Foreign banks face regulatory, technological, and social hurdles when entering the Indian market. Regulatory challenges include complying with priority sector lending requirements and obtaining a banking license. Marketplace challenges involve competing in a diverse banking environment and developing products suited to Indian customers. Social issues incorporate integrating into relationships-based Indian banking and overcoming perceptions. Infrastructure barriers relate to implementing specialized IT systems. Consulting firms can help foreign banks navigate these obstacles by providing regulatory expertise, market research, branding support, and assistance integrating new technology platforms.
WHAT IS INSIDER TRADING???
Insider trading is dealing in securities of a listed company by any person who has knowledge of material “inside” information which is not known to the general public.
WHO IS INSIDER???
Insider is the person who is “connected” with the company , who could have the unpublished price sensitive information or receive the information from somebody in the company.
CONNECTED PERSON WITH DETAILED CLARIFICATION
Any person who is or has been associated with company, in any manner, during the six months prior to the concerned act:
An immediate relative to the connected person.
A banker of the company.
An official of stock Exchange or of clearing corporation.
A holding/associate/subsidiary company.
WHAT INCLUDES TRADING ?
WHO ARE INSIDER TRADERS?
Corporate officers, directors ,and employees who traded the corporations securities after learning of significant, confidential corporate developments.
Friends, business associates, family members and employees of law, banking and brokerage firms who were given such information to provide services to the corporation whose securities they traded.
GOVERNING REGULATIONS
Securities & Exchange Board Of India Act,1992
SEBI (Insider Trading) Regulations,1992
SEBI (PIT) (Amendment) Regulations,2002
SEBI (PIT) (Amendment) Regulations,2003
SEBI (PIT) (Amendment) Regulations,2008
SEBI (PIT) (Amendment) Regulations,2011
HISTORY BEHIND INSIDER TRADING IN INDIA
Insider trading in India was unhindered in its 130 year old stock market till about 1970.
In 1979,the Sachar Committee recommended amendments to the companies Act,1956 to restrict prohibit the dealings of employees. Penalties were also suggested to prevent the insider trading.
In 1989 the Abid Hussain Committee recommended that the insider trading activities may be penalized by civil and criminal proceedings and also suggested the SEBI formulate the regulations and governing codes to prevent unfair dealings.
UNPUBLISHED PRICE SENSITIVE INFORMATION
REGULATORY ASPECTS OF PROHIBITION OF INSIDER TRADING
SEBI prohibition of Insider Trading regulation 1995.
Section 11(2) E of companies act 1956 prohibits the insider trading.
WHY THERE IS NEED FOR PROHIBITION OF INSIDER TRADING???
As per SEBI the Prohibition of Insider Trading is required to make securities market:
Fair and Transparent.
To have a Level Playing Field for all the participants in the market.
For free flow of information and avoid information asymmetry.
CASE STUDY
HLL – BBLIL MERGER CASE
HLL-BROOKBOND LIPTON INDIA LTD
The case primarily involves 4 pa
WHAT IS INSIDER TRADING???
Insider trading is dealing in securities of a listed company by any person who has knowledge of material “inside” information which is not known to the general public.
WHO IS INSIDER???
Insider is the person who is “connected” with the company , who could have the unpublished price sensitive information or receive the information from somebody in the company.
CONNECTED PERSON WITH DETAILED CLARIFICATION
Any person who is or has been associated with company, in any manner, during the six months prior to the concerned act:
An immediate relative to the connected person.
A banker of the company.
An official of stock Exchange or of clearing corporation.
A holding/associate/subsidiary company.
WHAT INCLUDES TRADING ?
WHO ARE INSIDER TRADERS?
Corporate officers, directors ,and employees who traded the corporations securities after learning of significant, confidential corporate developments.
Friends, business associates, family members and employees of law, banking and brokerage firms who were given such information to provide services to the corporation whose securities they traded.
GOVERNING REGULATIONS
Securities & Exchange Board Of India Act,1992
SEBI (Insider Trading) Regulations,1992
SEBI (PIT) (Amendment) Regulations,2002
SEBI (PIT) (Amendment) Regulations,2003
SEBI (PIT) (Amendment) Regulations,2008
SEBI (PIT) (Amendment) Regulations,2011
HISTORY BEHIND INSIDER TRADING IN INDIA
Insider trading in India was unhindered in its 130 year old stock market till about 1970.
In 1979,the Sachar Committee recommended amendments to the companies Act,1956 to restrict prohibit the dealings of employees. Penalties were also suggested to prevent the insider trading.
In 1989 the Abid Hussain Committee recommended that the insider trading activities may be penalized by civil and criminal proceedings and also suggested the SEBI formulate the regulations and governing codes to prevent unfair dealings.
UNPUBLISHED PRICE SENSITIVE INFORMATION
REGULATORY ASPECTS OF PROHIBITION OF INSIDER TRADING
SEBI prohibition of Insider Trading regulation 1995.
Section 11(2) E of companies act 1956 prohibits the insider trading.
WHY THERE IS NEED FOR PROHIBITION OF INSIDER TRADING???
As per SEBI the Prohibition of Insider Trading is required to make securities market:
Fair and Transparent.
To have a Level Playing Field for all the participants in the market.
For free flow of information and avoid information asymmetry.
