vision 2020 banking & finance

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  • 1. VISION 2020 IN BANKING ANDFINANCEPresenters: Seemoli , Pardha , Anant & Preeti

2. Mergers & Acquisitions More BRIC nation companies will be on theacquiring side The highest volume of M&A transactions in 2020will be seen in Energy & Utilities sector Standardization of accounting policies worldwidefacilitate M&A Indian banks may buy stakes in banks abroad 3. GlobalizationUpsurge of remotebanking Adoption of global standards Walk-in-loans & credit rating foreach customerTechnology wouldbe the key to competitiveness 4. Financial Inclusion AADHAR will cover the entire population by 2020 Urbanization & Predicted literacy rate close to 80% 600 million new customers accounts Rural areas to be covered by ATMs More households investing in shares , debentures ,mutual funds 5. Commodity Markets120Commodities Turnover100 80 60turnover Rs. Trillion 40 2002005-06 2006-07 2007-08 2008-09 2009-102010-11 6. FIs & banks will be permitted to invest in thecommodities markets. Bill to grant additional authority to the FMC has beenpending enactment for several years now it will bepassed It is a Futures market , by 2020 options will beintroduced Commodities markets to overtake capital markets 7. FDIs & FIIs FII inflows US$ 13 billion into Indian stocks till September 2012 FDI inflow Rs. 734,240.48 Crores (162,305.99 US$ million) The Centre for Monitoring Indian Economy (CMIE) projects that FII inflowssecond half of FY13 at US$ 11.2 billion Major FIIs like JP Morgan, Morgan Stanley and Deutsche Bank are believedto drive the positive wave of foreign investments 8. PRIVATE EQUITYRsRs Rs RsRs 9. Structure of Global GDP(in current US $ Trillion)20002011 20162020 2025World GDP 32.268.7 90.5110.5140.5Advanced Economies 25.744.453.3 61.171.7 (79.7%) (64.6%) (58.9%)(55.3%) (51.1%)Developing and Emerging6.5 24.337.2 49.468.8 (20.3%) (35.4%) (41.1%)(44.7%) (48.9%)of which India 0.5 1.93.6 5.8 10.0 (1.5%)(2.8%) (4.0%)(5.2%) (7.1%)Industry 11th Plan12th Plan(9.0%) 12th Plan(9.5%) (in %)(in %)(in %)Agriculture, Forestry & 3.24.04.2FishingConstruction7.810.0 11.0Financing, Insurance, Real 10.710.0 10.5Estate &Business servicesTotal GDP 8.29.09.5 10. Broad Macro-Economic Parameters -Previous Plan and Targets for Twelfth PlanThe labor force in India is expected to increase by 32 per cent over thenext 20 yearsThe Interest rates may be decreased (to 8%) in order to encouragegrowth11th Plan12th Plan 12th Plan (Target 9.0%) (Target 9.5%)1Investment Rate36.4 38.741.42Fixed Investment 30.9 33.535.53Savings Rate 34.0 36.238.94Current Account Balance-2.4 -2.5-2.55WPI Inflation Rate 6.0 4.5-5.0 5.0-5.5 11. Regulatory Systems in the Indian Financial Market Maintain the current conservative system of regulation Indian banks should conservatively trade in derivativemarket, not be influenced by US,UK banks Should resolve problems such as increasingpopulation, high unemployment rate Should not let the debt level rise as much asUS, Europe 12. Microfinance Financial education Product range, informed by understanding clientneeds Credit bureaus Client protection More loans available for rural india 13. Fiscal and Monetary policy FDI Investments Flexible Defence expenditure Short term loans 14. Banking Regulations Financial Inclusion in the banking sector The HR challenge : Re-skilling, attracting andChallenges retaining Automation implications Mortgages to cross Rs 40 trillion by 2020 The number of branches to grow 2X,ATMs 5X Investment banking to grow ten fold. Opportunities Infrastructure financing : Rs 20 trillion on bank books Wealth management : 10X growth 15. CAPITAL ACCOUNT 2020 Planning Commission envisages Foreign DirectInvestments (FDI) to contribute 35% (21% now) togross capital formation. FII inflows to get stronger in the second half of thisfiscal. Plan panel sets $100 billion target for pharma sector. 16. Insurance in India in 2020Cabinet approval ofIRDA support:Exit opportunity to FDI cap hike toSecure Rs 40,000promoters 49% croreIndia 2020: ConvergeAmong top three Innovate Insurance in India in life insurance marketsPenetrate2020 17. What it has in store for India?Immediate employment potential: 10million30 percent mandatory procurement preferably from MSMEs Infrastructure development: ruraldevelopment Technical expertise and better quality 18. Indian Pension market in 2020 Pension sector reforms (PFRDA Bill) : Favored byFICCI, ASSOCHAM and CII. Easing rules for pension and insurance funds could help secure$1 trillion in investment up to 2017. FDI could raise share of pension fund assets to GDP from thecurrent 5% to close to 17%, meeting capital needs. 19. Land Reforms and Land AcquisitionAnd Rehabilitation Resettlements Bill Infrastructure development for GDP target of 5.5trillion USD by 2020.: incentive to infrastructurefinancing Bigger share of the rewards of urbanization andindustrialization to landowners. Balance between social and economic uses of land 20. References Faster, Sustainable and More Inclusive Growth (Oct 11) Report of the Committee on India Vision 2020 (2002) Report of The Committee on Angel Investment & Early Stage Venture Capital June 2012 http://www.dnb.co.in/India2020economyoutlook/Macro_Ec onomic_Outlook2020.asp www.perjacobsson.org/external/np/seminars/eng/.../fiscal/.../ heller.pdf www.business-standard.com/india/...regulationfinancial- system/416450 www.articles.economictimes.indiatimes.com www.mpra.ub.uni- muenchen.de/4438/1/MPRA_paper_4438.pdf http://socialenterprise.georgetown.edu/events-and- media/2011-3/the-future-of-microfinance-opportunities- challenges-for-financial-inclusion