The global banking industry is currently in the grip of a perfect storm of disruption. Every component of the conventional banking model is under stress from the opportunities presented by the shift to a digital economy. Banking leaders everywhere are under intense pressure to conceptualize and implement a cohesive transformation strategy that will reinvent a classic business to thrive in a brand new normal.In order to ensure success, every transformation program will have to adopt a dual 'Renew & New' strategy. Banks need a transformation framework that renews current models, processes and systems, while simultaneously adding new capabilities and technologies relevant for digital competence. Based on our experience of working with banks of varying size and technological maturity, we believe there are five best practices crucial to a successful 'Renew & New' transformation.Best Practice #1 - Unify and optimize requirementsThere needs to be a concerted effort to unify, wherever possible, the diverse range of requirements coming from business, at the planning stage itself. In our experience, we have seen that it is possible to unify and optimize requirements focusing on commonality to distil a common pool of changes that can accommodate every requirement. For example, in multi-country Finacle transformations, we have observed that many market-specific business requirements can be fulfilled without deploying individual systems or processes for each geography. Here, we focus on working with the bank's technology and business teams to devise a unified approach to enabling all requirements while reducing the number of changes to be made.Best Practice #2 - Industrialize transformationIndustrialization refers to the automation of the transformation journey. Breaking down the transformation process into a sequence of steps makes it easier to identify processes that can be automated. Then it's on to drilling down into the details of automation - identifying common processes, assessing what needs to be done, understanding how to improve efficiency etc., with a focus on minimizing manual intervention wherever possible. A well-articulated automation strategy, clearly defined in terms of process workflows, ensures that the transformation process is streamlined and also easily replicated by users. Industrialization played a critical role in Finacle's transformation strategy for one of India's large private sector banks. As a result, in a matter of just over a decade, the bank was able to register a 35X growth in number of branches, 28X growth in number of customers, 52X growth in accounts and 24X growth in internet banking customers, among others.Best Practice #3 - Consolidate existing systemsOver the years, banks have built up a patchwork of applications, many of which are redundant or superfluous. Several traditional processes need to be completely re-engineered for the digital era. Transformation offers a huge opportunity for banks to rationalize and consolidate their systems landscape. Besides eliminating legacy satellite systems, the focus should be on centralizing operations across product lines to enhance agility and efficiency. Component and API-based banking solutions give banks the flexibility to redesign applications and processes to address changing market dynamics and business priorities.Best Practice #4 - Choose partners, not vendorsThe core focus of transformation should be on business outcomes rather than technology. The engagement model during transformation can no longer be based on traditional vendor-buyer dynamics. The emphasis has to be on building sustainable long-term partnerships that can deliver measurable value in terms of agility, efficiency, customer experience, market share etc. Productive partnerships will be those that go beyond the brief of designing and implementing solutions to actually cooperating on developing new ideas that can deliver unique competitive advantage.Best Practice #5 - Strengthen and streamline complianceCreating a robust regulation and compliance framework is a critical challenge in any banking transformation, more so in the context of a multi-country implementation. The focus should not only be on incorporating all essential regulatory requirements into the platform, but also on streamlining compliance across different enterprise layers. Wherever possible, regulatory and compliance processes need to be standardized across business lines and geographies, so that banks can connect the dots across the organization. Finacle's multi-country implementation in one of the largest banks in Africa is enabling its over 9 million customers to bank seamlessly across five countries.The overarching objective of any transformation strategy is to create an enterprise framework comprising ofinfrastructure, processes, products and channels,which enables banks to embrace new technologies and innovate continuously. The technology platform must give banks the agility to enter new markets, target new segments, launch innovative products and services. The journey to this preferred end-state is unique to every bank, based on their existing technology architecture and immediate business priorities. But regardless of size, profileor priority, every bank can leverage the aforementionedbest practices to streamline transformation even in the case of multi-country implementations.The author, Sheenam Ohrie, is head - delivery, support and testing at Infosys Finacle
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The Reserve Bank of India (RBI) said on Thursday it will allow lenders to count short-term bullion deposits under the gold monetisation scheme (GMS) as part of their cash reserve ratio or statutory liquidity ratios, increasing the appeal of the plan for the sector. The measure was part of the Reserve Bank of India's guidelines for the gold scheme, which is intended to lure Indian households to deposit gold at lenders in exchange for interest rate payments. Among the details, the RBI said it will allow banks to take a minimum deposit of 30 grams of gold from individuals, who will be allowed to place the bullion for time periods ranging from one-year to 15 years. The GMS will replace the existing Gold Deposit Scheme of 1999. However, the deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them.
