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Yerram Raju

Administrative Staff College of India, Finance, Alumnus

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Distinguished scholar in Economics. Career Management and Financial Risk professional. Authored 15 books. Specialized in MSME sector - policy and operations. Set up an innovative institution in stressed asset resolution - Telangana Industrial Health Clinic Ltd., (TIHCL) for Government of Telangana.
Phone: +91-40-27201592
Address: Director, Telangana Industrial Health Clinic Ltd & Adviser, Government of Telangana
2-19-57/B, Kalyanapuri, Uppal, Hyderabad -500039
www.yerramraju1.com

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Sanghmitra Acharya

Jawaharlal Nehru University

Dornadula Sundar Ram

sivani Hyderabad

AICTE Autonomous

RAM BILAS MISRA

Lebanese French University

Quantum School of Business

Parth Dev Jugnalia

guttikonda raviteja

JNTU , hyderabad

Jnafau

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Papers by Yerram Raju

Cloud Technology

Banking Frontiers, Vol. 22 (12)/24, 2024

Contours of The Cloud are interesting. When clouds clash, lightning, thunders and fear follows. ... more

Access to Credit - Making it Easy

by Yerram Raju and Alivelu G

https://www.researchgate.net/publications/create?publicationType=preprint, 2024

“ I take the opportunity to reiterate that increasing the flow of credit to the micro ,small and ... more “ I take the opportunity to reiterate that increasing the flow of credit to the micro ,small and medium enterprises (MSMEs) given their employment generation potential and other positive externalities, has been a policy priority of the Reserve Bank and the Government of India. Indeed, on a y-o-y basis the outstanding credit to the MSMEs increased by 14.2% during 2022-23 as compared with 11.7% in the corresponding period of the previous year. That said I do agree that there is a lot more to be done for the MSME sector and there is an urgency in the need for support to the sector which enabling policies will help ensure. We will have inclusive growth with equity, and an idea which is dear to my heart as a development economist, economic growth which will ensure that the fruits of Growth are shared by all.” Deepali Pant Joshi, Former Executive Director, RBI, Mumbai
Authors’ Response:
The growth indicated has happened because of the growth in the MSME services sector and not in the manufacturing MSEs. We definitely agree that the RBI has been nudging the banks through many policy interventions in this regard. We will carry your observations as referee's comments.

Institutional framework and enabling environment for rural non-farm sector

This chapter begins by asserting the link between the definition of and policy for the rural non-... more

Msme Credit Rating Set for a Change

Academia letters, Aug 19, 2021

Government Delivery Systems for Rural Development

Corporate governance in banking and finance

Small Scale Industries in the Liberalized Era Beg for Attention

Global Business Review, Aug 1, 2002

This paper begins by revisiting the Seoul and Bologna Charters on the SMEs and clarifies that the... more This paper begins by revisiting the Seoul and Bologna Charters on the SMEs and clarifies that the SME definition centres round the small scale industries in the absence of a clearly defined medium industry sector in India. A review of the policy, laws and the regulatory and institutional framework has been done in sufficient detail with a view to highlighting the fact that the SSIS in India require globally compatible facilitation in order to be competitive both domestically and internationally. The author maintains that easy and adequate institutional finance support is a necessary but not sufficient condition for the growth of this dynamic and vibrant sector. He envisages a clear role for the Small Industry Associations recognized on the basis of well-defined criteria. He argues for a quick enactment of a comprehensive enabling law for the sector and for restructuring the office of the DC-SSI, to attain the envisaged competitiveness.

Agricultural banking: getting the perspective right

Village and cottage industries sector integrated systems needed

The growth parameters of village industries in India indicate a phenomenal rise on all counts dur... more

