Greetings from mjunction!

The new financial year seems to have begun on positive notes. Propelling India into the world’s 10 biggest stock markets, the stock market cap crossed 1.5 trln. India's forex reserves rose by close to $11 billion- The reserves stood at $314.92 billion as of May 16, the highest since October 2011. With a gain of about 5.3% since the start of the year boosted by capital inflows and euphoria around the new government, the rupee’s surged to a 11-month high making it the best performing currency in Asia-Pacific region against the US dollar.

mjunction also began the new financial year with a new mission- to make the world a better place by creating robust and sustainable supply chains by bringing in efficiency, transparency through innovation and delivering the desired outcomes to the stakeholders. Our vision for the next five years reads, “mjunction will be customer-focused, technology driven and innovative as it charts its progress over the next five years. It will seek to create value for its customers whilst constantly achieving a YoY growth of over 25%.”

I am happy to let you know that financejunction connect with this issue has turned a year old. My team and I hope that you have enjoyed reading financejunction connect as much as we have enjoyed working on this. I would encourage you all to send in your valuable feedback to the editor, Shruti, at shruti.sanskriti@mjunction.in so that the next issue onwards it is able to satisfy all your requirements.

We look forward to a fruitful year working together to achieve the goals we have set ourselves. Wish you all the best!

Regards,

Vinaya Varma,Vice President, mjunction services limited

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Volume 5 Issue 5 Jun 2014

The global economy is expected to pick up speed as the year progresses and is projected to expand by 2.8% this year, strengthening to 3.4% and 3.5% in 2015 and 2016, respectively. High-income economies will contribute about half of global growth in 2015 and 2016, compared to less than 40% in 2013.

The World Bank lowered its forecasts for developing countries and is now expecting them to grow at 4.8% this year, down from its January estimate

of 5.3%. However, signs point to strengthening in 2015 and 2016 to 5.4% and 5.5%, respectively.

China is expected to grow by 7.6% this year. The Euro Area is on target to grow by 1.1% this year, while the United States economy, which contracted in the first quarter, is expected to grow by 2.1% this year. Growth in India is projected at 5.5% in FY2014-15, accelerating to 6.3% in 2015-16 and 6.6% in 2016-17.

GLOBAL ECONOMIC OUTLOOK

2012

2.5%

4.8%

1.5%

2.4%

4.8%

1.3%

2.8%

4.8%

1.9%

3.4%

5.4%

2.4%

3.5%

5.5%

2.5%

2012 20122014 2014 20142013 2013 20132015 2015 20152016 2016 2016

2014 2014 20142.8% 4.8% 1.9%Global Growth Developing Countries Higher Income Countries

THE GLOBAL ECONOMYGot off to a bumpy start this year but is expected to pick up speed up broadly in line with earlier expectations

is projected to pick up from 2.4% growth in 2013 to 2.8% in 2014, before gradually accelerating to about 3.5% by 2016.

are headed for a third year of relatively mutedgrowth, as capacity constrains, stalled domestic reforms, and political strife in middle-income economics offset a strengthening global environment.

A reduced drag on growth from fiscal consolidation, improving labor market conditions and a steady release of pent-up demand are projected to lift high- income GDP growth.

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INDIA ECONOMIC INDICATORSIndia's GDP grows under 5% for

2nd year running

Hit by a toxic mix of high inflation, costly loan rates and poor services and industrial sector growth, India’s Gross Domestic Product GDP has grown at less than 5% in seven of the last eight quarters. The Indian economy grew by 4.7% in 2013-14 making it the second successive year of sub-5% growth though the government forecast a growth of 4.9% for 2013-14 in February’14. India’s GDP grew 4.5% in 2012-13. A good monsoon last year pushed agricultural growth to 4.7% and food grain production rose nearly 3%. However, current climate forecasts indicate increased likelihood of a deficient monsoon in 2014-15.

