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THREATS TO INDIAN FINANCE SERVICE

INDUSTRY

By Radhika
Vaze

AGENDA
FINANCE INDUSTRY :COMPONENTS
OVERVIEW & RECENT TRENDS
THREAT
1) Fiscal Pressure
2) Regulatory Over-reach
3)NPAs
4)Economic Crime
ROAD AHEAD

WHAT EXACTLY DOES FINANCIAL SERVICES


MEAN

Financial Services are the Economic


Services provided by the finance
industry, which encompasses a broad
range of businesses that manage
money,

FINANCIAL SERVICE SECTOR

COMMERCIAL BANKS
INSURANCE COMPANIES
NBFCs
CO-OPERATIVES
PENSION FUNDS
MUTUAL FUNDS
OTHER SMALLER FINANCIAL ENTITIES

OVERVIEW & RECENT


TRENDS
ADVENT OF TECHNOLOGY
REFORMS TO LIBERALISE, REGULATE & ENHANCE
IMPROVING LIFE EXPECTANCY RATES
VARIED SOCIAL FABRIC
GOVERNMENT INITIATIVES

THREATS
Fiscal Pressure
FALLING

REVENUES(source:Economic Survey 2013: Planning

commission )

SPENDING ON SUBSIDIES
NEED OF FISCAL CONSOLIDATION

REGULATORS OF THE FINANCIAL SYSTEM

REGULATORY OVER-REACH
FSLRC recommendations

Kishori J Udeshi, a former deputy governor of the Reserve Bank of India


(RBI), objected to the proposed overbearing role of government regarding
capital flows:
P J Nayak, former chairman and managing director of Axis Bank, had a
different problem: "One must view with apprehension the very substantial
statutory powers recommended to be moved from the regulators (primarily
the RBI) to the finance ministry and to a statutory Financial Stability and
Development Council (FSDC), the latter being chaired by the finance
minister.

NPA
TARGET ORIENTED APPROACH
PRIORITY SECTOR LENDING
WEIVERS ANNOUNCED

FOR NBFC S Making NPA NORMS more stringent will


harm the cause of FINANCIAL INCLUSION
Ground realities of NBFCs is totally different from banks,
as they mainly deal with Rural/Illiterate/unbanked/self
employed section of the society.
Instalments are often delayed due to peculiar
circumstances of the borrowers
Realisation of default amounts through legal recourse is
time consuming
Anomoly correction as regards NPA Provisioning under

ECONOMIC CRIME

CYBERCRIME
DISTRIBUTION OF VIRUSES
PHISHING ATTACKS:THEFT OF
PERSONAL INFORMATION
HACKING

ROAD AHEAD

CONTINUOUS EVOLUTION EXPANSION & INTRODUCTION OF NEW


PRODUCTS
NEED FOR SWIFT CONSUMER ACQUISITION, QUICK FULFILMENT,
USE OF TECHNOLOGY & SOCIAL MEDIA TO IMPROVE RISK
ASSESSMENT & MANAGEMENT THEREBY CONTROLLING NPAS

TO ENSURE SUCCESS: NEED TO ADOPT SIMPLIFIED


,STREAMLINED,LESS TIME CONSUMING APPROACH FOR CUSTOMER
ON-BOARDING WHERE SPEED OF IMPLEMENTATION IS OF ESSENCE

Bibliography
www.indianbusiness.nic.in
www.rediff.com/business

Proceedings & Recommendations: Summit on Non-Banking


Finance Companies The Way Forward(23/01/2015)
:Associated Chamber of Commerce & Industry Of India

FINANCIAL SERVICES SECTOR ANALYSIS PWCS 2014 ECONOMIC


SURVEY

THANK YOU !

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