CXO Leadership Series:“Yesterday, Today and Tomorrow of Banking” – Prof. Arup Choudhuri, Chairman, Intasia Institute of Business Management


On 22nd June, Mr. Arup Chaudhuri interacted with the students of TAPMI and delivered a lecture on the topic “Yesterday, Today and Tomorrow of Banking.” He believes like everything else, to understand the performance of the banking sector in the future, the past needs to be scrutinized. Only when one studies the past can the future have minimum errors.

To begin with, he gives us a glimpse of the different banking systems prevailing in today’s world. The banking structure of Bangladesh is not advanced as most countries. It is mostly dominated by trade financing by outsourcing of garment manufacturing. The country has very cheap labour and since it outsources garment making, export banking is a dominating feature. On the other hand, we have the banking system of Islamic countries. These countries are governed by the Shariyat Law, according to which the banks cannot take interests on the sum loaned. The bank then treats the customers as shareholders of the bank. Instead of loaning the fund directly, the bank purchases or funds the needs on behalf of the customer. The price is repaid to the banks by the customers at a premium. Thus in banking it is important to consider the bank’s perspective.

Another important aspect according to him in banking is the technology used. The past technology used becomes part of life and has long lasting effects on the future generations. India is developing at a fast pace and the banking sector is keeping up. The technology used in India’s banking system should be affordable and user friendly so the large population can reap its benefits. The future of banking will be cashless transaction in the lines of the already prevalent Bitcoin. Online transactions are increasing with every passing day. Though India is developing a little slowly as compared to other countries but when the pace picks up she moves like a juggernaut.

The problem of differential interest rates or bad lending practices giving rise to Non Performing Assets (NPA) can be traced back to the time when only moneylenders existed. Giving more mortgages without proper background checks causes rise in more defaults. This “money lender” concept of giving loans is not new. This is why it is important for the banking sector to keep an eye on the past to learn from the mistakes. After industrial revolution, the money lenders formed a syndication which later evolved to form a bank.

He stated, that one of the major events in the history of banking is the implementation of the Basil Formula. After the world war 2, when Hitler had failed, the Swiss realized that all the loans they had given to Germany were now non-performing assets. The Swiss bank met in Basil to tackle the issue and formulated a policy. The policy had features like the capital adequacy ratio. This capital adequacy ratio, he said, increased mergers. Mr. Chaudhuri says that Basil 3 was done in a haste to help USA to oversee market risk and operational risks. The policy needed more work to increase its effectiveness.

Mr. Chaudhuri believes that the banking sector knows that it is growing and that is why it is funding investor education initiatives so that people grow with them. Though fraud and Ponzi schemes remain a major challenge, India has a lot of potential and this is just the beginning. He firmly states that for any banking sector to grow in future, they need to keep an on the past so as to not make a mistake today.

M-Power by MGM – E-commerce and Technological Trends in Indian Retailing – Prof. Venkataramanan Krishnamurthy, CEO – Wefaculty

Prof. Venkatramanan 3Prof. Venkataramanan Krishnamurthy, in a highly interactive session with the students of TAPMI spoke about two major topics, the e-commerce market and the technological aspects of the retail market in India.

He started the session by stating the importance of e-commerce in present times and how it affects sectors that do not deal with the e-commerce market. He went on to explain that e-commerce has great growth potentials, though most companies today are running into losses. This is because investors focus more on the future potential of a company than its present financial state. Flipkart was cited as an example. Investors continue to invest in the company owing to its future potential and that is the reason the company can sustain losses of about 30 percent.

Moving ahead, he presented an interesting comparison of the retail and e-commerce markets by taking examples of Walmart and Amazon, the world leaders in retail and e-commerce respectively. In the year 2014, Amazon’s revenue was $88 billion, while that of Walmart was $486 billion. The 20 years cumulative sales figures of Amazon was valued at $408,941 billion which is less than Walmart’s sales figures of one year. The same holds true for profit figures too. However, in 2014, Amazon overtook Walmart in its market capitalization value. This goes on to show the enormous potential of the e-commerce market.

