Monday, September 10, 2012

Manas Kumar Nag, CGM-Small and Medium Enterprises, State Bank of India

State Bank of India (SBI), being the largest lender in India, has the benefit of a wide and deep presence in the Indian market. This also reflects in its performance with respect to extending credit towards MSMEs over the years. SBI has in fact emerged as one of the biggest contributors to meeting their financial needs in a profitable way. Manas Kumar Nag, CGM-SME, SBI talks to Bhuvnesh Talwar and shares the dynamics of the company’s SME business in further detail:

B&E: What are the major challenges faced by you in the SME space?
MN: SME borrowers require continuous support. In case of a downturn, they are more likely to be affected as was evident for textile manufacturers last year. Therefore, we need to be constantly alert to their needs and nurture them. Further, MSMEs belong to the unorganized sector and may not be in a position to provide the required financial documents. They also require technical inputs to upgrade their machinery and due to lack of this expertise, our MSMEs are often unable to successfully compete in the export market.
 
B&E: How much of your revenue and market share comes from SMEs?
MN: Our credit exposure to SMEs amounts to around 19.73% of the overall credit exposure of the Bank for the last fiscal year.

B&E: Any new strategies or schemes for SMEs announced or in the pipeline?
MN: Recently, we have launched a bouquet of power products for different ranges of current accounts, which will be very useful for SMEs. We are also moving onto electronic platform funding for dealers as well as vendors. We have announced very competitive interest rates in various products viz. car loans, food processing units et al.

What proportion of your credit goes under the CGMSE guarantee and how has your performance been?
MN: In terms of numbers and total amount of loans sanctioned under CGTMSE, our bank is presently at No. 1 with 22.56% by account and 20.80% by value of loans covered.

What are your major criteria to reject loans to start-ups and SMEs?
MN: We do not have specific criteria. We have an assessment system based on credit rating/credit scoring models and a defined hurdle rate, below which we don’t normally extend finance.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

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posted by Editorial at 4:03 PM

Saturday, September 08, 2012

Good riddance to Rahm rubbish!

The mass exodus from the White House has several reasons: arduously severe working hours, round-the-clock pressure, disruption of work-life balance, ego clashes and salaries, which in most cases, are far below the private sector – but none of these quite seem worse than Rahm Emanuel, ex-White House Chief of Staff. Whatever be the reason for the resignation (or sacking) of White House’s most visible and controversial Chief of Staff, he’s good riddance, says a miffed

Whenever Rahm Emanuel starts sounding reasonable, I realise it’s time for me to increase my medication. Since he ‘assumed’ office (and I mean the double entendre), Rahm has seemed to me a conflux of all dodgy and cheesy limericks I’ve heard since childhood (the “No, my powers can only be used for killing Vulcans” varieties). Scott Adams, creator of Dilbert, once said, “You can’t motivate people to do things, you can only demotivate them. The primary job of the manager is not to empower but to remove obstacles.” For Rahm Emanuel, people were the obstacles who had to be removed. And any reality that went against it, impracticable idealism. Thus, in June 2010, when news was rife that Rahm Emanuel was planning to call it a day as the White House Chief of Staff (the first aide the President sees in the morning and the last he sees in the night – supposedly the toughest job in the White House besides that of the President) as he was tired of the ‘idealism’ of Barack Obama’s inner circle, the White House was quick to term the reports as ‘ludicrous.’ However, close to three months after thus a terming, on October 1, 2010, in the East Room of the White House, the US President himself made the “least suspenseful announcement of all” and officially announced the resignation of the hard-hitting Rahm Emanuel. Staff shake-ups are nothing new; it is very common in the White House e.g. Lawrence Summers, Head of National Economic Council, Christina Romer, Chairperson Council of Economic Advisors, Peter Orszag, Head of the Office of Management and Budget and James Jones, National Security Advisor have all quit or are in the process of quitting. But as far as Rahm Emanuel, better known for his caustic tongue and political toughness, is concerned, the reasoning that is being propagated – that Rahm has quit to pursue his political dream of contesting for the Chicago mayoral position – is clearly balderdash being fronted to the media as a last twig of respect for Emanuel, quite similar to what Rick Wagoner experienced from Obama.

The 5 and a half feet Rahm, known for his profanity and his penchant for having created enough acrimonious tension inside the Democratic party and the White House, was initially hailed by supporters as a hardball politician and was expected to help the President get things done in the Congress. As a centrist of the Bill Clinton era, party activists believed his presence would help President Obama cut deals with centrists and conservatives. It is ironical that the same set of that supported Rahm rabidly has now vouched for his ouster, thanks to his very own abrasive personality and his mystical ability to inflate his enemy count. The Progressives and the Liberals have not been kind either and they have their own share of legitimate grievances – the Progressives claim that Rahm compromised too many of their principles on health-care reform and some Liberals called for his ouster citing his political instincts.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

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posted by Editorial at 4:14 PM

Tuesday, September 04, 2012

HISTORY LESSONS: LEHMAN BROTHERS

On the 2nd anniversary of the Lehman Brothers debacle, what is evident is the fact that economies have learnt very little from history. B&E does a quick recap of the occurrence, the domino effect and the current global economic situation By Asif Ahmed

According to BIS-FSB & IMF assessment of the increased capital requirements (phased in over 4 years), each one percentage point increase in bank’s actual ratio of tangible common equity to risk-weighted assets will lead to a decline in the level of GDP relative to its baseline path by about 0.20% after implementation is completed. Now, has all this started helping? IMF’s Global Financial Stability Report 2010 shows that global bank writedowns declined to $2.3 trillion in April 2010 from $2.8 trillion in October 2009. This in reality brought down aggregate capital needs of the global banking system. Specifically in the US, banks saw their loan writedowns and provisions for the period 2007–10 being revised downward by close to $66 billion to $588 billion due to positive economic growth and stabilisation of house prices in the latter half of 2009; foreclosures and mortgage delinquencies are still on a rise. The IMF report, however, does caution that pockets of capital deficiency “remain in segments of some countries’ banking systems, especially where exposures to commercial real estate are high.”

