Sebi needs to focus on investor protection: FM

Protecting investors in the backdrop of the global financial crisis, which eroded a significant market capitalisation in the stock markets, topped finance minister Pranab Mukherjee’s agenda at the meeting with market regulator Securities and Exchange Board of India (Sebi) board.
“We generally discussed some of the problems Sebi... We shall have to address and pay attention, particularly to the basic objective of Sebi to protect investors in this current financial crisis,” Mr Mukherjee told reporters after the meeting on Friday. This was Mr Mukherjee’s first meeting with the full board of Sebi after taking over as the finance minister.
The meeting was also attended by finance ministry officials including finance secretary Ashok Chawla. Mr Mukherjee said the problems faced by some industry players, such as mutual funds post-financial crisis, and measures taken to address them also figured in the discussions.
Enhancing the corpus of the investor protection fund and financial literacy in the country also figured at the customary post-budget meeting, an official, who attended the meeting said.
The finance minister will also meet the RBI board on Saturday and expected to discuss the issues concerning the banking sector and financial inclusion.
Mr Mukherjee said RBI and Sebi were two important institutions that the finance ministry constantly needs to be in touch with.
“Two important institutions that the finance minister meets after the presentation of the Budget are Sebi and RBI.
On Saturday, I will have a meeting with RBI, on Friday I had a meeting with Sebi,” he said.

Source: http://economictimes.indiatimes.com/Indices/Sebi-needs-to-focus-on-investor-protection-FM/articleshow/4764786.cms

We do see long-term potential and promise in India: Rahul Gupta

He’s the first Indian to break the proverbial glass ceiling of Japan’s fiercely nationalistic, even parochial, banking system. Rahul Gupta, who started out as a banker 26 years ago with Punjab & Sind Bank, is the first Indian to join the board of directors of any Japanese bank. Mr Gupta, Shinsei Bank’s senior managing executive officer and CFO, in an exclusive interview with George Cherian from ET NOW. Excerpts:

Do you think there has been a mindset change in Japan’s nationalistic banking setup?
We often refer to Shinsei Bank as the United Nations of talent. At Shinsei, we would welcome talent irrespective of gender, cast, creed, colour, nationality. I have felt very welcome there. I believe performance has been rewarded. Yes, there is a lot that can be done on the Japanese banking landscape but I see the first signs of openness to talent.

There is now a proposal to link executive pay to the price of bonds of that bank in the market. That way the banker becomes more accountable to the creditors, investors. Do you agree?
I would concur. But it’s not about just either equity or debt. Let me tell you the key imperatives of a financial institution globally. I call this ECL—earnings power, capital strength and liquidity. So bankers need to make sure they have earnings that are long term and sustainable, that they have the right asset quality, they have plentiful liquidity so that they fund their balance sheet well and they have adequate strength to withstand a crisis well.
These are the internal measures for ECL. There are external measures as well. There are rating agencies. Second is the entire gamut of market performance. There also has to be the right alignment between reward, performance and timing of the reward.

Have things become more difficult over the last 9-12 months ?
I would think in terms of retail banking, Japan is still challenging because it has a long way to go before it becomes the international best practice for retail banking. Shinsei Bank saw a wide space and an opportunity in that area in 2000. We launched a new retail bank that has been extremely successful. It’s an award-winning retail bank.

Japan’s population is projected to drop to 90 million by 2055 from 128 million today. What are you doing to make sure profitability remains stable?
Japan has a problem with demographics in terms of its declining population. In absolute numbers, we are small in the retail banking and consumer finance space. We think there is tremendous opportunity to grow from 2.3 million to 5 million and even 10 million. So within a declining market, we could rapidly take market share, which is very exciting. But overall, both in retail banking and consumer finance, there will be a decline in consumer space.

You plan to launch three mutual funds in India. What makes you believe you will succeed in this space?
I think the value proposition clearly as what we have proven in Japan, in terms of complete focus on the customer. We think there is an opportunity to bring that consumer experience to India, leveraged by our technology, which is really Indian technology we took to Japan.

Is commercial banking business in India an option you are looking at?
I would say not at this point in time. We have had three not-so-very-good years in Japan. So, we are looking at fiscal year 2009 as the transition year to break even or better. We do recognise the promise and the potentials of India in the medium- to long-term. So, at the appropriate time we will have an India strategy and play along with that strategy.

Source: http://economictimes.indiatimes.com/Interview/Rahul-Gupta-Senior-managing-executive-officer-CFO-Shinsei-Bank/articleshow/4764562.cms