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News at APAS blog

A collection of stories about our people, our capabilities, our research, and the ever-changing face of our firm.

Recent Posts

AP-AS

Ayushman Bharat

India is presently undergoing enormous transition in healthcare system. Increased income and health consciousness among the majority of the classes and the introduction of private healthcare financing are driving the change. Healthcare in India is largely underpenetrated, with government expenditure at around 1.25% of the GDP and an underperforming public healthcare ecosystem.
AP-AS

Rupee depreciation in the context of monetary policy, trade deficit, inflation and general elections

Recently, Rupee depreciated to a record low of INR 70 to a US dollar in nominal terms and that has sent some shockwaves across the Indian Media and created trembles among some group of investors in the economy. But, is this situation really that troublesome to get shocked and cause a neurotic attack to the investors and policymakers alike? Let’s explore.
AP-AS

Consolidation in Asset Management Industry

The Indian asset management industry has been experiencing tremendous growth, growing at a CAGR of 15.5% between FY08 – FY18. For FY18, assets under management (AUM) of mutual fund industry crossed INR 23 lakhs crores. Pace of growth in the assets is evident from the fact that industry’s AUM had crossed the milestone of INR 10 lakhs crores for the first time in May 2014 and in a short span of about three years, the AUM size had increased more than two folds and crossed INR 20 lakhs crores for the first time in August 2017. Such a drastic growth is, of course, supported by zooming capital market.
AP-AS

Monetary policy – The basis and its effect on the economy

The Reserve Bank of India (RBI) in its last monetary policy meeting has decided to increase the repo rate by 25 basis points to 6.25%. The decision to raise rates for the first time since 2014 was driven by rising inflationary pressures and an indication of strong economy. However, the RBI has maintained “Neutral” stance giving it flexibility to move in either direction in the future depending upon the macro and micro economic data. Let us examine various parameters that formed the basis of the last monetary policy.
AP-AS

3Rs – Recognition, Resolution and Recapitalization of PSBs in the last 5 years

In the Indian Banking system, Public sector banks(PSBs) control approximately 70% of the market share and despite that they have been plagued with several problems, the prominent of which include the rising NPAs and the impact of that on their capital position. NPA issue has been a worsening and is perpetual problem in the Indian banking system particularly for the PSBs over the past 4-5 years as evidenced by the fact that total Gross NPAs(GNPA) have risen from 2.52 lakh crore in 2013 to nearly 8.4 lakh crore towards the end of 2017.
AP-AS

Frauds in Banking Sector

The Indian banking sector has experienced tremendous growth and multiple changes since liberalisation of economy in 1991. Though the banking industry is generally well regulated and supervised, the sector has its own set of issues such as enforcement of ethical practices, management of financial distress and health of corporate governance.
AP-AS

Cost of social banking

The traditional self-centered, profit-oriented commercial banking concept is fading, and a modern socio-economic role is emerging for the banks. The social control imposed over banks for the first time in 1967 has evolved into the philosophy of social banking.
AP-AS

Indian Economy: Inflation and Other Drivers

Indian economy is going under a major transformation due to various reforms such as Goods and Services Tax (GST) undertaken by the government. Recently published data shows that GDP growth recovered to 6.3% in the July-September quarter from a three-year low of 5.7% in the preceding quarter.
AP-AS

IPOs in Insurance Sector

Post 2008-crisis, the capital markets have now picked up pace in India. There have been many IPO issuances this year, with decent listings. Most popular among these have been IPOs of the insurance companies. Although the regulations for IPO issuance for insurance companies were announced way back in 2012, the companies have started launching their IPOs now.
AP-AS

Consolidation in banking

The Union Cabinet has given in-principle approval for Public Sector Banks (PSBs) to amalgamate through an Alternative Mechanism (AM). In 1991, it was suggested that India should have fewer but stronger PSBs. However, it was only in May 2016 that effective action to consolidate PSBs began to be taken by announcing amalgamation of 6 banks into State Bank of India (SBI).
AP-AS

Lending Rate Setting Mechanisms and their Efficacy

Consistent with the objective of providing credit to the productive sectors of the economy, the lending rates as well as the allocation of bank credit, was, by and large, regulated by the Reserve Bank till the late 1980s. After the initiation of financial sector reforms in the early 1990s, various steps were initiated to deregulate the lending rates of commercial banks.
AP-AS

GST

On the midnight of July 1, 2017, India ushered in the Goods and Services Tax (GST), which has been termed as a potential game changer and the single biggest tax reform undertaken by India since independence. This single indirect tax regime is founded on the concept of ‘one nation, one market, one tax’ and will dismantle inter-state barriers to trade in goods and services.
AP-AS

Disruptions in Financial Services

The financial services industry is one of the most fast paced industries and technology is not new to this sector. However, today, a new set of technology trends is disrupting this sector and creating a huge opportunity for fin-tech startups. These disruptions are bound to create some impact on the entire BFSI sector, be it banking, insurance, non-banking finance companies (NBFCs), payments or asset management companies. Let us examine the impact in each of these areas.
AP-AS

Battle Against NPAs

Non-performing Assets (NPAs) have been a major challenge confronting Indian banking system. Various measures have been taken by the regulator and the government to tackle this NPA issue. This article discusses the recent steps taken by the government to address the NPA menace and its effectiveness. The RBI has come up with schemes like Flexible Refinancing of Infrastructure (5/25 scheme), a scheme that permitted banks to extend the maturity of loans given to companies in the infrastructure sector
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Will Rupee Continue Its Rally ?