Governance in banks

Governance, Regulation of UCBs

None, 2023

Governance, Regulation and Urban Cooperative Banks (UCBs) B. Yerram Raju Abstract: National Coope... more Governance, Regulation and Urban Cooperative Banks (UCBs)
B. Yerram Raju
Abstract:
National Cooperative Policy 2023 emphasised on to practice self-governance, self- responsibility, democracy, equality, equity, and solidarity to work towards digitization, cooperate literacy for making cooperative institutions as meaningful economic institutions to enhance the implementation of financial inclusion agenda. Urban Cooperative Banks occupy 8 percent of financial space in the Indian economy and their sustainability would add to the financial stability. Reserve Bank of India classified these banks into four Tiers based on their capital and designed a risk-based supervision system. Since these institutions are member-led and member-governed entities and governed by the dual regulations of the Cooperative Acts of the state governments and the Banking Regulation Act, 1949 (with its periodical amendments), and since they operate in restricted area as community banks, they are subject to several pressures and conflicts of interest. The resolution through TAFCUB at the state levels, introduced over a decade and half back, would seem routinised in its functioning. The article, in such context, examines the need for improving governance, human resources management and technology adoption to fall in line with the rest of the financial system for enhancing financial stability. It also examines the recommendations of Vishwanathan Committee of the RBI that suggested setting up an Umbrella Organisation and the way forward.

How to redefine and rebuild banks for emerging demands Dr B Yerram Raju

Cashless banks and cashless ATMs are staring at the customers post demonetisation in India. Lendi... more Cashless banks and cashless ATMs are staring at the customers post demonetisation in India. Lending to important and in a way strategic sectors like agriculture, MSMEs has been more compulsive than welcoming business proposition. It is time to redefine banks and rebuild them sectorally and create Infrastructure Banks to help double digit growth of economy ere long. Bad banking and good economy can never travel together.

SMEs Access to Capital Markets in India

It took almost a decade since the SME Exchange has been formalised to see 60 floats in a month. S... more It took almost a decade since the SME Exchange has been formalised to see 60 floats in a month. Still the total number of listings on the SME bourses is not something that the growing Indian economy can be proud of. In India, most SMEs operate in debt markets. Cost of raising debt for SMEs is increasingly becoming problematic both from the points of adequacy and timeliness and most often banks remove the umbrella in times of either too hot Sun or heavy downpour. But in a digital world simplifying businesses in the small sector also demands investments where the returns come gradually and not at the pace at which a financial institution extending credit demands. It is therefore necessary for the firms in the sector to look for enhancing equity. Debt is cumbersome and equity is costly. Later is better choice if the SME has a modicum of discipline as creditors armed with amended SARFAESI Act 2016 and Insolvency and Bankruptcy Code are likely to be draconian. But such access demands of SMEs, better financial discipline, healthy balance sheets, and good governance. Scale of operation also matters for access to equity markets. Most often, The enterprise should have the habit of monitoring its debtors and creditors on a continuing basis and make finance a slave and not master of its operations. " Need for Equity financing " 1 While SMEs face challenges in accessing credit, they may also lack awareness of equity as an alternate source of financing. The nascent financing requirements for a start-up are met by informal financing from friends and family. Such seed money invested in a small business is in the nature of equity but is not formally recognised as such in SMEs without a formal legal structure. Even for start-ups that are more aware, the creation of a formalised venture often requires the aid of incubators and angel investors that provide financing and other services. Further scale-up then requires higher amount of capital, which is typically provided by venture capital funds. Apart from equity capital, the venture also needs debt for working capital. Access to equity financing has been examined in detail in the Report of the Committee on Angel Investment and Early Stage Venture Capital (Mitra Committee), June 2012. The key issues are related to differential taxation of investments, and the need for certain enablers to expand the availability of equity capital for early stage companies. Small and Medium Enterprises (SME) The SME platform of the Exchange is intended for small and medium sized companies with high growth potential. The SME platform of the Exchange shall be open for SMEs whose post issue paid up capital shall be less than or equal to Rs.25 crores. Across countries, the SME sector has thrived primarily on the back of access to financing through various facilities such as government-backed guarantees, credit insurance for export oriented units and schemes for equity financing. These facilities are supplemented by institutional infrastructure for advocacy, technical research, refinancing platforms and easy access to services. Both BSE and NSE of India have launched their versions of SME exchange in 2012.