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Reviews progress made with Public Sector Banks’ reform plan Indradhanush A high-level meeting, held on Wednesday (21 October) under the chairmanship of the Minister of State for Finance Jayant Sinha, deliberated on the issue of having robust compliance policies and the need to have requisite checks in place to detect any violations, along with strong alarm and signalling systems.The top level meeting, which was attended by the Secretary, Department of Financial Services Anjuli Chib Duggal, senior officials from the Ministry of Finance and Chairmen and Managing Directors of various PSBs among others, also discussed the issue of human intervention in compliance related issues was also discussed and it was deliberated as to how to make it completely system driven. Recent raids by agencies like CBI and Enforcement Directorate have brought to light the need for banks implement stricter KYC norms. Banks like Bank of Baroda, Oriental Bank of Commerce were caught napping when investigating agencies unearthed transactions worth crores that were being illegally remitted abroad. These recent investigations have again raised uncomfortable questions about the existence of middlemen and lax vigilance in banks. The meeting of Sinha with state-run bank bosses comes ahead of the quarterly results of banks (all hues, be it state-run or private banks) which are expected to trickle in over the course of the next fortnight. A big concern within the fraternity is the fresh slippage on account of dud-loans to discoms – estimates put it anywhere between Rs 50,000 to Rs 70,000 crore; it will have a serious impact on state-run banks, especially the weaker among the lot. The tete-e-tete with bankers this evening was also the first collective one after union finance minister Arun Jaitley announced a seven pronged plan-- Indradhanush--to revamp state-run banks in August. Indradhanush’s seven elements covered appointments, board of bureau, capitalisation, de-stressing, empowerment, framework of accountability and governance reforms. On the recapitalisation front, thirteen state-run banks were given Rs 20,058 for the current fiscal, plus an additional Rs 5,000 crore on on efficiency parameters. State Bank of India got the highest amount of Rs 5,511 crore followed by Bank of India (Rs 2,455 crore), IDBI Bank (Rs 2,229 crore), Punjab National Bank (Rs 1,732 crore) and Indian Overseas Bank (Rs 2,009 crore). While it is early days to pass a judgement on the effect of the above measures in the working of these banks, what’s been worrisome are irregularities that’s come to light in Bank of Baroda’s (BoB) foreign exchange operations. The Central Bureau of Investigation (CBI) has searched 50 locations after a sum of more than Rs 6,000 crore was remitted by the bank to Hong Kong toward “imports”. The money was transferred by 59 companies through fresh current accounts at BoB’s Ashok Vihar branch in New Delhi; two officials at the banks have been arrested.(BW Online Bureau)
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By Arshad Khan Yes Bank — India's fifth-largest private sector bank — has partnered with Blue Dart and Snapdeal to enhance the 'Cash on Delivery' (COD) model by making strategic interventions in the financial supply chains of these companies. This partnership is under Yes Transact — Yes Bank's award winning transaction banking product suite and reinforces the bank's philosophy of providing insightful knowledge banking solutions to the sunrise sectors of India's economy. The integration would enable Snapdeal to receive COD proceeds from Blue Dart in a faster, streamlined fashion and also help with faster payments to suppliers. For Yes Bank, it will help them enhance their financial supply chain management. "We are proud to partner with Blue Dart and Snapdeal who are leading the ongoing revolution in India's e-commerce space for this pioneering solution. The cash on delivery model is very important in the Indian e-commerce industry, and we are certain that our Yes Transact solution will bring in enhanced efficiencies offering significant value to the companies in managing their supply chain," said Asit Oberoi, group president & chief operating officer, Yes Bank. The COD model accounts for close to 60 per cent of all e-commerce transactions and the transaction value is expected to reach about Rs 54,000 crore size by 2016. "The dominant mode of payment for a large portion of online customers continues to be cash on delivery, this in effect adds time to the payment cycles for sellers. With this partnership we are confident that we can improve payments cycles and help our sellers become more successful," said Amit Choudhary, senior vice president, corporate finance, Snapdeal. Yes Bank reports that efficient COD model to enable e-commerce reach the consumers Tier-2 and Tier-3 cities in India. The bank also reported that it is also working on enabling electronic and digital payment solutions for consumers.Yes Bank will act as a collection banker to Blue Dart for its cash handling and also a technical integration through which data is processed electronically and payments are released to the market place basis the same.
