professionals and understand the problems and concerns banks face while growing their business. The students also made new contacts, men-tors, and references during the project work. It helped them to first hand information in the field of their interest en-able them to firm up how they must prepare for a career in banking. Students also made extensive report on their sum-mer project. This edition of PRAYAS highlights some of the pro-jects undertaken by the stu-dents at various banks, with their experiences and their findings.

Summer internship is an inte-gral part of the academic cur-riculum of the PGDM (B&FS) course at NIBM. The objective is to expose the stu-dents to the real-life working of an organization and inte-grate classroom learning with practical experience. During the summer of 2014, the students of PGDM 2013-15 batch underwent summer internships for 8 weeks in various prestigious organiza-tions such as RBI, SIDBI, EXIM Bank, IFCL, HDFC Bank, IDBI Bank, Bank of Baroda, Canara Bank and several other public and pri-vate sector banks. They were

placed in diverse business and functional areas like MSME lending, Corporate Loan Factories, NPA management, Risk Management, Marketing of Bank Products and ser-vices, Rural Finance, Busi-ness and Profit Planning etc.

The students were assigned an executive guide in the or-ganization of internship. This gave them the opportunity to closely interact with banking

Summer Internship: Introduction to the Corporate World

Challenges in MSME Lending

July 2014

Inside this Issue:

Changing Scenario in Retail Banking Orientation Programme for PGDM Batch 2014-16 Banking Paradigm in Private Sector Students’ Discussion Forum on Union Budget FLIP Certification @ NIBM Formation of Alumni Association Welcome for Fresher Students

During the summer of 2014, many students selected MSME lending as their project for study. They have discovered several issues facing banks when they lend to Micro, Small and Medium sized Enterprises. In India, MSMEs are consid-ered as the engines of economic growth and thus lending to the sector is extremely important. But this has its share of chal-lenges too.

MSME sector is largely an unregistered and companies have little records maintained by way of financial statements such as balance sheet and profit & loss account, which are re-quired when applying for a bank loan. As mentioned by Anirban Saha, who interned with SIDBI – “MSMEs mostly

hire external accountants to prepare financial statements and have no knowledge of the various items posted in it. Thus, they are unable to provide an-swer to queries made by bank officials when the financial statements are inspected.”

Moreover the MSME sector is very dependent on the industry environment where they oper-ate which includes changes in government regulations. Thus measuring their performance and providing credit rating

score is very difficult. Some banks may use the non-updated credit rating reports which can be very unstructured and thus can lead to potential distress in the long run. Also, as found by Akanshya Kar, who interned with Bank of Baroda – “many MSMEs are unable to even provide audited previous year balance sheets for bank inspec-tion and most of their financial data contain projections which always present a positive pic-ture of the operations.” Banks may thus lend to seemingly profitable enterprises but can incur heavy losses later. Steps should be taken towards better information sourcing as this sector encourages entrepreneur-ship, employment generation and makes a significant contri-bution to the country’s GDP.

Retail banking has gained enormous momentum in the Indian banking sector in the current years. There is vast opportunity as well as chal-lenges for retail banking. The changing portfolio of retail banking ihas many dimen-sions.

In their summer projects, eight students completed internship in the field of retail banking. They found that increasing middle class, young popula-tion, increasing literacy level, urbanization, adaptability of technology, increased con-sumption etc have resulted in steep growth of retail banking and exposure to many opportu-nities and challenges. Stiff competition has forced banks to move focus from products

to services. Abhijeet Joshi, intern at J&K bank found that the ability of a bank to admin-ister a large portfolio of retail credit products depends upon factors such as credit assess-ment capability, sound docu-mentation practices, constant follow-up, and robust recovery mechanism. Skilled human resource and technological support are very important for success in this segment.

Students also observed that in a world of ATM and internet banking, the customer still prefers the personal touch of their neighbourhood bank branch. They realized that sharing of information about credit history of households and borrowers is becoming extremely crucial for retail banking. Continuous innova-tion and differentiation of products and services are im-portant for relationships while issues of KYC, safety and money laundering have the potential to constrain the growth of retail banking.

students. The inaugural ad-dress was given by Mr. Sushil Muhnot, Chairman and Managing Director of Bank of Maharashtra, Pune. Mr Muhnot spoke about the evolution of banking from a transaction oriented business to a product oriented busi-ness due to the advent of

The admissions for the PGDM 2014-16 batch of students have been completed. 59 students have been selected in a process involving cut offs based on CAT and ATMA followed by Group discussion and Personal Interviews (GDPI). The new batch has students with diverse educational background. How-ever, almost 70% of the stu-dents are from engineering streams, while more than 50% have work experience.

A three-day orientation pro-gram was organized for the new batch, during which sev-eral eminent personalities from the industry interacted with

technology. He elaborated upon the various electronic channels and services made available to the consumer and gave insights on the emerging challenges for manpower and skill sets in banking industry at various functional levels. His address was very informative and

motivating for the students as they make their first steps towards enter-ing the bank-ing industry with greater confidence.

