BUSINESS
OPINION | Vault Matters: The consequences of dichotomy of ownership structure in banks
There is difference in approach at present in the ownership structures, whether through the government, foreign owners or the local promoter. While this issue hasn't gathered momentum yet, it would be constructive for the RBI to harmonise the capital structures before it can become a heated debate
BUSINESS
OPINION | Vault Matters: $7 billion, four banks and a new outlook to equity
Capital, equity, etc. are not concerns of RBI was the view that the central bank seemed to hold for a long time. The new regime and its thinking is proving this belief wrong, making for a welcome change
BUSINESS
OPINION | Vault matters: Who's to be blamed for steep healthcare cost inflation?
Healthcare costs have inflated in double digits post-pandemic, showing no sign of easing. Meanwhile, private equity and venture capital investments in India’s hospital landscape have touched around $15 billion since FY20. Is the changing capital structure of the healthcare business resulting in higher costs?
BUSINESS
OPINION | Vault Matters: Big-ticket corporate loans return, but stress lurks
With India Inc’s financial health at its best and loan growth remaining anemic despite efforts, the regulatory nudge towards big-ticket corporate loans is understandable. But who will lend in this cycle and more importantly, what happens to cautious lending are key questions ahead of the sector.
BUSINESS
Vault Matters | Can a Sumo wrestler play kabaddi? That’s SMBC’s real challenge with Yes Bank
There have always been a lot of apprehensions on what incremental value add a foreign bank can bring to India, more so with the exit of biggies such as Citi and Deutsche from India’s retail terrain. Can Sumitomo Mitsui Banking Corporation help find an answer?
BUSINESS
OPINION | Vault Matters: The unfortunate side effect of stress in the banking system
There are at least four major instances of death noted in the banking sector since the start of this fiscal. Two are natural deaths and two suicides. The common thread is that these were mid- to senior-level seasoned executives and may have been under tremendous work pressure
BUSINESS
Vault Matters | Beginning of the end of the hype around financial services
Two mid-sized SME lenders have supposedly called off their IPO plans. An NBFC focused on education loans has yet to refile for an IPO. One of the most anticipated listings of this year, HDB Financial Services, received only a lukewarm response from investors. Does this signal a tapering of investor interest in financial services?
BUSINESS
Vault Matters | Why now isn’t the time to upgrade banks
While there are at least four bank requests pending for regulator’s blessings to get a bump up in the value chain, now is the time to observe and assess, not react and regret
BUSINESS
Vault Matters: Why RBI should play a more proactive role as a supervisor
Senior supervisory managers upping their engagement with banks has instilled disciple and brought about some moral responsibility in dealing with matters that are not clear-cut. But can supervision be made proactive? How about involving SSMs as observers in critical board meetings, such as the Audit Committee Board (ACB) for a start?
BUSINESS
Vault Matters | Bank or NBFC, the valuation dilemma
Remaining an NBFC has merit, but converting to a bank offers long-term funding advantages. The dilemma lies in the cost and valuations involved in the transition
BUSINESS
Vault Matters | ‘True and Fair’ or ‘True and Correct’: What should be the objective of a statutory audit?
Given the complexity of business and accounting practices, and the growing list of interested stakeholders, it is critical that we reset the objective of statutory audit. It should rise above the customary tick mark with a lilac pen and a documents compilation process
BUSINESS
Vault Matters | HDB Financial’s IPO is a much needed reality check
A host of issues has gone against the company. However, the key takeaway is that being a part of a big house alone is not enough to sell a story to investors
BUSINESS
Vault Matters | The sudden rush of action in financial services sector
Development in the financial services space is a mix of good, bad and ugly. Nonetheless, the current happenings and its impact, expected to unravel in the next 12 - 18 months, will be critical in shaping the medium-term outlook for the financial services sector
BUSINESS
Vault Matters | Is it miscommunication, misunderstanding or the fear of missing targets that’s the root cause of mis-selling?
Mis-selling of financial products is at least a two-decade old problem and a solution is nowhere in sight. Maybe finding a solution is still many years away, but it would be worth trying to find the root cause of the problem
BUSINESS
Vault Matters | Why Japanese and Middle East investors should be welcomed into the Indian banking sector
After the early wave of bank licenses rolled out in the 1990s, there has been a dearth of innovation, ideation, creation of fresh talent, and more importantly, capital into the Indian banking landscape has thinned in the recent years. This may change if India embraces serious foreign interest flowing into the banking sector
BUSINESS
Vault Matters | The curious case of IndusInd Bank share price
Strangely enough, barring the single day fall on March 11 by over 20 percent, IndusInd Bank’s stock price has held up quite steady despite a barrage of bad news hitting the counter, denying the underlying negative sentiments around the stock. The logic defying price movement certainly warrants Sebi’s attention
BUSINESS
Vault Matters | What kind of a cop should RBI be?
Many things are now digitised and automated, and information is available on a real time basis. Yet, the happenings at IndusInd Bank highlight the need for more scrutiny on the process followed by RBI’s supervision. That it’s happening within five years of the Yes Bank debacle compounds the issue
BUSINESS
Vault matters | Can banks handle a third successive rate cut?
Despite strong macro signals for a repo rate cut, banks face financial strain and tightening credit risk. A cautious approach to further rate reductions is advisable to safeguard financial stability
BUSINESS
Vault matters | What’s behind the growing disconnect between Nifty Bank Index and reality
The Nifty Bank index has outperformed the bell-weathered index by a decent margin across timeframes. The index is clearly exhibiting a sense of optimism, but one unfortunately is not reflecting in the sentiments of those running these banks
BUSINESS
Vault Matters | An alternative to NPCI is needed, but is tough to create
A series of transaction failures which have affected the QR-based payments system in the recent times indicates that there is scope for further fine-tuning at the back end. But what exactly is the viable solution is the question
BUSINESS
Why the ongoing investigation at IndusInd Bank is not beyond reproach
Whether it’s a bank, a pharmaceutical firm or even a chocolate maker, people associated with an event that is allegedly dubious step aside or offer to do so to ensure a fair investigation of the matter. Why is that not happening yet at IndusInd Bank?
BUSINESS
Vault Matters | The buck stops with the CEO in IndusInd fiasco
The CEO may not immediately be aware of all things happening in the bank, but by being the leader the understanding is that he should have a handle over everything under his nose. While it’s a tough ask, unfortunately this is how the world works
BUSINESS
Vault Matters: Why green financing is not yet a greener pasture
The US is having a total rethink on its approach to renewable financing and back home the trend seems to have just gotten started. Like most times, are we picking the tail end of an idea?
BUSINESS
Vault matters: New leadership at RBI is rearranging priorities
As much as it’s true to say that give the Governor six months for him to be one of RBI in approach, the reverse is also equally true. There is a reason why it matters who helms the central bank. The question, however, is whether Governor Malhotra’s regulatory changes are a bit premature
