Showing posts with label India. Show all posts
Showing posts with label India. Show all posts

Saturday, March 2, 2013

Past, present and future of the company...

Chairman, MMTC with jayant mundhra on past, present and future of the company...

B&E: Who do you bear in mind as your target audience?
SB: India’s obsession and fascination with gold is well known. While some section want to keep it as a safeguard for the future, another section want to use it for purpose of jewellery. So, almost all classes in India are our target audience.

B&E: You are mainly into import of gold and selling it in India. Keeping that in mind, what is the relevance of ‘Festival of Gold’ that you hold every year?
SB: We are the biggest supplier of gold, but at the same time, our main focus is on importing gold. However, 1989 was the first year when we imported gold and sold it in the Indian market. As far as the ‘Festival of Gold’ is concerned, it has been a huge success ever since it came into existence. In fact, the festival is an exhibition where we showcase our products as well as varieties of gold to buyers from across the country. In fact, the gold fest is a platform where buyers get a platform to interact with us at length. Apart from this, the exhibition also helps artists, who come from various regions of the country, to showcase their artworks.

B&E: For the first time, MMTC recently entered into a joint venture (with Gitanjali Jewellers) to move a step closer to the retail consumers. How do you see the road ahead?
SB: This is the first time that we are entering into a joint venture and I must say that Gitanjali Jewellers is a great brand to start with. They are very aggressive in their approach to tap the market and have got tremendous brand recognition amongst Indian populace.

B&E: According to you which is your core competence?
SB: Our core competence is in doing purity check of gold and then hallmarking it accordingly. This kind of service is not provided by any other player in the country. Hence, we have also developed a special symbol for our hallmark. To understand the kind of gold a person is buying, all one needs to do is look for a hallmark.

B&E: How well has the market taken up the job of quality check so far?
SB: We first opened our shop in New Delhi, and at present, we are operating with 11 stores across India. The response has, however, been tremendous. We are now planning to increase that number to 63 shortly.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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Saturday, January 19, 2013

END OF THE WORLD: FROM MAYAN TO ‘OBAMA’YAN

Perhaps it’s already too late to save the world of its various ills; a primer

Economists who support the growth of nuclear arsenal (yes, they are there!) forward the hypothesis that in the modern era, weak countries are arming themselves not with an intention to attack, but with an objective to dissuade other stronger countries from attacking them. The theorem does hold credibility – when Pakistan attacked India’s borders, India was constrained in its response due to Pakistan’s visible atomic base.

However, those are not democratic and sane governments that rule all countries across the world. Studies have shown, but obviously, that even a limited nuclear war would devastate the world. And the day an autocratic or military ruler decides push has come to shove and the time to decimate the opponent is now, many more than the two of us would wish we were living near the Thames in London.

What the world today requires is a foolproof non-proliferation policy. Comprehending the vibes, Obama has already amended his policy to protect the world from nuclear terrorism. During his April 2009 speech in Prague, he delineated his arms control and non-proliferation agendas and promised a US-led international effort to secure “all vulnerable nuclear materials” within the next four years. That is the most far reaching agenda any US President – for that matter, any premier across the world – has announced in history. To start it up diplomatically, in the recent G8 Summit in Italy, he announced a Nuclear Security Summit in 2010 to combat nuclear smuggling and prevent nuclear terrorism.

Obama knows his priorities too well – the US considers climate emissions control its last priority on the ‘save the world’ list; the December Copenhagen summit will be proof enough. We aren’t complaining about that...


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
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Wednesday, January 16, 2013

PAKISTAN: INTERNAL CONFLICT

Swat militants’ request for help was declined by the Afghan Taliban, claiming non-interference policies

Both centres and six vehicles got destroyed. Thirty-three militants also got killed in the operation.”

The so-called Islamic militants have not only been a source of destabilisation in Pakistan but have also been providing fodder to India and executing terrorist attacks there much to the embarrassment of democratically-elected Pakistan government that is pursuing friendly relations with India.