A major focus area of the talk was about technological advances in the international retail market. A video of the Carrefour warehouse at Vert-Saint-Denis, France was played as an example of the highly functional, synchronized and efficient warehouses. Warehouses in international markets are centralized, serving a large geographical area while those in India are localized. Inefficient transport system and the complex tax structure were cited as hindrances to technological advancement of the retail market in India. He ended with a note that the introduction of the GST bill would pave the way for a more efficient retail market in the country.

“Emerging Trends in the eCommerce Industry” – Mr. Avinash Parhi, Director – Category Marketing at



In an interactive session with the students of TAPMI, Mr. Avinash Parhi spoke about the organized retail market, the challenges faced by it to go with that of modern trade and how eCommerce is the way forward.

He brought out the reality in the retail market scenario in India, wherein Organized Retail Penetration (ORP) was only 8% as of 2015 as compared to a staggering 85% in the United States. Breaking it down further into categories, he brought into focus, the market shares of these categories followed by their key category USPs and how they had performed in various formats of retail. While Food and Beverages had a market share of about 70%, it had gross profit margins of around 3% to 14%. On the other hand, Home Décor and Furnishing, which had a market share of only 3% has gross margins ranging between 40% and 50%.

Moving ahead, he listed down the major challenges that the organized retail sector was facing that formed a hindrance for the growth of modern trade. The various factors listed down by him included the highly diverse demographics of the country, poor supply chain infrastructure, real estate concerns to go along with workforce related concerns. He also highlighted the bureaucratic and legal hurdles that Indian businesses face and was very vocal about the need for a single apex body to govern retail operations. In his opinion, the uniqueness of Indian customers was one of the biggest challenges of modern trade.

The solution to all such problems lies in eCommerce, which, according to him, is the next biggest wave in the retail business scenario. It takes care of all the major hindrances to modern trade while providing a wide variety of assortment and helping consumers save time. He also spoke of how foreign players, in the past, have tied up with local players to understand the Indian market better. Furthermore, he delved into the two buzz words of eCommerce, i.e., growth and profitability and even took the students opinion of how firms can manage both at the same time. To end with, he spoke about the various departments that typically make up any eCommerce organization and the various aspects of marketing involved in the industry.

COBCAM 2016: CallOut – Taking advantage of the 7 year cycle in the stock market



Excerpts from the discussion:

Mr. Jayesh Gandhi, Senior Portfolio Manager at Birla Sunlife AMC

Mr. Gandhi was firmly of the belief that equity markets world over were driven by fundamental earnings data. Although he felt a little disappointed that the euphoria over the Modi government coming into power had not translated into corporate profits, he was bullish on the prospects of the Indian economy in the next two – three years. He was of the view that valuations of Indian companies were not expensive at current levels but closer to the long term average. He felt that there was no trigger to drive prices up but expected earnings growth to pick up in the times to come. He was confident that a combination of strong political leadership, sound RBI policy measures and low commodity prices would help corporate India to overcome the lack of growth in the global economy. He was particularly overweight on sectors like Automobiles, Private Sector Banks, Oil & Gas and Media.

Ms. Shibani Kurian, VP and Head – Equity Research at Kotak AMC

Ms. Kurian said that the three things her company looks into for selecting stocks are business, management and valuation. Companies with fundamentally strong corporate earnings are relied upon more than technical indicators. While they look at both the top down and bottom up approaches before selecting a stock, compounding returns and growth in excess of the market form key indicators as well. She put her weight behind the Cement and Automobile sectors, stating that they are growing at a higher rate than the GDP. While timing the market is difficult, it is essential. With the government being able to maintain fiscal targets, monetary conditions will improve and so will corporate profitability.