CASE STUDY
HLL – BBLIL MERGER CASE
HLL-BROOKBOND LIPTON INDIA LTD
The case primarily involves 4 pa
International Banking - presentation involves introduction to IB, Types, Services Offered, Reasons, Features and Benefits, Its Working, Challenges, and Trends in IB
1) 11400 Crores Fraud
2) Nirav Modi, the billionaire jeweler who along with others scammed Punjab National Bank (PNB) of over 11400 crore’s has fled the country.
3) Apparently Nirav modi spotted in which placeWE DON’T KNOWBut What exactly is this scam?
4) The CBI has registered a case against Nirav Modi on January 29. Punjab National Bank registered a case against Nirav Modi, His Brother Neeshal & His Uncle Mehul Choksi on February 13.
5) The Bank initially reported a scam of rupees 280 crores. But it was later realized to be rupees 11400 crores. This is a lot of money. So how does one get away with a scam of such magnitude? Possibly it is one of the biggest in Indias’s banking history.
6) Nirav Modi is an importer of diamonds. Basically importers prefer to take loans in foreign currencies as interest rates on that are lower. In this case a loan that is taken from any overseas bank guaranteed by PNB. Then what Modi had to do was approach PNB & ask for buyers credit?In order to do this PNB had to issue a “letter Of Undertaking” to an overseas bank. Basically LoU guarantees an overseas bank that if it gives money for a specified period to identified by the home bank (in this case PNB) then the home bank will assure that the money will be returned to the overseas bank.
7) Most of these overseas banks are Indian Banks with foreign branches. So the overseas bank directly give to loan PNB not Nirav Modi. An account has to create by PNB called a NOSTRO account where the overseas bank gives the loan.
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More.........
HERE IS THE PPT ON PNB SCAM
NIRAV MODI
WE MADE IT BASED ON EARLIER FACED FRAUD BY PNB
FRAUDSTER NAME IS NIRAV MODI
I THINK IT WILL CLEAR ALL YOUR DOUBTS ABOUT SCAM
This presentation is pledged to explain the London interbank offered rate scandal (LIBOR) that came to light in 2012 after one of its main offenders; the Barclays bank accepted about the manipulation of the interest rate. This scam was conducted due to the unethical practices by top executives, traders and employees. LIBOR manipulation was the result of unethical approach of top management and traders. London Interbank offered rate (LIBOR) is the largest financial scandal of all time.
International Banking - presentation involves introduction to IB, Types, Services Offered, Reasons, Features and Benefits, Its Working, Challenges, and Trends in IB
1) 11400 Crores Fraud
2) Nirav Modi, the billionaire jeweler who along with others scammed Punjab National Bank (PNB) of over 11400 crore’s has fled the country.
3) Apparently Nirav modi spotted in which placeWE DON’T KNOWBut What exactly is this scam?
4) The CBI has registered a case against Nirav Modi on January 29. Punjab National Bank registered a case against Nirav Modi, His Brother Neeshal & His Uncle Mehul Choksi on February 13.
5) The Bank initially reported a scam of rupees 280 crores. But it was later realized to be rupees 11400 crores. This is a lot of money. So how does one get away with a scam of such magnitude? Possibly it is one of the biggest in Indias’s banking history.
6) Nirav Modi is an importer of diamonds. Basically importers prefer to take loans in foreign currencies as interest rates on that are lower. In this case a loan that is taken from any overseas bank guaranteed by PNB. Then what Modi had to do was approach PNB & ask for buyers credit?In order to do this PNB had to issue a “letter Of Undertaking” to an overseas bank. Basically LoU guarantees an overseas bank that if it gives money for a specified period to identified by the home bank (in this case PNB) then the home bank will assure that the money will be returned to the overseas bank.
7) Most of these overseas banks are Indian Banks with foreign branches. So the overseas bank directly give to loan PNB not Nirav Modi. An account has to create by PNB called a NOSTRO account where the overseas bank gives the loan.
.
.
.
.
.
More.........
HERE IS THE PPT ON PNB SCAM
NIRAV MODI
WE MADE IT BASED ON EARLIER FACED FRAUD BY PNB
FRAUDSTER NAME IS NIRAV MODI
I THINK IT WILL CLEAR ALL YOUR DOUBTS ABOUT SCAM
This presentation is pledged to explain the London interbank offered rate scandal (LIBOR) that came to light in 2012 after one of its main offenders; the Barclays bank accepted about the manipulation of the interest rate. This scam was conducted due to the unethical practices by top executives, traders and employees. LIBOR manipulation was the result of unethical approach of top management and traders. London Interbank offered rate (LIBOR) is the largest financial scandal of all time.
The issues of proper Financial Management and Corporate Governance have taken a centre stage. The Public Sector Banks as well as Private Sector Banks are witnessing acute rise in nonperforming assets, moving up to 4.6% in March, 2015, whereas stressed advances have increased to 11.1% of the total advance, from 8% about 2 year ago. The major reasons as per a research of a large sample are as follows:
Banking sector is going to be the most watched sector in the coming quarters. There are reasons for this, RBI has reduced the CRR rate and repo rates. The debt/GDP ratio of the Government is scary at 80% essentially meaning that the Government cannot borrow much without jeopardizing stability of banking sector. Given project is an attempt to identify and analyse the vision and mission of HDFC bank, as well as comparing the position and strategies of the bank with its major competitor.
Project:
Provides all the crucial information on HDFC Bank Limited required for business and competitor intelligence needs.
Contains a study of the major internal and external factors affecting HDFC Bank Limited in the form of a SWOT analysis as well as a breakdown and examination of strategies of HDFC Bank Limited.