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5

10

15

2013 2014 2015 2016

Developing Countries High-Income Countries

Contributions of imports fromgroup to growth in globaltrade volumes

HIGH INCOME COUNTRIES’ CONTRIBUTION TO GLOBAL TRADE GROWTH WILL MORE THAN DOUBLE

FINANCINGCONDITIONSFOR DEVELOPINGCOUNTRIESHAVE EASEDSINCE THE STARTOF THE YEAR

FISCAL DEBT ROSE BY MORETHAN 10 PERCENTAGE POINTSOF GDP IN MORE THAN HALFOF DEVELOPING COUNTRIES

Contribution to annual growth of global trade

Sovereign bond yields,%Developing Yields

Developing Yields

USA 10 Year yeild

Levels

April 2013 Peak Today

467667522

020055

Change1400

1200

1000

800

600

400

200

2005 2006 2007 2008 2009 2010 2011 2012 20130

0

2

4

6

8

10

# of countries

12

-35 -30 -25 -20 -15 -10 -5 0Chage in debit to GDP ratio (% of GDP)(2002-2013)

Sources: World Bank, JP Morgan, Haver Analytics

5 10 15 20 25 30 More

14

16

2

India’s GDP growth in 2013 -14. This is the first time in 26 years after 1987-88 that GDP had grown at sub-5% in two successive years

Growth in Manufacturing sectorin 2013-14, lower than the previous year’s 1.1% growth

Growth in agricultural output, up from 1.4% last year, but deficient monsoon this year could push up inflation and hurt farm income

Growth in services sector (including construction) in 2013-14, marginally higher than last year’s 5.6% growth but sharply lower than the 10-year average of 9%

India’s economy grew 4.7% in 2013-2014, from 4.5% in 2012-13, conforming signs of a sticky slowdown

GROWTHENGINE TOLAGGARD

9.5%2005-06 2007-08

2009-10 2010-11

2011-12

2012-13

2008-09

2006-07

2004-05

9.3%8.6% 8.9%

6.7%

4.5%

6.7%

A SNAPSHOT

9.6%9.6%

7.0% 2013-142013-144.7%4.7%

4.7% -0.7% 4.7% 5.8%

GDP Growth over the years

3

INDIA GDP ANNUAL GROWTH RATEIn the first quarter of 2014, India's GDP growth slowed to 4.6% yoy from a 4.7% expansion registered in 2013-14. The output was mainly hurt by a contraction in the manufacturing sector.

On an annual basis, finance, insurance, real estate and business activities grew 12.4% (down from 14.1% in the previous period), followed by electricity, gas and water supply (7.2%, compared with 5.0% in Q3) and agriculture, forestry and fishing (6.3%, up from 3.7%) as the fastest growing sectors. In contrast, manufacturing contracted 1.4% (slightly up from -1.5 a quarter earlier) and mining and quarrying production fell 0.4% (up from -1.2%).

MAY CPI INFLATION AT 8.28%, WPI AT 6.01%Consumer price inflation (CPI) eased to 8.28% in May from a three-month high of 8.59% in April aided by lower food prices. Over the past two years, the CPI had been rather stubborn at around 10% making it difficult for RBI to cut interest rates even though economic growth fell below 5%.

Hitting a five-month high, India’s Wholesale Price Index (WPI) rose faster-than-expected to 6.01% in May. Food Inflation to jump to 9.50% from 8.64% in April.

However, if fears of El Nino come true, India may face a drought followed by higher inflation followed by tough monetary policy decisions and no rate cuts in the near future.

Historically, WPI has been the main measure of inflation in India. However, in 2013, the governor of The Reserve Bank of India Raghuram Rajan had announced that the CPI is a better measure of inflation.

INDUSTRIAL OUTPUT RAISES HOPE OF TURN AROUNDExceeding market expectations, the Index of Industrial Production(IIP) for April 2014 came in at a high 3.4% as against the sharp contraction of -0.5% in the previous month, indicating an improvement in business sentiments and revival in investor confidence. The improvement in IIP raises hopes of a turnaround for India's industrial sector.

5 STEPS TO 8% GROWTH Urgent steps are required to halt the slide in the economy

One of the surest ways to revive a sagging economy is to prompt people to spend more through tax breaks. A timeline for introducing Direct Taxes Code can be a good first step

Introduce urgent reforms in agriculture. At least 25% more farmland can be irrigated if infrastructure, such as feeder canals, is built

A Pan-India goods and services tax could save billions of dollars, cut corruption and boost economic growth

Roads and Railway projects can create jobs. Household can be financiers to build infrastructure if investment norms are eased for insurance

The Delhi-Mumbai Industrial corridor and other such projects should be accorded priority as they can potentially spin millions of jobs

India GDP ANNUAL GROWTH RATE

India INFLATION RATE

Source: www.tradingeconomics.com | Ministry of Statistics and Program Implementation (MOSPI)

