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by Rajen Kumar

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Running a magazine concentrating on issues of small and medium enterprises and managing with limited resources is a like living life on the edge. In this rush of meeting deadlines,...

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Apr 2012

EMRC, Brussels Associates with SME WORLD as its New Media Partner

EMRC has promoted business partnerships with the developing world and has organised dozens of business forums in key decision-making cities, such as Amsterdam, Rome,...

Money

Banking : Slow & Steady Loses The Game

Dr. B. K. Mukhopadhyay
Jul 2010

It is really surprising that even now – after announcing and implementing the stimulus after stimulus packages - it is being said that the impact of recession on our economy/ banking sector has been minimum! How can you remain insulated from the ongoing happenings and more so when you are in the process of increasing globalization? It so happens that the effects surface after a brief gap and as such the monitor leaves no stone unturned so that anticipation-sense does not get lost.

Crisis period calls for a careful assessment of the causes, effects as well as the future plans and as such any sort of complacency is out of question. What is more under the ongoing scenario - especially keeping in view the fast changing banking scenario – where a particular technology is being replaced rapidly by another technology - it is better to take for granted that in the near future there would be intense competition – intra and inter [players being Government owned banks, old private sector banks, new private sector banks and foreign banks] not only at the macro- level, but at the very micro-level also. Naturally, fixation of strategies, continuous up gradation of skill and making best use of talent backed by effective planning techniques that take care of the forthcoming series of happenings / things, pose the biggest challenge.

The Reasoning

It is a fact that India’s economy has not exactly be in crisis but the growth rate has been slowing down and any downward forecast (read IMF’s 3.5 percent GDP Projection for the ongoing year) should not be taken lightly. Every assessment has some reasoning and these reasoning must be studied well before becoming complacent. The big bosses even at Federal Reserve Bank failed in many ways to anticipate the writing on the wall in spite of being stalwarts in the financial sector! Even the ex-boss of FRB admitted the fact that timely detection of the downswing in the US Housing Crisis could shave saved from the result that has been experiencing thereafter. And now who could deny that the impact of global recession has not been there – Sri Lanka or Mali? Situation does not crop up overnight and that is why constant vigil on the rsik management practises is a must so that timely steps could steer clear of any untoward happening to a significant extent.

The challenge comes from two directions mainly - to what extent a bank is customer centric and risk-centric. In fact the post Basel II era will belong to the bank who could manage the risks effectively. Banks with proper risk management systems would not only gain competitive advantage by way of lower regulatory capital charge but also add value to the shareholders / stakeholders.

Risk Managers

Thus the future is for them who emerge to be top risk managers through optimal utilization of all of the resources – physical, financial, technological and the most important one – the human resource.

In this age of innovention – innovation plus invention - fast changing techno-savvy world - the buzzword is there - strengthen the marketing team and at the same time the very effectiveness so that the market share is broadened overtime following a set of strategies that are customer- centric and at the same time risk-centric in approach. To achieve the same continuously changing business environment is required to be given appropriate weight age in as much as retaining the customer emerges to be the biggest challenge all over the banking world now and for that matter following a renovated strategy [ e.g. a joint- drive like inter-institutional ] could strengthen the base.

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