Major factors contributing the success of HDFC.
Industrial analysis of HDFC through Porter’s five forces model as well as comparing that with its competitor ICICI.
Analysis done on BCG matrix
With this project we have tried to understand the different business process identified by the bank, as well as analyzing its strength and weakness as compared to other banks. Our project is mainly concentrated on the comparative analysis of HDFC and competitor ICICI. The source of information is secondary that is through internet and different newspapers and sites of HDFC and ICICI as well as some of the journals.
Using Adaptive Scrum to Tame Process Reverse Engineering in Data Analytics Pr...Cognizant
Organizations rely on analytics to make intelligent decisions and improve business performance, which sometimes requires reproducing business processes from a legacy application to a digital-native state to reduce the functional, technical and operational debts. Adaptive Scrum can reduce the complexity of the reproduction process iteratively as well as provide transparency in data analytics porojects.
It Takes an Ecosystem: How Technology Companies Deliver Exceptional ExperiencesCognizant
Experience is evolving into a strategy that reaches across technology companies. We offer guidance on the rise of experience and its role in business modernization, with details on how orgnizations can build the ecosystem to support it.
The Work Ahead: Transportation and Logistics Delivering on the Digital-Physic...Cognizant
The T&L industry appears poised to accelerate its long-overdue modernization drive, as the pandemic spurs an increased need for agility and resilience, according to our study.
Enhancing Desirability: Five Considerations for Winning Digital InitiativesCognizant
To be a modern digital business in the post-COVID era, organizations must be fanatical about the experiences they deliver to an increasingly savvy and expectant user community. Getting there requires a mastery of human-design thinking, compelling user interface and interaction design, and a focus on functional and nonfunctional capabilities that drive business differentiation and results.
The Work Ahead in Manufacturing: Fulfilling the Agility MandateCognizant
According to our research, manufacturers are well ahead of other industries in their IoT deployments but need to marshal the investment required to meet today’s intensified demands for business resilience.
The Work Ahead in Higher Education: Repaving the Road for the Employees of To...Cognizant
Higher-ed institutions expect pandemic-driven disruption to continue, especially as hyperconnectivity, analytics and AI drive personalized education models over the lifetime of the learner, according to our recent research.
Engineering the Next-Gen Digital Claims Organisation for Australian General I...Cognizant
In recent years, insurers have invested in technology platforms and process improvements to improve
claims outcomes. Leaders will build on this foundation across the claims landscape, spanning experience,
operations, customer service and the overall supply chain with market-differentiating capabilities to
achieve sustainable results.
Profitability in the Direct-to-Consumer Marketplace: A Playbook for Media and...Cognizant
Amid constant change, industry leaders need an upgraded IT infrastructure capable of adapting to audience expectations while proactively anticipating ever-evolving business requirements.
Green Rush: The Economic Imperative for SustainabilityCognizant
Green business is good business, according to our recent research, whether for companies monetizing tech tools used for sustainability or for those that see the impact of these initiatives on business goals.
Policy Administration Modernization: Four Paths for InsurersCognizant
The pivot to digital is fraught with numerous obstacles but with proper planning and execution, legacy carriers can update their core systems and keep pace with the competition, while proactively addressing customer needs.
The Work Ahead in Utilities: Powering a Sustainable Future with DigitalCognizant
Utilities are starting to adopt digital technologies to eliminate slow processes, elevate customer experience and boost sustainability, according to our recent study.
AI in Media & Entertainment: Starting the Journey to ValueCognizant
Up to now, the global media & entertainment industry (M&E) has been lagging most other sectors in its adoption of artificial intelligence (AI). But our research shows that M&E companies are set to close the gap over the coming three years, as they ramp up their investments in AI and reap rising returns. The first steps? Getting a firm grip on data – the foundation of any successful AI strategy – and balancing technology spend with investments in AI skills.
Operations Workforce Management: A Data-Informed, Digital-First ApproachCognizant
As #WorkFromAnywhere becomes the rule rather than the exception, organizations face an important question: How can they increase their digital quotient to engage and enable a remote operations workforce to work collaboratively to deliver onclient requirements and contractual commitments?
Five Priorities for Quality Engineering When Taking Banking to the CloudCognizant
As banks move to cloud-based banking platforms for lower costs and greater agility, they must seamlessly integrate technologies and workflows while ensuring security, performance and an enhanced user experience. Here are five ways cloud-focused quality assurance helps banks maximize the benefits.
Getting Ahead With AI: How APAC Companies Replicate Success by Remaining FocusedCognizant
Changing market dynamics are propelling Asia-Pacific businesses to take a highly disciplined and focused approach to ensuring that their AI initiatives rapidly scale and quickly generate heightened business impact.
The Work Ahead in Intelligent Automation: Coping with Complexity in a Post-Pa...Cognizant
Intelligent automation continues to be a top driver of the future of work, according to our recent study. To reap the full advantages, businesses need to move from isolated to widespread deployment.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Yes of course, you can easily start mining pi network coin today and sell to legit pi vendors in the United States.
Here the telegram contact of my personal vendor.
@Pi_vendor_247
#pi network #pi coins #legit #passive income
#US
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
USDA Loans in California: A Comprehensive Overview.pptx
Challenges for Foreign Banks Entering India Open New Opportunities for Consulting Firms
1. • Cognizant 20-20 Insights
Challenges for Foreign Banks Entering
India Open New Opportunities for
Consulting Firms
Consulting firms can play a crucial role in helping foreign banks navigate
the regulatory, technological and social hurdles associated with doing
business in India.