Source: www.tradingeconomics.com | Ministry of Statistics and Program Implementation (MOSPI), INDIA

Source: (MOSPI)

Percent Change in Gross Domestic Product

Annual change of consumer price index

2012 20132011

Jul/13 Oct/13 Jan/14 Apr/14

May2013

All Commodities

Primary Articles

Fuel and Power

Manufactured Products

Infl

ati

on

Jun2013

Jul2013

Aug2013

Sep2013

Oct2013

Nov2013

Dec2013

Jan2014

Feb2014

Mar2014

Apr2014

May2014

2012 20142013

4

8

16 16

14 14

12 12

10 10

8 8

6 6

4 4

2 2

0 0

8

4

4.5

8.5 8.5

4.5

5

9 9

5

7

11 11

7

7.5

11.5 11.5

7.5

8 8

6.5

10.5 10.5

6.6

6

10 10

6

5.5

9.5 9.5

5.5

6

9.52

5.1

9.84

4.5

10.17

4.6

11.16

4.4

9.87

4.8

8.79

4.4

8.03

4.8

8.31

4.7

8.59

4.6

8.28

7.5

9.87

6.5

9.64

WPI - Y-o-Y Inflation

Core Industries - Growth (%)

Core Industries

Coal

Crude Oil

Natural Gas

Pertro Refinery

Fertilizers

Steel

Cement

Electricty

3.7

1.2

-1.2

-17.4

6.2

-2.4

10.1

5.2

3.5

4.2

3.3

-0.1

-7.7

-2.2

11.1

3.1

6.7

11.2

(%) (%) Apr-2013 Apr-2013 Apr-2014 Apr-2014

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GDP at 4.4% in Q2, FY-14India's Gross Domestic Product (GDP) slowed by a decline in mining and manufacturing stood staggering at 4.4% in the second quarter of 2013. This is the lowest quarterly growth rate since 2002.

INDIA PMI REGISTERS AN INCREASEHSBC Purchasing Managers’ Index™ (PMI™) showed a marginal increase from 51.3 in April to 51.4 in May. Output rose for the seventh consecutive month in May though the rate of expansion was unchanged from the modest pace registered in April. The latest rise in production was broad - based by sector, with the sharpest expansion signalled by consumer goods producers.

The headline HSBC Services Business Activity Index jumped from 48.5 in April to 50.2 in May, the first expansion of output in 11 months. Supporting the rise in services activity was a rebound in new orders. However, the rate of expansion in incoming new work was slight.

Registering a growth of activity for the first time in three months fuelled by the higher output noted at manufacturing and services companies, the HSBC India Composite Output Index from rose from 49.5 in April to 50.7 in May, The rate of expansion was, however, slight overall and below average.

CFO CONFIDENCE IN INDIAN ECONOMY AT A NEW HIGHSenior Indian finance executives are bullish about the domestic economy and the balance is shifting more towards a growth outlook with business confidence on a high as is clearly reflected in the seventh annual American Express/CFO Research Global Business and Spending Monitor.

KEY POINTS

HISTORICAL OVERVIEW

HSBC India Composite Output PMI= no change on previous month, S.Adj50

60

55

50

45

40

2006 2007 2008 2009 2010 2011 2012 2013

65Increasing rate of growth

Increasing rate of concentration

Source: Markit, HSBC

Further information on service sub-sectors is available in the main report at www.hsbc.com

Mining registered a growth of 1.2% in April 2014 as against -3.4% during the same period last year. Growth in manufacturing was also encouraging at 11.9% in April, when compared with a growth of 4.2% in same month last year. This is a positive sign, given that the manufacturing sector was besieged by negative growth for nearly all of FY14.

Fourteen industries registered a positive growth during the month which included electrical machinery and apparatus with the highest growth (66%) followed by machinery and equipment (9.6%) and Tobacco products (9.1%). Electricity segment registered a significant jump in output from 5.3% in April 2014 to 11.9% in May 2014.

Negative growth was recorded by 8 of the 22 industries which include Radio, TV and communication equipment with the sharpest decline (-31.6%) followed by wearing apparel, dressing, and dyeing fur (-22.1%) and Motor vehicles, trailers and semi-trailers (-14.6%).

