BANKING CONCLAVE’ 2007

Predicting future is a difficult task in these turbulent times. Therefore, intelligence does not lie in prediction but in preparation so that when the future arrives we are alert and ready to capitalize on it.

SCMHRD, organized the Banking Conclave 2007 at the Hotel Inter Continental The Grand, Mumbai on 3 February 2007, bringing together the who’s who of the Indian Banking industry for a day of presentations, airing of views, opinions, criticism and enlightenment on two of the most burning topics of the New Age Banking - Microfinance and Basel-II norms.

The Banking Conclave debuted in 2005 as an endeavour by SCMHRD to provide a platform to discuss the reforms, policies affecting the future of the banking industry as a part of the broader perspective on Vision 2009 – Indian Banking industry. Prof K. S. Subramanian, Director, SCMHRD, kicked off the day’s proceedings by welcoming Shri Pawan Bansal, Hon’ble Minister of State for Finance, Government of India and other guests for the day. He set the ball rolling by emphasizing on the time of this event, which coincides with MNC Banks growing in size, S&P upgrading India’s ratings and corporate India on the move. Pouring came the following thoughts – “Banking is the pillar that would support the growth.” “Microfinance should change the face of developing nations.”

The Chief Guest, Mr. Pawan Bansal, highlighted the importance of banking to sustain an economy. Mr. Bansal was particularly happy and encouraged students to take part in more such events. Mr. Bansal also talked about the Self Help Groups (SHGs) and the fact that financial expansion shall lead to social expansion. He shared facts like “42% of population does not have access to institutional credit” and that “a financial exclusion leads to social exclusion.” What also stood out was his point on not leaving the SHGs “alone in the hands of NGOs.” He went on to emphasize on the need to work for “inclusive growth” and public participation in Microfinance. Shri Bansal’s speech was succeeded by a presentation on the “Emerging trends of Microfinance – an India Perspective” by students of FMS, Delhi, who were adjudged winners of the BANQUEST paper presentation contest on Microfinance. This was followed by a panel discussion on Micro Financing. The key note speaker for this event was B. D. Narang, Ex – OBC Chairman and Director, NABARD. He identified that India has the largest pool of manpower which again can be encouraged to become entrepreneurs. This thought is further facilitated by high rate of growth of economy. He emphasized the need to ‘look towards the poor as a customer instead of a beneficiary.’

Ms. Sharma, Head of Microfinance & Sustainable Development (SD) Division of ABN AMRO suggested the need for a sustainable model to reduce the cost through effective technology. The panel agreed upon developing a robust model which could be replicated. It was expressed that Micro finance could bring about a paradigm shift to the socio – economic structure of the society, thereby improving upon the economic parity amongst women in the society.

The panel discussion was followed by a presentation on “Basel II norms and Implementation” by students of NITIE, Mumbai, winners of the BANQUEST paper presentation contest on BASEL II. The panel discussion on BASEL II was initiated by Krishnakumar Variar, Director- Risk Solutions & Consulting at CRISIL. He kicked off the discussion by questioning the need and significance of regulatory compulsions of Basell II norms. The panel believed that risk systems should most definitely be a part of best practices. They were of the opinion that BASEL II reforms help in implementing a system to reduce operational risks and manage credit risk volatility. Also that Basel II is a policy which may not be directly good for the economy but it is for the survival of the banks in its own.

Some of the points that were deliberated upon were: ‘The accord directly refers to the need for reduction of operational risks and facilitates the same with standard procedures.’ ‘Raising the capital adequacy ratio to 12% from 9% increases the safety net towards credit exposure.’

The panel arrived at a consensus that for the successful implementation of BASEL II norms, the need of the hour was to create a talent pool of risk specialists in the market and thereby reducing the demand supply mismatch in the risk management scenario in the Indian Banking industry. In addition to this, they suggested on building skills for risk management by institutionalizing courses like actuarial sciences and introducing other risk management courses in the curriculum of management, technology schools.

Panel Discuses BASEL II	Panel Discuses BASEL II
Dr. Anrun Maheshwari
Lighting of the Lamp	Discussions on Microfinance
Discussions on Microfinance
Student Interaction	Director SCMHRD, Prof. K. S. Subramanian