Executive Summary
India’s banking industry has long enjoyed a
sizable foreign presence, and the country remains
a favored destination for conducting business. Since the economic liberalization policies
initiated in 1991, foreign entities have invested
in almost every sector of the Indian economy.
They have navigated the country’s tough business and regulatory environments, modified their
business models to suit India’s conditions, and
become an integral part of the Indian business
and social landscape.
Foreign banks have operated in India since the
1860s, when Comptoir d'Escompte de Paris (which
later combined with three other banks to form
BNP Paribas) set up a branch in Calcutta. Of the
current crop of foreign banks operating in India,
HSBC is the oldest one – having established a
branch as early as 1853. Standard Chartered Bank
has operated in India since 1858, while Citibank
began operations in the country in 1902. The fact
that these banks have functioned and flourished
cognizant 20-20 insights | october 2013
in India for so long is testimony to the fact that
they have successfully met the challenges posed
by the Indian banking environment.
However, today’s environment is very differ ent; foreign banks looking to enter the Indian
market have to face a number of tough and
unique challenges. This paper will examine these
roadblocks, and discuss how foreign banks can
overcome them. We will also analyze why, despite
the numerous barriers, foreign banks are keen
to set up shop in India, and analyze the Reserve
Bank of India’s (RBI) regulations and guidelines
concerning foreign banks. Lastly, we will highlight
the opportunities that the entry of foreign banks
in India present for consulting firms.
India — An Enticing Market for
Foreign Banks
There are a total of 43 foreign banks operating in
India through 331 branches. Another 46 banks have
a presence in the form of a representative office.
Out of the 43 banks, Standard Chartered Bank,
2. HSBC, Citibank and The Royal Bank of Scotland
lead in terms of number of branches, with 101,
50, 42 and 31 branches respectively as of
31 March, 2013.1
necessitated that they look at other markets.
India, with its growing number of HNIs, is an
obvious choice (See Figure 2, next page).
The vast Indian market, the significant unbanked
and underbanked populace, and the corresponding business opportunities are some of the more
obvious reasons why foreign banks are looking
to expand in India. There is also a demand for
specialized banking services, which 85 banks,
other than the four mentioned above, have set up
and maintained as a limited presence in India –
either in the form of a branch or a rep office.
These banks see opportunities in areas such as
investment banking; private banking and wealth
management; trade finance; cash management;
and specialized lending services, for example,
which do not require a large branch/ATM network
and customer base.
Demand for investment banking services —
Investment banking is another significant
source of fee income for foreign banks (see
Figure 3, next page). In the past few years,
India has witnessed steady growth in inbound/
outbound, as well as domestic, M&A activities.
As Indian entities have grown in size and scope,
they have felt the need to tap into newer and
cheaper sources of funds from overseas
markets. Consequently, they have turned to
foreign banks with experience and expertise in such activities. This trend is likely to
continue as Indian corporations look to costeffectively raise funds to reduce leverage and
restructure their balance sheets.3 Foreign
banks such as Citibank, which helped Indian
clients raise US$18 billion from equity and
debt markets and advised on M&A deals worth
US$10.4 billion during 2012-13,4 are well
entrenched. However, there seems to be
ample opportunity for other players to take
advantage of the expected growth in this area.5
Growth in international trade — Since the
opening up of the Indian economy in the
early 1990s, India’s share in global exports
and imports has shown considerable improvement. From a share of 0.5% and 0.7% in global
exports and imports in 1990, it has more
than tripled – to 1.6% and 2.6% in 2012.6 FDI
inflows and outflows, though at lower levels in
2012-13 compared to 2011-12, stand at US$36.9
billion and US$26.9 billion.7 The increase in
There are several reasons foreign banks look to
do business in India:
The growing HNI population — A majority of
the fastest-growing high-net-worth individual
(HNI) markets are located in the Asia-Pacific
region (See Figure 1). The annual growth in
wealth in the APAC region was at 12.2% in
2012 – the strongest gain among all geographies. Within the APAC region, India recorded
a 22.2% increase in its HNI populations.2
For most foreign banks, the private banking
and wealth management business forms a substantial portion of their revenue. The erosion of
wealth and negative growth in their traditional
markets of North America and Europe have
The Growing HNI Population
4%
3%
33%
Asia Pacific
North America
Europe
Middle East & Africa
South America
29%
31%
Source: World Wealth Report, 2013, Capgemini & RBS Wealth Management
Figure 1
cognizant 20-20 insights
2
3. HNI Households Worldwide (in millions)
0.6
0.5
3.4
Asia Pacific
North America
Europe
Middle East & Africa
South America
3.2
3.4
Source: World Wealth Report, 2013, Capgemini & RBS Wealth Management
Figure 2
trading activity has ensured the establishment
of trading relations with more countries. This
in turn has led banks in those countries to set
up branches and representative offices in India
(and vice versa), and explore the possibility of
expanding into traditional banking services.
The list of foreign bank branches in India,
as well as the roster of foreign banks having representative offices in the country, will
show that expansion in trade seems to be the
primary reason these banks established a
presence in India.8 Statistically, the number
of foreign banks in India has gone up from
28 in 2007–2008 to 43 in 2012–13, while the
number of branches has expanded from 277 to
331 in the same period. Although this increase
may not seem overly impressive, one should
consider that the number of foreign banks
applying for licenses could have been substan-
tially higher had the RBI not been so stringent
about giving out bank and branch licenses.