First expansion of private sector output for three months

Incoming new orders increase at services and manufacturing companies

Cost inflation across private sector hits one-year low

APR 2014INDEX OF INDUSTRIAL PRODUCTION

Growth in %[Base 2004-05 =100]

4.0

3.0

2.0

1.0

0

-1.0

-2.0

-3.0

-4.0

Apr2013 2014

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

- - - - - - - - - - - - -

2013-14 2014-15

-3.4 4.21.5

3.411.9

6.11.8

2.61.2

-0.6-0.1-0.8

ElectricityManufacturingMining Overall

Apr-Mar Apr-Mar Apr-MarApr-Mar Apr Apr AprApr

-2.5-1.8

0.4

2.6 2.7

-1.2-1.3

0.1

1.1

-1.8

-0.5

3.4

1.5

Companies investment plans-

86% Indian CFOs expect Indian economy to

expand over the next year

77% Indian respondents expect their company's

sales to increase the most in the Indian subcontinent

100% Indian CFOs will increase spending and

investment

79% Indian CFOs foresee expansion in the

domestic economy as the key driver for business growth

93% of CFOs are likely to increase spending

on business travel

57% CFOs look at Information Technology

for improving financial reporting and analysis

70% CFOs agree that Information Technology

will contribute most to their growth strategy by improving efficiency productivity, and reducing costs for the company

47% of CFOs say their companies have

critical needs to invest both in cloudcomputing and in mobile technologies

30% CFOs and senior finance executives will

look at aggressive spending and investment while

57% will approach spending more moderately

to support top-line growth while improving profitability

57% in expanding market access

55% in improving production-process efficiency

55% in new product/service development

87% CFOs agreed that the finance viewpoint

carried an influential and determining factor in strategic operations decisions

87% CFOs claim to have a strong working

relationship with their management

5

NORTH BLOCK READIES FOR A TOUGH GRIND

CII BUSINESS CONFIDENCE INDEX FALLS Business Confidence in India is reported by the Confederation of Indian Industry (CII) decreased to 49.90 in the first quarter of 2014 from 54.90 in the fourth quarter of 2013. Business Confidence in India averaged 58.94 from 2005 until 2014, reaching an all-time high of 71.80 in the first quarter of 2007 and a record low of 45.70 in the third quarter of 2013.

INDIA: ECONOMIC OUTLOOKIndia's economy has been stuck in a rut of sub 5% growth levels and a sticky inflation. The Narendra Modi government plans to take a series of steps to usher the economy into a high growth path, rein in inflation, reignite the investment cycle, accelerate job creation and restore the confidence of the domestic as well as international community in our economy. The focus will be on mending the economy in the next two years and then making an aggressive push for growth in the remaining three years of its term.

INDIA BUSINESS CONFIDENCE

Source: www.tradingeconomics.com | Confederation of Indian Industry (CII)

Presidentialaddress will spellout the broad agenda

Budget will listconcrete steps

PM to be activelyinvolved in budget

Jul/12 Jan/13Jul/11 Jan/12 Jan/14Jul/1345 45

50 50

55 55

60 60

65 65

48.6

52.9

55

51.3 51.3 51.249.9

45.7

54.9

49.9

62.5

53.6

2-PRONGEDSTRATEGY

Fiscal Consolidationto continue with a lowertarget for FY15

STEPS TO SPUR INVESTMENTS

FISCALCONSOLIDATION

Budget will spell out first round of details

Possibly some concession to smalltaxpayers

Emphasis on developing cost - competitive manufacturing

Focus on better spending mix to improvequality of spending

This will be followed by steady measures

Diesel subsidy will be wiped out throughmonthly increases

Retrospective tax is likely to be madeprospective

No extraburden via more taxes

Industrial and manufacturing policywill be reworked

Similar mechanism forcooking gas likely

States will be made party to investproposals

1 2

Exceeding expectations for 95.8, the NFIB's small business confidence index came in at 96.6 for May - the highest since 2007.

NFIB Business activity index (Left)

DebtCeilingFiasco

ISM Manufacturing index (Right)

100 50

104 55

108 60

96 45

92 40

88 35

84 30

8000 05 1001 06 1102 07 1203 08 1304 09 14

25

Shutdown

Fiscal Cliff

1. Poverty elimination: With a firm belief that the first claim on development belongs to the poor, the government will focus its attention on those who need the basic necessities of life most urgently. It will take necessary steps to provide security in its

entirety to all citizens; through empathy, support and empowerment.

