Indian Banking – The engine for sustaining India's growth agenda 5 th ICC Banking Summit Kolkata

Indian Banking – The engine for

sustaining India’s growth

agenda

5th ICC Banking Summit Kolkata

18 May 2013

© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Foreword

Over the past couple of years, the Indian banking sector has displayed a high level of resilience in the face of high domestic inflation, rupee depreciation and fiscal uncertainty in the US and Europe. In order to stimulate the economy and support growth of the banking sector, the Reserve Bank of India (RBI) adopted several policy measures.


Rajiv Mundhra PresidentICC

Asset quality, capital adequacy, financial inclusion and talent management are some of the key issues facing the Indian banking industry, which despite serving the second largest populated country in the world with a total of 87 banks (including 26 public sector banks, 20 private banks and 41 foreign banks), as per the RBI, reaches out to only about half of the country’s households, scripting a nominal global footprint. The rising consumerism from the emerging ‘middle’ India and the higher purchasing power in rural India on account of rising employment provides opportunities for banks to look beyond the traditional customer segments. However, these segments would require flexible operating models which would ensure responsiveness at the last mile and at the same time be viable for the banks. On the other hand, global aspirations of Indian corporates calls for funding of cross-country acquisitions, greater sophistication in services and scaling up of resources from the Indian banks. RBI’s final guidelines for licensing of new private sector banks towards beefing up competition and garnering fresh capital for financial inclusion would roll in a timely debate on the need for consolidation vis-a- vis numerical expansion in the industry. Capital adequacy will start becoming a big issue for the commercial banks in India, as they start gearing for growth and becoming compliant to Basel III guidelines.

To meet these requirements and challenges, industry players are gradually harnessing technology with cloud computing and analytics based on big data becoming a key differentiator. The budget referendum of allowing banks as insurance brokers is also a welcome move for the industry, which will gradually forge out a financial supermarket for the customers. With tele-density (based on total number of mobile connections) standing at 74.21, in 2012, according to Telecom Regulatory Authority of India (TRAI), India can consider the Kenyan model of ushering in financial inclusion through mobile banking services, including money-transfer systems and savings-and-loans services, through a simple SMS network. Leadership and the ‘right’ talent would be very critical for banks over the next 4-5 years as they work towards achieving their growth agenda and ward off competition for talent from the new local and foreign banks. The future operating model for banks would force banks to choose their areas of differentiation and expertise rather than aspiring to be a single service provider. This paper discusses the opportunities and challenges that lie ahead of the Indian banking industry. It also touches on some possible avenues for augmenting banking penetration in the strategically placed Eastern and Northeastern states of India.

Ambarish Dasgupta Head - Management Consulting KPMG in India


Acknowledgements

Ravi Trivedy

Kunal Pande

Neha Punater

Kuntal Sur

Jacob Peter

Aniruddha Marathe

Gaurav Batra

Rohan Padhi

V. Ramakrishnan

Natasha Wig

Ankur Jain

Priya Aggarwal

Bhargava Pingali

Divya Kalari


Table of Contents

Indian Banking – Emerging Opportunities

Infrastructure financing – building the foundation

Big Data as a source of real time business insights

Funding the aspirations of emerging modern India

The Aam Aadmi – profitably serving the unbanked and underbanked

Public sector banks – Challenged for growth capital

Micro, Small & Medium Enterprise – The next growth engine for banking

Innovative and cost effective operating models

Addressing the leadership vacuum in the PSBs

01

15

29

05

21

35

11

25

39


Indian Banking – Emerging Opportunities

As per KPMG in India’s analysis, capital requirements of public sector banks in the future will be based on three assumptions:

• GDP growth rate of 6-7 percent that will require credit growth of 20 percent

• Basel III norms applicable to higher risk assets that banks will have to develop in the future (Micro small and medium enterprises (MSME), retail)

• Government ownership in the range of 50-60 percent.

Assuming an annual credit growth rate from FY12-FY21 at 20 percent and the annual risk weighted asset growth rate at 22 percent, we expect the Tier-I capital requirement for public sector banks for the same period to be in the range of INR 9,60,000 crore1. Given

our current fiscal deficit, government may not be able to infuse additional capital in public sector banks. Also, the government’s intent to not dilute their stake leaves them with few options:

• The Government could consider creating a holding company (Holdco) and transfer its stake in the PSBs to this company. The Holdco can raise long term debt from domestic and international markets to infuse equity in the PSBs and act as an investment company for the Government of India.

• The Government could consider diluting its stake in PSBs through issuance of Differential Voting Rights (DVR) such that the economic stake dilution is also kept to the minimum. The Government could

avoid any dilution in its voting rights by first infusing money into the banks through issuance of normal shares to itself, which would raise its stake during the interim period, and follow this up with DVR issuance to the extent that its effective (voting rights) holding remains unchanged. The money can be infused either through preferential allotment of equity shares or through allotment of warrants.

• The Government may consider in the future on having a Golden share in each of the PSBs under which while the Government’s economic and voting stake may fall below 51 percent, it will always have the right to control the respective PSBs due to the possession of this Golden share.

1 KPMG in India Analysis; Based on a paper developed for a committee on ‘Funding of Capital Requirements of PSU banks by Government of India’

Raising capital for public sector banks (PSBs) — Yes, it could be a problem in the future!

1 | Indian Banking - The engine for sustaining India’s growth agenda


M&A in PSBs will be a reality only when the Reserve Bank of India (RBI) intervenes

Expect competition from foreign banks as they acquire ‘near national treatment’

Can two healthy public sector banks voluntarily merge to create a large bank? Considering the past record, no!

Most of the mergers in the past have been either through the acquisition of a small or regional bank by a large private bank (such as the acquisition of Centurion Bank of Punjab by HDFC Bank2 or the Bank of Madura by ICICI Bank3), or through the RBI managed process of a forced amalgamation of a potentially failing bank into a strong bank (such as the post-moratorium amalgamation of GTB Bank with Oriental Bank of Commerce4 or the acquisition of Bank of Rajasthan by ICICI Bank5). The RBI has encouraged voluntary consolidation in the past but to no avail.

India critically needs at least 3 to 4 large banks that are globally competitive and can meet the growing demands for cross-border acquisitions by the Indian corporate and take on larger ticket risks on their balance sheets without hitting limits ceilings. As per The Banker in 2012, there is no Indian bank in the top 10 amongst the list of top 1000 banks of the world, whereas China has 4 banks in the top 10 list. In fact, Chinese banking giant-ICBC, occupies the third rank on the top 1000 banks of the world, while

Indian banking giant-State Bank of India ranks at a low 60.

Given the fact that over 70 percent of the market is dominated by PSBs, the Government of India and the RBI will have to drive consolidation amongst the large PSBs to create ‘large banks’ by mandating the merger of identified banks. This will be a significant departure from the previously stated non-interventionist policy of the finance ministry and the RBI, and as expected, will require great political will power and many levels of dispute resolution models.

One of the most critical challenges of any mandated merger will be linked to the integration of the two teams in the merged entity. Efficiency gains will only accrue if the branch and skills overlaps of banks being merged are resolved amicably – both of which will severely test the relationship with strong trade unions and the working environment with bank staff competing to retain their jobs. Thus to achieve any consolidation, the Government and the RBI will have to strengthen their resolve to manage these tricky and politically sensitive issues.

The RBI announcement of a roadmap for seeking the conversion of systemically important foreign banks to ‘Wholly-Owned Subsidiary (WOS)’ was to have a better regulatory control over such banks, separation of ownership and management, clear and simple resolution in the event of bankruptcy and ring fencing of the capital within the country. In simple terms, the overall idea was to protect the tax-payer’s money being used as bail-out as was witnessed post-2008 when some of the foreign banks withdrew funds from India.

The foreign banks operating in India with large networks would be keen to convert to WOS if they get national treatment in terms of opening branches in metros and tier-II cities and not just to expand branch network within the context of RBI regulations. Foreign banks are also circumspect about adopting this route as the RBI has insisted that foreign banks should meet the priority sector lending (PSL) norms including the sub-targets (not portfolio buys) in direct agriculture and small scale enterprises (SSE) lending.

Sr.No. Particulars Target (% of Adjusted Net Bank Credit (ANBC) or credit equivalent amount of off-balance sheet exposure whichever is higher)

Current target (as a branch) Proposed target for WOS Target for domestic banks

1. Total priority sector lending target 32% 40% 40%

2. Export credit 12% 12% no target

3. Agricultural advances no target 10% [2.5% - indirect; 7.5% - direct] 18% [4.5% - indirect]

4. Small enterprise advances 10% 10% Part of overall priority sector target i.e. 40%

5. Weaker section No target No target 10%

6. DRI scheme (SC/ ST) No target No target 1% of total advances

Source: RBI’s notification on priority sector lending, KPMG in India analysis

2 http://economictimes.indiatimes.com/features/the-week-that-was/hdfc-bank-and- centurion-bank-of-punjab-to-merge/articleshow/2808784.cms

3 http://www.icicibank.com/aboutus/history.html

4 http://www.hindu.com/2004/07/27/stories/2004072707340100.htm

5 http://articles.economictimes.indiatimes.com/2010-05-19/news/27574194_1_tayal-bor- md-private-sector-banks

Indian Banking - The engine for sustaining India’s growth agenda | 2



However, when the major banks convert to WOS, they are likely to provide another level of competition to the domestic banks.

As on March 2012, there were 41 foreign banks operating in India with 323 branches and 46 foreign banks had their representative offices in India.6 Top 5 foreign banks have over 250 branches.