Obstacles Facing Foreign Banks
Foreign Banks looking to start operations in India
are likely to face challenges that are both unique
and specific to any foreign entity that wants to
do business in India. The difference is that the
risks associated with setting up and operating a
bank will be far greater than in any other type
of business.
Regulatory Issues
For any bank looking to start operations in India –
foreign or domestic – compliance with stringent
RBI regulations is a major challenge. For example:
No differential licensing — The RBI does not
encourage banks whose business model does
The Demand for Investment Banking Services
100%
80%
44%
60%
40%
30%
41%
34%
21%
27%
25%
32%
33%
28%
27%
28%
45%
44%
13%
20%
37%
37%
20%
21%
20%
30%
0%
48%
32%
38%
41%
38%
42%
36%
44%
42%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
(through July)
Inbound
Outbound
Domestic
Source: Doing Deals Successfully in India – Lessons from Dealmakers. KPMG report
Figure 3
cognizant 20-20 insights
3
4. not take into account the RBI’s objective of
financial inclusion. Thus, foreign banks that
are looking to offer very specialized banking
services in India must apply for a universal
banking license that mandates the roll-out of
full-fledged banking services in the country.
Consequently, giving precedence to financial
inclusion may not be viable for all foreign
banks entering the banking sector.
lending and related issues) recommended that
foreign banks with more than 20 branches
achieve PSL targets over a period of five years,
starting April 1, 2013. Banks must share a
relevant action plan with the RBI.
Setting up a wholly owned banking subsidiary (WOS) — Currently, foreign banks in
India operate as branches of the parent bank
located overseas. However RBI has recently
released guidelines for setting up wholly
owned subsidiaries (WOS) by foreign banks in
India. A WOS would have to be in the form of
a locally incorporated entity. These new guidelines will result in banks losing the advantages
of a branch structure (greater operational flexibility, support from the parent, reduced corporate governance requirements, etc.). Such new
entities are also likely to attract significant tax
liabilities that arise with operating a WOS.13
Longer gestation period — Traditionally, the
RBI has been tight-fisted about issuing banking licenses. Banking licenses in the private
sector were last issued in 2003; new licenses
will likely be issued in 2014. Licenses for foreign banks are even harder to come by due to
the complexities involved. Apart from regulatory issues, licenses to foreign banks are
issued on the basis of relations between India
and the home country of the foreign bank, and
reciprocal arrangements between the banking
regulators of both countries. This results in a
wide time gap from applying for and eventually getting the license. In the interim, the cost
of setting up and operating a bank in India is
likely to go up substantially, and may require
a rework of the business plan. The proposed
banking sector reforms may provide a solution
in the form of banking licenses “on tap.”
However, this issue might be resolved soon.
The RBI’s discussion paper, “Banking Structure
in India – The Way Forward” (August, 2013),9
supports differential licensing for banks in
India, and mentions that this is a “desirable
step” in a changing economic environment.
Financial inclusion — Complying with the
RBI’s guidelines on financial inclusion requires
offering banking products and services to
unbanked and underbanked areas and customers. This involves costs that foreign banks with
few branches and fewer sources of raising lowcost funds may find difficult to implement.
As of 31 March 2013, out of the 331 branches
of foreign banks in India, only 17 were located
in the rural and semi-urban areas. Out of the
total 1,261 ATMs set up by foreign banks, only
51 were in rural and semi-urban areas.10
More stringent monitoring and follow-up by
regulators may slightly rectify this skewed
ratio. However, a better solution would be to
evolve a business model that enables foreign
banks to benefit from opening rural/
semi-urban branches.
Priority sector lending (PSL) — Foreign banks
with less than 20 branches are supposed to
lend to the priority sector to the extent of
32% of Adjusted Net Bank Credit (ANBC). For
banks that have 20 or more branches, this
figure stands at 40%. Lending to the priority
sector includes lending to agriculture, micro
and small enterprises, and providing export
credit and advances to weaker sections of
the society. Meeting PSL targets is especially
difficult for foreign banks, given the high NPAs
and defaults associated with this sector.11, 12
Marketplace Challenges
Foreign banks have to factor in the challenges
they are likely to encounter from the Indian
banking environment, as well as the unique
market in which they are expected to operate:
To ease the impact of PSL targets, the Nair
committee (formed in 2011 to re-examine the
existing classification and suggest revised
guidelines with regard to priority sector
cognizant 20-20 insights
4
Diverse banking environment — As of March
31, 2009, India housed 27 public sector banks;
seven new private sector banks; 15 old private
sector banks; 31 foreign banks; 86 Regional
Rural Banks (RRBs); four Local Area Banks
(LABs); 1,721 urban cooperative banks; 31 state
cooperative banks, and 371 district central
cooperative banks. As of March 31, 2013, the
5. number of foreign banks operating in India had
risen to 43. Any foreign bank planning to enter
India faces intense competition from existing
players with a large network of branches/ATMs
and a largely loyal customer base.
Currently, foreign banks are prohibited from
starting operations in India’s Tier 3 - Tier 6
towns and cities. The proposed guidelines14
may remove this restriction. This could be an
opportunity for foreign banks, as existing players may not have a significant presence in such
areas. However, apart from the difficulty in
achieving financial viability in those locations,
new players will also face competition from
non-banking finance corporations (NBFCs),
credit cooperative societies and individual
money lenders operating beyond the scope of
regulations – hindering any formal set-up.