3. Agriculture: The government will increase investment in agriculture, both public and private, especially in Agri-infrastructure. Steps will be taken to convert farming into a profitable venture through scientific practices and Agro-technology.

4. Federal structure: The government has stressed on the need for greater co-operation between the state and the central governments its agenda. The government will reinvigorate forums like the National Development Council and the Inter-State Council.

5. Transparent systems and time bound delivery of government services: the government will committed to providing a clean and efficient administration focused on delivery. It will take steps to build the confidence and morale of the bureaucracy; enabling it with the freedom to work, and

welcoming innovative ideas. The government will stress on putting in place transparent systems and time bound delivery of government services to make them citizen friendly, corruption free and accountable.

Efforts will be made to eliminate obsolete laws, regulations, administrative structures and practices. Rationalization and convergence among Ministries, Departments and other arms of the government will be ensured to have focused delivery. Digitization of government records will be done for improving accessibility.

2. Containing food inflation: Containing food inflation will be the topmost priority for the government. There will be an emphasis on improving the supply side of various agro and agro-based products. The government will take effective steps to prevent hoarding and black marketing.

The government plans to reform the Public Distribution System by incorporating best practices from US. The government said that it is alert about the possibility of a subnormal monsoon this year and contingency plans are being prepared.

The ten key economic policies spelt out by the Modi government in the Presidential address are-

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6. E-governance: The new government believes that e-governancee brings empowerment, equity and efficiency. The National e-governance plan will be expanded to cover every government office from the centre to the Panchayat; to

provide a wide variety of services to citizens. Technologies like Social Media will be used as a tool for participative governance, directly engaging the people in policy making and administration.

8. Job creation: The government wants to strategically promote labour-intensive manufacturing. Employment opportunities will also be expanded by promoting tourism and agro-based industries. The government aims to transform Employment

Exchanges into Career Centres - connecting the youth with job opportunities in a transparent and effective manner through the use of technology as well as through counselling and training. The government will work to strengthen the pension and health insurance safety nets for labour force of all categories and will provide them access to modern financial services.

9. Infrastructure: The Modi government plans to give a major push to infrastructure and will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years. A fast-track, investment friendly and predictable PPP mechanism will be put in place. Modernization

and revamping of Railways is on top of the infrastructure agenda. The government also plans to launch a Diamond Quadrilateral project of high speed trains.

A network of freight corridors with specialized Agri-Rail networks for perishable agricultural products is also on the agenda. Investment in railways will be increased using innovative financing methods. Expansion of railways in Hilly States and Northeast region and modernization of rail safety systems will be prime focus areas. R&D and high level local manufacturing for railway systems will also be encouraged.

10. Tourism & Culture: India has a vast untapped potential for tourism which can play a special role in our socio-economic progress. The government will initiate a mission mode project to create 50 tourist circuits that are built around specific themes. With a view to encouraging pilgrimage tourism, a National

Mission for beautifying and improving the amenities and infrastructure at pilgrimage centres of all faiths will be launched.

7. Ease of doing business: The government aims to create a policy environment which is predictable, transparent and fair. It will embark on rationalisation and simplification of the tax regime to make it non-adversarial and conducive to investment, enterprise and growth.

IDFC AND BANDHAN FINANCIAL SERVICES PVT LTD WIN BANKING LICENCESA day after the Election Commission permitted Reserve Bank of India (RBI) to go ahead with the issue of new banking licences, the RBI on 2nd April ’14 gave in-principle approval to infrastructure finance company IDFC and Kolkata based microfinance firm Bandhan to comply with the requirements of a fledged bank in 18 months. IDFC plans to begin operations by October 2015.

The RBI originally received 27 applications in July 2013, after which Tata Sons and Videocon Group withdrew, leaving 25 contenders in the fray. Besides India Post, the other applicants included state-run IFCI and private sector Anil Ambani group and Aditya Birla group, Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital.

RBI governor Raghuram Rajan backed the postal department's demand to set up a bank, even as the finance ministry tried to block the move. The RBI governor said that the proposed Post Bank could start as a payment bank, making use of post office outlets to raise deposits and make payments. He suggested that the 'Post Bank' could be given a limited banking licence which will enable it to raise deposits and offer payment and remittance

SECOND BI-MONTHLY MONETARY POLICY STATEMENT - RBI HOLDS POLICY RATE AT 8%The Reserve Bank of India in its Second Bi-Monthly Monetary Policy Statement on 3rd July’14maintained the status quo with regard to the key interest rate in its monetary policy review based on the need to curb inflation, which has remained stubbornly high.