Considering the fact that foreign banks’ have been successful in garnering demand deposit in their overall deposit mix, once foreign banks acquire domestic residency and when the major foreign banks convert to WOS, and will have more freedom in the licensing for new branches, the competition for deposits could heat up resulting in competitive pressure on domestic banks.

Composition of Deposits in percent (March, 2012)

Source: RBI trends and Progress 2012

Closing the gap —financial inclusion will

require innovative operating models

The Economist in its issue dated 19 October 1929 carried an article highlighting that there was much truth in the observation that ‘the small man, living in the provinces, is neglected’. The banking sector has woken to the fact that there is potential in the unbanked areas, and to enter uncharted territories and capture unsaturated segments, the banking sector will have to come up with innovative operating models which will be different from the conventional ones.

Technology will be essential to access this market, as extensive branch networks in remote regions or regions with poor physical infrastructure may not be economically viable. Break-even period for a rural branch could take upwards three years.

Technology-driven models such as mobile banking will inevitably change banks’ operating models and help banks in lowering their cost-income ratio. Usage trends clearly show a significant year-on-year increase in the usage of alternate channels for transactions (ATM, internet and mobile).

The number of mobile banking transactions has doubled to 5.6 million in January 2013 from 2.8 million in January 2012. The value of these transactions increased threefold to INR 625 crore during January 2013 from Rs 191 crore in January 20127. Even the number of ATMs has increased from 74505 in FY11 to 95686 in FY12.8

6 RBI Trends and Progress 2012

7 http://rbidocs.rbi.org.in/rdocs/NEFT/pdfs/RTD05012013F.pdf

8 RBI trends and progress 2012

Country Number of ATMs (per 0.1 million adults)

India 8.9

Australia 166.92

Brazil 119.63

France 109.8

Russia 152.9

China -

Mexico 45.77

United States -

(-) Data not available. All data pertain to 2011Source: RBI trends and progress 2012 and IMF’s FAS database



The internet banking channel has evolved over the years. In 2011, 60 percent of the times basic transactions in banks were conducted in North America through online channels, whereas internet banking usage in India increased from 1 percent in 2006 to 7 percent in 20119.

Further, the easing of norms on using individuals as banking correspondents, coupled with the proliferation of the UID enabled account, will enable banks to bring in a very large percentage of the currently unbanked, into their folds. To enable the success of this model, banks will have to very quickly build trust by demonstrating better control, governance and transparency in all parts of their transaction processes.

9 Infosys report on Consumer Internet Banking

Share of population group in Increment of ATMs (FY12) (%)

Mobile banking transactions for banks (2012)

Source: RBI

Source: RBI



Funding the aspirations of emerging modern India

The ‘rising middle class’ – will account for close to one third of the population in the next 20 yearsMiddle class consumers are prominent drivers of growth and consumption in India due to their increasing disposable income. A report by National Council for Applied Economic Research’s (NCAER) Centre for Macro Consumer Research indicates that by 2015-16, India will be a country of 53.3 million middle class households, translating into 267 million people.1 NCAER defines Indian middle class as the one with income level between INR 3.4 lakh-17 lakh at 2009-10 level.

1 India’s middle class population to touch 267 million in 5 yrs dated February 6, 2011 in Economic Times

Rise in middle class

Source: NCAER



Investment in banking products may not be the

default choice for the middle class

While a rise in consumption is a given, all savings and investments going to banks is not. Banks would have to strive hard to attract deposits in the future as the rising segment opens up to other avenues for savings and investments such as mutual funds, insurance, real-estate and commodities. Statistics by the Reserve Bank of India (RBI) indicate that the share of claims on the government, which largely reflects small savings, that had picked up over the years, particularly during the first half of 2000s, declined during the second half largely in response to the unchanged (administered) interest rates on small savings since 2003-04. In fact, households disinvested their holdings of Small Savings during 2007-08 and 2008-09.

Banks will have to revisit their strategies for attracting current account, savings account (CASA) and term-deposits. Most banks will need to start putting together strategic plans and identify teams to focus on deposit raising, and move from the model of servicing walk-in customers, to aggressively pursuing new customers through innovative bundling, promise of better returns, higher levels of customer service and attractive rewards programmes.

Period Currency Bank deposits

Non- banking deposits

Life insurance fund

Provident and pension fund

Claims on govt.

Shares and debentures

Units of UTI Trade debt (Net)

Gross financial assets

1970s 13.9 45.6 3 9 19.6 4.2 1.5 0.5 2.7 100

1980s 11.9 40.3 4.6 7.5 17.5 11.1 3.9 2.2 0.9 100

1990s 10.3 34.7 6.8 10.1 18.8 9.5 7 3.8 -1 100

2000s 9.6 44.7 1.3 17.4 12.4 11.1 4.1 -0.5 0 100

(i) 2000-05 8.9 37.8 2 14.7 15.1 19.5 2.8 -0.9 0 100

(ii) 2005-11 10.7 49.9 1.7 19.9 10.3 3.5 4.3 -0.2 0.4 100

Source: Report of the Working Group on Savings during the Twelfth Five-Year Plan (2012-13 to 2016-17)



Retail credit will bloom – not all

banks will be able to manage the

challenges

Middle class not only wields increasing purchasing power, but also has an evolving appetite to take on debt for acquisition of assets and supporting their aspiring lifestyle. Significant growth has been witnessed in the financing of automobiles, mortgages, white goods and consumer durables. However, India has massive room for high growth in all these areas, as the level of retail credit penetration is extremely low compared to other developed and developing economies. From a demand side perspective, rising incomes, asset ownership aspirations

and low perception of risk is fueling the rapid growth in demand for retail credit. The supply side (banks and NBFCs) needs to step up to this significant opportunity by leveraging credit data from the recently setup credit bureaus, speedier assessment of risk and rapid processing of credit.

According to CRISIL, aggregate car and UV loan disbursements will grow at a CAGR of 18-20 per cent till 2016-17. A steady growth in underlying vehicle demand, increase in finance penetration and higher LTV ratios will drive disbursements over the next 5 years.

Growth in Car and Utility Vehicle finance disbursements (INR billion)

Source: CRISIL report on retail finance on Autos



In terms of housing loans, high prices and interest rate kept the buyers on tenterhooks and growth in disbursements fell from 22.1 per cent in 2010-11 to 16.1 per cent in 2011-12. However, the property prices are expected to stabilize and CRISIL forecasts disbursements to grow by 16.0 per cent CAGR to reach Rs 4,269 billion by 2016-17.

A few leading banks are likely to gain dominant market share through a focussed approach that identifies the needs of these middle income customer segments, and aligns products and operating models, to meet these needs. New risk assessment

models that consider future cash flows, ownership of other financial products and behavioural data from alternate sources (such as track record of mobile bill payments etc.), shall be increasingly deployed by these banks to assess credit risk in real-time. Further, these banks shall also change their operating model to centralise credit decision and support it with innovative tools to analyse behavioural data at an individual and segment level. A major opportunity exists for retail lenders to develop and implement skills and tools that shall enable them to make credit pricing decisions at each individual’s level, rather than at a product level.

Growth in Housing Finance Disbursements (INR billion)

Source: CRISIL report on housing finance



Gold loan business will continue to thrive in the future – banks will have to fight for

their niches

India has among the largest consumers of gold with an annual consumption of 900 tonnes2 and the middle class is waking up to the fact that taking a loan against gold is relatively easy due to its high acceptance as a collateral and liquidity. Organized gold loan market has grown at a robust CAGR of over 55 percent in India during FY 2008 to FY 2012. Among the segments of gold loan market, gold loans from banks have increased at a CAGR of 57.5 percent and NBFCs have increased at a CAGR of 98.5 percent during the same period.3

Gold loans disbursed by NBFCs have witnessed rapid growth in the recent past. Therefore, it seems that NBFCs account for the majority of gold loans disbursed. However, contrary to the popular belief, share of banks in

total gold loans is the highest. Banks dominate this market with a share of 72 percent in total gold loans as of March 20123.

Banks will have to identify the niche customer segments in the middle income class – those seeking higher value loans, small businesses that need capital for expansion – that they have the power and model to address. It is very likely that NBFCs will continue to dominate the market for customers seeking small ticket and high flexibility loans. This segment focus will enable banks to build a branch led operating model, where the speed of disbursement and flexibility of repayment terms will be of less importance when compared to size of loan and other bundled services.

2 http://www.thesmartceo.in/growth-enterprise/the-golden-eye.html

3 Report of the Working Group to Study the Issues Related to Gold Imports and Gold Loans by NBFCs, RBI, January 2013

Share of banks and NBFCs in gold loans outstanding (in percent)

Source: “Report of the Working Group to Study the Issues Related to Gold Imports and Gold Loans by NBFCs”, RBI, January 2013



What will the emerging middle class seek? Will banks be able to

provide?

The new middle class is likely to be fickle in its banking relationship – given the very low costs of, and multiple available options for, switching. The key to building and profiting from a long-term relationship with this segment will be the ability to build trust over a series of transactions. The current trend in banks of disproportionately rewarding the ‘aggressive seller’ of fee based products and services will thus need to be replaced with rewarding relationship sustainers – those who balance a holistic view of customer profitability with equally high customer satisfaction ratings.

