Country's second-largest private sector lender, HDFC Bank today launched a 10-second paperless instant loan plan for its existing customers. "HDFC Bank will now disburse personal loans to its customers in just 10 seconds. With this product, existing customers will have a pre-approved loan amount available to them 24x7," the bank said in a statement. The entire process of availing the loan is completely paperless, and users can simply log into their bank account via net-banking or mobile banking and avail of this loan at a click, it added. The loan is completely hassle-free and transparent. Users will no longer have to wait for disbursement of funds, particularly in medical or other types of emergencies. "It is like having a real cheque in one's virtual wallet and is part of our mission of enabling customer delight by creating simple and speedy banking solutions that are available at a click," the statement said. Commenting on the development, HDFC Bank Unsecured Loans, Home & Mortgage Loans Business Head Arvind Kapil said: "Most customers expect banks to connect the dots between online and offline options to deliver convenient, consistent service." The 10-second loan is another offering under HDFC Bank's digital banking platform GoDigital. Under the platform, the bank had launched PayZapp application to cater to e-commerce space. In financial year 2014-15, 63 per cent of all transactions at HDFC Bank were conducted through digital channels. (PTI)
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Rather than waiting, exiting from IDFC Premier Equity Fund could be the right thing, says Sunil Dhawan. Read on why? Mutual funds investors, especially those who are holding units of IDFC Premier Equity Fund, have a common question in mind. Should they continue or exit? The news is that Kenneth Andrade, head of investments at IDFC Asset Management Company (AMC) and the fund manager of IDFC Premier Equity Fund has quit. Managing mid-caps space is not as simple as managing large cap funds especially when it comes to managing huge corpus and not finding the right stocks to invest in. IDFC Premier Equity Fund, a mid and small cap fund, has a corpus of about Rs 7,200 and is probably the only open-ended fund that opens its window for fresh subscription intermittently. Investing in IDFC Premier Equity Fund however is always open through the SIP mode and for the last 7-8 years, the fund has been a regular in most investor’s equity portfolio. What changes: Kenneth had been a winner stock-picker. His stock-picks may or may not perform while in his absence the decisions around these stocks will matter hugely. Further, the potential to identify future winner may not necessarily be seen in the new manager. On the contrary, the fund may do as well. The uncertainty prevails. Performance: When it come to performance, its been a consistent performer since its launch. The fund has been able to beat its benchmark regularly however of late the performance against its peers has been the matter of concern. The others are doing much better. See ‘Performance’ below. What to do: Had it been any other run-of-the-mill fund, the decision could have been different. With IDFC Premier Equity Fund, whose stellar performance came largely on the back of solid investment acumen of Kenneth Andrade, the answer could be fairly simple. Existing investors may exit and redeploy the proceeds elsewhere. New investors contemplating to invest in IDFC Premier Equity Fund may choose to consider other funds. In fact, all funds where he directly managed may be exited. As a practice, AMC needs to be more proactive in reaching out to the investors in such developments when the fund manager leaves. This becomes more important when the fund is backed by ‘fund manager’ and not by the investment team as perceived by investors at large. In these times of social media, when there’s no such update to investors about a major change in AMC’s website, Facebook, Twitter page, much needs to be thought about the role of social media. Its time, they stop making use of these platforms only for showcasing laurels and awards they win.
