MANTHAN-2013
Finance Summit
Topics of discussion:
New Banking Laws: Enabler of Growth
Investor Behaviour During Financial Crisis
The Eminent Speakers
Mr. Paresh Sheth
CEO, Indus1Advantage iBank
Mr. Jagannadham T.
Head Research, SMC Global Securities
Mr. Vipul Jain
VP, Max Life Insurance
Mr. Jitendra Solanki
Founder, JS Financial Services
Mr. Pawan Kumar
Founder, Trishna Trading and Research
Our Guests of Honour
Dr. S. Rangnekar
HoD, DoMS,
IIT Roorkee
Dr. A.K. Sharma
Associate
Professor, DoMS, IIT Roorkee.
Mr. R.S. Singh
Chief
Manager, CANARA Bank, Roorkee
Mr. Diwankar Chowdhry
Chief
Manager, Union Bank of India
Mrs. Aruna Bhat
Treasurer,
ISTD, Dehradun Chapter.
New Banking Laws: Enabler of Growth
Point of bill – As new licensed banks
have to open 25% in unbanking region of India, will it
could solve the problem of rural
banking as private companies would be reluctant.
Point of Bill
- The Banking Laws (Amendment) Bill, 2012, which has now been cleared by both houses
of Parliament, seeks to increase voting rights of investors in the private
sector banks to 26 percent from the existing 10 per cent. Shareholders' voting
rights in the public sector banks is capped at 10 per cent. This will make the
Indian banking sector attractive for the overseas investors and is expected to
lead to consolidation in the industry.
News - Draft
rules issued in 2011 had barred companies in the property and brokerage
industries from applying, and disagreement between the central bank and finance
ministry over exclusions had slowed the release of the final rules. Now today
all the corporate are allowed to enter and open the banks.
Investor Behaviour During Financial Crisis
Larger questions
1. Are Institutional Investors Part of the Problem or Part of the
Solution?
a.
They quit when they see
trouble in the functioning of the company
Are Asset backed
securities preferred during crisis?
.
If people are motivated to
follow this behaviour what will be the repercussions on the economic system as
a whole
Is the Bayesian Model
significant and practical in real life scenarios?
.
What are the models that
have come up in recent times and are favourites among the professionals?
Effect of Basel norms on
the situation of the economy
.
Do these prevent an
economy from falling into a financial crisis
a.
Do these make situation
more difficult
b.
How to decide correct time
to impose and implement the norms
c.
How much does general
perception of the financial crisis and its handling by the government affect
the effectiveness of implementation of financial policies
These days we see a plethora of new
laws that have been introduced into the banking sector. Do these laws and
policies actually serve as an enabler for growth? How should investors behave
during a financial crisis? To build a clearer perspective regarding some of
these topics Vittharth, The Finance Club of DOMS IIT, Roorkee organized Manthan
2013 on the 24th of February. The Event was graced by the presence
of some eminent speakers from the industry, the esteemed faculty of the
department and the students.
The event started with the
traditional lighting of the lamp and the welcome note given by the head of
department Dr. Santosh Rangnekar. This was followed by an introduction
regarding the theme of the event by Dr. A.K. Sharma. He stressed on the fact
that during these troubled economic times how the banking sector had to balance
the lending aspect at the precise rates to the common people as well as provide
financial assistance to the industries. He also stated that the three main
goals of this sector were priority lending, rural banking and Financial
inclusion.
The next speaker to take the dias was
Mr. Paresh Seth, CEO at Indus Advantage iBank. Mr. Seth stated right from the
outset that he promoted a free market economy. He felt that the idea of
introducing new players into the sector was not very prudent as it to incur
additional uninvited costs. Whatever changes were to be implemented could have
been done with the existing players in the sector at a fraction of the cost. He
also stated that even though new players would give cause to rise in employment
in the sector that it would be short lived as some players would end up
exiting. He further stated that rural banking would be rather difficult to
implement in India as there was very little return on investment. He added
however, that the opportunities for graduates was high in the IT and Research
and development sector. According to him there was a huge requirement for
business analysts if a bank was to develop itself from scratch. He also threw
light on some of the new banking laws which now state that the voting rights
have gone up to 26%. He said this would particularly be a boon for mergers and
acquisitions.
The next speaker was Mr. Jagannandham T. who right from the outset was as dynamic and enthusiastic as one could be. He is the current Head of Research at SMC Global Securities. He dove right into the importance of macro economy. He started with the term ‘Chimerica’ and explained how world dominance has shifted from the U.S. to China. He added that these days America was only known for its Military Power and how it had increased its Debt limit over the past few years. He also spoke briefly about the state of Euro and its future in the world economy. He went on to state that even though the Euro and the European Union are experiencing troubled times currently we cannot deny the importance of this currency in the world economy today. He explained how 28% of the FOREX Reserves in the Central Bank are Euro Denominations. He further went on to explain the role that some of the major players like China and Japan are playing or not playing in the world economy these days. He aptly concluded a very insightful interaction by saying “In good times bad MBA’s are created while in bad times good MBA’s are created”.
The stage was then graced by the presence of Mr. Vipul Jain, Vice President at Max New York Life Insurance. He started by explaining that the customer today is much more knowledgeable these days. He stated that as managers in the industry to be successful it is imperative that we understand the Ecosystem of the customer. He also stressed on the importance to start at the lowest level in order for us to better understand the subtle nuances of the industry. He spoke about the 24 Degree to 48 Degree theory stating that if you don’t sell in 48 degree heat you can’t make decisions in a 24 degree air conditioned office.
The Final speaker of the day was Mr. Jitendra Solanki, Founder at JS Financial Advisors. He spoke about the importance of personal finance and how the indifference towards personal finance on path of common people in our country has become a cause for concern. He further stated that during a financial crisis it is important to understand that the risk tolerance of a customer changes rapidly. It is important to understand why an individual behaves in this manner, where he is today and where he aspires to be tomorrow.
Finally a Panel Discussion was held in accordance to the theme – Investor Behavior during a Financial Crisis. The Panelists touched upon topics like the ongoing recession in India, Lack of penetration of Demat Accounts in India. All the panelists concurred to the fact that financial independence was the key to being asuccessful investor as it allows an investor greater freedom to take risks and hence get higher returns. An example quoted was the takeover of united spirits by Diageo and how intra-day trading on this deal helped many Indians make millions in a day.
The event was concluded by the Note of thanks given by Kaushik Dutta a first year MBA Student from the department. All in all it was an exceptional knowledge gaining experience for all the students. It definitely went a long way in enabling the students correlate the theoretical knowledge gained in the classroom to the real world experience.