According to a study, about 69 percent of the customers in the high and upper middle income group would tend to remain with their bank when choosing to buy a financial product even if the bank did not quote the best price.5

A key aspect to this challenge will be the bank’s ability to build and retain a team that is trained, not only in the nuances of the products and services they sell, but also in the development of soft skills and trust building skills. The emerging middle class is likely to value the relationship higher; if their point of contact is someone they trust.

5 http://www.iibf.org.in/scripts/monthlycolumn_july.asp



Micro, Small & Medium Enterprise – The next growth engine for banking

The Micro, Small & Medium Enterprise (MSME) sector is a major driver of growth for the Indian economy. In 2009-10, there were around 29.8 million registered and unregistered enterprises (as classified by the banking definition of companies with a turnover in the range of 20 to 200 crores) across various industries. Out of these, about 60,000 are public or private limited companies, 1.5 million are partnership companies and the rest are proprietorships. There are another 30 million micro enterprises in the unorganised sector.1

Under a broad categorisation, approximately 77 percent of the total turnover of the MSME sector is linked to various industries in the manufacturing

sector (agri and food products, textiles, metals etc.) and the balance is contributed by the entities linked to the services sector (agriculture, trade, retail, maintenance, IT etc). All together the MSME segment accounts for 45 percent of the country’s industrial output and 40 percent of exports. The overall contribution of this segment to India’s Gross Domestic Product (GDP) has been holding steady at 11.5 percent a year2. And yet, the MSME sector faces a chronic shortage of bank financing to aid its growth and improvement agendas.

Ownership structure of enterprises in the MSME

Type of structure Share of MSME enterprises

Proprietorship 94.5%

Partnership, Cooperatives 1.2%

Private Limited, Public Limited 0.8%

Others 3.5%

Source: MSME Census , IFC Report on micro-small and medium enterprises in November 2012

1 MSME Census, IFC Intellecap Analysis 2 Report of the Working Group on Sick Micro, Small and Medium Enterprises, Reserve Bank of India (RBI), 2009-10



Only one third of the MSMEs have access

to organized financing channels in India

The slow growth of MSME is broadly attributable to the lack of financing or lack of facilities and skills. Given the high growth aspiration levels of MSME promoters, both are debilitating factors. It is estimated that only 33 to 34 percent of the MSMEs had any access to bank or institutional financing channels and in the absence of this finance, prefer to raise financing through personal channels (friends, family, informal financiers etc).

By any stretch of imagination, this unmet demand presents a significant opportunity for the flow of banking credit. To encourage greater bank led financing, the Reserve Bank of India (RBI) had increased its focus on this sector through directed lending policies such as priority sector lending (PSL) norms. However, given the significant demand-supply constraints, the financing chasm has grown.

Small Industries Development Bank of India (SIDBI) has estimated the overall debt finance demand of the MSME sector at INR 32,50,000 crore (USD 650 billion)3. 22 percent of this amount is the debt financed through the formal sector, in which banks have the largest share (approximately 85 percent). Most

of this debt flows to the registered enterprises. The risk perception attached to unregistered or unorganised enterprises due to a lack of transparent financial data, limited immovable collateral and lack of credit assessment skills of some sub-segments and the preference for ‘less hassled’, informal financing, reduces addressable demand considerably. Working capital financing, and to a lesser degree debt for capital expenditure are the two key offerings sought by MSMEs.

MSMEs in Eastern Indian and particularly North Eastern states have been lagging behind the other states in terms of access to financing from the banks. Low access to infrastructure and electricity and roads has significantly hindered the growth of the MSME industries in these regions and consequently their access to organized lending from banks. The MSME industry clusters in these states are varied and range from the trade and metal processing centres in Orissa, Jharkhand and Chattisgarh to forest product and handloom related centres in the North Eastern states.

Distribution of enterprises in the MSME sector and prevalent ownership structures

Source: MSME Census, IFC - Intellecap analysis

3 IFC report on MSME



While challenges for financing this sector

continue, Reserve Bank of India (RBI) is creating an impetus for banks to

finance

Source: IBEF, IFC – Intellecap Analysis

As awareness of formal financing opportunities grows within the addressable parts of the MSME sector, banks have an opportunity to grow their credit exposures, limit risks and seek better spreads by developing and implementing MSME sector specific policies and operating models.

The regulatory framework defined by the RBI (and recently strengthened by the Nair Committee report) has set targets for banks to achieve in lending to the MSME sector (7 percent to 15 percent of lending portfolio to be allocated for financing micro enterprises) and an overall 40 percent of their annual credit to be allocated to priority sector lending. Further, the Nair Committee has also sought to limit to 5 percent, the indirect lending portfolio earlier used by banks who lent to NBFCs to further lend to MSMEs, to meet PSL norms.

Given the significant variance in MSME knowledge, extensive branch network linked liability relationships and regional versus centralized credit assessment skills between public sector banks (PSBs) on one side and private and foreign banks on the other, it is no

surprise that PSBs account for over 70 percent of the debt financing to this sector, while private and foreign banks account for 22 percent of credit flow.

However, traditional challenges of bank financing of MSMEs remain:

• Broad, rather than niche segmentation of the market

• Limited market assessment skills at branches (and limited ability to gather and analyse proxy data)

• Centralised product design rather than customised products that address the needs of specific sub-segments

• Vanilla models of fund based products and limited credit assessment skills for knowledge based industries with limited immovable collateral.

Many banks also treat credit to this segment as a necessity for meeting compliance norms, rather than as an opportunity. Many such banks tend to narrow the definition of such enterprises (investment in assets) rather than seek a broader definition that could include revenues, order flows, past cash flows etc.

Arunachal Pradesh

Arts and Craft

Weaving

Cane and Bamboo

Mizoram

Bamboo

Energy

Sericulture

Orissa

Iron and Steel

Aluminum

Handloom

Assam

Tea

Tourism

Traditional Cottage Industry

Tripura

Food Processing

Bamboo

Handloom Handicrafts

Manipur

Handlooms Handicrafts

Sericulture

Food Processing

Bihar

Food Processing

Rubber and Plastics

Transport Equipment

Meghalaya

Food Processing

Horticulture

Mining

Chhattisgarh

Food Processing

Gems and Jewelry

Iron and Steel

Nagaland

Bamboo

Food processing

Horticulture

Jharkhand

Mining/Iron and Steel

Rubber and Plastic

Handloom



Banks will need to develop multiple

operating models and go-to-market strategies for

the MSME market

Banks need to work with SMEs linked to the supply chains of their large corporate customers and leverage this relationship to better manage and control credit exposures. Many banks have successfully implemented supplier and dealer financing products and processes and will seek to increase penetration deeper and across a larger number of corporate clients. Co-write credit with a trusted Non Banking Finance Company (NBFC) partner, where first lien on collections remains with the bank. The advantage of this model is that both partners leverage their respective strengths (banks’ ability to provide an envelope of services such as forex hedging, LCs/guarantees and debt, and NBFCs providing subsidiary debt, specialised knowledge of the MSME, local collections capability and other non-banking services). Given the recently imposed limits on indirect financing, this model shall become more attractive.1. Cluster based financing has already

been demonstrated successfully by some banks by focussing on small sub-sectors that are geographically concentrated into specific areas and have very similar market cycles and supply chain linkages. By creating specialist credit capabilities for each sub-sector, banks have been able to reduce their credit risks substantially through the modulation of credit flows based on knowledge of business cycles.

2. Linking personal and small business accounts has enabled many banks to develop a close link with promoters and proprietors. The availability of data linked to personal accounts provides good insight to support credit decisions to this group.

3. Strengthening of support infrastructure a. Legal and regulatory framework

– such as a single consistent definition of the sector, extending the Securitisation Asset Reconstruction and Enforcement of Security Interests (SARFAESI) coverage, expanding the coverage of credit rating agencies, enhancing credit guarantee coverage, securitisation of trade receivables through conducive legal infrastructure, creating a single collateral registry for immovable assets, supporting Asset Reconstruction Companies (ARCs) etc.

b. Governmental support – such as providing platforms for market linkages, skills development, technology upgradation and promoting cluster development, enhancing advisory support, supporting the growth of venture funds.

Segmentation of customers

Source: KPMG in India analysis



Infrastructure financing – building the foundation

Given India’s size and relative under-development, there exists an immense need to setup basic infrastructure across the countryAs per the Planning Commission’s XIth and XIIth 5-year plan, the investment requirement in infrastructure is expected to grow at CAGR of 14.6 percent from FY 08 to FY 17.

In order to sustain the long term growth momentum, India needs significant investment in the infrastructure sector. Planning commission has projected infrastructure investment of more than INR 40 lakh crore in the XIIth 5-year plan, which is nearly twice that of the XIth 5-year plan.



However, private investments which are required to increase significantly to INR ~20.5 lakh cr for FY13-FY17, have not seen the required traction in the first year of this plan.

Significant private sector investments are required for bridging infrastructure investments gap and meeting revised targets by the Planning Commission. Considering the 70:30 debt to equity ratio, the overall debt requirements (disbursement potential) is expected to be INR ~14.3 lakh cr.

