
THE RECENT GLOBAL banking debacles have highlighted the robustness of India’s ₹216-lakh crore banking industry. But there are important lessons there for India’s banking sector as well. The crisis has brought to the fore factors such as portfolio concentration, liquidity risk, the superiority of equity over additional tier-1 (AT1) bonds—a kind of debt issued by a bank that can be converted into equity if its capital levels fall below requirements—as well as market risks.
The emergency credit lines opened by regulators also raise questions about the role of governments and regulators in rescuing stressed banks. “Every crisis gives us a new regulatory blueprint,” says a private sector banker who wishes to remain anonymous. Banks have a lot to deal with—from risk management to credit to liquidity to market risks by moderating the expectations of equity shareholders. “They [banks] should address portfolio diversification, growth in the intrinsic net worth of their assets, quality of credit, market risk in terms of measurement of assets’ sensitivity to interest rate movements and funding risks, especially depositors leaving as quickly or quicker than when they came in,” says Monish G. Chatrath, Managing Partner of MGC Global, a risk advisory firm.
Esta historia es de la edición April 16, 2023 de Business Today India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición April 16, 2023 de Business Today India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar

VINE TO VINO
Calling all wine lovers to explore India's wine trails and vineries

TIGHT FINISHES AT TOLLY
RAZOR-SHARP COMPETITION WAS THE ORDER OF THE DAY FOR ROYAL RANTHAMBORE BT GOLF'S KOLKATA LEG AT THE HISTORIC TOLLYGUNGE CLUB

Helping More Indians Fly
We need to think and dream big, and combine that with flawless and speedy execution, accompanied by deep reforms

Fighting The Dragon
China's subsidies and export strategy have accelerated its dominance in the EV space. Amid fears of EV 'dumping', can India withstand the Chinese onslaught?

Buckle up for the Ride of a Lifetime
Many IPOs flunked, while several fell below ethical governance standards, and quite a few bombed. However, the capital markets have their own way of self-regulating excesses

❝Slow down but stay involved"
IndiQube provides flexible workspaces

Ready for Take-off
Total passenger traffic has grown from around 120 million to over 236 million per annum. Indian aviation sector continues to soar, and the best is yet to come

BURMANS IN CONTROL
After a long battle, the Burman family has seized control of Religare. It needs to infuse money and get it back on track

Reimagining India's Public Sector
India's policies since 1991 have been to get government out of business' way. Robust public sector is needed for providing basic needs equitably

No Theme Lasts Forever
A sensible investment strategy involves ignoring the noise and using a systematic criterion to pick assets. A good investment strategy can be boring