Finance Shared Services - What is it?

Today, the Bangalore chapter of ICWAI organised a Professional Development programme and the topic is Finance Shared Services. Mr.S.Rengarajan, Managing Director, Caterpillar India was the speaker.

Mr.Rengarajan explained what Finance Shared Services (FSS) means. He shared his experience in setting up an FSS and the benefits of FSS. He also touched upon the possible risks of an FSS or outsourcing.

He pointed out that efficiency can be built, if the systems are common. If the systems are different, achieving efficiency is bit difficult. Having an ERP environment will make it easy and help centralisation.

He explained how the invoices are settled using scanners, ERP and sitting in a remote place.

The programme was for an hour and it was interesting. Mr.Rengarajan answered the members questions during the Q&A session.

Mr.Rengarajan is an Engineer and a fellow member of the ICWAI. When I googled, I see that he belongs to the PGXPM VI batch of Great Lakes Institute of Management.

It was a great day with too many meetings in the morning and a good session in the evening. Thanks to Simhan for accompanying me.

Cheers,

Gopal

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Credit Policy - Highlights

Further to my post on the Credit Policy expectation, here are the highlights of the Credit Policy:

The Repo rate and the Reverse Repo Rate were increased by 25 basis points. Now the Repo rate stands at 6.5% and the Repo rate at 5.50%

The Cash Reseve Ratio (CRR) remains unchanged at 6%.

With inflation daunting the Indian economy and the government, the RBI is cautious in increasing the rate by 50 basis points - they settled for 25 bais points this time. I am sure that RBI will slowly start increasing the rates by another 50 basis points in the months to come (mostly in March).

How these rates impact the liquidity and the inflation? I am reproducing my earlier post on Repo & Reverse Repo below for your easy reference.

2. What is REPO RATE?

 

Repo (means Repurchase Agreement) Rate is the rate at which the banks borrow funds from the Reserve Bank of India to fund their shortfall (the money they require to do business vis-a-vis the money they have with them to lend). Repo rates plays a critical role in the liquidity position. If RBI wants more liquidity in the market, it will reduce the repo rate so that the borrowing cost becomes cheap for the banks. So they will borrow more and lend more. If the RBI wants to cut the liquidity position, it will increase the repo rate, so that the borrowings will be more expensive for the banks and result in reduced borrowings by the bank. This borrowings are of short-term in nature and often for overnight borrowing. It will help the RBI to push money into the banking system for more float.

3. What is a Reverse Repo Rate (RRR)?

As you would have guessed, it is the opposite of repo rate. It is the rate at which the RBI borrows or Banks placing their monies with RBI. This is a very handy tool for the RBI to control the availability of money in the banking system.

If the RRR is increased, the banks would prefer to place their funds with RBI, as it is the safest one. By this, the money circulation is curtailed. When RBI feels that there should be more money in the system, it would reduce the rate, so that the banks would lend to outsiders for a better interest rate. The RRR helps the RBI to absorb the liquidity from the banks.

With the fear of interest rate hike, the stock market is also in for correction.

Cheers,

Gopal

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Change Management

Do not get carried away by the title. It is not really about the Change Management in a management perspective. It is managing your change (currency, coins etc.,) in a day to day life.

We struggle everywhere for change, especially in Bus, Train, Coffee shops etc., Nowadays, anything is rounded off to the nearest Rupee. No one (leave alone beggars) accepts anything less than a rupee. I tried giving 25 paise coins (4 nos) to a restaurant cashier and he looked at me and accepted the same.

With the spiraling inflation the money has no value at all. Even the government is reducing their cost of minting money (hey...I am not talking about politicians minting money). The cost of minting 25 paise coin is more than its real value. Steel prices, labour cost, inefficiency added to the inflation make the cost of the coins more.

With this in view and make people not to struggle with smaller denomination changes, the Government has withdrawn the circulation of 25 paise coins with effect from 1st June 2011.