Unique product mix — Products offered by
banks in India are generally skewed towards
the retail banking business; for most banks,
the retail customer is their primary source of
cheap funds and fee income. What the retail
customer cannot make in value is made up
in volume. As a result, product innovation
also focuses on these customers. For foreign
banks that derive value largely from specialized banking services, such as private banking, investment banking, trade finance and the
like, it is a challenge to offer innovative retail
banking products, since domestic competitors
already offer them. Also, products offered by
foreign banks in their home countries may not
be permitted by the regulator in India.
banks’ discretion to accurately report numbers. Master Circulars – a one-point reference
of instructions issued by the Reserve Bank of
India on a particular subject between JulyJune15 – can often be vague. In such cases,
foreign banks need to understand and follow
industry best practices.
Conflicting objectives — The reason behind
RBI’s stated objective of giving out new banking licenses – whether to domestic or foreign
entities – is to promote financial inclusion. The
CRISIL Inclusix score, which measures financial inclusion on three parameters – branch
penetration, deposit penetration and credit
penetration – stands at 40.1 for banks in India,
which is quite low. India’s six largest cities have
11% of the total bank branches, while regions
such as the Northeast are severely underbanked (four districts in the Northeast have
just one bank branch among them). Foreign
banks will find it difficult to balance this objective with the expectations of their stakeholders and their own reasons for starting Indian
operations.
Branding and publicity — As mentioned
earlier, a lot of banking in India is based on
relationships and trust. In this regard, public sector banks, on account of their government antecedents, tend to score heavily over
private sector and foreign banks. Foreign banks
especially are associated with high costs and
fees and aggressive marketing tactics, and are
more prone to upheavals in the global financial
markets. Foreign banks looking to enter India
will need to counter this perception with smart
and effective branding. They can highlight
their strengths, such as technology advancements in banking, a better understanding of
financial markets and/or a proven track record
in various geographies.
Social Issues
Acknowledging and overcoming social challenges
is vital for a bank operating in a foreign country.
Among these:
Social integration — Even today, a lot of
banking in India is carried out on the basis of
relationships and trust. For example, customers expect the bank to contact them when the
balance in their account is insufficient to cover
a check they issued, even though banks are
not obligated to do so. Such practices may
not fit the model for foreign banks. The bank
would also need to understand the complex
guidelines that are issued by the RBI from
time and time, and how they apply to their
institution. The RBI, especially in the case of
regulatory reporting, is known to leave it to
cognizant 20-20 insights
Infrastructure Issues
Foreign banks entering India are likely to face
infrastructure challenges in terms of systems and
branch infrastructure.
5
System challenges — Banks in India already
use some of the best core banking solutions
available on the market. Since retail and
commercial banking are the most developed
lines of business (LOBs) in India, innovation
and product implementation concentrate on
these areas. Foreign Banks with robust private
6. banking, wealth management, Anti Money
Laundering (AML), trade finance, and investment banking systems and processes may
not find much use for them until the market
attains a certain level of maturity. The current
volume of transactions in these areas may not
justify implementation of the systems.
Branch infrastructure — The number of
branch walk-ins in Indian banks is much higher
compared to other countries, where the focus
is on keeping customers engaged through
channels such as the Internet, phone and
mobile banking. Foreign banks will need to
develop an infrastructure (both physical and
human) equipped to handle more footfalls.
Additionally, setting up a new infrastructure
and processes takes much longer in the Indian
banking scenario. A good example is CTS
(Cheque Truncation System), which has yet
to be implemented across the country – even
10 years after the pilot program was launched.
of wholly owned subsidiaries (WOS) by foreign
banks in India. As a locally incorporated entity,
the WOS will be treated at par with other Indian
banks in terms of branch expansion, and will also
be permitted to participate in the development of
the Indian financial sector. Existing foreign banks
will be incentivized to convert into a WOS. An
analysis of this proposal reveals more pros than
cons as far as the banking sector is concerned
(see Figure 4, below).
Below are some other significant changes
proposed in the discussion paper:
Banks
•
that do not provide adequate
disclosure in their home country, banks with
complex structures, banks that are not widely
held represent types of banks that will be
permitted entry only by setting up a WOS.
• Wholly
owned subsidiaries of foreign banks
will not be given “full national treatment” even
though they are locally incorporated. This is
to prevent foreign banks from dominating
domestic banks.
RBI Guidelines for Foreign Banks:
The Framework for Setting Up A WOS
In a press release dated November 6, 2013,
RBI announced the framework for the setting up
RBI Policy for Foreign Banks Setting Up a WOS.
Pros
Cons
"Ring Fence Banks" from
Global Risks
Huge Tax Liability for
Subsidiaries
Easier for the RBI
to Regulate
Less Operational
Flexibility
At Par With Domestic
Banks in Terms of
Branch Expansion
Greater Corporate
nts
vernance Requireme
Go
Raising of Non-Equity
Capital in India
Figure 4
cognizant 20-20 insights
6
7. Some other significant changes announced are as
follows:
•
• Foreign
banks that become “systemically
important” because of their balance sheet
size in India have to convert themselves
into wholly owned subsidiaries. Systemically
important banks are those whose assets
account for at least 0.25% of the total assets
of all commercial banks.