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Raghu MohanShares of the Aluva-based Federal Bank fell 14.67 per cent to its 52-week low of Rs 55.80 on the Bombay Stock Exchange after dismal second quarter numbers. Net profit for the period fell 32.88 per cent year-on-year to Rs 161.28 crore (from Rs 240 crore in 2015-15). Asset quality also slipped. Gross non-performing assets (NPAs) was up by sharply by 80 basis points (bps) at 2.90 per cent with the net NPA ratio up 67 bps to 1.33 per cent. The net interest margin, a key indicator of profitability, was down by 24 bps to 3.11 per cent.
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By (Dr.) Suresh Surana Nowadays, it is observed that a lot of young talented kids are being hired in different fields like acting, singing, choreographing, etc., and they are paid a handsome amount for their skill and talent. The question arises is whether the income earned by these children are taxable and if yes, in whose hands, will it be taxable. Dr Suresh SuranaThe Indian tax law has special provisions related to clubbing of income earned by the minor child under Section 64(1A) of the Income Tax Act (‘the Act’). A child also includes a step child and an adopted child who has not attained the age of majority. i.e. 18 years of age. Till the minor has not reached the age of 18 years, his income will be assessed/ clubbed with the income of the father or mother of such child, whoever has a higher income. The first point that should be remembered by a taxpayer is that the provision regarding clubbing would be operative only so long as the child is a minor. If the child attains majority at any time during the financial year, clubbing provisions would not be applicable and he would be assessed independently from that particular year. Section 10(32) of the Act entitles the parent under which the minor’s income is being clubbed to avail exemption of Rs.1500 per child. There are certain exceptions under which income of minor will not be clubbed with his/ her parent such as- i. Income earned by the minor child suffering from a disability specified in Section 80U of Income Tax Act, orii. Income earned by minor from manual work or from any activity which includes his own skill, or specialized knowledge or experience.However, if such income is invested or utilized otherwise, then any income earned from such investment/ utilisation will be clubbed with the income of parent of such minor. Further, clubbing of income also depends upon whether marriage of their parent subsists or not. i.e. If the marriage of the parents subsists means if the parents live together, normal provision of clubbing will prevail. However, if the marriage of their parent does not subsists that means they have agreed to live apart in such case, income will be clubbed in the hands of the parent who maintains the child. Further, where none of the parent is alive, no clubbing provisions shall apply and the minor shall file the return through his/her legal guardian.
