challenges in banking sector in india
TRANSCRIPT
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7/31/2019 Challenges in Banking Sector in India
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11225 Namrata Thapa11241 Ridhi Shree
11256 Sadhana Zargad
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INTRODUCTIONBANKING SECTOR IS ENGINE FOR ECONOMIC
DEVELOPMENT
Rapid GrowthGreater growth opportunitiesOutstanding track record of innovation, growth and value creation.
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EVOLUTION OF INDIAN BANKINGSECTOR
Nationalization
LiberalizationPriority SectorTechnological changeSocial sector and Microfinance
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Challenges before Indian BankingSystem
Basel and capital adequacy normsStability and volatility of Indian banks Dynamic environmentCompetitionHuman resource management and developmentTechnological changesNew product development
Greater consumer orientation(CRM)Change ManagementContain politicization and promoteprofessionalization
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BASEL I Vs BASEL II: A MAJOR PARADIGM SHIFT
More emphasis on banksinternal methodologies,
supervisory review &market discipline
Flexibility, menu of approaches, capitalincentives for good riskmanagement
Increased risk sensitivity
Focus on a single risk measure
One size fits all
Broad brush structure
The Existing Accord The New Accord
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Basel and capital adequacy norms:Basel II to Basel III
Transparency Liquidity requirementRequires strategizing risk managementCapital conservation buffer of 2.5%
Stability and volatility of Indian banks:Structural changes in financial marketGlobal competitionRapid technology advancement
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Human resource management and developmentTechnology alien HR Attrition rateBalancing the workforce
Develop human resources for future challenges
Technological changes
Technological redundancy Slower adaption of technology Rejection of technology by employees
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Dynamic environment:Consists of changing surroundings Adapt to the changing environmentOvercome unpredictable obstacles
CompetitionLocal/Global Private banks
NBFCs
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New product developmentFailure of product to gain sufficient distributioncoverage.Higher development costsCompetitors fight back harder than expected. Strengthen awareness of new intelligent bankingproducts
Focus on innovative sales techniques
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Greater consumer orientation(CRM)CRM is Information industry term for methodologies,
software, and usually Internet capabilities Requires a strong coordination between IT and marketingdepartments
Change ManagementIdentify employee attitudesevaluate technological developmentsIdentify the impact of application of technology and theemployeeFocusing upon the factors that influence employee behavior
Contain politicization and promoteprofessionalization
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CONCLUSION
India has made progress in several areas like:Reducing the extent of NPAsSpeedier mechanismsBetter application of assetsRisk management by financial intermediaries
But bankers must realize that it is going to be survivalof the fittest and they have to move to professionalismEndeavour to be proactive