So, from June 2011, the minimum acceptable coin is 50 paise. I really do not know whey they want to keep the 50 paise also, when everyone is looking at rounding off to nearest rupee.

Coin collectors are busy collecting the 25paise coins. I did collect the 5 paise, 10paise, 20 paise (brass / aluminum) and treasure the same. We can show it to our future generation that we too had coins in our system.

By the by, RBI will come out with a notice soon on how to call back the 25 paise coins.

Cheers,

Gopal

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Review of Monetary Policy - Today

Today is the Credit Policy day. RBI will release the Credit Policy today and the markets are eagerly waiting for the same.

It is expected to see an increase of 25 basis points in the repo and reverse repo rates.

So, for those who are waiting for good FD rates, expect the same soon.

If you remember, Review of Monetary Policy was my second post (on 28th Jan 2009). For those who want to know, what is SLR, CRR, LAF, Repo, Reverse Repo rates, please have a look at the blog posting (http://gopalramanan.blogspot.com/2009/01/third-quarter-review-of-monetary-policy.html).

Will post tomorrow on the review of the policy.

Cheers,

Gopal

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Human Resources Management - A Chinese Perspective

Today (19-Jan-2011), I attended a session organised by NIPM, Bangalore Chapter at Hotel Woodlands.

The speaker and the title impressed me and forced me to attend the session. The title is "Human Resources Management - A Chinese Perspective" and the speaker - Mr.Lin Bo (VP - Human Resources - APAC, Exide Technologies).

For the first 20 minutes, Mr.Lin Bo was presenting the Chinese economy, on how they were and got to the open world in the 90s. It was nice to see someone presenting rather than reading it from the net or book. He was really good at presenting the topic. 

He started with the Chinese-Indian connection. Anyone in China who is 40+ years will know India by a movie - Awaara. He said, this movie is liked by most of the population. He also said about the movie Caravan. I can vouch for this, as our Bollywood movies are hit in China. When I was there, they were talking about Threee idiots, AR Rehman, etc.,

He then compared the Chinese economy and the Indian economy,, especially the  areas like geographical, population, number of states, languages, dialect, policies etc.

After this, then he presented a slide on the cities, which contribute to the growth of the economy. We all know that in China most of the industries & services are run by the Government. The numbers presented was really stunning. The State Owned Enterprises govern 66% in terms of the numbers and contribute to about 80% of the Profit. It is obvious that they are well managed, people are productive and also that the government is monopoly and can fix the price.

He came later to the topic of Human Resources management.

He said the labour laws of 2008, labour cost,legal compliance were the major labour related issues that are faced today in China.

The big challenge is retention & talent management. High turnover at top level is a concern for MNC. People prefer State Owned Enterprises. 

With the population control in place (one child per couple), the country is facing labour shortage in various industries. Due to the Generation Y, there are no takers for agriculture, high labour oriented industries like construction etc., With the growth of Tier 2 cities, the population is moving towards the cities. This is nothing new to us, as we too face it in India.

Then the floor was open to Q&A.

The meeting ended thanking Mr.Lin Bo for taking his time out.

It was a good session for me in terms of learning something new on economy, HR and about our neighbor.

Cheers,

Gopal

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Rejig of Cabinet ministers - What is the impact?

With the 2G and other scams around, the PM reshuffled the ministry except the Home, Defence, Finance, External Affairs.

It looks like Mr.Murli Deora, the man behind free pricing of Petroleum has taken over the Corporate Affairs from Mr.Salman Khursheed. 

Mr.Salman Khursheed is now given the Water Resources and additional charge of Minority Affairs.

In a corporate environment, we allocate based on the experience and here it looks like experimental. That too at the cost of the public. One thing the PM made sure is that no minister is dropped and only the portfolios have been changed.

What is so important about Mr.Deora & Mr.Khursheed, when most of them were shuffled? 