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State Bank of India, the nation's top lender by assets, reported a better-than-expected 23 per cent increase in quarterly profit and a lower bad loan ratio, sending its shares more than 5 per cent higher. SBI, which accounts for about a quarter of Indian loans and deposits, said net profit rose to Rs 3,742 crore ($589.11 million) for its fiscal fourth quarter to March 31 from Rs 3,041 crore a year earlier. Analysts on average had expected a net profit of Rs 3,723 crore, according Thomson Reuters data. Gross bad loans ratio stood at 4.25 per cent in the March quarter, compared with 4.9 per cent in the December quarter. (Reuters)
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With China' impressive economic growth catapulting their banks into the top global league, India's top private sector lender ICICI Bank's chief Chanda Kochhar has said Indian banks also must aspire to scale up their activities significantly. ICICI Bank, which has opened its first branch in China, would also keep reviewing the India-linked business opportunities in the international markets and expand its presence as new avenues emerge, Kochhar said. "For economies like India and China, where banks are the major financiers of growth, the performance of the banking sector is closely linked to the economy. "China has an exceptional record of consistent high growth of over 10 per cent for three decades which has helped to catapult Chinese banks to a significant size at a global level," said Kochhar. "India is expected to be the fastest growing economy in the medium term. As India grows, Indian banks must also aspire to scale up their activities significantly," added more. A number of Chinese banks have made it to the world's top banking league, but Indian banks are still not there. Kochhar, who was here for the opening of ICICI Bank's first branch in China on Saturday, was replying to a question on whether some Indian banks, including ICICI Bank, would be able to join the top global league some time soon. With a consolidated asset base of $132 billion, ICICI Bank is India's largest private sector bank and it is present across 17 countries. It already had a representative office in China, which it had opened over 10 years ago in 2003. The bank's international book accounts for about one-fourth of its assets. To another question on whether ICICI Bank would look at entering other countries which have potential for greater trade flows with India, Kochhar said, "The Bank continues to review India-linked business opportunities and expand our presence as new avenues emerge." "The Bank continues to calibrate its global presence as per its India-linked strategy. We have had a presence in China since over a decade through our representative office, which can now been be scaled up further through the branch to take advantage of the growing linkages between the two countries," she said. ICICI Bank's global footprint consists of subsidiaries in the UK and Canada, branches in the US, China, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre, and representative offices in UAE, Bangladesh, Malaysia and Indonesia. The bank's UK subsidiary has established branches in Belgium and Germany. (PTI)
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HDFC Bank Ltd, India's second-biggest private sector lender by assets, said on Thursday it was optimistic of growing loans on the back of faster economic expansion after reporting net profit grew more than a fifth in the March quarter. The lender said net profit rose to Rs 2807 crore ($444 million) in its fiscal fourth quarter from Rs 2327 crore a year ago. Analysts on average had expected a profit of 27.8 billion rupees, according to data compiled by Thomson Reuters. HDFC Bank expects to grow loans faster than the banking sector during the financial year to March 2016, Paresh Sukthankar, deputy managing director at the lender, told reporters. He expected the banking system loan growth this fiscal year to be between 13 and 14 percent if the economy grows one percentage point faster. Bank loans grew about 12 percent last fiscal year. Indian lenders have been hurt by two straight years of slower economic expansion that led to projects being stalled and corporate balance sheets getting stretched. Demand for loans from companies has yet to pick up, although consumer loans are growing fast. "Have we seen a huge pick up on the capex side? The answer is 'no'," Sukthankar said, but added that was not a surprise since loan demand revival typically comes with a lag to economic recovery. HDFC Bank's net interest income grew 21.4 percent in the March quarter as advances rose 20.6 percent. Net interest margin was stable at 4.4 percent. Bad loans as a percentage of total loans was at 0.9 percent compared with 1 percent in the third quarter. Shares in HDFC Bank, which is India's most-valuable lender with more than $40 billion in market capitalisation, have outperformed bigger rivals such as State Bank of India and ICICI Bank so far this year. HDFC Bank stock has gained 6.5 percent in 2015, while the bank sector index is down 2.6 percent.