Rebuilding Banks in India

Rebuilding Indian banks is extremely important. Pleasing the boss approach and the hypocrisy of b... more

BIG Data Helps but Incremental Steps Matter

MSMEs Cry For Attention

Start-Ups in MSMEs, particularly in manufacturing can now look for vertical growth instead of hor... more Start-Ups in MSMEs, particularly in manufacturing can now look for vertical growth instead of horizontal growth with the MSME Ministry revising the definition of plant and machinery to include all such equipment owned by the same owner(s) across the districts and country to be reckoned for classification of MSME under the MSME Development Act 2006. In the long run this redefinition would do lot good to the sector. The sector may witness in the short term more NPAs. NPAs in MSMEs put to stress test, at pre-shock level were 5.04 percent as of December 2015 with no significant contribution to the losses as percent of either profit or capital. The industry NPA level was 6.68 percent although at the systemic level MSMEs represent 5.94 percent. Only 7.9% constitute MSME advances to the total advances. (FSR 12, December 2015) Risk appetite for the MSMEs is very low among banks and their adherence to the guidelines of both the RBI and GoI to identify sickness at incipient stage and introduce corrective action plans is highly suspect. By just allowing postponement of instalments for three months, they christen as restructuring without going into the processes of restructuring. The restructured standard advances to substandard advances were range bound at 0.09 to 0.38 percent indicating that not much restructuring took place in the sector. Banks know for sure that the MSMEs as vendors to the large industry and infrastructure sectors could not realise their bills within 90 days and unable even to pay interest turned NPAs. There is reluctance among banks for either restructuring or revival of even viable advances. Credit origination is also no less to blame. State Bank group is thrusting its insurance products as a compulsory product along with credit. The size depends upon the loan sanctioned. The Banks debit the working capital loan account with the premium running to lakhs of rupees. SBI Life pays hefty commissions to the staff who cross-sells this product to the loanees. Monitoring and supervision are hit hard by inadequate field staff leaving most accounts for arm chair surveillance. Even the CMI data is passed off as compliance formality and not as monitoring tool. A couple of cases will prove the point: An innovative entrepreneur manufacturing edible cutlery financed by one of the public sector banks in 2013 almost close to going into commercial production was declared NPA. During the two years, not even once the bank officials visited the unit – not even when it shifted the machinery to a different location under advice to the bank. SLIIC directed the bank to offer six months' time but the bank chose to give only 3 months – all because it has collateral – the only residential building of the entrepreneur valued at Rs.10mn as against the outstanding loan of Rs.6.5mn and interest overdue of Rs.2.3mn. Even as the CNN-IBN was interviewing the entrepreneur for his Innovation Award, a notice under SARFESI Act was slapped on the house. The unit has market inquiries for the products – edible spoons, forks, chopsticks, etc and at least five developing economies and UK evinced interest in transfer of technologies. Coffee Day is the first domestic buyer and a few more are on line. Marketing this product is cost intensive and time consuming. Given the reprieve the unit would show case India in its Make in India drive. In another case, another leading public sector bank declared the account as NPA of a partnership firm manufacturing electric transformers for installation in rural areas. This partnership firm whose Managing Partner is financially illiterate inducted a knowledgeable partner in financials at the instance of its Relationship Manager. The Relationship Manager and the Accounting Partner colluded 1

Consolidation of Indian Banks is no cure to the ills

James Crabtree of the FT reporting on the predicament of the then PM Singh commented in March 201... more James Crabtree of the FT reporting on the predicament of the then PM Singh commented in March 2012 that Indian Banking was at the brink and needed heavy capital infusion to catch up with Basel III requirements and clean up to measure up to the requirements of economic growth to revive to beyond 7%. The position worsened ever since. Gyan Sangam (Intellectual Confluence), the second after the formation of the present government that discussed the revamp of the banks a couple of days back at Gurgaon, Delhi have not offered any better wisdom than loud whispers of consolidation of banks. Is consolidation of banks the right solution? The messy Indian Banking at the moment due to huge pile up of NPAs in PSBs in particular caused by more of funding long term infrastructure projects through short term resources, trying to seek a bail out through mergers and acquisition route, history would not spare the government. Although Raghuram Rajan rightly warned recently that the merger move is risky without cleaning up the beleaguered banks' balance sheets, FM hinted at the consolidation of unwieldy and economically weak state-run banks even as he kept the door open for lowering the state's stake in them below 50%. He has also spread a red carpet to multinational ARCs providing scope for sale of distressed assets.
first published in Moneylife.in on the 10th March 2016.