• Banks
with complex structures, banks that
do not provide adequate disclosure in
their home jurisdiction, banks that are not
widely held, banks from jurisdictions that
have legislation giving a preferential claim to
depositors of the home country in winding up
proceedings, etc., will be allowed entry into
India only in the WOS mode.
• Foreign banks that commenced banking busi-
ness in India before August 2010 shall have
the option to continue their banking business
through the branch mode. However, they will
be incentivized to convert into a WOS because
of the attractiveness of being treated almost
on par with national banks.
The initial minimum paid-up voting equity capital for a WOS shall be 5 billion rupees for new
entrants. Existing branches of foreign banks
desiring to convert into WOS will need to have
a minimum net worth of _ 5 billion rupees.
RBI — Proposed Banking Sector Reorientation
The Reserve Bank of India is also contemplating
major banking sector reforms.16 (See Figure 5,
below). These reforms are not specific to foreign
banks, but could be a solution to some of the challenges they face. The RBI recently released a discussion paper, “Banking Structure in India – The
Way Forward,” which deals with the reorientation
of India’s banking sector. The intention is to have a
dynamic and flexible structure that remains resilient, even during periods of financial instability.
Opportunities for Consulting Firms
The Indian banking sector currently offers
significant scope and opportunities for consulting
firms and system integrators (SIs). The licensing
of new banks in the private sector and the RBI’s
automated data flow (ADF) program are some of
the business opportunities that IT and business
consulting firms are already targeting. This space
is likely to get a further boost when the RBI goes
Proposed Banking Sector Reforms
Consolidation
of Banks to
Create Global
Banks
An Indicative 4-tier
Reorientation
of the Banking
Structure
Differential
Banking
License
Regime
To increase
competition.
Indian
Banks’
Presence
Overseas-Local
Incorporation/
JV
Proposed Banking
Sector
Reorientation
Continuous
Licensing of
Banks “On-tap”
Licensing
Presence of
Foreign Banks
in India
Conversion
of Some Urban
Co-ops Into
Commercial
Banks
Figure 5
cognizant 20-20 insights
7
Promote efficiency of
local banking system.
To bring in
sophisticated financial
services and riskmanagement
methodologies.
Local incorporation
is more desirable.
8. ahead with its proposed banking sector reforms,
and if it announces new guidelines for foreign
banks operating in India. Here is a look at some
of the business opportunities for consulting firms
in the Indian banking space. The opportunities
primarily apply to foreign banks. However, the
same may also be applied to other new banks
looking to enter the Indian market.
Defining Operational Processes, Listing Key
Requirements
It is essential that foreign banks planning
to enter the Indian market have a thorough
understanding of the Indian banking sector.
Apart from the rules, regulations and guidelines defined by the regulator, new entrants
have to gain knowledge about the products
and services they need to offer, the business
and IT processes that must be in place, and
the staffing required to set up and operate a
branch. Gaining this level of knowledge within
the short span of time when the banking
license is valid is a tough task.
Consulting firms with experience and expertise
in the banking domain and similar projects can
help develop a strategy and a set of requirements for new banks looking to start operations in India. These requirements can include
functions such as cash management; teller
management; account and deposit management; lending; payments; clearing; and trade
finance, for example. Within these systems,
services encompass inward/outward clearing;
withdrawals; account opening/closure; export
collection; and inward/outward remittances,
among others. Qualified consulting firms can
also offer research and findings based on peer
banks’ best practices – and actual regulatory
reporting requirements.
Business process consultants can also help
banks design or modify business processes
related to banking functions, including retail
banking, corporate banking and private banking. Existing process repositories can be used
to showcase domain expertise, which can
be used as the building blocks for a bank’s
specific processes.
Internal Process Consulting
In addition to business processes, a qualified consulting firm can offer banks entering
India's banking market internal process consulting, which focuses on processes carried
out by the bank’s “in-house” departments,
such as finance, human resources and legal.
These consulting services are geared to foreign banks, and address local requirements as
well as industry best practices.
Selecting a Core Banking Product
With multiple core banking solutions (CBSs)
on the market, and considering banks’ unique
requirements, selecting the right one becomes
critical. A foreign bank entering the Indian
market may look to implement its existing
CBS. However, determining whether this solution is appropriate locally, and whether it
provides support for local regulatory reporting can only be determined after a detailed
gap analysis – a task ideally suited to consulting firms with experience in core banking
product selection and implementation.
Selecting a core banking product should
consider the following:
• The bank’s target operating model.
• The bank’s size and scope of operations.
• Expected transaction volumes.
• The viability of using an “off-the-shelf”
Business Process Consulting
Foreign banks that seek to enter Indian markets carry the legacy of business processes
followed in their home markets or in other
geographies in which they operate. However,
those processes may not be suitable for the
Indian market. New entrants can make use
of business process consulting to design or
restructure their processes to help cut costs,
improve productivity, lower turnaround time
and enhance customer service, for example.
Banks can use these services to document
processes for training and reference, and to
identify gaps.
cognizant 20-20 insights
product.
Customizations required and costs involved.
•
• Implementation, maintenance and upgrade
costs.
Opportunities in Core Banking
Implementation
Considering the constraints – time, tasks and
the interdependencies among multiple stakeholders involved in any CBS implementation,
there is a significant role to be played by
consulting firms acting as Systems Integrators
(SIs). Systems integration consulting enables
a new foreign bank to maintain a single point
8
9. of contact and communication for multiple
vendors and different groups within the bank.
