It was yet another day of knowledge sharing in the calendar of the Indian Merchants’ Chamber (IMC) as it hosted a national seminar on Indian banking at a South Mumbai hotel. Attended by Chairmen and Managing Directors of India’s top banks, banking professionals, accountants and a host of delegates, the seminar titled ‘Indian Banking at the Crossroads - Challenge of risk management - from globalisation to financial inclusion’ laid bare the challenges to Indian banks in today’s globalised scenario.
Shailesh Vaidya, President, IMC expressed much gratification at the way the seminar stayed focussed. “Risk management and financial inclusion are complex challenges for our banks in today’s globalised scenario. I’m glad we were able to put together a distinguished panel of speakers. I’m sure this seminar would offer its attendees an informed perspective and a sharper view.”
Split into four sessions, the seminar kick-started on an honest note with an address by Chairman of the Finance &Banking Committee, IMC, and former MD of SBI, Chandan Bhattacharya. “Risks of banks today are like a rainbow –multi-layered and unique. But they’re also connected with the global scenario and the aspirations of the common man. Banks must make advances to bring in sophisticated tools to manage risks. And they must do this while expanding at a rapid speed too, so our vast population avails banking services.”
That said, the headliner of the day was clearly the Chief Guest, Arundhati Bhattacharya, Chairperson of the State Bank of India, the first lady to occupy the designation in the history of India’s largest commercial bank. In her multi-point speech, she delved into the complex nature of challenges in financial inclusion, such as migrants in urban areas not having documents to open bank accounts. While putting into perspective that it is in the inherent nature of banks to take risks, she highlighted the importance of pricing risks and the dangers of under-pricing them.
“The two most important risks banks are facing today are interest rate risk and exchange rate risk. And as they affect other risks too, banks will have to revamp their assessment of credit risk at portfolio levels and the expected losses on account of credit risk will also rise,” Bhattacharya suggested, signing off that risk management will only get more complex in a globalised world.
The seminar saw another distinguished lady on the dias, Usha Ananthasubramanian, Chairman & MD of the Bhartiya Mahila Bank Ltd, a one-of-a-kind institution in India. ‘Financial illiteracy’, i.e. inability of customers to understand the banking process, to her mind is an issue that Indian banks face not only in rural areas but in metros too. “Today I know so many urban women, even HNIs, who can't make their own financial decisions, depending upon their husbands or friends. Financial literacy is the key to financial inclusion.”
The second session on Financial Reporting & Risk Management saw CA. Charanjot Singh Nanda (Central Council Member of the ICAI) and CA. Jatin Lodaya discuss financial reporting as a support to risk management. “Every bank has a different risk appetite. But if it’s financial reporting is in good shape, its managers will be able to manage risks better. Elements such as IFRS, ADF and ICAAP are the success mantras to better risk management,” Lodaya offered.