Risk Management in Financial Cooperatives (With particular reference to Urban Cooperative Banks

In the backdrop of R.Gandhi Committee's recommendations that the UCBs can cross the floor to the ... more In the backdrop of R.Gandhi Committee's recommendations that the UCBs can cross the floor to the Small Finance Banks if they exceed in their business aggregate of INR 200bn they have to prove their existence and competence to be on the financial map of India. It ipso facto requires a critical look at the risk culture and risk absorption capabilities.

Cooperative Governance

Cooperative governance is a dynamic process that should keep absorbing the best practices prevail... more Cooperative governance is a dynamic process that should keep absorbing the best practices prevailing elsewhere. Cooperative governance should be viewed as integral to the healthy growth of ethical cooperative financial institution. It promotes member trust, greater member participation and more effective risk management practices. Urban Cooperative Banks like the Visakhapatnam Cooperative Bank Ltd., celebrating its centenary in February 2015 will be a good example for best practices.

Dwindling Economic Sustainability of Agriculture

Farmer is needed by everybody for he feeds the billions of mouths and not necessarily stomach ful... more Farmer is needed by everybody for he feeds the billions of mouths and not necessarily stomach full. But several of the farmers themselves starve and die for want of a just price for what they produce. Several farmers report suicides due to heavy burden of indebtedness – mostly usurious private debt – and indiscrete farming applications and technologies. Penury is most common among farmers growing food crops while huge losses in commercial crops leave the farmers in the lurch. After globalization markets have integrated and the trends in commodity markets around the globe are also causing tremors. On top of all these is the consequence of climate change turning totally adverse to this seasonal occupation of agriculture. Youth are moving away from farming threatening the future of food security in India. Was farming economically sustainable in the past or is it only declining in the recent past? Is something wrong with the farmer or farming? This article focuses on addressing a few questions: what type of farming is sustainable economically? What has to be done to make it sustainable? Comprehensive treatment of the subject may be difficult because of the interconnectedness of the activity with several sectors of the economy and the way the labour markets have also been shaping up post MNREGA in India. This article keeps in view the following criteria for assessing the economic sustainability both from supply side and demand side: 1. Size of the holding 2.Crop specific growth 3. Yield Gaps 4. Costs, returns and prices of farm products 5. Availability of credit 6. Agricultural marketing 7. Food Security, and 8. Governance.

Cloud Technology

Banking Frontiers, Vol. 22 (12)/24, 2024

Contours of The Cloud are interesting. When clouds clash, lightning, thunders and fear follows. ... more

Access to Credit - Making it Easy

by Yerram Raju and Alivelu G

https://www.researchgate.net/publications/create?publicationType=preprint, 2024

“ I take the opportunity to reiterate that increasing the flow of credit to the micro ,small and ... more “ I take the opportunity to reiterate that increasing the flow of credit to the micro ,small and medium enterprises (MSMEs) given their employment generation potential and other positive externalities, has been a policy priority of the Reserve Bank and the Government of India. Indeed, on a y-o-y basis the outstanding credit to the MSMEs increased by 14.2% during 2022-23 as compared with 11.7% in the corresponding period of the previous year. That said I do agree that there is a lot more to be done for the MSME sector and there is an urgency in the need for support to the sector which enabling policies will help ensure. We will have inclusive growth with equity, and an idea which is dear to my heart as a development economist, economic growth which will ensure that the fruits of Growth are shared by all.” Deepali Pant Joshi, Former Executive Director, RBI, Mumbai
Authors’ Response:
The growth indicated has happened because of the growth in the MSME services sector and not in the manufacturing MSEs. We definitely agree that the RBI has been nudging the banks through many policy interventions in this regard. We will carry your observations as referee's comments.

Institutional framework and enabling environment for rural non-farm sector

This chapter begins by asserting the link between the definition of and policy for the rural non-... more

Msme Credit Rating Set for a Change

Academia letters, Aug 19, 2021

Government Delivery Systems for Rural Development

Corporate governance in banking and finance

Small Scale Industries in the Liberalized Era Beg for Attention

Global Business Review, Aug 1, 2002

This paper begins by revisiting the Seoul and Bologna Charters on the SMEs and clarifies that the... more This paper begins by revisiting the Seoul and Bologna Charters on the SMEs and clarifies that the SME definition centres round the small scale industries in the absence of a clearly defined medium industry sector in India. A review of the policy, laws and the regulatory and institutional framework has been done in sufficient detail with a view to highlighting the fact that the SSIS in India require globally compatible facilitation in order to be competitive both domestically and internationally. The author maintains that easy and adequate institutional finance support is a necessary but not sufficient condition for the growth of this dynamic and vibrant sector. He envisages a clear role for the Small Industry Associations recognized on the basis of well-defined criteria. He argues for a quick enactment of a comprehensive enabling law for the sector and for restructuring the office of the DC-SSI, to attain the envisaged competitiveness.