• As a  Corporate finance person, everyone is looking for the IFRS convergence and with all odds, Mr.Khursheed was able to get the things moving in the parliament. Now we need to see the pace of the IFRS with changes to Companies Act and other related areas.
• The name change for the ICWAI was well received by Mr.Khursheed. Now we have to see how this is being taken further.
• ICAI, ICWAI & ICSI has to rebuild the relationship with the new minister.

My thanks to Mr.Khursheed for all the support to the Corporate world and let us wait and see whether Mr.Deora can fuel the momentum given by Mr.Khursheed in the above areas.

Cheers,

Gopal

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Index of Industrial Production (IIP) - What is it?

Today everyone was waiting for the IIP numbers to be announced by the Central Statistical Organization (CSO) of the Ministry of Statistics & Program Implementation, especially the stock market. What is it and why it is so important? Let us see what this IIP is all about and then the Nov IIP numbers released today.

The Index of Industrial Production (IIP) compares the growth in the general level of industrial activity in the economy with reference to a comparable base year. As you know, to have any index measured, we need to have some base year to see where the current position is.

History of the base year for IIP 

In order to capture the structural changes in the industrial sector, the base year of the all-India IIP which was commenced in India in 1937 was revised in 1946, 1951, 1956, 1960, 1970, 1980-81 and 1993-94.

The current series of all-India IIP (base 1993-94) was released in May 1998.

It covers the following sectors (the weightage is given along the sector)

Mining....................10.47%

Manufacturing.........79.36%

Electricity............... 10.17%

Who compiles IIP?
The Quick Estimates of IIP are compiled on the basis of data furnished by the source agencies located in various Ministries/Departments/Subordinate Offices of the Government of India.

When is this IIP released?
The index is released within six weeks from the reference month and are subsequently revised in the next and the third month based upon the revised production data furnished by the source agencies.

For those who want to know more, please mail me or visit www. mospi.nic.in

What is the IIP number tell for Nov ? 

India's Index of Industrial Production, or IIP, in November fell sharply due to poor patronage by consumer non-durables, intermediate goods, manufacturing and power sectors.

 

However, the industrial growth for the eight months of this fiscal witnessed a higher growth rate.

 

Data released today (12th Jan 2011) by the Central Statistical Organization (CSO) of the Ministry of Statistics & Program Implementation showed the IIP for November had a growth rate of only 2.7%, sharply down from the 11.3% for the corresponding month last year, and lower than the growth rate for October.

 

The cumulative index of industrial production for the first eight months of this fiscal grew to 9.5% from the 7.4% in the corresponding period of last fiscal.

 

The data kept the estimated growth rate for October revised upwards to 11.3% from the earlier provisional figure of 10.8%.

 

During November, growth rate of the manufacturing sector, with a weightage of 79.4%, fell drastically by 2.3% from the 12.3% in the November of the preceding year.

 

The power sector's growth increased by 4.6% from the 1.8% for the corresponding month last year. The mining sector's figure declined by 6% from the 10.7% in November last year.

 

(Source : RTT News).

 

With the IIP numbers showing slowing trend, the Reserve Bank of India (RBI) will have to take corrective action to control the inflation. So, expect some rate increase in the coming monetary policy review.

 

Cheers,

Gopal

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Know your EPF (Provident Fund) balance online

It was a year ago that EPFO (Employee Provident Fund Organisation) announced that it will make the balance in one's PF account will be made available online.

What it means? You need not waste your time in the PF office to know your balance, you need not wait for the account statement (which normally issued after 3 or 4 years in arrears).

How do I know my balance? Simple. Go to the following link, which is the All India PF office link. Click the "Our Regional Sites" on the left hand side.

It will open up the regional / state sites. You can check your state site to see whether they have this online balance checking. I have checked for Chennai & Bengaluru office sites and they are working. Chennai is updated till Dec 2010. The Technology Capital is updated till 2008 (It is a shame!!!). Below are the quick links for the Chennai & Bengaluru regional sites, where you can check your balance.