President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani have been quite vocal against Talibanisation of Pakistan and have pursued a policy of eliminating the menace as quickly as possible because suicide bombings threatens the length and breadth of Pakistan and even military installations are not safe from these deadly attacks.

“The Swat operation has been successful to the extent that no territory is now under the control of Taliban,” Pakistan’s top defence analyst and scholar Dr Hasan Askari-Rizvi told B&E. “Normal administration has been restored. However, the Taliban are hiding in mountains and come down to engage in violence from time to time. This kind of threat is likely to persist for an indefinite period,” he said.

Unlike his predecessors, Chief of the Army Staff Gen Ashfaq Pervez Kayani has been serious in eradicating the so-called Islamic militants and life has returned to almost normal in the scenic Swat Valley after displaced people returned home. Even the US administration that looked towards military operation carried out by Gen. (retired) Pervez Musharraf with suspicion has shown satisfaction over the operation carried out by Kayani.

However, several scholars are still skeptic about the intensity of the military operation.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
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Friday, January 11, 2013

What got them here, might get them there!

That we irreverently make a slim play of Marshall Goldsmith’s quote is obvious (we use him inside too), but that we do so to describe a group of intemperately argumentative entities that refused to accept India as a losing proposition, is perhaps slimmer than they would agree with.

Ejerome McCarthy, professor, Michigan State University, in the 1960s, wrote a discreet discourse for his spring students where he proposed that marketing should be undertaken in a structured manner, perhaps using a four parameter model, 4Ps! Those were the 60s, and models were just waiting to be lapped up. McCarthy’s 4Ps was no exception to the rule. In fact, the model became the rule itself over a matter of years.

Over time, many more Ps were added to this marketing mix, with each proposer invigoratingly justifying his P’s inclusion – our own group magazine, 4Ps Business & Marketing, once ran a cover story, The 50Ps of Marketing! That said, if India were the test ground, any post-hoc analyst of contemporary times would have found it really astonishing that, forget 50Ps, many multinational corporations operating within India forgot to structure even McCarthy’s initial 4Ps, blindly assuming that if people have purchasing power, they’ll buy any product.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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Friday, November 30, 2012

Mirror Mirror on the wall, why’re we the worst amongst them all?

Why discrete development of just a few sectors will prove futile. And why collective is the way to go...

After analysing every sector, we decide to write about one that is really pulling India down. And after hours of heated discussion and analysis of myriad reports, the editorial board came to a very interesting conclusion – we found that each sector had an impact on the other, something which is more grave than it sounds... ‘negative synergy’ for India is what we called it. In spite of such growth and development, the country is yet to initiate some basic transformations or changes.

A nation is generally considered successful when it achieves three significant milestones – free politics (which implies freedom of peoples’ choices), economic freedom (bringing prosperity and equality coupled-with social freedom) and finally, achieving peace and social cohesiveness. The world, during the last sixty years has fought to achieve these three ingredients of a healthy nation. Even when we speak about the Western countries, they have all achieved democracy and prosperity, but whether they’ve successfully been able to bring about ‘social cohesiveness and integration’ is really a question. Though India scored high in both political freedom and social integration, it is yet to witness that dream economic growth (that of 10%). Fortunately, with the initiation of economic liberalisation during the 1990s, India has brought revolution which Gurcharan Das in his book, The Elephant Paradigm, has explained vividly. The world can easily remember 1789 for French revolution and/or 1917 for the Russian revolution because of their pro-active nature. But the revolution in India has been like silent water flowing peacefully downhill... it’s happening but the rate of flow and change cannot be imagined or justified, or even quantified!

While expressing his view Parag Khanna, Director, Global Governance Initiative, New America Foundation comments, “I am impressed with the sustained growth in the economy and taken by surprise at how quickly and broadly manufacturing has boomed. This will be the secret to employment-generating-growth which can tackle one of the largest social deficiencies of the economy to date. There are still worrying signs at the top level like slow investment in infrastructure, and also deregulation. Many investors from America complain ceaselessly of the still opaque business environment in India...”