In 2016, a lot of significant events took place, which affected global markets - One being UK’s exit from the European union, called Brexit, which led pound to decline 20% against dollar (1.50 in June 2016 to 1.20 in October 2016). Another event that evidenced a shift in global economy was the outcome of US Presidential elections. However, rupee remained unaffected by these events. During 2016, it was not expected that rupee would break out of the range of 66-68.
AP-AS

Social banking: A global and Indian perspective

Social banking, though an integral part of Indian banking system since its establishment, has gained awareness with the significant steps and programs initiated by the Indian government and RBI. Key measures such as Aadhar card, unique identification mechanism, Pradhan Mantri Jan Dhan Yojana and various associated schemes, are helping social banking in India scale new heights. 
AP-AS

Bad Bank: Is it the solution?

Indian banks’ pile of bad loans is now a huge drag on the economy. The stressed assets now stand at over 12% of the total loans in the banking system. Public sector banks, which own almost 70% of banking assets, have a stressed-loan ratio of almost 16%. The measures taken till now to tackle the burgeoning bad loans in the country’s banking system are still short of yielding any tangible results and the problem is not just draining the bank’s profits but also hampering the financial sector’s ability to fund productive sections of the economy. Therefore, effective resolution of stressed assets issue is the need of the hour.  
AP-AS

Digital Data

Four decades ago, Ray Tomlinson a computer engineer working in the APRPA net system of the US department of defense a precursor to the current day internet, went onto become the first man to ever send an email and pioneering an era where the invention fundamentally transformed the way human society communicates. It has ushered us into an era combining nearly 3.2 billion people, organizations, economies and even countries to digitally communicate creating a milestone in the information age. The growth of global internet bandwidth and data flow across borders has been a key driver of national economies. Data flows account for $ 2.8 trillion of global GDP and generates more economic value than traditional flow of traded goods.
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Consolidation in insurance industry

Recent news on proposed HDFC Life – Max merger has triggered the waves of consolidation across the industry. Other players in the industry have become extremely cautious of the giant emerging out of this merger. As the water treads deeper, we take a look at how this consolidation wave could set forth another landmark in the Indian insurance industry.
AP-AS

Differentiated banking

Financial sector reforms in 1991 rejuvenated Indian economy and contributed greatly to the progress that India has achieved today. Much later in 2014, a set of recommendations which aimed at financial inclusion were set forth by RBI-constituted Nachiket Mor committee. The committee recommended establishing differentiated banks meant for providing banking access to the poor and the unbanked. Hence, the foundation stones for differentiated banking were laid.
AP-AS

Global slowdown: Impact on foreign operations of Indian banks

In the past decade, many Indian firms embarked on expanding their global footprint, taking an opportunity to expand their horizons. The Indian multinational companies expanded across diverse sectors from pharmaceuticals to automotive, textiles and engineering goods. The fundamental reasons behind Indian companies acquiring business including resource mining are to secure natural assets such as mines, oil fields, intellectual properties, etc. and to put up their presence in global markets. This truly described the global aspirations of Indian companies.
AP-AS

Revised GDP calculation method in India and its impact

Gross domestic production (GDP) represents the health of the economy and is used as an indicator by the Government and policy makers for planning and policy formulation. It represents a single number that indicates the monetary value of all finished goods and services produced within a country.
AP-AS

Stress of NPAs in the banking system: Preventive and Curative Measures

A robust banking industry is a vital component in the engine of growth and particularly in India as dependency on banking for lending is very high. Indian banking industry is a vibrant space with multiple players, dominated by public sector banks (PSBs), holding nearly 70% of the assets.
AP-AS

Peer to peer lending

Peer to Peer lending or commonly referred to as P2P is a form of crowd funding, which leverages technology to match lenders to borrowers. The roots of P2P lending has been witnessed in pockets around various parts of the world throughout history, but was initially started in a formal setting with the help of technology by company called ‘Zopa’ in UK in 2005.
AP-AS

Fundamentals of monetary policy framework

In the global context, slowdown of major economies, weakening of China, plunge in manufacturing activity coupled with a steep fall in commodity prices are everyday news, and the situation is here to stay for quite some time. Amidst this turmoil, India has been the ray of hope with its sustained growth. To capitalize this trend, RBI has maintained that an effective monetary policy is vital to economic performance, among other things.
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