Agricultural banking: getting the perspective right

Village and cottage industries sector integrated systems needed

The growth parameters of village industries in India indicate a phenomenal rise on all counts dur... more

Governance in banks

Governance, Regulation of UCBs

None, 2023

Governance, Regulation and Urban Cooperative Banks (UCBs) B. Yerram Raju Abstract: National Coope... more Governance, Regulation and Urban Cooperative Banks (UCBs)
B. Yerram Raju
Abstract:
National Cooperative Policy 2023 emphasised on to practice self-governance, self- responsibility, democracy, equality, equity, and solidarity to work towards digitization, cooperate literacy for making cooperative institutions as meaningful economic institutions to enhance the implementation of financial inclusion agenda. Urban Cooperative Banks occupy 8 percent of financial space in the Indian economy and their sustainability would add to the financial stability. Reserve Bank of India classified these banks into four Tiers based on their capital and designed a risk-based supervision system. Since these institutions are member-led and member-governed entities and governed by the dual regulations of the Cooperative Acts of the state governments and the Banking Regulation Act, 1949 (with its periodical amendments), and since they operate in restricted area as community banks, they are subject to several pressures and conflicts of interest. The resolution through TAFCUB at the state levels, introduced over a decade and half back, would seem routinised in its functioning. The article, in such context, examines the need for improving governance, human resources management and technology adoption to fall in line with the rest of the financial system for enhancing financial stability. It also examines the recommendations of Vishwanathan Committee of the RBI that suggested setting up an Umbrella Organisation and the way forward.

How to redefine and rebuild banks for emerging demands Dr B Yerram Raju

Cashless banks and cashless ATMs are staring at the customers post demonetisation in India. Lendi... more Cashless banks and cashless ATMs are staring at the customers post demonetisation in India. Lending to important and in a way strategic sectors like agriculture, MSMEs has been more compulsive than welcoming business proposition. It is time to redefine banks and rebuild them sectorally and create Infrastructure Banks to help double digit growth of economy ere long. Bad banking and good economy can never travel together.

SMEs Access to Capital Markets in India

It took almost a decade since the SME Exchange has been formalised to see 60 floats in a month. S... more It took almost a decade since the SME Exchange has been formalised to see 60 floats in a month. Still the total number of listings on the SME bourses is not something that the growing Indian economy can be proud of. In India, most SMEs operate in debt markets. Cost of raising debt for SMEs is increasingly becoming problematic both from the points of adequacy and timeliness and most often banks remove the umbrella in times of either too hot Sun or heavy downpour. But in a digital world simplifying businesses in the small sector also demands investments where the returns come gradually and not at the pace at which a financial institution extending credit demands. It is therefore necessary for the firms in the sector to look for enhancing equity. Debt is cumbersome and equity is costly. Later is better choice if the SME has a modicum of discipline as creditors armed with amended SARFAESI Act 2016 and Insolvency and Bankruptcy Code are likely to be draconian. But such access demands of SMEs, better financial discipline, healthy balance sheets, and good governance. Scale of operation also matters for access to equity markets. Most often, The enterprise should have the habit of monitoring its debtors and creditors on a continuing basis and make finance a slave and not master of its operations. " Need for Equity financing " 1 While SMEs face challenges in accessing credit, they may also lack awareness of equity as an alternate source of financing. The nascent financing requirements for a start-up are met by informal financing from friends and family. Such seed money invested in a small business is in the nature of equity but is not formally recognised as such in SMEs without a formal legal structure. Even for start-ups that are more aware, the creation of a formalised venture often requires the aid of incubators and angel investors that provide financing and other services. Further scale-up then requires higher amount of capital, which is typically provided by venture capital funds. Apart from equity capital, the venture also needs debt for working capital. Access to equity financing has been examined in detail in the Report of the Committee on Angel Investment and Early Stage Venture Capital (Mitra Committee), June 2012. The key issues are related to differential taxation of investments, and the need for certain enablers to expand the availability of equity capital for early stage companies. Small and Medium Enterprises (SME) The SME platform of the Exchange is intended for small and medium sized companies with high growth potential. The SME platform of the Exchange shall be open for SMEs whose post issue paid up capital shall be less than or equal to Rs.25 crores. Across countries, the SME sector has thrived primarily on the back of access to financing through various facilities such as government-backed guarantees, credit insurance for export oriented units and schemes for equity financing. These facilities are supplemented by institutional infrastructure for advocacy, technical research, refinancing platforms and easy access to services. Both BSE and NSE of India have launched their versions of SME exchange in 2012.

