Banking stocks on a low

If you are a regular in the stock trading, you would have watched the banking stocks steadily falling for six months now. I do not look at the Banking Industry stocks in my portfolio these days. Those stocks purchased through IPOs have just been sitting idle under this category and I would definitely not want to add any banking stocks even on a very low market day, when I normally go out to purchase stocks for investment.

But, why is this situation?

Ever since the farm debt waiver was announced in the last budget, there have been debates on the profitability of PSBs. But the Finance Minister P. Chidambaram was seen reiterating that ‘the farm loan waiver will stregnthen banking‘

Again on the recent inflationary trend, the loans have become costlier and the banks have lost out on the retail and small lending where the recovery has been fairly on time. The low-cost deposits with the banks are sliding down, as number of people with surplus money on hand coming down fast. A small businessman has to close down his low cost deposits on the first attempt and then go fo loans as the interes rates on loand have gone up badly.

The Business Line analyses why and how the banking stocks have hit the low. Read it here.

With all the issues from the vegetables in the market and the stocks in the international market zeroing in on inflation, it is now time that inflation is brought under control. The government need not plan much for the elections if this trend is arrested as the voters will give the government 100% rating and bring them back for sure.

Financial Chronicle in Mumbai

At last Financial Chronicle, published by the Deccan Chronicle Holdings comes to Mumbai.

Any financial bites begin with Mumbai normally. Strangely FC chose Hyderabad and Bangalore for their first release of the financial daily. And more surprisingly Chennai came next.

From last week the daily toed up with International Herald Tribune and the Mumbai edition will have a four page pull out of IHT, says the press release.

The Financial daily has its e-version here.

F-School certification Vs CAIIB

The emerging ‘concept’ of F – Schools really amused me.

It was in the 1980s, the recruitment in the Public sector Banks was in bulk numbers. Though SSLC was the minimum qualification for a clerical job in a Bank, the examination conducted by the Banking Service Recruitment Board (BSRB) was of a little higher standard that mostly the graduates are students in their final year of graduation could only make it to the next level.

The boom in the youngsters’ ratio in the exployees cadre increased the enrollment for the CAIIB examsa conducted by the then Indian Institute of Bankers, now Indian Institute of Banking and Finance.
the main reasons were :

1. The fresh-out-of college kids could crack the exams easily.
2. The increment in basic pay the Banks granted for completing every stage of the exam (One increment for CAIIB Part 1 and two increments for Part 2)
3. The quick climbing up to the next cadre. Those who completed both parts of CAIIB were eligible to appear for the Officer’s exams two years before their other colleagues could do so)

The CAIIB exams have evolved now to online as JAIIB and CAIIB. Still with a commitment to make the employees better learned crowd.

The idea of B-School graduates and F-Schools have come in much later.
The CFA program by the ICFAI was popular among the bank officers, though the course fee was a bit higher than these officers could shell out for a certification. Later, the label of this program came under dispute with CFA Institute.

Then came a time when banks started hiring top-brand B-School grads. The pay packet however was not to the expectation of the MBAs. So these grads quit quickly to be in their choice of businesses.

But, now, why blame it on the course module saying that it is not a B School certification but a F-School certification is what would go with the Banks. In my opinion, the need of the hour is the adaptability of an individual to the changing trends in the Banking scenario. And the traditional CAIIB, which is an on-the-job learning and training for the bankers is what will go with the need of the banks. The course is designed to elaborate and learn more on what the bankers do on a daily basis at their work place.
But this course should also evolve with the changing times and generations.