Wednesday, August 30, 2006
Corporate Non-governance
Government's attempt to increase its nominees on the board of Public Sector Banks is a step taken backwards. Earlier, it had directed these banks to go for their board's approval before taking any decision on raising the interest rates. This is unjustified keeping in view the increasing importance of corporate governance. Indian companies have been successful in acquiring the companies and raising large-scale funds from abroad because of the high standards of corporate governance showed by them. Either the Government should rethink its decision or it should also instruct SEBI for ignoring the corporate governance norms.
Tuesday, August 22, 2006
Don't Pass this Word!
Yesterday, I was logged into my bank account through internet. First time, I was asked to enter my Customer ID and password. Later, I was prompted to enter my second password, this one for validating the transaction. That gave me the food for thought.
Have you ever thought, how many passwords one needs to remember now a days? If you want to check your e-mail, there is a password and in case you have multiple e-mail accounts, so multiple passwords too. As mentioned internet banking requires password. You ATM card will have a PIN number, another password. Same is the situation if you want to get an airline or railway reservation through internet. Forget all these, in the morning when you reach your office and start your office computer, which will also ask for a password!
Imagine how to remember so many of them. You can’t have one password for all the transactions as one mistake and you have everything on stake. And if you forget one, definitely some problems for you.
I discussed this problem with one of my friends who agreed with my point of view. He found solution to this problem and prepared an excel file. He wrote all his transaction IDs and passwords in this file. Off course, since this was one of the sensitive files so he decided to make this file password protected.
You will not believe. He called me yesterday to tell that he is not able to remember the password for that excel file!!!
So, how many passwords do you have?
Have you ever thought, how many passwords one needs to remember now a days? If you want to check your e-mail, there is a password and in case you have multiple e-mail accounts, so multiple passwords too. As mentioned internet banking requires password. You ATM card will have a PIN number, another password. Same is the situation if you want to get an airline or railway reservation through internet. Forget all these, in the morning when you reach your office and start your office computer, which will also ask for a password!
Imagine how to remember so many of them. You can’t have one password for all the transactions as one mistake and you have everything on stake. And if you forget one, definitely some problems for you.
I discussed this problem with one of my friends who agreed with my point of view. He found solution to this problem and prepared an excel file. He wrote all his transaction IDs and passwords in this file. Off course, since this was one of the sensitive files so he decided to make this file password protected.
You will not believe. He called me yesterday to tell that he is not able to remember the password for that excel file!!!
So, how many passwords do you have?
Friday, August 11, 2006
Ashok Raina and Doordarshan!
"India loose its 2nd wicket. Ashok Raina gets out on 29."
Wondering when did Ashok Raina join Indian cricket team? Ask Doordarshan. This was the news flashed on DD News when India and West Indies were playing their 3rd ODI at St. Kitts. One thing is for sure that the person responsible for this either hates cricket or is a great fan of Ashok Kumar – cinestar of yesteryears because every kid knows about Team India and its members.
Anyways, let us come to the issue. I am talking about the quality aspect in broadcasting. Though these kind of mistakes occur every now and then on any channel or publication, I was thinking whether, over the years, has anything changed on Doordarshan (DD)?
Not much. Deluge of new channels and innovative technology used by them has forced DD to innovate. Not only has it introduced many channels, there have also been some improvements in the telecast and presentation. Particularly, it's news where we were used to see the map of India with some clouds over it. Now, we have more options. We can also see a world map! It has also managed to attract lot many sponsors now.
Actually, except 'Ramayana', 'Mahabharata', 'He-man', 'Spider-man' and off-course kid's favourite 'Shaktiman', we have not seen anything great on DD. Even the movies which are shown on the weekend have already been shown on other entertainment channels. Also, who can forget every over of 5 balls, whenever a cricket match is telecasted on DD.
So, why are we seeing this laxity? If other channels have dramatically improved themselves, why DD could not? However, it had got some different ideas. It had made compulsory for all the cable operators to show some of its channels. After all, this is not a solution. At least it should think about those people who do not have access to cable connection or DTH service.
All said and done, there is something which I have not seen on DD for last few years i.e. 'Rukavat ke liye khed hai'. Have you? Do let me know.
Wondering when did Ashok Raina join Indian cricket team? Ask Doordarshan. This was the news flashed on DD News when India and West Indies were playing their 3rd ODI at St. Kitts. One thing is for sure that the person responsible for this either hates cricket or is a great fan of Ashok Kumar – cinestar of yesteryears because every kid knows about Team India and its members.
Anyways, let us come to the issue. I am talking about the quality aspect in broadcasting. Though these kind of mistakes occur every now and then on any channel or publication, I was thinking whether, over the years, has anything changed on Doordarshan (DD)?
Not much. Deluge of new channels and innovative technology used by them has forced DD to innovate. Not only has it introduced many channels, there have also been some improvements in the telecast and presentation. Particularly, it's news where we were used to see the map of India with some clouds over it. Now, we have more options. We can also see a world map! It has also managed to attract lot many sponsors now.
