Tuesday, March 9, 2010

Change is the only thing dat doesnt change!!!

Hey all... Its been a long time since I have scribbled. It took me one year to cum back to my comfort zone!!! In this one year I have learnt so much that I have forgotten myself!!! Good Bad I cannot comment. Everything changed... the way I think, speak, write and so has my passion. Passion changing??? Passion is the one ultimate thing that u would die to do or get... Its important next to your breathe...how could it change???

hmm... As we had studied any decision be it strategical or day to day is influenced by external and internal factors. Internal factors are US. But external factors... those are uncontrollable. Few of these uncontrollable factors have FORCED me to change my passion - Finance.

Now the question is do I regret it??? Hmm not exactly... I have found a new love which keeps my mind occupied so much that I dont miss my old one that much ( but i do miss u finance:( ). My new love is none other than MARKETING!!!

I know this blog was made for my ex-love ;) but now it will be shared by both of my loves...

So here starts my journey again... stay tuned :)

Sunday, February 15, 2009

it started with tulip!!!

Ever wondered how it started... or lets say its first official beginning?
I am talking about the most talked after hero(villain) of the century(as of now), the FINANCIAL CRISIS which has slowed down the entire world economy and led us to recession…

It all started with tulip (that’s what I read). Sounds very romantic and interesting isn’t it? It happened in Holland in 1637.

In 16th century, Tulips(a kind of flower) were very rare and expensive. At that time Dutch tulips got affected by a disease called mosaic which resulted in color variations in form of flames. This made Dutch tulips more sought- after. People started speculating on the blooming tulip market. They were not only bidding on the actual tulip harvest but on future blooms too!!! Actually this could be considered as one of the First Commodity investing Markets. The Tulips bulb prices zoomed so high and fast that at one point of time the price of tulip bulb was equivalent to one’s estate!!!

There was a general notion among Dutch investors that whatever be the prices in domestic markets there will always be a demand in foreign market and that bulbs could be sold to them at any price!!! This could be the one of the first example for the “greater fool” theory which states that : no matter how much ever I pay, there will be always someone who will pay EVEN MORE!!!

At this stage some prudent investors started to sell their bulbs in order to realize the profits. The selling slowly resulted in decrease in price of bulbs and in no time people were selling off their tulip bulbs even in losses so as to prevent major losses!!! The future contracts were breached and the panic rose in the country. Instead of cushioning, the government’s offer to buy the contracts at 10% face value increased the panic. Even those “wise” people who stayed away from tulip romance were effected as the entire country dipped into economic depression which lasted for years…

Some more interesting facts about recession to follow in next posts…



Business line

Monday, February 9, 2009

class to mass

Global recession, stagnant economies, inflation and so on are the top stories among the middle and high class. But has anyone thought about the chai- wallah (tea shop owner) or that kaka who is working day and night to support his family back in village? Unfortunately, in this race for economic progress we have neglected them.Quite astonishingly a study reveals that even the most developed country in the world, USA, has a population struggling for one square meal a day!!!

The governments of the developed as well as developing countries have come up with strategies for achieving inclusive growth. The main focus is on financial inclusion. For instance, the US example of Community Reinvestment Act and making it a statutory right to have bank account in France and so on.

Financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups with high transparency. Our India is also plying hard towards this goal. The Reserve Bank of India (RBI) has asked the banks to move from “class banking to mass banking”. Some of the nationalized banks like SBI have already come ahead with this. The strategies include opening up of more rural branches, availing basic no frills account, relaxing the norms for opening of accounts and then providing financial support both monetary and advisory.

The main reason for this financial exclusion is the bank’s reluctance to explore rural market because of the less competitive advantage. When all the firms are working towards global existence, it was less advantageous to invest in low margin areas. Second was the ignorance of masses about the benefits of the banking facilities and third, the long procedures and red tapism which forced the rural masses to depend on cut throat money lenders.

To handle this, bank have to come forward with strategies to extend credit facilities and increase the awareness among the rural masses. This can be done by conducting fairs, through concepts like e-choupal, through post offices. As most of the transactions are depositing and withdrawing, the transaction cost can be reduced by introducing ATM with vernacular instructions. The banks could join hands with micro finance institutions and NGO’s because that would reduce the cost of putting up branches and increase the awareness levels. In this way, it could also me a profitable business for banks.

Now the question is will these strategies of financial inclusion work under this slowing economy and liquidity crunch??? Hoping the best for India…