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Eight months ago Kunal Bahl of Snapdea, met Kunal Shah of Freecharge at a coffee shop to discuss what would be the next step to stay ahead in the e-commerce industry. Yesterday, both of them joked with the media that they did not need a banker to seal the deal. The deal was signed with the aim of beating the competition and staying ahead in the e-tail race. "We chalked out the foundation and our small M&A team took care of the rest," says Kunal Bahl, founder of Snapdeal, along with Kunal Shah of Freecharge. There will be some accounting and shareholding patterns to sort out because Freecharge is part of Accelyst Solutions Private Limited, which will now be the subsidiary of Jasper Infotech, the company that owns Snapdeal. However, the synergies of the deal are evident and there may be some push from the Softbank team, the Japanese telecommunications and internet giant, run by business tycoon Masayoshi Son, in driving the consolidation. Snapdeal is backed by Softbank which put in $627 million in 2014 itself while it also has a 37 per cent stake in China’s e-commerce giant Alibaba. Ali Baba has invested in PayTM, which competes with Freecharge. Clearly the message is to take on Flipkart and Amazon in India. Now all eyes will certainly be on PayTM, Freecharge's competition, and their their fund raising plans. The larger question is will they be up for consolidation with a suitor now?. Softbank has invested $627 million in Snapdeal last year. They also have a 32 per cent stake in Ali Baba, the Chinese online market place, which has invested $575 million in One97Communications which is the parent company that owns PayTM. Why was Freecharge important? Its revenues could be around $8 million (the company does not disclose its revenue and does not confirm the number) and since it did not have a e-commerce play like PayTM, it makes absolute sense for Snapdeal to acquire it. But with Softbank in the helm of things, in Snapdeal (which now owns Freecharge) and in PayTM (through Ali Baba) we at Businessworld believe that the payments industry is clearly heading for big consolidation phase. Freecharge has 20 million registered customers and 3 million active users who regularly pay their mobile and DTH TV bills on the platform. In return Freecharge offers users coupons which can be redeemed at their favourite restaurants and cinema halls. This also included a percentage of the payments that could be availed as cash back offers. Through the Freecharge platform Snapdeal has access to a younger customer, who is between 18 and 25 years of age, and they can cross sell deals on the market place through Freecharge. Rumours are ripe that it was a 80 per cent stock deal and that 20 per cent was paid in cash. Kunal Bahl says that majority of it was a stock deal. Newspapers value the deal size to be Rs 2,800 crore or $420 million. Sources also add that Kunal Shah is richer by Rs 80 crore, in cash, after this current deal. Sources also say that his business is now valued at 50 times its revenue in dollar terms.
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The Reserve Bank of India (RBI) is expected to keep its benchmark interest rate on hold at 7.50 percent at a policy review on Tuesday, while signalling that it could act swiftly to lower rates further if inflation stays within its target. This year, RBI has already cut the repo rate twice, by 25 basis points each time, in a bid to bolster economic growth. Neither reduction took place during a regular policy review. "Having cut rates in mid-March and mid-January, a pause may be warranted to reassess the outlook on inflation," said Gaurav Kapur, senior economist at Royal Bank of Scotland in Mumbai. The RBI rates on the back of easing inflation. The consumer price index rose 5.37 percent in February, marking a fifth consecutive month of staying within the RBI's target of 2 to 6 percent. Earlier-than-expected rainfall in parts of the country have pushed up prices of winter crops, such as wheat and pulses, which could make the RBI cautious over the outlook for inflation. The RBI's wariness will also be heightened by any rebound in crude oil prices due to tensions in the Middle East. Only nine of the 40 economists surveyed by Reuters expect the RBI to cut rates on Tuesday, but most expect at least a 25 bps cut by the end of June. Those analysts reckoning on a rate cut later this month, instead of at a policy review in June, are expecting inflation to remain within target when the next data is released on April 13. Beyond the outlook for inflation, the RBI has also made rate cuts contingent on Prime Minister Narendra Modi's government containing its fiscal deficit and passing economic reforms. Lower Indian interest rates would help stop the rupee from strengthening further against other currencies whose central banks are cutting interest rates. A surge in foreign investment flows into India has pushed up the rupee, raising worries about sudden, destabilising outflows should the Federal Reserve start raising U.S. interest rates later this year, as is widely expected. Analysts expect any dovish statement from the RBI to be accompanied by more pressure on commercial banks to lower their lending rates. Only a few reduced rates after the previous central bank cuts, raising concerns about the transmission of monetary policy actions to the broader economy. Although markets have speculated that the RBI could cut the cash reserve ratio (CRR) - the portion of deposits that lenders must keep with the central bank - to boost banks lending capacity, few analysts believe the RBI would resort to such a blunt tool. (Reuters)