Infrastructure investment, FY08 - FY17 (at 06-07 prices)

Source: Planning Commission, KPMG in India analysis

Public/ Private investment break-up (at 06-07 prices)

Source: Planning Commission, KPMG in India analysis



Policy inaction, reluctance of

promoters to invest additional equity, and

specific issues like lack of reliable fuel supply or issues in

land acquisition have increased risk in the

largest infrastructure sectors i.e. power

and roads

Opportunity mapping across sub-sectors within infrastructure shows the current balance of risk and attractiveness as perceived by lenders in infrastructure finance

Source: KPMG in India analysis Note:

- Investment in Storage does not include investment requirement in land - Numbers corresponding to the bubbles indicate financing opportunity in INR cr

As of April 2013, several power sector projects are stalled due to the lack of assured coal supply leading to unseen levels of risk averseness amongst lenders. Contrasting with the scenario of 2009-10 where lenders would sanction funding to projects with the assumption of eventual signing of Fuel Supply Agreements (FSA), today they require a signed Power Purchase Agreement (PPA) as well, in order to have clear visibility of project cash flows prior to sanction. The roads sector has also faced a number of issues on the regulatory front, primarily land acquisition, environmental clearances, right-of-way clearances and occasional resettlement problems with local population.

Roads have traditionally been considered a lower risk sub-sector within infrastructure, with quicker commencement of commercial operations as compared to power projects. This has led to intensification of competition amongst road developers and aggressive bidding to win projects. However, significant deviations in toll revenues in recent times have forced lenders to restrict disbursements even to sanctioned projects based on the increased perception of construction and operational risks.



Due to lack of depth in the corporate debt market, bank finance

to the sector is of critical importance

and the banks have currently taken a

cautious approach as they are experiencing

portfolio stress

Banks had been the mainstay for infrastructure funding during the XIth plan period, especially for the power sector. However the banks are taking highly cautious approach towards lending to the infrastructure sectors. Several key reasons exist for banks’ reluctance in further funding. Most banks have already reached their internally approved sector-wise exposure norms. Limited availability of take-out finance is leading to the asset being on the bank’s balance sheet longer than expected. Difficulties in recovering dues from promoters due to stalled projects not generating revenue has increased the overall portfolio stress. Also, the banks have limited appetite for complex structures, which are more popular with NBFCs for smaller deals.

The lack of depth in the corporate debt market in India restricts the channelization of capital flows towards the infrastructure sector. The corporate bond issuer profile is dominated by banks and public sector companies, with minuscule participation from non-financial private issuers. Additionally, nearly 100 percent of such issues are raised through private placement, with nearly no secondary market in place to encourage market-making, liquidity and price efficiency of debt issues. Without this key avenue for diversification of funding sources away from the bank dominated financial system, infrastructure developers are finding it difficult to raise long term money efficiently from the capital markets.

The takeout financing scheme introduced in 2010 by the government through Indian Infrastructure Finance Company Limited (IIFCL) sought to assist banks in avoiding an asset-liability mismatch and also free up funds to finance new projects. However, the scheme experienced limited success since the government restricted IIFCL

from continuing to fund the project after the lead bank exits. In April 2013, a committee comprising finance ministry officials was setup to make takeout financing work better. The government is considering relaxing these rules which could help the state-owned IIFCL provide longer-term funding to such projects at economical terms.

Insurance companies, who have access to long term funds, are restricted by regulator-imposed sector investment limits which further restricts the flow towards infrastructure projects.

The current supply constraint has led to the rise of External Commercial Borrowings (ECBs) as a competitive alternate source of supply. Infrastructure developers have raised money in foreign currency at a significant cost advantage; however they continue to remain wary of global group policies of the lending banks which had created issues in the sector in 2008.

Developers are willing to accept a higher cost for structured products. Nearing the end of their equity investment capacity, increasing number of developers are looking for options such as quasi equity, mezzanine debt, holding company debt, viability gap funding, etc. Indian banks are wary about innovative structures as is evident from long cycle time for sanctions, primarily a result of strict regulatory capital standards for products deemed riskier by RBI. Smaller NBFCs and foreign banks active in this space have demonstrated a more nimble and fast-moving approach towards closing deals of this nature. These products remain significantly higher yielding than standard project loans or corporate term loans.

Approximate total supply XIIth Plan Period

IFCs 450,000

Banks – fund based (Direct to clients)

350,000

Primary debt funding 750,000

Source: KPMG in India anaysis INR Cr.



Owing to inherent benefits and

significant potential, the government is taking several

initiatives to drive growth of renewable

energy sources

Installed capacity - renewable energy*

Renewable energy capacity mix - FY12**

Source: Central Electrical Authority (*) As on 31 December 2011

Source: Central Electrical Authority (**) As on 30 June 2011

The evolving process maturity amongst developers in solar, and increasingly in wind energy generation has created a niche space for financiers who have cultivated technical expertise amongst their personnel.



Several financial institutions are flocking to the

opportunity represented by

renewable energy due to the overall

cautious stance on thermal sources of

generation

ConclusionA significant proportion of the infrastructure investment is expected to come from the private sector. Banks have been the mainstay of the infrastructure funding through direct and indirect routes however they have taken a highly cautious approach in the recent times as they are experiencing significant stress on their portfolio due to underlying business issues. Unless government takes strong policy measures addressing the supply constraints, approval delays and creates enablers for infrastructure growth, infrastructure finance would remain a tough proposition for the financers. Infrastructure financers are keenly pursuing funding opportunities in the emerging segments and are bringing in product structure innovations which may prove to be key growth drivers in this challenging environment.

At a per MW cost of INR 13 cr based on negative movement in currencies, deal sizes are still small compared to conventional power sources. Despite this fact; starved of opportunity due to management reluctance to fund conventional energy, renewables are expected to be a crucial focus area for banks and Infrastructure Finance Companies (IFCs) alike.

Energy sourceTotal capacity to be added during XIIth Plan (MW)

Benchmark cost (INR Cr/MW)

Total investment requirement

(INR Cr)

Debt requirement (INR Cr)

Wind 11,000 6 66,000 46,200

Solar 4,000 13 52,000 36,400

Other RES (Biomass + Small hydro [<25MW])

3,500 5 17,500 12,250

Total 18500 135500 94850




The Aam Aadmi – profitably serving the unbanked and underbanked

Rural opportunity is large and growing

Rural India constitutes 69 percent of the total population and drives about half the GDP of the country, a ratio which has mostly remained unchanged over the past ten years. However, it has been observed that its per capita GDP has grown faster than its urban counterparts, growing at ~ 6.2 percent since 2001 as against 4.7 percent for urban India, signaling higher productivity growth. The proportion of the rural households earning an income of INR 90,000 and above has increased to 37 percent in 2011 as compared to ~18 percent in 2001 with maximum growth being seen in the higher income brackets.1

1 How India earns and spends, NCAER; KPMG in India analysis



The profile of rural economy is also changing fast and is getting increasingly diversified and moving beyond agriculture. The share of agriculture in rural GDP has reduced from 42 percent in 2001 to 27 percent in 20112. A holistic approach to rural India would therefore require understanding the non-agro space as well which includes activities such as manufacturing, trading, transportation, construction etc.

In addition to rising rural incomes, improved rural infrastructure like roads, power and telecom has also contributed to growth of the rural economy.

Access to banking services is still constrained despite the size of the pieIn the backdrop of this growth in rural India, however, there is still a huge demand supply gap for banking services. Rural India accounted for only 9 percent of the total deposits and ~10 percent of the total credit of the banking sector in 2011 with a large number of rural households having no access to formal sources of credit.3

Various challenges inherent in rural finance have led to inadequate access to financial services for the rural population. Some of these are as below:

• Lack of adequate credit information: Credit information for rural customers is usually constrained as the penetration of credit bureaus is not strong and the borrowers possess limited documentation in terms of proof of income.

• Limited collateral: Assets ownership is limited and generally restricted to farm land with lack of clear title and documentation. As a result of which, this sector becomes a high risk segment for banks to finance.

• High operational costs and complexity: Operational costs are higher on account of low ticket sizes, low population density and higher cost of due diligence. In addition, the rural economy is largely a cash economy, which leads to increased complexity and risk of operations.

• Diverse profile: The sheer diversity of the Indian rural landscape poses significant challenges as the customer profile and banking needs vary across regions.

2 Credit Suisse Report on India Market Strategy, 20123 RBI Basic Statistical Returns; KPMG in India analysis

Income pyramid - Rural households (mn)

Source: How India earns and spends, NCAER - CMCR analysis, KPMG in India analysis



Tapping the rural banking opportunity

requires an innovative approach

The traditional banking model has clearly not worked in rural India due to its high cost structures and ineffectiveness in adapting to the requirements of rural customer. Tapping the rural opportunity would require banks to focus on the following few things:

Developing simple products Rural customers would typically have basic needs which can be met with simple plain vanilla products with minimal additional features and options. The product terms need to be communicated clearly and in a transparent manner.

A gold loan is a good example of a highly simple and effective product to meet the credit needs of the rural customers. The product can be delivered quickly in a decentralised environment, requires very limited documentation and provides the security of collateral like gold.

Low cost innovative delivery modelsSeveral new alternative channels are emerging as against the traditional branch-led model. Business Correspondent (BC) channel has a strong potential to deliver technology enabled low cost solutions. However, the BC channel is only a means of delivering service and the banks would still need to work on product and market development to make the BC model sustainable and effective. There are several instances of BCs opening a large number of accounts which continue to stay inactive and ultimately become dormant. Banks need to work on developing a comprehensive product suite including credit that can help BCs engage the customer all year round.

Another low cost delivery model is supply chain linked financing. Several commodities and agricultural produce have a strong well developed value chain, wherein the linkage of the farmer to the end buyer can be tapped to create a financing opportunity. A case in point is sugarcane, where the farmer is obligated to sell his produce to a sugar mill in the vicinity. The farmer’s cash flows are dependent on the sugar mill, and the repayments for any loan to

the farmer can be collected out of the money that the sugar mill owes to the farmer at the time of harvest. The model helps banks leverage the long standing relationship of sugar mill with the farmers to do appraisal, disbursement and collections in a cost effective and efficient manner. The same model can be extended to other commodities that have strong value chain linkages e.g. tobacco, milk and other crops where contract farming model is being adopted.