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
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Saturday, November 24, 2012

African safari gone sour

Discontinuing talks with MTN will not prove to be a long term setback for RCOM

It has the makings of a typical ‘Hindi Masala’ film, where boy (Reliance Communication or RCOM) meets girl (MTN) and they fall in love. Before exchanging the marriage vows the two enter in an exclusive ‘courtship’ period to plan their life ahead but then there’s a twist in the tale. Enter the villain – Mukesh Ambani, who claims that he has the right to veto and hence starts the arbitrage process, which ultimately leads to the state where both lovers decided to part on a good note. If talks would have been successful, it would have created an emerging market powerhouse worth up to $70 billion with a subscriber base of 120 million (as on June 30, 2008) spread across the globe, far larger than most Western mobile phone businesses.

After talks with RCOM ended, the grapevine had it that there could be a possibility of a return to Bharti-Airtel. Dobek Pater, Partner at Africa Analysis did not deny this as a possibility in times to come and added, “MTN has established a reputation of being too demanding in the past few month and in case it is bullish about entering India, which is a highly lucrative emerging market, it should drop some items from its wish list.”


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
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Friday, November 23, 2012

Animal index!

India would surely rank high on it

According to a recent report released jointly by Assocham and PwC, India is still way behind other BRIC countries when it comes to public spending on social sectors like health, education, providing access to healthy water, sanitation, schemes for elderly population et al. While India’s public spending on education and health was about 6% and 5% respectively according to the latest Indian Economic Survey, the same for its BRIC counterparts like Brazil, Russia and China is around 7.9% and 5.2% and 4.9% on health, and 12.8%, 12.9% and 10.2% on education respectively. The low public spending by India on health is visible by high mortality rate and growing health problems.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
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Tuesday, October 16, 2012

Why Indians Will Hate Obama

 Very soon, you might have Prakash Karat and fellow comrades crooning, ‘I told you so’, as the Indian media slams Barack Obama and Uncle Sam for once again ‘tilting against’ India. You can already hear murmurs of protest as protectionism gathers momentum in America and young Indians find their dream jobs disappearing in the United States. You must have read some pundits suggest how India must adopt tit for tat measures by denying contracts to companies like Boeing. By now, many defense pundits, too, have expressed shock at Uncle Sam denying some key technologies to the Indian armed forces. Then there are those hawks who are now convinced that America is absolutely not interested in genuinely helping India

when it comes to battling cross border terrorism. And rest assured, the Obama administration will take many decisions and make many choices that will anger, dismay and even outrage urban Indians who haven’t stopped fantasizing about the emerging strategic partnership between India and America. For this breed of Indians, Uncle Sam would follow up the nuclear deal by doing everything that is anti-Pakistan and anti-China if they have a conflict of interest with India. Sadly such delusions always get shattered. They will inevitably get shattered by end of this year. So after the Indo-US euphoria of the last few years, get prepared for a phase of disappointment and rage at the perfidy of Uncle Sam. And don’t be surprised if Obama becomes one of the most criticized personalities in Indian media (in any case, even his honeymoon with the American media is on the verge of collapsing).

The brutal fact is: both the media and the middle class Indians will be wrong when they rail at Obama and his policies. The reason behind that is another brutal fact: India stills behaves childishly and naively when it comes to the pursuit of national interests, foreign policy and geo-poltics. No wonder, the discourse on foreign policy in India oscillates between triumphant and childish optimism and naïve pessimism. When India signed the nuclear deal, optimism reached a feverish pitch; when a few Indians don’t get American jobs, the pessimism plunges into depths of despair. That is because most Indians confuse between cold blooded pursuit of national interests and the feel good buzz around emotional bonding. There will always be some occasions when America and India’s national interests do not converge when it comes to dealing with Pakistan. That does not make America anti-Indian. There will always be some occasions when the head will rule over the heart and Uncle Sam will choose China over India (China happens to literally propping up the US economy at the moment by sending surplus dollars to America). That doesn’t make America anti-Indian. There will always be some occasions when political compulsions in America will hurt India Inc. Again, that doesn’t make America anti-Indian. But beyond these simple facts, there is another brutal fact that would hurt many Indians. We tend to think that India is more important than it actually is. Sample this fact: Obama''s Secretary of State Hillary Clinton has visited Tokyo, Seoul and Beijing soon after taking over. New Delhi was never on the agenda. And who visited India?