RBI governor, Dr.Raghuram G Rajan, decided to:

• Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0%

• Keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0% of net demand and time liabilities (NDTL)

• Reduce the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 23.0% cent to 22.5% of their NDTL with effect from the fortnight beginning June 14, 2014

• Reduce the liquidity provided under the export credit refinance (ECR)

facility from 50% of eligible export credit outstanding to 32% with immediate effect

services. He said there would, however, be restrictions on investments and the entire amount would be have to be parked in government securities

This model could be a win-win solution for the RBI and India Post, and also address the capital-related concerns that the finance ministry has. For RBI, a payments bank model will help it tap into the post offices' extensive reach that goes beyond what even State Bank of India can offer. Compared to SBI's over 15,000 branches, there are over 1.5 lakh post offices across the country. For India Post, it means that it can get additional revenue stream, learn the tricks of the trade and then hope to convert into a full-fledged bank later. It also comes with the advantage that lower capital may be required to sustain this model.

The RBI has issued bank licences after a gap of a decade. It last awarded licences to Kotak Mahindra Bank and Yes Bank in 2003-04. Currently there are 27 public sector banks and 22 private sector banks operating in the India.

This move will pave way for more entities to come forward and spread financial inclusion. This will increase healthy competition among banks to offer competitive commercials and customer service. Besides the banking sector and the economy, the public is sure to benefit with better financial inclusion, rates, services and customer satisfaction.

• Introduce a special term repo facility of 0.25% of NDTL to compensate fully for the reduction in access to liquidity under the ECR with immediate effect

• Continue to provide liquidity under 7-day and 14-day term repos of up to 0.75% of NDTL of the banking system

Consequently, the reverse repo rate under the LAF will remain unchanged at 7.0%, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0%

.The Current Account Deficit (CAD) narrowed sharply to 1.7% of GDP for 2013-14 due to decline in gold imports, although other non-oil imports also contracted with the weakening of domestic demand. The trade deficit narrowed sharply due to resumption of export growth after two consecutive months of decline, and the ongoing shrinking of import demand. The foreign direct investment supported inflows of portfolio investment and external commercial borrowing, kept external financing conditions comfortable and helped add to reserves. While these have been positive signs, the RBI continues to hawkish because of the fears of a weak monsoon during the June-September due to chance of the occurrence of El Nino which would further raise inflation.

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SUPPLY CHAIN FINANCE - BENEFITSSupply Chain Finance (SCF) has been around for a while in one form or another but it is only in the last few years that this market has shown sustainable growth with a significant (global) opportunity ahead. SCF has proven its potential and ability to add value to both buyers and suppliers. Banks are investing in this area and there are a lot of instances of service providers providing an innovative easy to use platform that connects all three parties- the seller, buyers and the banks.

Benefits to the Buyer:

• Improved cash flow (DPO) due to extended payment terms

• Optimization of working capital and improved liquidity management

• Potential early payment discounts resulting in reduced COGS

• Reduced risk with more financially stable and reliable supply chain

• Streamlined and automated payment, reconciliation and forecasting

Benefits to the Suppliers:

• Accelerated receipt of payments and improved forecasting ability

• Improved cash flow and reduced working capital requirement

• Better financing rates and terms

• Automated payment process

• Reduction of credit risk

Benefits to the Banks:

• Stronger collaborative relationships with customers- Enhanced Customer Retention

• Increased topline by supporting the client’s entire supply chain

• Lower cost of customer acquisition and increased cross-selling opportunities

• Increased reach and profile of trade and treasury organization

THE FINANCEJUNCTION SOLUTIONThere are a few challenges that mar prevent organizations from implementing SCF solutions for their supply chain, SCF service providers like financejunction understand these road blocks and provide innovative solutions.

1. Lengthy processes of onboarding suppliers, especially if being on boarded onto multiple platforms from their buyers’ banks. Most banks also require Opportunity for supplier/B2B networks to get more involved with their networks of already connected buyers and suppliers and their streamlined and efficient methods of enrolling suppliers.

To correct this, financejunction provides a simple on-boarding process. It offers end-to-end services via a single window platform which connects the Seller, Buyers and Banks. Using a single id and password, one can log into the platform and view all their account and transactions at one place.