Bengaluru : http://stg1.kar.nic.in/epf/memberlogin.aspx (updated till 2008)

Chennai : http://www.epfochennai.tn.nic.in/obcb/oblogin.aspx (updated till 2010)

Check your state's PF office site : http://epfindia.nic.in/RegSites.html

Following are the state links available:

1 Ahmedabad (Gujarat)
2 Bengaluru (Karnataka)
3 Chennai (Tamil Nadu)
4 Dehradun (Uttarakhand)
5 Delhi (North)
6 Faridabad (Haryana)
7 Goa
8 Gurgaon (Haryana)
9 Hyderabad (Andhra Pradesh)
10 Kanpur (Uttar Pradesh)
11 Tiruvananthapuram (Kerala)
12 Mangalore (Karnataka)
13 Mumbai - I (Bandra, Maharashtra)
14 Pune (Maharashtra)
15 Jaipur (Rajasthan)
16 Surat (Gujarat)
17 Thane (Maharashtra)
18 Vadodra (Gujarat)

PF is a good method to save your money for the future. It is your hard earned money. I noticed several times that transfer not happening properly on time, interest is wrongly calculated, Interest not calculated while transferred. So, have a tab on the balance and track it.

Please share your experience in checking the balance in your state. It will help other readers.

Cheers,

Gopal

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Indiblogger meet & Akshyapatra

This was my second Indiblogger meet (on 9th Jan 2011) and an excellent  turnout of bloggers from all over India. Thanks to Indiblogger and Akshayapatra (initiative from ISKCON). Akshyapatra sponsored this event by giving space and also food for the bloggers. I have been to ISKCON several times and know the food quality. The quality of food that was served was too good and tasty. This is the same food which is served to the needy school children in India (wherever ISKCON is situated).

Akshayapatra: Started with a mission of No child in India shall be deprived of education because of hunger. Today, they serve 1.3million needy students all over India.

How can we support this initiative?

• By donating yourself (Click HERE to know more)
• By spreading awareness by blogging (Click HERE to know more)
• By volunteering (Click HERE to know more)

Visit : http://www.akshayapatra.org/onlinedonations

About the meet:

Got to know fellow bloggers and made new friends. It was an excellent meet and with an agenda. They have arranged IndiBus for the bloggers in Bangalore. We were welcomed with Samosa & Juice at the auditorium. The meeting started late, as the IndiBus could not make it on time.

Anoop (from Indiblogger team) welcomed and gave an idea on the program. Later they played a movie clipping on Akshayapatra, which was followed by Shri.Chanchalapathi Dasa (Vice President, Akshayapatra) speech. He explained how this idea was formed and the tough route it has taken and the supporters for this movement.

The next agenda item surprised me (like many others). It was introducing 60 famous bloggers. The first name was beamed and the next name appear at the bottom in the screen. I was pleasantly surprised to see my name. Everyone was given 30 seconds to present themselves and their blog. With my toastmaster experience on time keeping, I could make it crisp in the 30 seconds.

Then it was lunch time and we were served with the food that is being served to the students. True to the quality of ISKCON, the food was real KrishnaPrasadam. We had Sakkara Pongal (Sweet Pongal) and Bisi Bele Bath. Everyone enjoyed the food and were convinced about the project. The proof of the pudding is in the eating.

After the good food, we gathered and had a presentation cum Q&A session by Shri.Madhu Pandit Dasa (Chairman, AkshayaPatra) and his team. There were good suggestions and the session was very interactive.

We then had the Live & let comment session. In that we can interact with other blogger, get to know them, visit their blog. This is more from a networking angle. Those who got more comments / contacts were given photoframes of ISKCON. This was followed by 4 groups discussing on 4 topics on how to make indiblogger/ blogging more successful.

The meeting ended with Thanks to the Indiblogger team. They have taken pains in getting this big event organised.

It was overall a well organised (except for the delay..that is common in Bangalore traffic) programme and everyone enjoyed it. Networking was at its best. Blogging is becoming more popular. Thanks to Indiblogger team and Akshayapatra for the wonderful day.

Waiting for the next meet !

My thanks to those who shared the photographs, which helped me in making this post.