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With India and some other nations threatening criminal proceedings over suspected black money in Swiss banks, the European nation has stepped up its supervisory and enforcement efforts to keep away the illicit funds from its banking system. This comes at a time when a number of Swiss institutions have seen "asset outflows" and the tax status of many of their clients have been found to be "inappropriate", as per the Swiss Financial Market Supervisory Authority (FINMA), which also has the mandate to combat money laundering activities. Switzerland has been making efforts to strengthen its bilateral cooperation with India and some other countries on tax matters, as many Swiss banks are finding themselves in regulatory crosshairs in multiple jurisdictions. Acknowledging that international pressure on cross-border wealth management remained high in 2014, FINMA said in its latest annual report that the same would continue to preoccupy the country's financial sector in the years to come. "Germany, France, Belgium and Argentina have followed the US in launching high-profile criminal investigations, while Israel and India are threatening to do so," the supervisory authority said, while adding that it is keeping a close watch on such proceedings. FINMA's observation comes at a time when Indian authorities are making efforts to trace black money allegedly stashed by its citizens in Swiss banks. Recently, there was also an international uproar over reports suggesting that many entities parked their illicit assets at HSBC bank in Geneva. Elaborating on cross-border taxation issues, FINMA said it is deploying both supervision and, where necessary, "enforcement to ensure that banks adequately assess, manage and limit their legal and reputational risks in this area". The regulator said that a number of institutions recorded asset outflows as they parted with clients whose tax status was inappropriate or who had filed voluntary declarations in their countries of origin. "This trend will intensify in the run-up to the planned automatic exchange of information scheduled to begin in 2017/2018," it noted. Sources recently said that Swiss banks are asking their Indian clients to provide fresh undertakings to ensure that untaxed money is not stashed in their accounts. Besides, they have also sought auditor certificates from high net worth individuals and corporate clients to vouch for the "clean status" of their money. Last month, a Swiss Finance Ministry spokesperson had said that talks with India on automatic exchange of tax information would begin at the "earliest" once the domestic procedures are in place. According to FINMA, one of its major concerns is the declining trust in the finance industry. "This trust is the key to financial stability and therefore to a flourishing economy. Misconduct at many banks around the globe has eroded that trust. "We have seen many examples of unacceptable business conduct: manipulation of stock prices and foreign exchange markets, and aggressive conduct in cross-border wealth management, all of which absorbed much of our time in 2014," the report said. (PTI)
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Most investors make their investment decisions purely on past performance, that is, returns. The trouble with such an approach is that it often fails to suggest how the fund will perform going forward. Analysts and fund trackers must consider factors beyond just performance and focus on more critical parameters. Morningstar calls these parameters the five key pillars — Parent, People, Process, Performance and Price.
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Today size isn’t everything. It is true that a large organisation fails to innovate if it tries to do everything on its own. This statement may not be true in the smart phone manufacturing world, but in the retail industry it is the hard truth. Corporations, with serious revenues, like the $473-billion Walmart, the $130-billion Tesco PLC and the $73-billion Target have all suffered a drop in profits because of unpredictable shopping habits of the new millenials, who are people born after the year 1990. These folks would rather look at a smartphone, for a price comparison and to quickly place the order, before walking in to the store. So where do the large companies begin to change or rather when do they change? They begin by working with startups, small technology companies that have built platforms to engage and understand consumers, ideas which large corporations are desperately after to redeem themselves of falling profits. Walmart’s IT company, Walmart Labs, has acquired 13 start-ups, since 2011, globally. Tesco has sponsored a startup accelerator called “Rainmaking Loft”, in London, and is working with a few startups on a pilot basis. The game is bigger than we think because even large system integrators, like Infosys, have announced the need to work with startups to give them the edge in business deals.