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Monday, October 15, 2012

Global best practices

Safexpress will need to proactively align with global best practices, says Pawan Chabra of B&E

If one goes by the numbers, the future of logistics in India certainly looks dazzling. In fact, according to a study done by Cushman & Wakefield, the Indian logistics industry is anticipated to grow at a healthy rate of 15-20% per annum (way above the average growth rate of 7-10% that the sector have had between 2002 and 2007) to reach a whopping $385 billion by 2015. According to a KPMG report, India’s spend on logistics activities is equivalent to 13% of its GDP, compared to less than 10% in almost all the developed nations. But then this necessarily doesn’t mean big business! The key reason for this astonishing big size is relatively higher level of inefficiencies in the system, with lower average transportaion speeds, higher turnaround times at ports and high costs of administrative delays. Players like Safexpress will need to take the lead in correcting this anomaly.

Moreover, the Indian logistics industry is dominated by unorganised players. Transporters with fleets smaller than five trucks account for over 75% of the total trucks owned and operated in India and make up 80% of revenues. Even the freight forwarding segment comprises thousands of small customs brokers and clearing & forwarding agents, who just cater to local cargo requirements. So, considering this, the biggest challenge for organised players like Safexpress will be to take the growth forward. In fact, “one can even see a major phase of consolidation in the sector in the coming times,” avers Pradhan.

No doubt Safexpress has generated a decent level of loyalty and trust towards the brand in the past few years, but with the sudden flurry of international behemoths like FedEx, DHL, TNT, et al, and considering their edge over domestic players, particularly because of their big pockets, players like Safexpress will definitely find it hard to retain clients.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, October 13, 2012

BARACK OBAMA: PRESENTS THE NEW BUDGET

So says Obama, who spares nobody in his attempt to save the world
In 2009, the same is estimated by IMF to reach a lower 12.20%! Compare this to say a country like India. In 1990, India’s savings rate was 23%, in 2004 it reached 27.6%, and in 2008, the same touched a mind numbing 40%. China has already touched 50% in this decade!!!

Is there a learning out here? “For too long, our budget has not told the whole truth about how precious tax dollars are spent,” Obama quoted while presenting the budget, “Large sums have been left off the books, including the true cost of fighting in Iraq and Afghanistan. And that kind of dishonest accounting is not how you run your family budgets at home. It’s not how your government should run its budgets either.” Obama, we hope your citizens got your irritation with them quite clearly...


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Wednesday, August 29, 2012

SADO MASOCHISM: QURESHI & KRISHNA ...

You got it right. When it comes to the impossible task of dealing with Pakistan, a hack can always fall back upon a dictionary full of clichés and yet have room for some of the more tired ones. The one I have stumbled upon this time gives a slightly wicked twist to that old one about hoping for the best. When it comes to Pakistan, it is high time (another damn cliché!) that India hopes for the worse and is prepared for the worst. The real reason for this conclusion is based upon another old one: those who forget history are condemned to repeat it. And yes, we in India are on the verge of repeating history in a manner that will only confuse, befuddle and eventually humiliate the nation.