Actually, except 'Ramayana', 'Mahabharata', 'He-man', 'Spider-man' and off-course kid's favourite 'Shaktiman', we have not seen anything great on DD. Even the movies which are shown on the weekend have already been shown on other entertainment channels. Also, who can forget every over of 5 balls, whenever a cricket match is telecasted on DD.
So, why are we seeing this laxity? If other channels have dramatically improved themselves, why DD could not? However, it had got some different ideas. It had made compulsory for all the cable operators to show some of its channels. After all, this is not a solution. At least it should think about those people who do not have access to cable connection or DTH service.
All said and done, there is something which I have not seen on DD for last few years i.e. 'Rukavat ke liye khed hai'. Have you? Do let me know.
Wednesday, August 09, 2006
Surprisingly Public Sector Banks!
No matter whatever is the topic we discuss whether it is in economics or business or trade, first half of 90s always comes out as a distinct period. That was the period when we adopted the path of economic reforms or popularly known as the advent of LPG: Liberalization, Privatization and Globalization.
Of course, even banking industry wasn't untouched and what we see now is something which public sector banks (PSBs) could never have imagined and which has become their nemesis. Yes, we are talking about the advent of private banks, the huge market share that has been captured by them and the slew of innovative products being offered by them. Whether it is personal loans, housing loans, fixed deposits, credit cards or corporate lending, they appear to be ruling everywhere.
Who is in fault for this sorry state of PSBs? Of course they themselves are responsible. Being in business for so many years, they could not foresee the future and they kept on leaving the ball thinking that the game is a 5-day Cricket Test Match. However, on the other hand, private banks came out with a professional approach - proper and innovative thinking, hard selling and proactive customer relations armed with latest technology, taking it as a One Day Cricket Match and keeping in mind that an experienced player always prepares in advance, changes the tempo according to the match situation and plays accordingly. Within no time they took the match away from PSBs.
Today, private banks are providing those services, which we could, only dreamt of. If you want to pay your electricity bill, you need not search for a Bill Collection Centre. Instead go to the nearest branch of the bank in which you have account and give them the instructions. Moreover, that's to be given only once! Further, if you need talk-time, don't talk to vendor, go to the nearest ATM and get recharged – cellular phone as well as you! You can also pay your direct tax, service tax and insurance premium in the same manner. If you want an accident insurance cover and a credit card, there is no need of going to an insurance company first and a bank later on. You will get this accident insurance cover free of cost once you apply for a credit card. Also, if you want to undertake any of the above-mentioned transactions, you need not move! Just log on to the Internet: Click of a mouse and it is done!
It is ironical that private banks have forced PSBs to think that a working man/woman needs 8 to 8 banking and Internet Banking. He/She may want to check his/her account balance through his/her cellular phone. Still if one doesn't get time, at least that person can go to the nearest ATM after working hours, which is just at a 2 minutes drive from his/her home. And why ATM in night? Now, 24 Hours banking facility is also available! Let us not forget the Anywhere Banking facility, which has also been initiated by private banks.
Private banks have been a pioneer in providing all these services. Here, it will be worthwhile to mention that foreign banks have also come up with innovative products and services but they are yet to garner a major market share.
However, it does not mean that PSBs have been just spectators. They have definitely made some progress. The question to be asked is that are they too late? Were they sleeping? If after so many years one of the PSBs feels that it needs to change its logo so as to give it a fresh look or so as to give an international appeal, one can only be amazed at this approach. Take another example. A PSB feels that it needs to surprise people with the advertisements that it has the largest number of ATMs in India! So many years after the establishment, it is not a surprise at all. The point being made is that if it is trying to make people realize about this fact then there has been definitely been some deficiency in its approach towards the customers. That's why they don't know this fact. Why did all the PSBs take so much time to realize that cost of a transaction through an ATM is far lesser than that through branch banking!
Instead of being leaders, PSBs have been followers. But it is well said: Better late than never. Gradually PSBs are waking up and realizing the importance of a customer-centric approach.
Criticisms go along with praises. At least PSBs have been able to percolate to the rural areas accompanied by an increase in priority sector lending, which private banks have not been able to do. The probable reason is the low level of social responsibility of business on the part of private and foreign banks. Another notable thing is that by and large PSBs have been ethical as compared to their counterparts in private sector. For God's sake, they don't resort to gangsters or force a common man to sell his kidneys to recover loans. In case of private banks, the fine print is often more dangerous than the bold print on agreements with the customers. What we need is strong corporate governance norms that do not restrict themselves to filling and filing of forms and returns. What we need is good banking practices and clear customer relationship. If not, what is the difference between a Dubai or Karachi based don and a foreign or private bank.
Hence, PSBs are understanding the rules of the game. But now, do they need to score a six on every ball or can they manage by scoring 5 runs an over. Only time will tell this.
Of course, even banking industry wasn't untouched and what we see now is something which public sector banks (PSBs) could never have imagined and which has become their nemesis. Yes, we are talking about the advent of private banks, the huge market share that has been captured by them and the slew of innovative products being offered by them. Whether it is personal loans, housing loans, fixed deposits, credit cards or corporate lending, they appear to be ruling everywhere.