“We are already taking start-ups to work on IT transformation projects, mobile and digital, for large corporate retailers,” says Krishnakumar Natarajan, CEO of Mindtree. He adds that large corporations cannot ignore the digital consumer if they have to stay relevant. What about ‘Target’? The company has, unlike other companies, has a India first strategy when it comes to ideas. While they continue to focus on analytics, like Walmart and Tesco in India, they believe that mobile is the biggest driver of shopping, which together with other technology trends like big data and cloud will decide the future of brick and mortar retailing. These large retailers get less than 3 per cent of their revenues from online sales today. So while the likes of Amazon become powerful, across the globe, Target has to look at an omni channel strategy for revenues. In less than a year it has worked with ten startups and has signed vendor agreements with a couple of them. It has plans to sign up two more this year. Trigger Happy IdeasIt was early 2014 when Konotor, MuHive, InstaClique, Turnaround Innovision and UnBxd were all picked to work with Target. Of the 350 applications these five startups were picked to pilot their ideas with over 100 stores in the USA. Each of them was unique to the pain point that Target was facing (see chart). Konotor, founded in 2012, started building messaging apps before realising that their unique selling point was in listening to the noise, also known as usage patterns, that the users were creating on applications. “We realised that mobile apps need a different form of engagement and there was so much data generated by conversations,” says Srikrishnan Ganesan, co-founder at Konotor. The platform can be used to segment people on an active and not active basis. This is where the analytics kicks in for retailers; they can use the “active” user data to push relevant messages to individual shoppers or floor managers that visit the app. Konotor quickly developed an internal messaging application that allowed store managers to communicate with headquarters faster. “It is a mobile communications bridge, where quick queries on product, including pictures of stock outs, could be uploaded and sent to management teams,” says Ganesan. This software is offered as a service and is integrated to the mobile devices of the organisation. Target has now offered a vendor contract to the company because of real time resolution of problems in stores. The product puts the power back in the hands of store managers and allows them to serve their guest better and increase return to store, which is an indirect victory for Target’s corporate office in increasing shareholder wealth. Now Konotor has gone from being a startup to winning big names like GoIbibo, Shopera and BigBasket as clients in India. The Konotor platform boasts of 10 million users across 38 apps, and has used $1,25,000, which they won through a Qualcomm prize. Another vendor from the 2014 batch to have a contract is MuHive, a Bangalore-based social analytics platform. Today corporations have integrated their apps and websites to social channels, like Twitter and Facebook, and there are consumers commenting on the service and the product offered. MuHive collects these conversations and puts down questions to the retailers. The retailer will then have to work with the startup to find answers based on a sentiment analysis, of the text on the social channel, or by studying the consumer’s views of a product. “A retailer launches an electronic device or apparel campaign, he must know what kind of product his demographics like and then stock only that product in the store,” says Sagar Vibhute, co-founder of MuHive. This platform fits well with Target’s “Express” store format, small 20,000 square feet stores, which will be used as delivery centres for orders placed on the e-commerce site. If a customer does not like a particular fit of jeans and she puts it up on the social feed, Target can then figure out which store in the locality has that fit and can deliver to the lady before she drives to the store. “We can use the social data and merge it with loyalty data to make more meaningful insights,” says Vibhute. This platform connects social feeds with the customer relationship management software, of the retailer, and can make legacy tools more effective. Both Konotor and MuHive are in advanced talks with investors to raise their first large round of funding. Similary Bangalore-based ‘Unbxd’, which raised $2 million from IDG Ventures and Inventus in 2014, worked with Target’s e-commerce platform to make the search engine intelligent. “Our technology picks up user behaviour, on the site, and makes suggestions,” says Prashant Kumar, co-founder of Unbxd. The company has managed to get 250 global customers. “Working with Target gave us the requisite experience to find retailers across the world,” says Kumar. Today the company studies 20 million user events a day and has customers like Yepme, Madura Garments and PepperFry. Data analytics, intelligent search and smartphone solutions were the theme, for Target, last year and the company is investing, it does not disclose the numbers, in integrating stores with intelligent technology. “It is a time of unprecedented change …. driven by smart phones,” says Navneet Kapoor, MD of Target India. He says that the future of retail is still not scripted and he adds “Relevant merchansiding and inventory management is the future of retail. We need to connect with our guests beyond sales data and technology allows us to connect on a real time basis.” Target is absolutely right. The consumer is not coming to the store because he wants products available on phone screens first. This makes managing inventory, for such a consumer, a difficult proposition. Old style in store advertising along free coupon campaigns is no longer interesting, unless it is personalised, for the millennial population. “These Indian startups are helping us with ideas ranging from content to customer engagement to intelligent search,” says Kapoor of Target. Also the shareholders of Target Corporation are keen that the company do this immediately. Its stock price on the NYSE has, over the last year, gone up from $57 to $75 per share on a year to date basis. “It is a value