Harnessing and developing local talentA key challenge in rural markets is information asymmetry due to lack of documented information. A good way to overcome this challenge is to tap the local talent which brings in immense local knowledge and relationships which can otherwise not be accessed. Local talent is also likely to be much more stable against talent brought in from larger cities. Banks therefore need to actively develop the local talent base and use it as a hiring ground.

Leveraging technologyTechnology enabled solutions can go a long way in developing low cost and efficient delivery channels for rural India. There are several technologies which have already come up in the market – low cost ATMs, point-of-sale terminals, mobile-based technologies etc. and are being experimented with. Mobile- based technologies are likely to lead the way as mobile consolidates its position as an ubiquitous connectivity device. The key to success lies in early adoption by the customers and banks need to work extensively towards customer education and awareness. Experiential marketing is a good way to encourage the usage of new technologies and banks should focus on making customers comfortable with new technologies with a sustained campaign. Targeting youngsters is also a good idea as they are likely to be the future customers and are also strong influencers in adoption of new technologies in the household.



Banks need to bridge the gap between

regulatory obligation and commercial

opportunity

Rural India presents a significantly large opportunity that is still at a nascent stage of being tapped by the banking industry. Recent regulatory interventions have required banks to penetrate deeper in rural markets with ultra small branches in villages with population as low as 2000. With substantial investments going into rural markets, developing a sustainable business model has therefore become a key imperative. We have witnessed similar waves of transformation in other industries like telecom where a deep market penetration has been achieved driven by industry efforts rather than a push for universal service obligation. It is time now for the banks to change their outlook towards rural banking from a regulatory obligation to a commercial opportunity.



Innovative and cost effective operating models

With increasing competition, emerging customer demands, regulatory interventions, technology led disruptions and higher shareholder expectations, Indian banks are being forced to constantly review and revisit their operating models. The resulting changes are making Indian banks nimbler, more cost efficient, better focussed on customer services and witnessing better returns through fee based services and products.

A responsive target operating model will be the need of the hour. The determination of whether the business model can be modified to increase its adaptability to market and client needs is one that has to be made at the top of the house. Based on the firm’s business strategy and changing market dynamics, a bank’s target operating model should encompass the following guiding principles:

• Operation and technology should be highly automated, low cost, robust and scalable.

• Operations and technology should be extendable to other parts of the business.

• Redesigned business operating models should separate generic products from higher margin products in order to leverage scale and cost efficiency for generic products and to focus on revenue and margin for complex products.

• Combining functions (as in factory and or utility models) and costs across multiple products/ services and territories can eliminate products/ service and geographic silos.

• A joint venture or consortia structure that combines in-house capabilities, processes and functions with other processing leading capabilities, scale, and/or cost structures can deliver big benefits—but is not easy to achieve.



Can operational functions be standardised or

combined?

The virtues of product-centric models are clear: faster time to market (especially for products such as derivatives), strong product domain specialization, and high single-product throughput are obvious benefits. The drawbacks are the cost of excess capacity when volume trends down and duplicative functions and systems. Excess capacity, in terms of technology assets and operations, consist of systems and staff.

In contrast, process-centric models offers greater processing efficiency that can more effectively leverage straight-through processing (STP) to conduct the entire capital markets trade and payment process electronically ( the ‘industrial’ methodology many are moving to). These are risks, however. Some domain knowledge may be lost, or the firm may appear unresponsive if a poor service level agreement (SLA) is in place, and single product throughput may be limited.

Alternate Partnership Models Alternate partnership models are sparking interest.

Outsourcing relationships are moving towards partnership models with key service providers. These may include two or more banks in partnership with a service provider in order to develop a key product capability using technology as an enabler. This is certainly true in emerging markets, where collaborative models (joint ventures, consortia) are being considered as a way to lower transaction costs in Asian, European, and Middle Eastern markets.

+ Faster time-to-market for product

+ Strong product domain knowledge

+ High single product throughput possible

- “wasted”excesscapacityasvolumesfluctuate

- High cost: extensive duplication of functions and systems

+ Greaterprocessingefficiency

+ Any single product throughput may be limited

+ Can more effectively leverage STP

- Can appear unresponsive if a poor SLA is in place

- Can lose domain knowldege

Source: KPMG’s Rethinking operations - A closer look at operational transformation, 2012 and KPMG in India analysis



Optimizing the use of technology as the

change agent

Enhanced focus on digital banking and

self-service channel usage to reduce the

cost of operations

Straight Through Processing (STP) will be a key determinant

for process efficiencies

While many banks have invested in core systems and horizontally integrated operations centres, most face challenges in extracting value from investments in technology. Leading banks will be able to take a holistic view of implementing new technologies, by simultaneously changing processes and organisation structures, and thus will be able to measure the benefits of the effective use of new technology for improving customer-facing as well as internal processes.

Leading global banks have focused on providing customers with more self-service options for carrying out all banking activities. In India, the success of the ATM channel and increasing usage of internet and mobile banking is clearly evident. However, it is highly imperative to undertake a comprehensive risk assessment exercise and plan carefully before shifting processes to digital/self-service mode. Many banks have struggled in this effort as they tried to replicate a branch based or paper based process onto the internet channel. Only a few banks have successfully transitioned a customer service to the internet, by redefining the underlying process, the customer interface and all support systems.

Lack of end-to-end automation of transaction and service processes, some of which can be conveniently automated from start to finish, is a key contributing factor to high costs and inefficiencies of banking operations. Disparate technology platforms and processing systems within a bank make it difficult to achieve this in a seamless manner. Banks need to drive STP through the adoption of technology enablers such as imaging and workflow systems and reconfiguring processes. STP can be extended to customers as well with most banks integrating their online platforms with the financial systems of customers such as SAP, Oracle Financials, Tally etc.



Branch will continue to play a core role in

the operating model; although in a different

avatar

Customer as the focal point of the operating

model

Leading banks have realized that branches will continue to be highly relevant, albeit with a significant role change. The branch will remain a significant channel of choice not only for older and less technology-savvy customer segments, but surprisingly also for a number of younger urban and semi-urban consumers, many of whom value face-to-face interaction and personal touch while availing complex or investment-led financial products for the first time. Leading banks are already experimenting with the formats, roles and operations scope of their branches by making available multiple channels inside branch premises, focusing on customer awareness and on complex transactions which require a very high degree of customer advice and interaction.

The banks rated high on customer service satisfaction levels will have adopted an operating model that would have processes organised by relevant customer segments, and deliver a comprehensive, integrated service package to each customer segment with clearly defined ownership and accountability. A First-Time-Resolution (FTR) approach will need to be adopted across the bank to help ensure servicing of customer requests and handling of customer requirements at the first node of contact, without the need for request routing and multiple iterations and interactions. Customer centric operational realignment with requisite technological support is imperative for this to work effectively.

Globally, banks are trying to model their operations around customer centricity taking a cue from the fast-moving consumer goods industry. To provide an example, leading banks in Australia have adopted an owner/entity end-to-end total responsibility model similar to the role of a brand manager in the FMCG context. Leading Indian banks are expected to reconfigure their service delivery model and processes and institutionalize new customer centric behaviours through the management of new skills in employees.

The target operating model hence developed should be flexible enough to handle the complexities and uncertainties, cope with the heightened business and regulatory demands, highly fluid market environment, changing customer expectations and preferences.



Big Data as a source of real time business insights

Big Data is now widely applicable, becoming useful to users of digital technology and is relevant from an economy, sector, and an organisation view point. Today an online search on Big Data throws up a result of more than two billion pages – which clearly indicates that big data itself unwittingly, has become part of the big data phenomenon.

This data come from posts to social media websites, digital pictures and videos, transaction records, call data records, global positioning system (GPS) etc. Industry leaders are showing keen interest in harnessing the potential of big data to enhance value creation by offering specially designed products for their customers. This can be lucidly explained in the social media

environment, where data is created by the consumer which provides insights on the needs of the consumers and thus allows businesses to offer targeted services for the consumers. The combined effects of Moore’s law, cloud computing and a rapidly increasing digital presence have provided businesses an opportunity to aggregate, store, manipulate, integrate, analyse and interpret ‘The Big Data’ to provide real time business insights.



The multitude increase in the number of people, devices and nodes being connected by digital networks is further revolutionising the ability to generate, communicate, share, and access data. In 2012, close to 5 billion people, or 60 percent of the world’s population, were using mobile phones, and about 15 percent of those people had smart phones, whose penetration is growing at more than 20 percent a year.

We believe that the transformational changes that Big Data is bringing about are at an inflection point and are in the process of being unleashed.

Financial services and Big Data

Wal-Mart handles more than 1m customer

transactions every hour, feeding databases

estimated at more than 2.5 petabytes.

SAS whitepaper - Big Data Meets Big Data Analytics

The financial services industry is highly data intensive. The following depicts a snapshot of the volume of data that a typical bank can be exposed to.