Rebuilding Banks in India

Rebuilding Indian banks is extremely important. Pleasing the boss approach and the hypocrisy of b... more

BIG Data Helps but Incremental Steps Matter

MSMEs Cry For Attention

Start-Ups in MSMEs, particularly in manufacturing can now look for vertical growth instead of hor... more Start-Ups in MSMEs, particularly in manufacturing can now look for vertical growth instead of horizontal growth with the MSME Ministry revising the definition of plant and machinery to include all such equipment owned by the same owner(s) across the districts and country to be reckoned for classification of MSME under the MSME Development Act 2006. In the long run this redefinition would do lot good to the sector. The sector may witness in the short term more NPAs. NPAs in MSMEs put to stress test, at pre-shock level were 5.04 percent as of December 2015 with no significant contribution to the losses as percent of either profit or capital. The industry NPA level was 6.68 percent although at the systemic level MSMEs represent 5.94 percent. Only 7.9% constitute MSME advances to the total advances. (FSR 12, December 2015) Risk appetite for the MSMEs is very low among banks and their adherence to the guidelines of both the RBI and GoI to identify sickness at incipient stage and introduce corrective action plans is highly suspect. By just allowing postponement of instalments for three months, they christen as restructuring without going into the processes of restructuring. The restructured standard advances to substandard advances were range bound at 0.09 to 0.38 percent indicating that not much restructuring took place in the sector. Banks know for sure that the MSMEs as vendors to the large industry and infrastructure sectors could not realise their bills within 90 days and unable even to pay interest turned NPAs. There is reluctance among banks for either restructuring or revival of even viable advances. Credit origination is also no less to blame. State Bank group is thrusting its insurance products as a compulsory product along with credit. The size depends upon the loan sanctioned. The Banks debit the working capital loan account with the premium running to lakhs of rupees. SBI Life pays hefty commissions to the staff who cross-sells this product to the loanees. Monitoring and supervision are hit hard by inadequate field staff leaving most accounts for arm chair surveillance. Even the CMI data is passed off as compliance formality and not as monitoring tool. A couple of cases will prove the point: An innovative entrepreneur manufacturing edible cutlery financed by one of the public sector banks in 2013 almost close to going into commercial production was declared NPA. During the two years, not even once the bank officials visited the unit – not even when it shifted the machinery to a different location under advice to the bank. SLIIC directed the bank to offer six months' time but the bank chose to give only 3 months – all because it has collateral – the only residential building of the entrepreneur valued at Rs.10mn as against the outstanding loan of Rs.6.5mn and interest overdue of Rs.2.3mn. Even as the CNN-IBN was interviewing the entrepreneur for his Innovation Award, a notice under SARFESI Act was slapped on the house. The unit has market inquiries for the products – edible spoons, forks, chopsticks, etc and at least five developing economies and UK evinced interest in transfer of technologies. Coffee Day is the first domestic buyer and a few more are on line. Marketing this product is cost intensive and time consuming. Given the reprieve the unit would show case India in its Make in India drive. In another case, another leading public sector bank declared the account as NPA of a partnership firm manufacturing electric transformers for installation in rural areas. This partnership firm whose Managing Partner is financially illiterate inducted a knowledgeable partner in financials at the instance of its Relationship Manager. The Relationship Manager and the Accounting Partner colluded 1