Mr. Saurabh Mukherjea, CEO at Ambit Capital

Mr. Mukherjea said that the Prime Minister’s lack of tolerance for crony capitalism meant that sectors which contributed the most to the capital expenditure would not be able to do so any more. Hence, it would be unrealistic to expect the benchmark index to give ideal returns at this stage. With our Savings to GDP ratio at a 10 year low, it would also be irrational to think of a surge in consumption. The crackdown on black money means that people have had to shift from investing their money in gold and real estate to other avenues. He said that the social metrics of the country to go along with the banking system, the capital expenditure cycle and global interests were not in favor of growth in the near future. The downside risks outweigh the upsides and that not a single measure of economic activity has shown any growth in the country of late.

Mr. Supreeth Sankarghal, Hedge Fund Manager at Novo Investment Trust

Mr. Sankarghal had a bearish view of the market and said that there is no single rule of thumb in the market, but there are several variables that simultaneously play for the movement to take place. He predicted that there may be a big crash in the US markets in the near future. The major reason behind such a prediction was the declining fundamentals and poor investor confidence in stock markets. He went on to say that the economy is being run on steroids and painkillers and that the Make In India campaign is just a fairy tale. He went on to put his weight behind the Service and Consumption sectors believing them to be the bright spots in the future while being pessimistic about the Industrial sector.

COBCAM 2016: CallOut – The impact of Payment Banks on the Indian Banking Sector


Excerpts from the discussion:

Mr. Madhav Nair, Country Head at Deutsche Bank

According to Mr. Nair, Payment Banks need not be disruptive. They should use technology to lower cost of operations to become competitive with traditional commercial banks since they would take five to six years to break even. They have to offer rates higher than four to six percent. That, along with the use of additional services and selling of financial instruments can help them stabilize and position themselves as a small bank in the years to come. It can also help them collaborate with large banks. He also mentioned that the telecom players like Airtel and Vodafone have an advantage of connectivity to rural India which cannot come overnight for commercial banks due to the high amount of capital costs which are required.

Mr. Bharath Shastri, Head – Risk Modelling at HDFC Bank

Mr. Shastri was of the opinion that banks need to offer better services to customers to attract them rather than reduced interest rates. Discount offers and mobile wallets can bring in more customers rather than conventional banking methods or the cash system. He spoke of how analytics has become a very important part of this generation and how customer experience can be made better through better analytics. When asked about the primary risks faced by payment banks, he spoke of online security and technology related risks. He also mentioned about money laundering and questioned the effectiveness of Aadhar cards as a part of Know Your Customer (KYC) norms.

Mr. Saurabh Sharma, Product Head at National Australia Bank

At the outset he firmly believed that there is a requirement for payment banks in the Indian banking sector. He believed that the three main objectives of payment banks would be to provide safety to depositors, reduce the cost of operations and widen the distribution network. He felt that RBI had awarded licenses to companies who could reach out to a large proportion of the population particularly in the semi urban and rural areas. In this regard he was of the opinion that telecom companies had certain advantages and it reflected in the licenses awarded as four of the eight remaining players had telecom capabilities. He expressed the possibility that companies like Paytm could utilize their technological platform to enable vertical integration of their existing business. He believed that apart from the three defined revenue streams i.e. Net Interest Income, Cross Selling of products related to mutual funds, insurance and Transactions based income, companies would primarily use the payment bank as a way to complement their primary business. On a cautionary note he admitted that the Universal Payment Interface (UPI) launched by the RBI could dilute the advantage of a payment bank.


COBCAM 2016 – An overview



COBCAM (Confluence of Banking and Capital Markets) 2016, the annual conclave of the Banking and Finance (BKFS) program of T. A. Pai Management Institute, Manipal, was held on the 28th of May 2016 at The Lalit Hotel in Mumbai. The event was attended by renowned guests from the banking and financial sectors. The Chief Guest for the event was Shri Deepak Mohanty, Executive Director of RBI. Dr. R. C. Natarajan, Director of TAPMI was also present for the event along with Professor Madhu Veeraraghavan and other faculty members of the institute.

