Tagged #India

18/11/2014

India’s First Female Bank CEO Aims High

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Chanda Kochhar, the first woman to run a bank in India, is no stranger to tough situations.

She became chief executive officer and managing director of Mumbai-based ICICI Bank Ltd., India’s largest private-sector lender, as the global financial crisis raged in 2009. Soon she was battling a run on retail deposits, fuelled by unfounded reports the bank had significant exposure to troubled U.S. banks.

With the quiet confidence that is her trademark, Ms. Kochhar ordered branches across India to stay open as long as customers wanted their money, made sure ATMs were constantly restocked and coached edgy branch managers late into the night.

The key, she explained, was doing everything possible to make customers and employees feel comfortable in the face of a crisis, and communicate clearly.

With similar resolve, she has pushed ICICI, a bank hitched to India’s burgeoning middle class, into risky new markets – from the smallest of Indian villages to Canada’s rugged oil sands. Under Ms. Kochhar’s leadership, ICICI has followed India’s far-flung diaspora of immigrants and businesses into 18 other countries, while nearly doubling the bank’s return on equity.

And with clever use of technology, such as full-service branches in mobile vans and transactions via Facebook, she has brought millions of India’s “unbanked” into the modern economy.

ICICI, which stands for Industrial Credit and Investment Corp. of India, is now the country’s largest private bank, as well as its leading, private life and general insurer. It has more than 3,750 branches and 11,300 ATMs in India. Ms. Kochhar’s goal is to grow ICICI into a top 20 global bank.

The bank was a “gender neutral” institution long before it gained favour in the banking industry, in India and elsewhere. It has evolved into an organization that doesn’t give any special privileges to women, but also doesn’t distinguish between the sexes, Ms. Kochhar said. She’s now one of at least three female bank CEOs in India who rose through the ranks at ICICI, along with Axis Bank’s Shikha Sharma and JPMorgan India’s Kalpana Morparia.

In contrast, none of Canada’s Big Six banks has ever had a female CEO; nor have most of the top banks in the United States. With worldwide assets of $124.5-billion (U.S.), it is significantly smaller than National Bank of Canada, the smallest of Canada’s Big Six banks (assets: $199-billion Canadian) and Toronto-Dominion Bank, the largest (assets: $922-billion).

Ms. Kochhar regularly ranks on Forbes magazine’s annual list of most powerful women (No. 42 in 2014) and is widely recognized as India’s leading female CEO. She has earned every leading business prize in India as well as the Padma Bhushan, one of the country’s top civilian honours.

Expanding ICICI’s presence in Canada is a natural, given the extensive familial ties and growing economic relationship between the two countries, she said. She pointed out that roughly 30,000 Indian immigrants come to Canada every year, along with tens of thousands of students.

11/09/2014

There is No Magic-Wand Solution to India’s Problems

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IndusView Chairman Bundeep Singh Rangar on India’s Macro Trends and Why the Country Remains Favourable as a long-term Investment Destination...

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01/09/2014

India to Become Single Market and Outperform Global Markets

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More than six decades after it achieved independence, India has yet to have a single internal market, with its economy divided up by state taxes on commerce. 

That may be about to change, following the reversal by one of the biggest foes of a national sales tax—Narendra Modi, the Prime Minister who took office in May 2014. After opposing a goods and services tax (GST) during his 12 years running Gujarat, Modi has pulled his ruling party behind the idea and plans to enact it within eight months. 

Success would mean replacing more than a dozen types of tax that increase incentives for corruption, and offer the economy a boost of as much as 1.7%, according to the National Council of Applied Economic Research in New Delhi. 

Here are the reasons why India will outperform global markets in long term:

Foreign Institutional Investors (FIIs) have already poured in $26 billion in equities:

FIIs have been raising their ownership steadily in the Indian markets so far in the year 2014. They have already poured a little over $26 billion so far in the year, on account of the reforms agenda of the new government at the Centre.

Foreign institutional investors, which have been the primary contributor to the massive rally, increased their ownership in top Nifty-50 stocks in the June quarter, ICICI Securities said in a report.

Macro showing signs of improvement: 

Sentiment on domestic economic activity appears to be reviving, with incoming data suggesting a firming up of industrial growth and exports. The June round of the Reserve Bank's industrial outlook survey also points to improvement in business expectations in Q2.

India Ratings & Research (Ind-Ra) has revised its FY15 gross domestic product (GDP) growth forecast to 5.7% from 5.6% (April 2014 forecast). Even though the Union Budget FY15 has addressed certain supply-side issues plaguing the economy, they believe a single budget or one year's policy reforms are not enough to ensure a non-inflationary, sustained and higher economic growth. 

The rating firm also expects industrial GDP growth in FY15 to improve to 5.1%. If achieved, it will be the highest since FY12 (7.8%). The Index of Industrial Production (IIP) grew 4% over April-May 2014. The Index of Eight Core Industries grew 4.6% during Q1 FY15. Although it is still early to call it a trend, we believe this could be the beginning of a broad-based industrial recovery. 

Continuation of policy reforms by the new government: 

There will not be many global triggers for the Indian markets, but much of the action will revolve around policy action by the newly appointed Modi-led government.

Earlier this week the Union Cabinet allowed foreign investment in the Railways for the first time and raised limit for such investment in the defense sector, a step in right direction, say analysts.       

India has definitely a very bright future ahead…