Consolidation of Indian Banks is no cure to the ills

James Crabtree of the FT reporting on the predicament of the then PM Singh commented in March 201... more James Crabtree of the FT reporting on the predicament of the then PM Singh commented in March 2012 that Indian Banking was at the brink and needed heavy capital infusion to catch up with Basel III requirements and clean up to measure up to the requirements of economic growth to revive to beyond 7%. The position worsened ever since. Gyan Sangam (Intellectual Confluence), the second after the formation of the present government that discussed the revamp of the banks a couple of days back at Gurgaon, Delhi have not offered any better wisdom than loud whispers of consolidation of banks. Is consolidation of banks the right solution? The messy Indian Banking at the moment due to huge pile up of NPAs in PSBs in particular caused by more of funding long term infrastructure projects through short term resources, trying to seek a bail out through mergers and acquisition route, history would not spare the government. Although Raghuram Rajan rightly warned recently that the merger move is risky without cleaning up the beleaguered banks' balance sheets, FM hinted at the consolidation of unwieldy and economically weak state-run banks even as he kept the door open for lowering the state's stake in them below 50%. He has also spread a red carpet to multinational ARCs providing scope for sale of distressed assets.
first published in Moneylife.in on the 10th March 2016.

Risk Management in Financial Cooperatives (With particular reference to Urban Cooperative Banks

In the backdrop of R.Gandhi Committee's recommendations that the UCBs can cross the floor to the ... more In the backdrop of R.Gandhi Committee's recommendations that the UCBs can cross the floor to the Small Finance Banks if they exceed in their business aggregate of INR 200bn they have to prove their existence and competence to be on the financial map of India. It ipso facto requires a critical look at the risk culture and risk absorption capabilities.

Cooperative Governance

Cooperative governance is a dynamic process that should keep absorbing the best practices prevail... more Cooperative governance is a dynamic process that should keep absorbing the best practices prevailing elsewhere. Cooperative governance should be viewed as integral to the healthy growth of ethical cooperative financial institution. It promotes member trust, greater member participation and more effective risk management practices. Urban Cooperative Banks like the Visakhapatnam Cooperative Bank Ltd., celebrating its centenary in February 2015 will be a good example for best practices.

Dwindling Economic Sustainability of Agriculture

Farmer is needed by everybody for he feeds the billions of mouths and not necessarily stomach ful... more Farmer is needed by everybody for he feeds the billions of mouths and not necessarily stomach full. But several of the farmers themselves starve and die for want of a just price for what they produce. Several farmers report suicides due to heavy burden of indebtedness – mostly usurious private debt – and indiscrete farming applications and technologies. Penury is most common among farmers growing food crops while huge losses in commercial crops leave the farmers in the lurch. After globalization markets have integrated and the trends in commodity markets around the globe are also causing tremors. On top of all these is the consequence of climate change turning totally adverse to this seasonal occupation of agriculture. Youth are moving away from farming threatening the future of food security in India. Was farming economically sustainable in the past or is it only declining in the recent past? Is something wrong with the farmer or farming? This article focuses on addressing a few questions: what type of farming is sustainable economically? What has to be done to make it sustainable? Comprehensive treatment of the subject may be difficult because of the interconnectedness of the activity with several sectors of the economy and the way the labour markets have also been shaping up post MNREGA in India. This article keeps in view the following criteria for assessing the economic sustainability both from supply side and demand side: 1. Size of the holding 2.Crop specific growth 3. Yield Gaps 4. Costs, returns and prices of farm products 5. Availability of credit 6. Agricultural marketing 7. Food Security, and 8. Governance.

Micro and Small Enterprises Need a Separate Law

Micro and Small Enterprises (MSEs), the second largest employers and the strongest link in the su... more Micro and Small Enterprises (MSEs), the second largest employers and the strongest link in the supply chain, are the seedbeds of innovation and entrepreneurship. The drivers of growth thus rest on entrepreneurship, and enterprise creation. When the subjects of a Law continue to voice the same grievances for decades, despite a law meant to protect them, there is need for introspection on such law. Legal, and regulatory facilitation fall short of the requirement because these micro and small units-both in manufacturing and services-are regulated under the 15-year-old Micro, Small and Medium Enterprise (MSME) Development Act, 2006, the Act benefitted the large SMEs bypassing the micro and small. The Act was amended amidst the pandemic providing for classification under the twin criteria of investment and turnover from the earlier single criterion-investment. This paper argues that MSEs require a separate law and supporting dedicated institutions at the federal level. This is imperative in the interest of financial inclusion agenda, and for the success of the ambitious 'Make in India.'