Hence Big Data analytics will have an important role to play in the performance of this sector. The industry drivers that accelerate the need for big data in financial services industry are:


REGULATORY COMPLIANCE

RISK MANAGEMENTCUSTOMER

INSIGHT



Understanding the customerBanking for the affluentThere exists a set of customers who have access to a variety of financial products across institutions. These customers have transient relationships with multiple banks - a current account at one bank that charges no fees, a savings account with a bank that offers high interest, a mortgage with a one offering the best rate, and a brokerage account at a discount brokerage. Banks no longer have a complete view of their customer’s preferences, buying patterns and behaviors. This problem is compounded by the fact that social networks now capture very valuable psychographic information – the consumer’s interests, activities and opinions.

Even if banks manage to integrate information from their own disparate systems, which in itself is a huge task, a fully customer-centric view may not be attained. It is imperative to obtain a full understanding of customer’s preferences and interests. Only then, banks can address customer satisfaction and build more extensive and competent models. Banks must therefore bring in external sources of information, information that is often unstructured. With a large population of consumers adopting smartphones today, we see a growth in the use of mobile applications that allow us to carry out transactions related to managing personal finances. This will lead to even more unstructured data flows from a wide variety of sources that banks will have to manage. Valuable customer insight may also be culled out from customer call records, customer emails and claims data and other documents, all of which are in textual format. New data integration and business intelligence technologies are needed to gather transactional data residing in CRM systems and payments systems, and unstructured data flowing from within and outside the bank. This shall augment the traditional data

warehousing and analytics approach. Big data technologies therefore play a pivotal role in enabling customer centricity in this new reality. It will not only bring in more operational efficiencies in financial decision making processes but will also see more and more consumer tools and applications that will leverage the same Big Data technology to alter how consumers manage their finances.

Banking for the unbankedOn the other hand, a vast proportion of the population in India is excluded from formal banking services. The Government as well as the Reserve Bank of India (RBI) has placed a significant thrust in driving financial inclusion across the country. Traditionally financial institutions have struggled to provide banking services since they lacked quality data in authenticating this segment as bonafide customers. However with the ‘Aadhar’ initiative, this is likely to change as there will be a single database capturing the attributes of every citizen in the country. The regulator has issued guidelines advising banks on accepting ‘Aadhar’ as an identity for opening of bank accounts.

Some institutions have already taken the lead in understanding the needs of this segment and coming up with tailor made solutions. Remittance solutions, no frills banking account and microinsurance products are in various stages of rollout for this segment. This is a clear example of how big data can be leveraged in designing customized products and solutions.

Only 1 in 6 villages in India have access to banking services.RBI Vision Documents on Payment Systems for 2012 – 2015



Being on the right side of the regulator

Dealing with increasing fraud and risk

The most obvious driver for Big Data adoption is that financial transaction volumes are growing multifold which is resulting in explosive data growth in banks.

Considering the sudden surge in the number of devices that customers can use to initiate core transactions, we can also expect to see a surge in the number of transactions they make. Not only is the transaction volume increasing, the data points stored for each transaction are also expanding.

In order to limit fraud and to detect security breaches, data logs from bank’s internet channels, geospatial data from smart phone applications, have to be stored and analyzed along with core operations data. In the recent past, fraud analysis was usually performed

over a small sample of transactions, but increasingly, banks are considering analyzing entire transaction history data sets. Similary, in order to accommodate better predictive modelling, the number of data points used by banks for loan portfolio evaluation is also increasing.

A number of public sector banks in India have came together to construct a collaborative fraud detection program through the usage of sophisticated analytics techniques. This initiative aims to scan transactions real time to identify patterns which can help prevent fraud.

The Financial sector is a highly regulated sector in India with norms and guidelines set for every transaction and every process.

For instance, the RBI has directed all banks to standardize their regulatory reporting by following an automated data flow (ADF) approach to ensure 100 percent accuracy and zero human intervention in every stage of reporting - right from data extraction from source systems till the actual submission of returns (reports) on to RBI’s Central Data Repository. Banks that cannot utilize complete information (probably due to storage challenges) and firms that believed reporting didn’t really require management attention, are now warming up to the new big data reality.

The Basel regulations around risk management alone have added a significant number of theorems around liquidity planning and overall asset and liability management functions. Point-in-time liquidity positions currently provided by static analysis of relevant

financial ratios are no longer sufficient, and a more near real time view is being required. Efficient allocation of capital is now seen as a major competitive advantage, and risk-adjusted performance calculations require new points of integration between risk and finance subject areas. Additionally, complex stress tests, which put enormous pressure on the underlying IT architecture, are required with increasing frequency and complexity.

Similarly on the capital markets side, regulatory efforts are focussed on getting a more accurate view of risk exposures across asset classes, lines of business and firms in order to better predict and manage systemic interplays. Many firms are also moving to a real-time monitoring of counterparty exposure, limits and other risk controls. From the front office all the way to the boardroom, everyone is keen on getting holistic views of exposures and positions and of risk-adjusted performance.



Critical success factors

At the press of a button-a near reality

Big Data in isolation can scarcely yield any benefits. A combination of reliable data elements, advanced analytics, deep domain expertise supported by a robust technology framework and skilled resources is vital to harvest the opportunities presented by Big Data (represented in the framework below).

The technology layer is required to create meaningful blocks of logical data and information, while advanced analytics solutions assist in the creation of actionable business insights.

Big data assumes special significance for a country like India. A nation with multitude of customer needs corresponding to different economic strata, languages and social profiles presents an interesting opportunity for businesses. Some organizations have made attempts with varying degrees of success in trying to harness this. CEOs, irrespective of line of business

are in constant exploration of the ‘magic button’ that will at a simple push; enable them with information in making the right decisions for capital deployment, revenue up-liftment, efficient operations and customer satisfaction. Big data combined with power of analytics can go a long way in providing a close substitute for this ‘magic button’.

Farecast, a part of Microsoft’s search engine

Bing, can advise customers whether to buy an airline

ticket now or wait for the price to come down by

examining 225 billion flight and price records.

The Economist ‘Data, data everywhere‘- 25 Feb 2010




Public sector banks – Challenged for growth capital

Evaluation of capital requirements

From 1992, capital was regulated with a simple structure known as ‘Basel I’, by keeping 8 percent capital to risk-weighted assets (RWA). A ‘revised framework’ known as Basel II was released in June 2004. The simplified Basel II approach is more ‘granular’ than Basel I, but retains its basic features. The Basel II covers minimum risk capital covering credit, market and operational risks. Banks were to choose between: first, an approach based on external ratings; and second an internal ratings-based (IRB) approach for sophisticated

banks, driven by their own internal rating models.

The Basel II is in different stages of implementation among the leading economies of the world, when the financial crisis affected the global economy. As the global economy tries to stand on its feet – financial authorities and regulators agreed on new norms for banks’ capital adequacy standards (Basel III).

Capital is one of the most significant components of the banking system. Capital requirements are rules that force a bank to maintain minimum ratio (based on regulatory guidelines) of capital (such as the bank’s equity, long term debts etc.) to assets (such as the loans and investments it holds). The purpose is to ensure that banks can sustain unexpected losses of the assets they hold while still honouring withdrawals and other essential obligations. The stability of the financial system depends on effective and adequate capital availability and the 2008 crisis did reveal serious problems with the existing requirements. But the prospects for economic recovery, both in India and in the rest of world, depend on a steady flow of credit and lending.



Basel III-the new norms

In India, as per the RBI, implementation of Basel III started from 1 April 2013 and will be completed in a phased manner by 31 March 2018. The key elements of Basel III norms are (i) definition of capital; (ii) enhancing risk coverage of capital; (iii) leverage ratio; and (iv) liquidity framework.

As per the Reserve Bank of India (RBI) guidelines for Basel III, minimum tier 1 capital ratio has been fixed at 7 percent of risk weighted assets (RWAs), of which 5.5 percent is common equity. One of the key features of Basel III, all non-common tier I and tier II instruments issued by banks will have a provision that requires such instruments, to be either written off or converted into common equity upon the bank which has solvency issues.

Basel III also prescribes a capital conservation buffer (CCB) of 2.5 percent of RWAs, comprising common equity tier I capital, over and above the minimum common equity requirement of 5.5 percent and total capital requirement of 9 percent. This can be drawn down as losses are incurred during periods of stress. In India, RBI has not published the requirements on countercyclical capital buffer (0-2.5 percent of RWAs), which is aimed at ensuring that banking sector capital requirements take account of the macro-financial environment in which banks operate.

Basel III also requires banks to carry out credit valuation adjustment (CVA) capital charge to protect themselves against the potential mark to market losses associated with deterioration in the creditworthiness of the counterparty, if the deals are done in over the counter (OTC) market.

These capital requirements are supplemented by a non-risk-based leverage ratio (a minimum Tier 1 leverage ratio of 4.5 percent in India, during the parallel run period) that will serve as a backstop to the risk-based measures described above.

Basel III has also introduced two new liquidity standards to improve the resilience of banks to liquidity shocks. a) The Liquidity Coverage Ratio would require banks to hold sufficient high-quality liquid assets (including cash, government bonds and other liquid securities) to meet a severe cash outflow for at least 30 days. b) The Net Stable Funding Ratio is intended to ensure banks hold sufficient stable funding (capital and long-term debt instruments, retail deposits and wholesale funding with a maturity longer than one year) to match their medium and long term lending needs.

