Presented By: CA ANAND SAKLECHA Phase in Indian Banking and Alternative Source of Finance Presented By: CA ANAND SAKLECHA

FINANCE: Finance includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty and risk. Three distinct categories of Finance: Public Finance Corporate Finance Personal Finance

Evolution of Indian Banking Sector

Liberalization (1991 & onwards): In order to improve financial stability and profitability of Public Sector Banks the following recommendations were made to reform banking system in the country: To make banks competitive and strong and conducive to the stability of the financial system. No more nationalization of banks. Foreign banks would be allowed to open offices in India either as branches or as subsidiaries.

Public sector banks and private sector banks should be treated equally by the Government and RBI. To encourage Banks to abandon the conservative and traditional system of banking and adopt progressive function such as merchant banking and retail banking, etc Foreign banks and Indian banks permitted to set up joint ventures in these and other newer forms of financial services. 10 Privates players got a license from the RBI to entry in the Banking sector.

Sector wise Credit distribution Key Points:- As per data publishes by RBI on Jan 19, 2018 Total credit distributed is Rs. 96,895 Billions. Major proportion of Credit mainly infused in Industrial sector, Priority sector, Personal loans. Total Rs. 50511 billions infused in Industrial and Priority sector. Personal loans are infused of by Rs. 18286 billions.

Retail Lending Scenario Key Points:- Total personal Loan: Rs.13491 Billions Major portion of retail lending is given for housing Purpose with total exposure of Rs. 7238 Billions.

V/s Bank Fraud Intentional act of deception involving financial transactions for purpose of personal gain. Fraud is a crime, and is also a civil law violation. Bad Loans (Defaults) It is failure to meet legal obligations (or conditions) of loan.

Pitfalls of Indian Credit Industry: Bad loans : At nearly Rs10 lakh Crore, India’s pile of bad loans is bigger than the gross domestic products of at least 137 countries. The share of gross NPAs in India could inch up to 10.2% by March 2018, from 9.6% in March 2017, according to the FSR. Bank fraud: As per RBI, almost all corporate loan-related fraud cases get seasoned for two to three years as NPAs before they are reported as fraud. In the last five years, the volume of bank fraud has increased by 19.6% to 5,064 cases.

Bad Loans Examples: Good Loans Asian Paints Ltd Bajaj Corp Ltd Colgate Palmolive (India) Ltd Dabur India Ltd. HUL Good Loans Defaulters: Bhushan Steel Ltd. Sahara Essar Steel Ltd. Frauds: Nirav Modi (Gitanjali) Kingfisher Airlines Bad Loans

Road Ahead Block Chain Technology. Artificial Intelligence- From Sci-fi to reality. Proliferation of non banks. Banking on Cloud First Technology. Banking Architecture Simplification. Automated Financial Services Employees.

Recent Government Initiatives: Following are the initiatives taken by the Govt. of India to strengthen the Credit lending Institutions: Planning to introduce a 2% discount in GST on B2C transactions made via Digital Payments. Introduction of ‘The Banking Regulation (Amendment) Bill,2017‘. Capital infusion of Rs 2.11 lakh Crore. The Lok Sabha has approved recapitalization bonds worth Rs 80,000 Crore for public sector banks. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed.

No Route to Escape With the introduction of Insolvency and Bankruptcy Code (IBC), following schemes are now no more: 5/25 Scheme CDR Scheme SDR Scheme S4A Scheme JLF Mechanism

Alternative Modes Of Finance: Equity IPO FPO Private Placement Venture Capital Financing Strategic Investors Debt Inter corporate Deposit (ICD) Commercial Papers Treasury Notes Bonds Asset Securitization

Thank You ! By: CA Anand Saklecha