2. Most banks require “Know Your Customer” (KYC) checks to be performed on suppliers that are considered new customers. This increases the total processing cost especially if they are international.

By partnering with finncejunction, banks can lower their cost of acquisition and also increase their instances of cross selling. financejunction offers a simple documentation process for both the buyers and the banks. financejunction collects the KYC forms and the necessary documents from the buyers and only forwards the same to the banks after running a due diligence screening.

3. Cost of finance is perceived to be higher

The higher notional cost of funds is a myth. As compared to the market rates, financejunction offers supply chain finance at a lower cost. It offers largely unsecured finance at competitive costs. Besides the Variable Arrangement Fee Model, it even introduced the Fixed Arrangement Fee Model to further lower the cost of finance for its customers

• financejunction signed a contract with BalmerLawrie Ltd to offer its supply chain finance services to the channel partners of their grease and lubricants division via Tata Capital Financial Services Ltd

• Besides SCB, HDFC and Tata Capital, financejunction entered into a strategic alliance with Yes Bank Ltd for it Channel Finance program to finance the channel partners its clients like Tata Steel

• financejunction extended it Buyer Finance service for the coal chemical customers of metaljunction through Axis Bank

FINANCEJUNCTION DIARY

MIBOR rates have decreased by 6% from the levels of 9.26 (on 2nd April) to 8.74 (on 2nd June) for the 1- month MIBOR rate

In India, the interbank rate is the rate of interest charged on short-term loans made between banks. Interbank Rate in India decreased to 8.65% in May of 2014 from 8.86% in April of 2014.

INDIA INTEREST RATE

INDIA TREASURY BILL YIELD

Bench Mark Interest Rate

MIBOR Rates

Interbank Rates

Source: www.tradingeconomics.com | Reserve Bank of India

Source: www.tradingeconomics.com | Reserve Bank Of India

Oct/13 Feb/14 Jun/14

2 Feb/14

Nov/13 Mar/14

2 Mar/14 2 Apr/14

Aug/13 Dec/13 Apr/14

2 Dec/13

Sep/13 Jan/14 May/14

2 Jan/14 2May/14

Jul/13 Oct/13 Jan/14 Apr/14

7.2

77

7.2 7.27.2

7.4

88

7.4 7.47.4

7.50 7.50

8.00 8.00

8.50 8.50

9.00 9.00

9.50 9.50

10.00 10.00

10.50 10.50

7.6

99

7.6 7.67.6

7.8

1010

7.8 7.87.8

8.0

1111

8.0 8.08.0

8.28.2 8.2

1212

7.48

11.26

12.02

9.57

8.68.94

8.73 8.99.15

8.948.86 8.65

1313

8.2

0

5

28-1-2014

Bank Rate

Effe

ctiv

e D

ate

Repo Reverse Cash Reserve

Fix Range LAF Rates

Marginal Statutory

7-10-2013 15-7-2013 19-3-201329-10-2013 20-9-2013 3-5-2013 9-2-2013 29-1-2013

10

15

20

25

9 8.75

9 9.5

10.2

5

8.25

8.5

8.75

8.75

8 7.75

7.5

7.5

7.25

7.25

7.5

7.75

7.75

7 6.75

6.5

6.5

6.35

6.25

6.5

6.75

6.75

4 4 4 4 4 4 4 4 4.25

9 8.75

9 9.5

10.2

5

8.25

8.5

8.75

8.75

23 23 23 23 23 23 23 23 23

mjunction is the largest ecommerce company in India.It is a 50:50 venture promoted by the Steel Authority of India Limited (SAIL) and TATA Steel.

shamim.ahmed@mjunction.insubarna.gupta@mjunction.in

www.mjunction.inwww.financejunction.in

corporate office

mjunction Services LimitedGodrej Waterside Tower – I, 3rd Floor, Plot No. 5, Block – DP Sector – V,Salt Lake City, Kolkata – 700091, WB, IndiaTel: +91 33 6610 6100Fax: +91 33 6610 6187/ 6179

+91 33 6601 1719 / 1720

CIN: U00000WB2001PLC115841

eMail: contactus@mjunction.in

Registered office

TATA Centre,43 Jawaharlal Nehru Road,Kolkata 700 071Tel: +91 33 6610 6100

+91 33 2288 2606Fax: +91 33 2288 2078

Editor: Shruti Sanskriti For feedback regarding newsletter, write to: shruti.sanskriti@mjunction.in

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