31-Jun-13 31-Mar-14 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18

(% of RWAs)

Common equity 4.5 5 5.5 5.5 5.5 5.5

Tier I 6 6.5 7 7 7 7

Tier II 3 2.5 2 2 2 2

Min capital ratio 9 9 9 9 9 9

Capital conservation buffer Na Na 0.625 1.25 1.875 2.5

Source: RBI



Implications of Basel III on Indian banks

To begin with, Basel III norms on capital requirements may not affect Indian banks as most of the Indian banks are operating at 6-8 percent of common equity. However, as the CCB creeps in from 2015 and if loan growth outpaces the internal capital generation, banks may face challenges in terms of adequate capital for growth. The banks may need to review their business strategy, which will be dictated by the availability of capital. One of the other challenges in terms of non-equity capital is that the Indian market has not developed an appetite for Basel III bonds, which requires a loss absorbing capacity. The banks may find it difficult to price these bonds and find buyers for the same.

For banks with subsidiaries/Joint ventures (JVs), aggregate investments in subsidiaries exceeding 10 percent of the bank’s equity capital would be deducted from core-equity, while

investments up to 10 percent of the equity capital would be risk-weighted at 250 percent. Fortunately, most of the Indian banks’ holdings in their JVs and subsidiaries are less than 10 percent of Tier I capital.

Indian banks are already complying with RBI regulations on liquidity in terms of Statutory Liquidity Ratio (23 percent of Net Demand and Time Liabilities) and Cash Reserve Ratio (4 percent of NDTL), which acts as liquidity buffer in times of distress. Since 27 percent money is already blocked in statutory requirements, as mentioned above, and given government’s high deficit financing through market borrowings, it is interesting to be seen how RBI allows these liquid assets to be part of the Basel III liquidity estimations. The final calibration of liquidity ratios and leverage ratio will be made after further quantitative impact study and observation.



Additional capital requirements

RBI has estimated that Indian banks will require an additional capital of INR 5 trillion to meet the new global banking norms. Of the total INR 5 trillion, equity capital will be around INR1.6-1.75 trillion. The government, which owns 70 percent of the banking system, alone, will have to pump in around INR 415,955 crs till FY211 to retain its shareholding in the public sector banks at the current level to meet the norms. The implementation of new norms will affect the investor returns. They have to look at a longer horizon, where a stable financial system will ensure a better and less volatile return. With the new capital norms coming into effect, sectors like retail will be attractive as these require less capital. However, banks need appropriate infrastructure (Human resource (HR), technology and analytics) to manage large pool of retail assets. The buyer of OTC derivatives will find costlier as the credit valuation adjustment (CVA) charges will be applicable for such derivative transactions from 1 January 2014. The banks will most probably pass on the same to customers.

Can capital requirements be improved without undermining economic growth? Assuming that banks may be able to raise the increased capital requirement under Basel III from the share holders and markets, questions have been raised as to its impact on economic growth and profitability of banks. In general, the increase in equity capital requirement is likely to increase the weighted average cost of capital. Banks would partly pass on the increasing cost of capital to the borrowers as higher lending rates. Thus, the equilibrium lending rates are likely to be marginally higher and as a consequence, credit growth could be a little lower than in the last few years. But based on past experience; where the financial system globally had fallout, as we have learned all too painfully, allowing banks to expand credit on an inadequate base of capital delivers short-term credit growth at the expense of medium-term credit collapse and economic disaster. It is time to recognise that longer horizon of stability comprising of prudent regulations and market disciplines are better propositions to keep the banks in check while also enabling economic growth.

1 KPMG in India analysis for a committee on ‘Funding of Capital Requirements of PSU banks by Government of India’



Addressing the leadership vacuum in the PSBs

Indian banking continues to transform at a rapid pace. The entry of private banks with high efficiency operating models, deployment of integrated technology platforms, new risk paradigms, and above all, the emergence of highly demanding customer segments have all contributed to this transformation. The focus of leading banks has strategically shifted from being generic services providers to becoming aggressive sellers of financial products and providers of differentiated service levels. This shift is forcing banks to relook at all aspects of their talent management strategies. Issues such as talent acquisition, better on-

boarding, career planning, learning and development, compensation, rewards and succession planning, are quickly becoming the key strategic challenges for most bank boards.

Within this scenario, the Indian public sector banking group is currently set to face a major talent pipeline challenge- with over 80 percent of senior management personnel in the industry due to retire in the coming 5 years1, there is a shortage of skilled managers to replace the middle management personnel who will be moving into these senior management roles; thereby creating a leadership vacuum in the middle.

With the banking industry facing several challenges in terms of sector growth, increasing regulatory complexity and globalisation, this middle manager gap acts as a barrier to the effective execution of business strategy. Companies that can address this gap can dramatically improve their chances of long-term success as skills deficiencies amongst middle managers can be a significant and hidden drag on organisational performance.

1 http://www.business-standard.com/india/news/rbi-for- overhaulbanks-hr-practices/476424/



Understanding the leadership

vacuum

Public sector banks (PSBs) are set to face a ‘retirement decade’ soon- Over 1.8 lakh personnel from the baby boomer generation, who are currently in senior and middle management roles in PSBs, are due to retire in the coming 5-10 years2. Due to a decade long hiring freeze in the 1990s and high resistance to hiring talent laterally, many PSBs do not have a strong enough talent pipeline to replace the personnel who will be moving out of these roles.

With the shift in focus towards customer facing and sales roles, the industry has been hiring aggressively at the entry level in order to sustain sector growth- PSBs are set to hire as many as 56,000 employees at the entry level in the coming year3. This has led to a growing generation gap as there is not enough middle management talent to direct and lead the growing pool of entry level team members.

The middle management talent gap might have several adverse effects including:

• Difficulty in driving business strategy due to the lack of a middle management layer to ‘translate’ the strategy designed by the top management into workable action plans. Given the large generation gap between the senior management level and entry level talent, lack

of middle managers who can communicate strategy and drive execution efforts can have an adverse effect on productivity and motivation levels.

• Gaps in critical roles- In the absence of a strong succession plan and talent pipeline, more and more critical middle management roles in Public Sector Banks are lying vacant leading to a slowdown in decision making4.

• Loss of institutional knowledge – Given the hierarchical nature of decision making in the banking sector, the current junior management talent lacks the skills and capabilities required to handle the growing regulatory and technical complexities of the banking sector. A concerted leadership development and re-skilling exercise would be required to develop their capabilities.

• Motivation challenges- In the absence of strong middle management staff, it is difficult to motivate and engage entry level employees given that attrition amongst entry level staff is very high amongst private sector banks, and that a large number of employees leave within 1 year of joining in both PSBs and private sector banks.

2 http://www.thehindubusinessline.com/industry- and-economy/banking/retirements-will-create-18- lakh-vacancies-in-public-sector-banks/ article3855137.ece

3 http://www.thehindubusinessline.com/industry- and-economy/banking/public-sector-banks-will- recruit-bigtime-this-year-too/article2065923.ece

4 http://content.timesjobs.com/?p=3619



A two level approach can

be adopted for addressing the leadership

challenges

Banks need to adopt a two-pronged solution to address the leadership vacuum- firstly, they need to develop an immediate Level 1 approach to address talent management issues in the short term. A course correction plan needs to be developed to address highly critical and immediate issues such as hiring of talent to replace attrition and the effects of the ‘retirement decade’ as well as re-skilling of talent to take on middle management roles. Level 1 approach can include hiring talent laterally, hiring retired executives and freelancers to fill critical roles and assessment and development of junior management talent.

Banks also need to look at talent management holistically and define a long term Level 2 approach as well- they need to develop a talent strategy by taking a systems approach to recruitment and talent management and rethinking their employer value proposition.

Prioritising risk areas for developing Level 1 and Level 2 approaches

Source: KPMG in India analysis For representational purpose only



Developing a Level 1 approach: Key trendsLevel 1 approach addresses immediate risk areas in terms of manpower and organisational capabilities. However, these solutions can be incorporated into the larger talent management plan at a later stage. A few possible Level 1 approach that will play a critical role in the coming years include:

Manpower planning will become more competency-based and skill oriented in order to address impending skill gaps.The first step in addressing a problem is to understand it. Banks will need to internally identify the magnitude of the shortfall, not only in terms of manpower numbers but also in terms of skills and capabilities. To do this, they will need to approach manpower planning from a skill requirement and capability perspective. Banks will need to create an organisational skills inventory and a competency framework to identify skills and competencies required to match business needs. Assessing current talent on these skills/ competencies will help them identify not only current skill gaps but potential future risk areas in terms of skills and capabilities. Creating a skills heatmap will help the bank’s HR leadership pinpoint critical areas and accordingly create focused training and leadership development interventions. This is especially true for specialised skill sets such as rural banking and international banking.

While conducting this exercise, banks will also need to account for change in skill requirements and reduction in manpower requirement in the future as banking becomes more technology intensive and global. They need to consider this as an opportunity to optimise their manpower deployment model so as to make maximum use of existing skills and capabilities.

Ad hoc recruitment in the past two decades is one of the main reasons for the current lack of talent at the middle management level.5 This exercise will act as a solid base for creating a comprehensive long term recruitment

strategy which will help banks in hiring at a steady pace and thereby, developing a better employer value proposition.

Creating customised succession plans for critical middle management roles will become crucial for sustaining growth.Based on the manpower assessment exercise, critical leadership roles which pose a succession risk can be identified. Banks will then need to focus on identifying and developing successors for these critical roles. The key steps in this process would be to assess the criticality level of the position and accordingly create a succession profile for each role by identifying feeder roles to form a potential pool of successors. Once this is done, possible successors need to be assessed based on the organizational skill inventory/ competency framework to determine their readiness to take on the role. Targeted and customised individual development plans will need to be designed for each of the candidates so as to address their individual developmental needs- both in terms of technical and leadership skills. These developmental plans need to also take into account succession timelines.