Atma Nirbhar Bharat Abhiyan MSME Schemes: A Review

Atma Nirbhar Bharat Abhiyan MSME Schemes, 2021

GARP in its Annual Report 2021 viewing risk perceptions mentioned that in the next three to five ... more GARP in its Annual Report 2021 viewing risk perceptions mentioned that in the next three to five years, economic fragility and societal divisions are set to increase due to disparities arising in healthcare, education, financial stability, and technology. The pandemic shockwave resulted in loss of 490mn job losses measured in terms of working hours in the second quarter of 2020 alone. Only 28 economies were expected to grow in 2020-21. The growth in inequalities is expected to be exponential. This context brings us to look at the way India moved in this regard. MSME Sector has been pump-primed as one of the growth sectors. Atma Nirbhar Bharat Abhiyan (Self-reliance) involving Rs.28trn was announced of which Rs.3.20mn was meant for the MSME sector with guarantee of sorts from the Government. This paper intends to the Emergency Credit Linked Guarantee Scheme (ECLGS) under four tranches. Manufacturing sector growth of 25 percent of GDP holds the key for the $5trn economy of 2025 and for realizing the dream of self-reliant India (Atma Nirbhar Bharat).

Data, data Searching for it

In India, it is difficult at the moment to figure out the success or failure of MSMEs in manufact... more In India, it is difficult at the moment to figure out the success or failure of MSMEs in manufacturing sector. Government of India stopped Census of the sector and depends on the data of Goods, Services Tax (GST) to backtrack the sector details. This proved wholly unreliable as several micro and small enterprises are not digitized. While the pandemic accentuated the process of digitization, there is no data on mortality of micro and small enterprises. The historical data hides more than what it reveals.

MSMEs and the Union Budget 2019-20

The first woman FM of India presents her 9-month budget on 5th July 2019 and #MSME sector's expec... more

Mergers and Acquisitions in Indian banking.doc

This paper contributes to the ongoing debate on mergers and acquisitions in Indian Banking partic... more This paper contributes to the ongoing debate on mergers and acquisitions in Indian Banking particularly in the context of SBI merger on 1st April 2017. While arguing on the issues of consolidation and convergence of banks through the M&A process, the paper cites the experiences of mergers in banks thus far. The author opines that strong banking is imperative for strong economy. He has referred to the demerits of the size in the context of ‘too big to fail’ experience of the 2008 global recession. The article highlights the fact that size of bank does not guarantee its stability. The merger of banks should consider the difference of culture prevailing in the merged and merging bank. Leadership issues come into play for the merger to be successful. Often mergers fail because of lack of integration of people, their hierarchy issues, difference in technology, neglect of customers, etc. He considers that ‘people’ in the organisations should be the focus in any such interventions. He concludes that the issues of vacuum in leadership, succession, and governance in public sector banks cannot be addressed by a larger size. Viewing from the policy angle, mergers and acquisitions targeting size are no insurance to either financial inclusion or improved customer service and therefore need extreme caution. Further, higher capital allocation with or without Basel III cannot prevent bank failures triggered by systems, people and processes. The Indian banking system is facing tough challenges. It is therefore, important to move strategically and not ideologically and emotionally in regard to mergers and acquisitions in banking industry.

What Ails and what aids MSMEs

Presentation at the CII-Manufacturing Summit at Hyderabad, 2019

Entrepreneurs who would like to live in the past cannot get into future markets which are highly ... more

Just A Mercenary? Notes from my Life and Career Author: Duvvuri Subba Rao (2024) Publisher: Penguin Random House Price: Rs.799 © Duvvuri Subba Rao

https://yerramr.com/2024/05/14/book-review-just-a-mercenary/, 2024

This is a review of a bureaucrat who rose from humble beginnings in a village in Andhra Pradesh -... more This is a review of a bureaucrat who rose from humble beginnings in a village in Andhra Pradesh - Kovvuru in West Godavari District to the well-deserved enviable position of the Governor of Reserve Bank of India and handled turbulent times post recession (2008-13) with dexterity. His rate cuts did not go well with the Government of India that was keen on growth-oriented interventions.