Look at what happened recently in Islamabad when the former Chief Minister of Karnataka and former Governor of Maharashtra and current Foreign Minister S.M Krishna was holding ‘peace’ talks with his Pakistani counterpart S.M Qureshi. I still fail to understand how the word ‘peace’ is so badly misused and rammed into the agenda of talks between India and Pakistan. I mean, both you and I know that the real chances of peace (at least if you interpret the word honestly) between India and Pakistan are more remote than Rahul Gandhi joining the BJP – as long as the existing ruling establishment in Pakistan rules the roost (another damn cliché!). What happened in Islamabad was predictable, if you know your history. The Foreign Minister of Pakistan was least interested in ‘peace’; his agenda was to play to the gallery (oops, another one!) – a gallery that seats the ruling military establishment and its principal strategic ally, the group of Jehadi outfits whose declared aim is the destruction of India. Semantics about whether Qureshi broke diplomatic protocol and niceties and whether Krishna should have given a fitting reply are useless; the problem is, we persist with the vain hope that Pakistan might one day stop giving two hoots about niceties when it comes to India.

The second decade of the 21st century looks ominously similar to the last decade of the 20th century when the retreating Soviet Union left a vacuum in Afghanistan. It is a matter of time before American and NATO forces will do something similar in this decade. In both cases, the ruling military establishment of Pakistan had, and has, strong and credible reasons to be convinced that its policy of forging a strategic alliance with the Jehadis is paying spectacular dividends. Despite tall talk from America and feigned bluster from the generals in Islamabad, the fact of the matter is that Pakistan has never severed its ties with Jehadi groups even after 9/11.

And now, when the generals in Islamabad sense an opportunity to once again acquire strategic depth in Afghanistan a la the 1990s, it makes no sense for them to stop mollycoddling the Jehadis, particularly the ones that are most viciously disposed towards India. So please stop nursing silly notions of our neighbour actually dispensing justice and punishing those guilty of 26/11. In fact, they will be rewarded.


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Tuesday, August 28, 2012

Living history is on your agenda,

Along these 50 miles of highway in Nagaland, where a feared warrior race keep a watch over an uneasy peace, the deeds of thousands of men who have died for their countries are etched. If living history is on your agenda, this is a must see…

Do visit Khonoma, Phizo’s village and the cradle of militancy in the North-east. Seated in Phizo’s small pastel blue cottage in the village, about 25 km from Kohima, 80-year old Vi Sebi Doulie, the legendary rebel leader’s cousin counts on the future to see his people through. “Once the politics of the present goes, there will come a time when India will realise that Naga blood is different.” A short distance away, a plaque on a monument marking the grave of the “first President of the Federal Government of Nagaland” Khrisanisa Seyie declares: “Nagas are not Indians, their territory is not a part of the Indian Union. We shall uphold and defend this unique truth at all costs and always”. As negotiations go on between the two sides, Khonoma offers a rare look into the political churning this region has seen.

Make sure you meet the people who live here – they’re almost always glad to meet you. In the violence of it all, men of peace have found their place in these distant mountains. “After Gandhi told our elders, who met him in Delhi in 1947, that we were not bound to join the Union, he walked through the garden to see them off. On the way, he pointed to a bed of flowers and said: ‘Look they are all different flowers but they live together and aren’t quarrelling.”

Close to Khonoma is a Tragopan Sanctuary that the village now looks after – to the intrepid camper it would mean a stay among high mountains and gurgling streams. If time and energy remain, then trek through the mountains to the Dzoukou Valley close by. If you want more, the Japfu range near Kohima is home to the tallest rhododendron tree in the world!

Drive up a few kilometres beyond the heritage village at Kisama, out on to the road to Moreh. An estimated 45,000 soldiers – 30,000 Japanese and 15,000 Allied and Indian – are said to have died in the battles in Kohima and Moreh in Manipur where the Allies would go following the victory at Kohima, for another decisive battle against the Japanese. A sign tells you where that advance began.

Here, it has always been a war within a war within a war. Post 1947 and the ‘Indian occupation’, casualties on both the sides have been in thousands. The road to Moreh is dotted with graves of Naga soldiers. “Maj Sieso Yano, Naga Army,” says one. “Born 1940, Died 25-5-88. Trained in East Pakistan 1963-1964, 1964-1965, trained in China 1966-1968...” Up on the picturesque hillside, an Assam Rifles unit of the Indian army keeps watch from their camp; the peace, however uneasy, currently holds. Still, this a trip where you have to be on the watch at all times. Back in his small, pastel blue cottage in Khonoma, Phizo’s cousin Dolie speaks on about Gandhi and his ways. “Had the Mahatma not been killed, all this would not have happened in Nagaland,” he says. In the pursuit of peace, some men are remembered, some honoured and some revered. To experience a taste of that, this place is a must see.


