preparedness of banks to roll out the government’s financial inclusion plan, bankers and a government official said.
“The meeting is mainly to review how banks are gearing up for the rollout of the financial inclusion mission,” said the government official, who did not wish to be identified.
The financial inclusion plan will look to provide universal access to banking facilities with a basic bank account with an overdraft facility of Rs.5,000 and a Rupay-enabled debit and ATM card with inbuilt accident insurance cover of Rs.1 lakh.
“This account would be linked with the Aadhaar number of the account holder and would become the single point for receipt of all government benefits,” the paper said.
Rupay is an Indian government initiative and the country’s own equivalent ofVisa and Mastercard.
Account holders will also receive financial literacy training sessions and, on completion of these training sessions, a Rs.5,000 overdraft limit. According to Reserve Bank of India estimates, 182 million zero balance accounts had been opened in India up to March 2013, but only 3.95 million of these availed overdraft facilities adding up to Rs.155 crore.
The approach paper, dated 16 July, outlines six pillars upon which the entire programme will be based. The financially excluded should be provided universal access to banking facilities, the paper said.
They should have basic bank accounts and should be provided microcredit, microinsurance and unorganized sector pension facilities, it added. The borrowers under this scheme will undergo financial literacy training, while the entire loan portfolio should be insured against a credit guarantee fund, with an initial corpus of Rs.1,000 crore, which will provide for defaults on such accounts, it said.
To achieve these objectives, the government is open to public-private partnerships while it will also tap into the existing national infrastructure of post offices and the future payments banks network, according to the approach paper.
Various microcredit organizations will be allowed to compete with each other while the crucial role will be played by the business correspondents (BCs), or agents of banks who reach out to the last mile, offering simple credit and deposit products to customers.
According to S.S. Mundra, chairman and managing director of Bank of Baroda, not all objectives have to be met by 2016 and the entire financial inclusion drive will be done in a phased manner, which should give banks ample time to prepare.
“We already have 6,000 business correspondents, and they are doing a very good job. If need be we will hire more such BCs,” Mundra said, adding that banks’ own resources won’t be stretched much because the bank staff will largely play a supervisory role.
“This is not a big task because most of the job has already been done by banks. Accounts are being opened every day and by 2016, we will be covering every household of every village we have been assigned without any problem,” said M. Narendra, chairman of Indian Overseas Bank, which has about 3,500 BCs who are paid Rs.3,500 per month.
In order to incentivize BCs, the paper proposes that remuneration for them be set at Rs.5,000.
According to Rishi Gupta, chief operating officer and executive director ofFINO PayTech, a banking correspondent service provider, the payment ofRs.5,000 is less than what it should be but still a welcome raise.
“Government is acknowledging that providing last mile delivery involves a lot of expense and expertise. If you don’t incentivize the people who are involved in the last mile delivery, soon they will lose interest and any such financial inclusion plan will not fructify,” Gupta said.
Technology will also need to play an important part in the government’s financial inclusion plan.
For providing fully enabled bank accounts to the unbanked population, banks will have to ensure that every transaction is part of the core banking solution. Till now, most of these transactions were offline and not connected to the bank’s core banking network.
That could well address the issue of inactive accounts, said a bank official.
“Unlike earlier, the bank accounts will be fully operational from anywhere, be it a bank branch, an ATM or a business correspondent outlet,” added this person who did not wish to be identified.
“Transfer of money directly to beneficiary accounts under the direct benefit transfer scheme will also make sure that the accounts are active,” the bank official added.
The direct benefits transfer scheme envisages transferring directly to beneficiaries the money they are entitled to under government schemes.
Funds will be transferred after a customer’s biometric authentication, either through Aadhaar-enabled payments system or the bank’s own servers. Aadhaar is a unique ID issued by the Unique Identification Authority of India that has thus far issued 650 million cards.
To make it lucrative for bankers to open bank accounts and transfer funds from the government to beneficiary accounts, the government is considering paying banks 2% of the transaction amount for every transfer.
The government’s plan could also be a big business opportunity for technology providers. The department of financial services, in an advertisement, has asked interested technology providers to present their innovative ideas to improve the existing last mile connectivity.
“The combination of bio-metric, smart cards and low-cost ATMs have not been successful in scaling up. Putting the responsibility on leading banks to adopt a region for financial inclusion hasn’t worked either. The needle has not moved,” said Rama Vedashree, vice-president at software lobby body Nasscom. “The ministry of finance may be looking for new technology solutions to ensure the outreach of financial inclusion programme as the current technologies being used have not been able to do that.”
“This may be an effort to find and understand the scope of new low cost technologies that can fast-track the process of financial inclusion,” she added.
Once the mission is launched, its progress will be reviewed quarterly by the finance minister, rural development minister and the minister for communication and information technology. In addition, financial services secretary G. S. Sandhu will review the progress with bankers every month.
Moulishree Srivastava in New Delhi contributed to this story.