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11225 Namrata Thapa11241 Ridhi Shree

11256 Sadhana Zargad

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INTRODUCTIONBANKING SECTOR IS ENGINE FOR ECONOMIC

DEVELOPMENT

Rapid GrowthGreater growth opportunitiesOutstanding track record of innovation, growth and value creation.

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EVOLUTION OF INDIAN BANKINGSECTOR

Nationalization

LiberalizationPriority SectorTechnological changeSocial sector and Microfinance

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Challenges before Indian BankingSystem

Basel and capital adequacy normsStability and volatility of Indian banks Dynamic environmentCompetitionHuman resource management and developmentTechnological changesNew product development

Greater consumer orientation(CRM)Change ManagementContain politicization and promoteprofessionalization

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BASEL I Vs BASEL II: A MAJOR PARADIGM SHIFT

More emphasis on banksinternal methodologies,

supervisory review &market discipline

Flexibility, menu of approaches, capitalincentives for good riskmanagement

Increased risk sensitivity

Focus on a single risk measure

One size fits all

Broad brush structure

The Existing Accord The New Accord

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Basel and capital adequacy norms:Basel II to Basel III

Transparency Liquidity requirementRequires strategizing risk managementCapital conservation buffer of 2.5%

Stability and volatility of Indian banks:Structural changes in financial marketGlobal competitionRapid technology advancement

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Human resource management and developmentTechnology alien HR Attrition rateBalancing the workforce

Develop human resources for future challenges

Technological changes

Technological redundancy Slower adaption of technology Rejection of technology by employees

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Dynamic environment:Consists of changing surroundings Adapt to the changing environmentOvercome unpredictable obstacles

CompetitionLocal/Global Private banks

NBFCs

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New product developmentFailure of product to gain sufficient distributioncoverage.Higher development costsCompetitors fight back harder than expected. Strengthen awareness of new intelligent bankingproducts

Focus on innovative sales techniques

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Greater consumer orientation(CRM)CRM is Information industry term for methodologies,

software, and usually Internet capabilities Requires a strong coordination between IT and marketingdepartments

Change ManagementIdentify employee attitudesevaluate technological developmentsIdentify the impact of application of technology and theemployeeFocusing upon the factors that influence employee behavior

Contain politicization and promoteprofessionalization

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CONCLUSION

India has made progress in several areas like:Reducing the extent of NPAsSpeedier mechanismsBetter application of assetsRisk management by financial intermediaries

But bankers must realize that it is going to be survivalof the fittest and they have to move to professionalismEndeavour to be proactive