Who is in fault for this sorry state of PSBs? Of course they themselves are responsible. Being in business for so many years, they could not foresee the future and they kept on leaving the ball thinking that the game is a 5-day Cricket Test Match. However, on the other hand, private banks came out with a professional approach - proper and innovative thinking, hard selling and proactive customer relations armed with latest technology, taking it as a One Day Cricket Match and keeping in mind that an experienced player always prepares in advance, changes the tempo according to the match situation and plays accordingly. Within no time they took the match away from PSBs.
Today, private banks are providing those services, which we could, only dreamt of. If you want to pay your electricity bill, you need not search for a Bill Collection Centre. Instead go to the nearest branch of the bank in which you have account and give them the instructions. Moreover, that's to be given only once! Further, if you need talk-time, don't talk to vendor, go to the nearest ATM and get recharged – cellular phone as well as you! You can also pay your direct tax, service tax and insurance premium in the same manner. If you want an accident insurance cover and a credit card, there is no need of going to an insurance company first and a bank later on. You will get this accident insurance cover free of cost once you apply for a credit card. Also, if you want to undertake any of the above-mentioned transactions, you need not move! Just log on to the Internet: Click of a mouse and it is done!
It is ironical that private banks have forced PSBs to think that a working man/woman needs 8 to 8 banking and Internet Banking. He/She may want to check his/her account balance through his/her cellular phone. Still if one doesn't get time, at least that person can go to the nearest ATM after working hours, which is just at a 2 minutes drive from his/her home. And why ATM in night? Now, 24 Hours banking facility is also available! Let us not forget the Anywhere Banking facility, which has also been initiated by private banks.
Private banks have been a pioneer in providing all these services. Here, it will be worthwhile to mention that foreign banks have also come up with innovative products and services but they are yet to garner a major market share.
However, it does not mean that PSBs have been just spectators. They have definitely made some progress. The question to be asked is that are they too late? Were they sleeping? If after so many years one of the PSBs feels that it needs to change its logo so as to give it a fresh look or so as to give an international appeal, one can only be amazed at this approach. Take another example. A PSB feels that it needs to surprise people with the advertisements that it has the largest number of ATMs in India! So many years after the establishment, it is not a surprise at all. The point being made is that if it is trying to make people realize about this fact then there has been definitely been some deficiency in its approach towards the customers. That's why they don't know this fact. Why did all the PSBs take so much time to realize that cost of a transaction through an ATM is far lesser than that through branch banking!
Instead of being leaders, PSBs have been followers. But it is well said: Better late than never. Gradually PSBs are waking up and realizing the importance of a customer-centric approach.
Criticisms go along with praises. At least PSBs have been able to percolate to the rural areas accompanied by an increase in priority sector lending, which private banks have not been able to do. The probable reason is the low level of social responsibility of business on the part of private and foreign banks. Another notable thing is that by and large PSBs have been ethical as compared to their counterparts in private sector. For God's sake, they don't resort to gangsters or force a common man to sell his kidneys to recover loans. In case of private banks, the fine print is often more dangerous than the bold print on agreements with the customers. What we need is strong corporate governance norms that do not restrict themselves to filling and filing of forms and returns. What we need is good banking practices and clear customer relationship. If not, what is the difference between a Dubai or Karachi based don and a foreign or private bank.
Hence, PSBs are understanding the rules of the game. But now, do they need to score a six on every ball or can they manage by scoring 5 runs an over. Only time will tell this.
It's all about fundamentals!
Now a days, it does not matter whether we read The Times of India or The Economic times. Headline is same. It is about our lovely and respectable 'Sensex' – God for investors! Finally, it has gone down. Not only that, it has also taken many people along with it!
What has happened? Till recently, it was a party time for the investors over last many months. Even beers had come out of the jungle to accompany bulls. People kept on buying in frenzy as if a discount sale was going on. It hardly mattered which share it is. I had heard, "Valuations are attractive", "Fundamentals are strong, you see!" People were talking about the Great Indian Growth story, huge quantity of foreign exchange reserves and many more positive factors. Thank God! The only thing they were not talking about was Indian cricket team's good performance. They even ignored rising oil prices.
Now, scenario has changed. Market has crashed. Nothing has changed about India, its growth, competitiveness and foreign exchange reserves are also still intact. Again somebody said, rising oil prices is a concern. But is it a newly discovered phenomenon? No. It always existed, even during the good times.
Same lot who were making quick bucks earlier are now out on the road, burning Finance Minister's effigy in spite of knowing that he is not the proprietor of Sensex. After all they have to take some blame on themselves. They were on a wild treasure hunt.
It is not a million dollar question – finally, who gained? Since, it is a zero-sum game, somebody must have won. Who? My guess is as good as anybody's. FIIs! Statistics tell us they are selling. It cannot be just because of a draft put up on a website for public comments. These kind of rules are not made overnight. Intelligent investors can always foresee them. So, why this blood bath? Are we witnessing another scam or is it a profit maximization strategy of FIIs. I have got a food for thought. What do you say?
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