An experienced SI also brings the domain and
process expertise required to understand the
functions of various dependent and independent banking systems and processes.
planning to enter the Indian market; applying
for the license within the specified time frame;
interacting with the various government
and RBI departments involved in the entire
process; updating the foreign bank regarding changes in policy, as well as defining the
implications for the bank and its license application. Banking Licensing Consulting can
extend to post-licensing; consulting firms can
assist banks in obtaining memberships of
clearing and settlement houses, depositories,
credit-rating agencies, insurance and credit
guarantee corporations, as well as various
banking associations such as IBA and IIBF.
The Role of Automated Data Flow (ADF)
Banks in India are required to submit a set of
reports to the RBI at various periods throughout the year. These are used by the regulator
to analyze a bank’s financial health and its
compliance with other regulatory directives.
The RBI also uses statistical reports for macroeconomic analysis – making the quality of data
extremely important. Some of these reports
have been prepared manually by banks, which
increases the odds of producing and reporting
inaccurate data. With this in mind, the Reserve
Bank of India launched its automated data flow
(ADF) program, whereby “clean” data from a
bank’s source system is captured, compiled and
submitted to the RBI in the prescribed format.
Since this is a comparatively new area of focus
for banks, ADF consulting and implementation
is a prime opportunity for consulting firms
with expertise in the regulatory reporting
domain. Consulting firms acting as SIs can be
the link between the bank and the ADF product
vendor. Services such as ADF consultancy
(short-listing of reports to be submitted by the
bank; analyses of data to be reported in shortlisted reports; applicability of reports based
on the bank’s target operating model; a gap
analysis of data required to be reported; data
available in the source system, and ADF implementation) can all be provided by these firms.
Banking License Consulting
Banking Licensing Consulting is a niche
area of consulting with significant potential.
It involves consulting services for obtaining a
banking license in the country. Services in this
area can include end-to-end services – starting
with a feasibility analysis for the foreign bank
cognizant 20-20 insights
Conclusion
In spite of stringent RBI regulations and other
restrictions, India will continue to attract foreign
banks looking to set up branches/representative
offices in order to facilitate trade and commerce
in their home markets. There will also be banking institutions keen to enter India as full-fledged
banks that offer the entire gamut of banking
services, and emulate the success achieved by a
Citibank or an HSBC or SCB.
The various challenges these foreign banks are
likely to face in the Indian markets provide a
significant opportunity for IT and business consulting firms to position themselves, provided
they suitably gauge the bank’s requirements and
offer pertinent solutions at competitive prices.
Firms that have experience and expertise in
providing comprehensive end-to-end solutions
for foreign banks – from conducting a commercial feasibility analysis and outlining target operating models, to defining business and internal
processes and selecting a CBS, to setting up a
branch and providing solutions for MIS and regulatory reporting – will have an edge over “product-specific” firms. There are likely to be ample
business opportunities for such “all-inclusive”
firms acting as system integrators, since the
services they offer are based on an objective and
unbiased approach.
9
10. References
1. www.rbi.org.in
2. www.crisil.com
3. www.financialservices.gov.in
4. www.livemint.com
5. RBI Discussion Paper – “Presence of Foreign Banks in India.”
6. RBI Master Circular – Priority Sector Lending – Targets and Classification
7. Doing Deals successfully in India – Lessons from Dealmakers, KPMG report
8. World Wealth Report 2013 – Capgemini and RBS Wealth Management
9. Annual Report 2012-13 – EXIM Bank
10. Monetary Policy Statement 2013-14, May, 2013.
11. RBI Discussion paper – “Banking Structure in India – The Way Forward,” August, 2013.
Footnote
1
http://rbidocs.rbi.org.in/rdocs/Content/pdfs/71207.pdf (source: rbi.org)
http://www.capgemini.com/thought-leadership/world-wealth-report-2013-from-capgemini-and-rbcwealth-management
2
http://www.ft.com/intl/cms/s/0/12eab212-9542-11e2-a151-00144feabdc0.html#axzz2cgOVcUBT
3
4
http://profit.ndtv.com/news/corporates/article-citibank-india-profit-grows-41-4-to-rs-2-718crore-324018
http://www.ft.com/intl/cms/s/0/12eab212-9542-11e2-a151-00144feabdc0.html#axzz2cgOVcUBT
5
6
http://eximbankindia.com/ar1213.pdf (source: eximbankindia.com)
http://210.212.115.113:81/Rahul%20Singh/Mexico%20ISP%20prog/4.%20India%20foreign%
20trade.pdf
7
http://rbidocs.rbi.org.in/rdocs/Content/pdfs/71207.pdf
8
http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=713 (source: rbi.org)
9
http://financialservices.gov.in/banking/Overviewofefforts.pdf (source: financialservices.gov.in)
10
http://www.financialexpress.com/news/column-need-to-rethink-priority-sector-lending/1042131
11
http://www.thehindubusinessline.com/industry-and-economy/banking/banks-may-not-hit-prioritysector-lending-target-for-fy12/article3381062.ece
12
http://articles.economictimes.indiatimes.com/2013-08-06/news/41131777_1_foreign-banks-parentbanks-mnc-banks
13
14
http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2313 (source: rbi.org)
http://www.rbi.org.in/scripts/BS_ViewMasterCirculardetails.aspx
15
http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=29405
16
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