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Saturday, July 28, 2012

Dr. Raj Aggarwal, University of Akron, Akron (Ohio)

A more even distribution of income and living standards is very important for continuing economic growth – for a number of reasons. First, a more even distribution can lead to a more stable rise of the consuming middle classes, a critical driver of demand and economic growth. Second, a more even distribution is important for maintaining the social contract and political stability, both of which undergirds our high rates of economic growth. Third, a more even distribution is important for better nutrition and education among the least advantaged and, thus, for the future development of Indian manpower and human capital, another very important base for economic growth.

Indeed, Indian growth needs to be balanced between a number of competing objectives, e.g., between incomes and living standards of urban and rural residents (recognizing that people in urban areas will always tend to earn more); between the output growths of agriculture and industry (growth in agricultural incomes is especially important for the two-thirds of Indians that live in rural areas); between domestic consumption and exports (we need to fund our imports and overseas investments); and between resource exploitation and responsible stewardship of resources keeping in mind environmental degradation and climate change (e.g., India must deal with growing air pollution and faces major shortages of potable water).

It is time to refocus on a very important part of our country and economy – the rural areas of India. Most Indians live there and rural entrepreneurship will reduce the unsustainable pressures on urbanization. India not like fast urbanizing China, it is more like America which is truly found in its small rural towns. While the focus in this essay has been on rural areas, similar approaches and programs can and should be developed for urban dwellers that are among the most disadvantaged.

India needs to recognize that opportunities to create production surpluses at the household, state, and national levels are very important in the continuation of our high rates of growth. More importantly, human capital is the most important resource for any nation and is too precious to waste in India. This short essay notes that frugal, perhaps, Gandhian living combined with the widespread availability of entrepreneurial opportunities can be the way to go forward.


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Friday, July 27, 2012

SBI in a Flux, Time to Regain Momentum

More than external factors, it’s internal inefficiency that is troubling SBI. To continue as the big gun, it now needs to go through a reality check.

When State Bank of India’s new Chairman Pratip Choudhary announced the bank’s fourth quarter performance for FY 2011, it came as a shocker to almost everyone. It was down by 99% to a paltry Rs.208.80 million from Rs.18.67 billion in the year ago period. This even made the bank’s share to plunge as much as 18% at the bourses as compared to its pre-result prices. But the fact was that it was only because the bank took a bold step to make an one time provision for its non-performing assets and sidelined as much as Rs.23.30 billion, which could have easily bolstered the banks bottomline for the quarter. Nevertheless, despite a 9.84% fall in the bank’s net profit for the year, SBI still stands tall as the 5th most profitable company in the country with its registered net profit of Rs.82.65 billion. But with the first quarter of the fiscal approaching an end the question remains, after the disastrous performance in Q4, is everything alright now with SBI? Is it on track to hold onto its position in the current fiscal?

The answer perhaps is, tough, if not impossible. And the reasons, well, some are external to the company and some are self created. Talking about the problems that’s not in control of SBI, the biggest is of course the current sluggish economic conditions including inflation and continuous rate hikes by the Reserve Bank of India. With the apex bank raising its policy rates by 25 basis point early this month marking the tenth hike since April 2010, credit growth in the current financial year looks to be in jeopardy, more for the fact that the banks have no other option than passing the burden on to the customers. And with SBI being forced to shut down its teaser scheme, which was instrumental in the bank’s 20.32% credit growth last year, it may find itself in deep water in terms of lending. The bank too have understood the very fact. Thus, to prepare its stakeholders, it has already slashed its credit growth forecast by around 300 basis points to 16-19% from 19-22% given earlier.


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