proposition, it is an era of personalised solutions, technology provides insights and retailers need to know their guests,” says Devangshu Dutta, CEO of Third Eyesight, a consulting firm. The writing was on the wall when Target’s Canadian operations, 133 stores, shut shop in January 2015. Although the business was generating $2 billion in annual revenues, it was still running in to huge losses worth $500 million and more. The company realised that deep discounting can win customers for a short while and not in the long run. Hence it pulled out, at the right time, to retrospect on the future and focus all its business in the USA. Apart from MuHive and Konotor it is now working with a new bunch of startups in 2015 for new ideas. Warehouse Comes To The Living Room“Internet of things is real and every company must open up their IT infrastructures for start-ups to build apps on,” says Karsten Ottenberg, CEO of the $15 billion Bosch Siemens Home Appliance. He adds that the mobile word is part of a business that no company can miss. “They should be open to new ideas,” he says. This year Target selected four companies from a list of 3,000 applications that it received on December 2014. One of the first problems Target wanted to solve was the guest’s inability to find the right apparel in the store and on the website. It brought in WazzatLabs to build a visual search engine on a pilot basis to power the ecommerce store. The five founders of WazzatLabs are machine learning experts who say images speak a “million words” and that the creating visual recognition algorithms for ecommerce or mobile sites could easily win over younger customers. “The algorithm recognises image uploads and matches, available apparel, inventory to fit the person’s choice,” says Mautik Kulkarnai, co-founder of WazzatLabs, the three-year-old startups from Hyderabad. WazzatLabs is trying to win over customers by solving a pain point, at the very onset of entering the app or the website. The software can be plugged in to a mobile app and a web platform. Image technologies are becoming powerful in a mobile and soon 50 per cent of the shopping revenues will be driven by customer engagement on smart phones. Moving a step ahead in to the future of image recognition is Whodat, a two year old startup from Bangalore, which essentially is building artificial intelligence or gesture recognition technology in to mobile apps which can use the camera. Take for example, a customer wants to buy furniture for her house. The lady goes shopping on an ecommerce site and cannot make up her mind. All she has to do is take a print out of a paper marker provided by the catalogue, and then point the camera – of the phone - towards the living room along with the paper marker. Voila! The furniture of your choice and colour show up as a virtual image in the frame. “Our visualisation technology can change the way a store is designed, it brings the store to the living room,” says Sriram Ganesh co-founder of Whodat. Target is on warpath to work with such path breaking technology. It wants to do away with dumb content on its ecommerce site and wants images to become much more interactive. Today a creative that an ad-agency builds does not fit in with every device because of the proliferation of different screen sizes and operating systems. This can indirectly impact customer interaction if a person is accessing the website through a phone. Solving this problem is Visarity, a self funded startup that has put in $100,000 to begin its venture. “Our real time rendering engine compresses high definition images and makes them interactive on the mobile,” says Harsha Padmanaba, co-founder of Visarity. He adds that the company has opened the 3D platform for developers to create and test their creatives. Harsha and his partner Bastian Zuhlke began building chips for automobile companies before jumping full time in to interactive technology. Today their technology is used in the websites of global automotive giant Mercedes and a global watch brand. “Using our tool has helped clients increase their clicks per impression, which translates to customer involvement in buying the product,” says Harsha. Indian retailers are yet to adapt to or even adopt such technologies. They have taken baby steps and have just launched mobile apps to keep the guest interested. But soon apps themselves will be commoditised if there isn’t a quest undertaken to personalise service. Target is also working with Synapse Inc, a one year old start up, whose technology recognises customers when they walk in to the store and pushes relevant messages to their smart phones. “Our platform brings context in to the picture, after which content takes over,” says Ranjan Jagganathan, co-founder of Synapse Inc a one year old startup. He adds that his company’s technology allowed retailers to know where the customer is located in the store. “Imagine sending messages to the lock screen and getting users to make additional purchases because of the relevant content,” says Jagganathan. “The whole idea of customer engagement is going beyond a loyalty card. The customer is happy if he is engaged at the point of need, which is why everyone is investing in start-up technology,” says Ajay Kelkar, Hansa Cequity, a data science firm in Mumbai. May be Target has read the India story right. But for it to keep its revenues increasing consistently, it needs to figure out whether the consumers are ready for this path breaking technology to make an impact on their lives. Only time will tell how successful they will be but it has been a great attempt nevertheless.
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