Challenges Ahead
Challenges are not insurmountable, yet extremely tough both for emerging economies (leave exceptions India and China) to maintain their current growth and for advanced economies to get back to shape. As a direct effect of attempting to save drowning economies by investing borrowed capital, the cumulative sovereign debt levels of G7 nations as a proportion of GDP, at close to 110, is now reaching 60-year highs. We saw the trailer of problems associated with sovereign debt in May this year when Greece – a country which contributes negligible in terms of economic output and trade – made the life EU more difficult. A possible concern is that a sustained period of debt reduction might lead to low growth in the future. For advanced economies, dealing with unemployment is another top challenge that needs to be tackled head-on. US unemployment rates are at historic highs too (10.6% in January 2010, down a bit to 9.6% in June 2010). One must remember that an economic recovery that does not translate into more jobs will not mean much for most people. So creating jobs in a foregone ask, another challenge that is common to both emerging and advanced countries is dealing with burgeoning budgets deficits, more so with US and EU, the taps that were opened to support growth almost two years ago are still running and now pose serious macroeconomic threats.

What started as a pure US isolated case of a financial institution called Lehman collapsing is now a case study in history of how a domino effect can cause global recession. And what about Mr. Paulson? Well, he apparently is making quite a good royalty on the sales of his new book – On the Brink: Inside the Race to Stop the Collapse of the Global Financial System…


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posted by Editorial at 1:47 PM

Monday, September 03, 2012

INFORMATION PORTAL: US PROPAGANDA

Secretary of State Hillary Clinton’s State Department considers Pranab Mukherjee to be India’s foreign minister! More similar gaffes inside...

This was apart from the CIA correcting the misrepresentation of the number of deputy prime ministers that South Korea had had. However, the country is still trying to convince the agency to rectify names of two locations on CIA’s map of South Korea.

On the same lines, Northern Cyprus is still being shown as a part of Republic of Cyprus, despite the region having gained independence in the year 1983, 27 years earlier. On another line, while the whole of Kashmir is shown as being “disputed”, Taiwan is peacefully included on the map of China. This has to be seen along with the fact that Taiwan is shown as a separate country on the US Department of State site with the names of its President and Prime Minister. And when it comes to Myanmar, both the CIA and US State Department list the country under its old name Burma. In 1989, Burma changed its name officially to Myanmar; a rename that was endorsed by the UN. Apparently, not by the CIA/State Department.

While some of the mistakes – including India’s foreign minister’s name – are evident typographical mistakes (and show the lack of intent within the government to keep critical diplomatic facts updated), some of the mistakes, like Kashmir or Taiwan, seem deliberate and evidently committed with political intent. This can be considered even propaganda if one were to assume the worst, as many institutions globally (including schools) refer to these websites for authentic information. There’s a thin line between a diplomatic error and a strategically planted insult. Imagine if were considering Bush still to be the US president.


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posted by Editorial at 5:51 PM

Saturday, September 01, 2012

NMDC the most successful mining company in the country

Rana Som, CMD, NMDC, talks to deepak ranjan patra about what makes NMDC the most successful mining company in the country and what are its future plans...

What are your plans for NMDC’s diamond mines in Panna?
NMDC’s diamond mines at Panna were re-dedicated to the nation in August, last year. The mine has been rated to produce 1 lakh carats of diamonds per year.

Mining industry has been on a roll for the past few quarters. What is your outlook for the remaining part of the year?
As per me, it will remain bullish for most part of the coming few quarters. India has a tremendous need for infrastructure, which calls for increase in steel production. This will fuel the demand for iron ore, coal, limestone, manganese et al, if we take a look at the global scenario.

Does being a public sector undertaking restrict you in any way from a fast track growth or create a roadblock in running the show professionally?
NMDC is a Navratna PSU and as per the norms we have a Board of Directors comprising 5 functional Directors, 2 Directors from the Ministry and few Independent Directors and we manage the show in a very professional manner. All our major decisions are taken to the board for ratification. Thus, so far, we have never faced any major problem in trying to achieve fast track growth.

What are your mid-term plans for NMDC?
We are on an expansion mode at present. NMDC’s future plans for expansion include, ramping up production capacity to 50 MTPA by 2014-15, getting the 1.20 MTPA slime based pellet plant and 3 MTPA Integrated Steel Plant at Nagarnar, Chhattisgarh started. Moreover, within 5 years we would like NMDC to have a turnover in excess of `300 billion and contributing not only to the national exchequer, but also to the stakeholders.

What are your views on the growth of Indian economy during the year?
Despite fluctuating inflation figures, Indian economy has been having a steady growth so far this year. By the look of the things, the double digit growth as forecasted for this fiscal does not seem improbable.


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posted by Editorial at 11:19 AM