Cheers,

Gopal

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Cash in when the markets are down

Remember the market downfall in Jan 2008? This time also the market shed more points and is a good time for investors in get into the fundamentally good shares.

With the market comes down, start investing in the fundamentally strong stocks. Those who invested when the market was down in 2008 made a good money in 2010! Few examples: Tata Steel, Canara Bank, Tata Motors etc.,.

Do not wait for the market to bottom out, as no one know what is the bottom. Instead of the Systematic Investment Plan (SIP), which you sign up with some mutual fund, you start investing in the good stocks, whenever the  market sheds more than 100 Nifty points. You can consult your stock broker on the fundementally good stocks. Do your home work and have a diversified portfolio. Good sectors i would bet are: Infrastructure, Banking & Steel.

I hope the market will be going up on Monday, eventhough the rate hike impact is ther.

Happy investing!

Cheers,

Gopal

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First ever World Samskrit Book Fair 2011 - Bangalore

Friends,

For those who stay in Bangalore and who has some interest in Samskrit or want to learn Samskrit, here is a good opportunity. Yes, here comes the first ever World Samskrit Book fair. It is being held in Bangalore - National School grounds, Basavanagudi, Bangalore from 7th Jan to 10th Jan 2011.

Am planning to go there, to start learning the language, which I tried in my early days. Why samskrit of all language? This is not the question that you only ask, but many, including my family members. My answer to them is simple. Most  of the manangement books, nowadays, refer to the great epics like Mahabharatham, Ramayan etc., It is better, if you could read in those in the original flavor.

Not only that, Samskrit is being learnt all over the world and is said to be mother of all languages (including Computer languages). I know that in the late 80s and early 90s, foreigners take students from Sanskrit College, Chennai on scholarship to their country to learn the language. Learning this language is for self and not from a job-seeking perspective.

There is an article today (7th Jan 2011) in the bangalore edition of Times of India (you can visit the times of india site and view the e-paper) captioned "For this Britisher, speaking Sanskrit is easy as talking English". We know that Samskrit is being learnt by many in United Kingdom and lot of schools & colleges teach Samskrit there.

There is a village in Karnataka, India, where the people speak in Samskrit. It is a versatile language. Let us try to revive the language, which is spoken in our country.

For more details on the book fair, please visit http://www.samskritbookfair.org

Tomorrow is the indibloggers meet and after that am planning to go to the fair. Will blog tomorrow more on the meet & fair.

Cheers,

Gopal

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Indiblogger meet - 9th January 2011 - Bangalore

When & Where? - Sunday January 9, 2011 

MVT hall (Multi Vision Theatre),
ISKCON Bangalore
HK Hill west of Chord road, Rajajinagar, Bangalore-10
Landmark: ISKCON Temple

Time: 12:30 PM - 4:30 PM

Seats Available : 300

About the meet :

Bloggers from all over the country are going to flock to Bangalore for a MASSIVE IndiBlogger meet - register quick before the seats are taken!

For more information, call Anoop Johnson at +919900001655.

Register yourself at indiblogger(dot)in

For those who blog and want to know more on blogging, visit the website and be there for the meet to share the experience.

Cheers,
Gopal

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HAPPY NEW YEAR - 2011

Friends,

Happy NEW YEAR to you, your family & friends. Like previous years, let this new year too usher in good luck. We wish everyone a Happy New year, every year. How about wishing once for all a HAPPY FUTURE !

Time flies and I stopped blogging from Apr 2010. I stopped blogging, as i got a mail from my company on blogging policy. That stoppage took a long time to get back to blogging.

This is not my new year resolution to start blogging, but to restart from where I left. There were many things I wanted to share the shames & scams (CWG, 2G etc.,). Stock Market ups & downs, IFRS deadline, Direct Tax Code, but could not.

May be this post for wishing you all a bright future,  will make me to come back on track and start my blogging.

Hope to keep up my regular posting.

Once again wishing you all a bright and happy future.

Cheers,

Gopal

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