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HDFC Bank, India's second-biggest private sector lender by assets, reported quarterly net profit grew by a fifth and asset quality was stable as loans grew faster than expected. Indian banks are battling slower credit growth and a surge in bad loans as companies and consumers have been squeezed by an economic downturn. While corporate loans have yet to revive, lending to individuals is growing at a faster pace. HDFC Bank, with its stronger retail business and relatively smaller exposure to project finance has far lower bad loans than its bigger rivals and is seen as a better bet for investors. The Mumbai-based lender said net profit rose to Rs 2,869 crore ($440 million) for its fiscal second quarter to September 30, from Rs 2,381 crore a year earlier. Analysts on average had expected a net profit of Rs 2,881 crore, according to data compiled by Thomson Reuters. Gross non-performing loans as a percentage of total loans fell to 0.91 per cent from 0.95 per cent in the June quarter. Cuts in minimum lending rates to pass on policy rate reductions by the central bank weighed on net interest margin that fell to 4.2 per cent in the September quarter from 4.3 per cent in the previous three months. HDFC Bank will likely recoup some of the lost margins in the coming quarters, said Vaibhav Agrawal, a sector analyst at Mumbai's Angel Broking. Agrawal, who considers the lender among his preferred stock picks, described its asset quality as "rock solid". Net interest income for the quarter grew 21.2 per cent to Rs 6,681 crore as loans grew about 28 per cent - much faster than the industry. Non-interest revenue including fees and commissions grew a faster 24.7 per cent. Shares in HDFC Bank, India's most-valuable lender with a market capitalisation of more than $42 billion, were down 0.2 per cent by 0743 GMT. The stock has gained more than 6 per cent since the start of September and is up nearly 15 per cent this year during which it has outperformed the NSE bank index and the broader Nifty.(Reuters)
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C H UnnikrishnanVenture capital (VC) and private equity funding in global digital healthcare or healthcare related information technology sector was up 66 per cent during the July-September quarter in 2015 to $1.6 billion compared to $964 million in the same period a year ago. The funding in this sector was also up 32 per cent this quarter over the preceding quarter’s $1.2 billion. There were a total of 148 investment deals during the third quarter as against 139 deals in the second quarter, according to data compiled by global communications and research firm Mercom Capital Group. The debt and equity market financing in the sector during these three months ending September 31, came to $495 million in nine deals including two initial public offers (IPOs). The total corporate funding raised in the sector including venture capital, debt and equity by publicly traded companies were about $2.1 billion, the Mercom report said. VC funding has reached nearly $3.57 billion for 2015 year-to-date (YTD), comparable to $3.53 billion raised during the same period in 2014, showed the reports that cover deals of all sizes across the globe. “VC funding into healthcare IT companies bounced back this quarter after a slow start this year,” says Raj Prabhu, CEO and Co-Founder of Mercom Capital Group adding that “Rating, booking and comparison shopping companies had their best fundraising quarter since we began tracking the category.” The segment wise data showed that healthcare practice-centric companies raised $357 million in 42 deals in this quarter as compared to $473 million in 41 deals in the previous quarter. While, consumer-centric companies raised $1.2 billion in 106 deals this quarter compared to $727 million in 98 deals in Q2 2015. The top VC funded category this quarter was rating, booking and comparison shopping which brought in $728 million in 15 deals. Mobile Health companies were second with $319 million in 59 deals, with mHealth apps receiving $206 million and wearables as well as sensors receiving $88 million. While personal health and wellness companies accounted for $114 million in 17 deals, followed by practice management companies with $72 million in five deals, telehealth and data analytics companies raised $65 million in 14 deals and $61 million in 14 deals respectively. There were 69 early-stage deals at or below $2 million, including 22 accelerator or Incubator deals. The top VC deals this quarter included the $394 million raised by Guahao, an online health information portal for patients in China to book appointments with physicians; the $130 million raised by ZocDoc, an online doctor appointment booking platform; the $90 million raised by Practo, developer of a physician search engine to book appointments and rate providers, and of practice management software; the $55.4 million raised by Kareo, a provider of cloud-based medical office software for small medical practices; the $55 million raised by Grand Rounds (previously Consulting MD), a company that matches patients with specialists and connects them for second opinions on a medical diagnosis, and the $50 million raised by Remedy Partners, a developer of bundled payment programmes for government payers, health insurers and self-funded employers, the Mercom data showed.
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