The successor pipeline may be very limited or may not exist for certain roles with specialised skill sets. In such cases, alternative solutions such as lateral recruitment, hiring of freelancers/ independent financial advisors/ retired executives and extension of the tenure of current incumbents can be considered. However, these must be treated as stop-gap measures and long term successors will still need to be identified and developed.

Talent development and training initiatives will become more business need-based in order to maximise returns on trainingTraining and talent development interventions in most banks currently is an ad hoc exercise.6 In order to maximise returns on the investment made in training and talent development, banks will need to create customised training solutions that are tailored to business needs based on the organizational skill inventory. Banks will also need to focus more on e-learning and continuous learning to address knowledge dissemination and geographical reach issues, especially in the case of public sector banks. Tie-ups with leading national and international management schools and technical institutes in order to create customised courses will also develop the talent pool, especially in terms of skill sets such as sales, relationship management where the attrition rate is fairly high. Given the low faculty to employee ratio, especially amongst public sector banks, banks will also need to rope in more external faculty to provide better exposure.

Another critical step which will be crucial for developing middle management talent is the introduction of a strong coaching and mentoring system with each incumbent being assigned as the mentor for his/her identified successor pool. This will help in smooth transfer of skill sets and will help possible successors understand the complexities of their future roles.

5 http://content.timesjobs.com/?p=3712

6 http://www.livemint.com/Money/ BBPrvun2NGwrzghHOAPqyL/Public-sector-banks-take- a-look-at-human-resources-challenge.html



More and more banks will focus on creating specialist career paths for entry level talent.A key step in addressing the shortage of specialised skills is to define career paths for middle management talent. In PSBs, middle management personnel tend to be more generalists rather than specialists. Globally as banking becomes more technically compartmentalised, this may prove detrimental in developing specialist skills and capabilities. To address this, banks need to define career options for entry level personnel, especially in the managerial cadre and encourage them to specialise. The dual career model is a good option in this regard – it provides employees visibility regarding both generalist and specialist career paths and helps them make a choice between the two. It also helps in identifying and maintaining a sizeable talent pool for specialist skills.

To make career pathing more actionable, a more structured process is required. Career stage profiles for individual candidates need to be developed and coaches and mentors need to have regular discussions with employees to ensure their career aspirations are being met. Initiatives such as tying up with academic institutions for higher education or for providing specialised banking certifications or international stints for providing global exposure can also help ensure development of specialist skills and capabilities.

Banks will need to identify and tap into non-traditional talent pools in order to replace niche skills.Banks can also consider alternative solutions which do not require them to draw from their traditional talent pools. Some possible options may include:• Outsourcing of non-core activities:

While a number of large private sector banks have already created subsidiaries to outsource non-core activities in order to control costs and be able to tap into a larger talent pool, Public Sector Banks and

smaller private sector banks have yet to adopt this strategy due to trade union pressures. This strategy has an added advantage of requiring less middle management supervision from the bank’s side.

• Lateral/ Global recruitment: Given the large talent gap that they face in terms of middle management, Public Sector Banks may need to look at the option of hiring laterally in larger numbers. Private sector banks could look at the option of hiring global talent to meet lateral hiring requirements as well as addressing the needs of their international branches. Many Indian IT companies have successfully adopted this approach of hiring global sales heads in different geographies.

• Hiring from alternative talent pools: Banks can also look at the option of tapping into alternative talent pools such as freelancers and independent financial advisors as well as talent from related industries such as insurance, investment banking, microfinance, etc. to replace the loss of certain specialised skill sets.



Developing a Level 2 approachTo define a long term talent management strategy, banks will need to look at their talent management model and critically reassess and redefine it. In our opinion, plan will have to be devised at each step of the talent cycle using either one or more of four key strategic design elements- restore, grow, develop and strengthen.

Developing a long-term talent management strategy

Each area of talent management will need to be addressed using either one or more of these key strategic design elements in order to formulate a comprehensive talent management strategy.

In conclusion, if corrective measures are not undertaken soon, the leadership vacuum is likely to snowball into one of the major challenges in the banking industry in the near future. However, banks whose current leadership has the vision and foresight to address this issue now are sure to reap the benefits in the future.




Founded in 1925, Indian Chamber of Commerce (ICC) is the leading and only National Chamber of Commerce operating from Kolkata, and one of the most pro-active and forward-looking Chambers in the country today. Its membership spans some of the most prominent and major industrial groups in India. ICC is the founder member of FICCI, the apex body of business and industry in India. ICC’s forte is its ability to anticipate the needs of the future, respond to challenges, and prepare the stakeholders in the economy to benefit from these changes and opportunities. Set up by a group of pioneering industrialists led by Mr G D Birla, the Indian Chamber of Commerce was closely associated with the Indian Freedom Movement, as the first organised voice of indigenous Indian Industry. Several of the distinguished industry leaders in India, such as Mr B M Birla, Sir Ardeshir Dalal, Sir Badridas Goenka, Mr S P Jain, Lala Karam Chand Thapar, Mr Russi Mody, Mr Ashok Jain, Mr.Sanjiv Goenka, have led the ICC as its President. Currently, Mr. Rajiv Mundhra is leading the Chamber as its President.

ICC is the only Chamber from India to win the first prize in World Chambers Competition in Quebec, Canada.

ICC’s North-East Initiative has gained a new momentum and dynamism over the last few years, and the Chamber has been hugely successful in spreading awareness about the great economic potential of the North-East at national and international levels. Trade & Investment shows on North-East in countries like Singapore, Thailand and Vietnam have created new vistas of economic co-operation between the North-East of India and South-East Asia. ICC has a special focus upon India’s trade & commerce relations with South & South-East Asian nations, in sync with India’s ‘Look East’ Policy, and has played a key role in building synergies between India and her Asian neighbours like Singapore, Indonesia, Bangladesh, and Bhutan through Trade & Business Delegation Exchanges, and large Investment Summits.

ICC also has a very strong focus upon Economic Research & Policy issues - it regularly undertakes Macro-economic Surveys/Studies, prepares State Investment Climate Reports and Sector Reports, provides necessary Policy Inputs & Budget Recommendations to Governments at State & Central levels.

The Indian Chamber of Commerce headquartered in Kolkata, over the last few years has truly emerged as a national Chamber of repute, with full-fledged offices in New Delhi, Guwahati, Patna and Bhubaneshwar functioning efficiently, and building meaningful synergies among Industry and Government by addressing strategic issues of national significance.

Indian Chamber of Commerce Head Office

Dr. Rajeev Singh Director General-ICC 4 India Exchange Place Kolkata 700 001

T: +91 33 2230 3242

F: +91 33 2231 3380/ 3377

E: [email protected]

W: www.indianchamber.net

About Indian Chamber of Commerce



KPMG in India, a professional services firm, is the Indian member firm of KPMG International and was established in September 1993. Our professionals leverage the global network of firms, providing detailed knowledge of local laws, regulations, markets and competition. KPMG in India provide services to over 4,500 international and national clients, in India. KPMG has offices across India in Delhi, Chandigarh, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Kochi, Hyderabad and Kolkata. The Indian firm has access to more than 7,000 Indian and expatriate professionals, many of whom are internationally trained. We strive to provide rapid, performance-based, industry-focused and technology-enabled services, which reflect a shared knowledge of global and local industries and our experience of the Indian business environment.

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 156 countries and have 152,000 people working in member firms around the world.

Our Audit practice endeavors to provide robust and risk based audit services that address our firms’ clients’ strategic priorities and business processes.

KPMG’s Tax services are designed to reflect the unique needs and objectives of each client, whether we are dealing with the tax aspects of a cross-border acquisition or developing and helping to implement a global transfer pricing strategy. In practical terms that means, KPMG firms’ work with their clients to assist them in achieving effective tax compliance and managing tax risks, while helping to control costs.

KPMG Advisory professionals provide advice and assistance to enable companies, intermediaries and public sector bodies to mitigate risk, improve performance, and create value. KPMG firms provide a wide range of Risk Consulting, Management Consulting and Transactions & Restructuring services that can help clients respond to immediate needs as well as put in place the strategies for the longer term.

About KPMG in India

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

Printed in India.

KPMG Contacts

Pradeep UdhasHead – Markets T: +91 22 3090 2040 4100E: [email protected]

Akeel MasterHead – Financial Services T: + 91 22 3090 2486E: [email protected]

Ambarish DasguptaHead – Management Consulting T: + 91 33 4403 4095E: [email protected]

Shashwat SharmaPartner – Management Consulting T: + 91 22 3090 2547E: [email protected]

Neha PunaterDirector – Management Consulting T: + 91 22 3090 2158E: [email protected]

Follow us on: Twitter - @KPMGIndia

kpmg.com/in

ICC Contacts

Dr. Rajeev SinghDirector GeneralIndian Chamber of Commerce4, India Exchange Place,Kolkata-700001T: +91 (33)-22303242-44F: +91 (33)- 2231 3380/3377E: [email protected] [email protected]

indianchamber.net

Indian Banking – The engine for

sustaining India’s growth

agenda

5th ICC Banking Summit Kolkata

18 May 2013

Indian Banking – The engine for sustaining India's growth agenda 5 th ICC Banking Summit Kolkata

Documents

Transcript of Indian Banking – The engine for sustaining India's growth agenda 5 th ICC Banking Summit Kolkata