Shri Mohanty discussed about the importance of regulation in the financial sector. He stressed on the importance of transparency in regulation and stated that “Trust is the essence of finance.” He delved into the role of banks in the economy and highlighted the perils of overleveraging of bank balance sheets which led to the global crisis of 2008. He believed that not only quantity but also quality of capital is important for banks. He discussed about the challenges ahead for the Indian banking system in terms of maintaining and improving the asset quality. On a concluding note he said that “Financial inclusion is important for Social inclusion” and urged banks to include more people into the formal banking system.

The Key Note Speaker for the event was Shri S. V. Murali Dhar Rao, Executive Director of SEBI. In his address, he spoke how the 2008 financial crisis was a big lesson for all countries and how it led to paradigm shifts in countries with regards to various aspects. He also spoke about the objectives for which SEBI was set up and how it has evolved since its inception. He took pride in the fact that the Indian securities market has become one of the most regulated and developed ones in the world. He also spoke of the various reforms that SEBI plans to undertake during the year while constantly aiming at creating and increasing investor awareness.

The event also included two panel discussions on the topics – “The impact of Payment Banks on the Indian Banking Sector” and “Taking advantage of the 7 year cycle in the stock market.” There were special mentoring sessions for the Banking and Finance students followed by a presentation on Risk Management and Financial Risk Management (FRM) by Mr. Lalit Taneja, Regional Director of GARP (Delhi Chapter). To conclude things, Ms. Monica Veer, a BKFS student of TAPMI, gave a student perspective of the BKFS program to all the guests which was followed by the Vote of Thanks.

MANTHAN 2016, Echo – Is it the right time for India to lead Global Growth?


Excerpts from the discussion:

Mr. Tamal Bandhopadhyay, Adviser, Strategy Consulting Editor -Bandhan Bank Live Mint

Moderator, Mr. Tamal Bhandopadhyay, started the discussion on the note that the topic revolves more around political stance than an economic one; the root of which is slowing down of China.

Mr. J. K. Vishwanathan, Chief Credit Officer – Development Credit Bank

Mr. J. K. Vishwanathan started the discussion by telling that, before asking whether it is the right time for India to lead the global growth, we should first analyse if India is heading in that direction with the right contributors of economic growth and government policies in place. He also said that in 1999, when China entered the World Trade Organization, it was ranked below many countries, but has now climbed up the ladder. He was optimistic and said that though we are not going bigger than China, we are heading towards a better future. He went ahead to explain the factors which hinder the growth process like low capacity utilization, problems related to infrastructure and land acquisition. He also highlighted the issues faced by the banking sector in India such as negative operating cash flows. He suggested that the government can come up with right policies to assist banking sector and facilitate growth.

Mr. Ashwini Mehra, Deputy Managing Director & CDO – State Bank of India

Mr. Ashwini Mehra talked about the growth rate of developed countries like US and Japan and told that developed countries grow faster than emerging economies. He told that India is in a sweeter spot with 7.5% growth rate. Though he supported the topic and said that India will definitely lead the global growth in five years, he also highlighted the problems which can act as roadblocks like issues faced by banks to raise capital, problems faced by private sectors due to government policies etc. He went ahead and spoke about the positive measures which are driving the growth process such as Make in India, financial inclusion etc.

Mr. Vishwanathan Iyer, Director, Head of Institutional Banking – National Australia Bank

Mr. Vishwanathan Iyer was of the opinion that to lead global growth, not only GDP, but many other factors also come into play. Slowing down of China might not be an opportunity in real sense as it is affecting some sectors in India too. First we have to get our internal act together. For example, democracy has its own challenges; the labour laws in India have some pitfalls, contemporary issues in banking etc. Public expenditure and consumption is increasing and the focus needs to be on these serious gaps instead of global growth, he said.

Mr. Shreenivas Kunte, Director of Content – CFA Institute

Mr. Sreenivas Kunte, spoke about the fundamental attribution error and the anchoring effect in policy makers. He was against the idea of competition and was of the opinion that old power structures will not allow growth. Growth will happen anyway but it should trickle down to the masses, he said.