Changing Scenario in Retail Banking

Orientation Programme for PGDM Batch 2014-16

In a world of

ATM and internet

banking, the

Indian customer

still prefers the

personal touch of

their

neighbourhood

bank branch

Page 2

We reap what we sow. We are the makers of our own fate. None else has the blame, none has the praise.

Swami Vivekananda

NIBM has

selected the 59

students in a

process involving

cut offs based on

CAT and ATMA

followed by GD

and PI.

During the orientation of the PGDM 2014-16 batch, Mr. Deodutta Kurane, Group President, Yes Bank, introduced his bank, the product and service solutions offered to cus-tomers and accomplishments made in the short duration of its being in the industry. He outlined the topmost areas of opportunity for growth of banks and therefore the career opportunities for employees. These include customer relationship management, digital bank-ing, mobile banking, wealth manage-ment, innovative lending products to infrastructure and SME, branch opera-

tions and IT security. He however stressed upon the need for better ac-countability in banking and observed that the Reserve Bank’s decision to move to risk based supervision would lead to greater understanding of the

management and functioning of banks by auditors and the regu-lator. Mr Kurane also high-lighted the opportunities avail-able in providing financial in-clusion to uncovered house-holds. His talk of newer vistas and avenues in banking moti-vated the students to appreciate and consider the newer dimen-sions of career in the banking sector .

Smart Banker Program conducted by FLIP as a part of the curriculum and sponsored the entire batch of PGDM 2013-15 for the same. The Program includes 154 hours of on-line learning on basics of banking and simulation of finacle followed by evaluation

FLIP is India’s largest e-learning and certification offering in bank-ing and finance. It is a unique, job-oriented program, which includes banking operations, with first-time

The PGDM (Banking & Financial Services) course of NIBM is con-stantly updated to meet the emerg-ing knowledge and skill needs of banking sector. Though the course is very comprehensive, there has been a felt need to update the stu-dents to meet the sector’s require-ments of preparedness of new managers having functional under-standing of banking operations, much of which are conducted on on-line platforms. Accordingly, the institute has introduced the

ever online Finacle training and simulations. The certification adds to student’s skills and preparedness for undertaking banking operations, and is well recognized in banking indus-try.

Banking Paradigm in Private Sector

FLIP Certification @ NIBM

Students’ Discussion Forum on Union Budget

dents presented overview and analysis on various topics such as State of Economy, Budget Highlights, Sectoral Implica-tions, Tax Implications and likely Impacts for the Banking Sector. Students asked pointed questions and debated upon various aspects of the budget and its implications.

The Chief Guest for this event, Dr. Brinda Jagirdar, Ex-GM, State Bank of India, appreci-ated the presentations and made observations and sugges-tions on the presentations along with her general opinion on the budget.

The occasion was graced by Director and Faculty of NIBM. A token cash reward of Rs. 500 was announced for each group at the end of the event to encourage their initiative and participation. The students greatly benefited from an en-hanced understanding of the Union Budget.

For the first time in 30 years, the country has elected a ma-jority Government with great hope and expectations for economic growth and develop-ment. The Finance Minister Arun Jaitley presented his maiden budget for not just the ‘aam aadmi’ but also the mid-dle class and investment starved businesses.

NIBM students took the op-portunity to organize a Discus-sion Forum on the Union Budget on 18th July 2014. Both the first and second year students jointly participated in the event. Five groups of stu-

Students

presented various

topics such as

State of Economy,

Budget

Highlights,

Sectoral

Implications, Tax

Implications and

likely Impacts for

the Banking

Sector

Page 3 July 2014

Editorial Team Rahul Wadhwani PGDM (2013-15) Aishwarya Raj PGDM (2013-15)

National Institute of Bank Management

The Post Graduate Programme in Banking and Finance at NIBM, now rechristened as Post Graduate Diploma in Management (Banking and Financial Services) has created not just talented bankers but also leaders capable of taking on challenges in their organizations. The alumni of NIBM have proven their professional capabilities and made their presence felt in their organizations. They also stand as the mark of quality of education in the institute.

An Alumni Meet was conducted on 14-15 of February, 2014 in which the cur-rent students got a chance to interact with their seniors. The alumni arrived for the event with great feeling of nos-talgia for the campus where they once lived and spent an important part of their academic lives.

In an informal session, the alumni interacted with the faculty, who were also their friends, guides and mentors, and relived back some of the most cherished memories and moments of their NIBM life. This informal session became extended into a Cultural Night where the current students ac-

tively took part in welcoming them.

On 15th February, a formal meeting of all the alumni, current students, faculty and staff was held leading to the birth of the NIBM Alumni Association. The need for Alumni Association has been felt for some time now as the numbers of alumni have as-sumed a significant size and there are tremendous opportunities for networking and gaining from each other. Mr. Arafat Ahmad Shakeel (2007-08) became the first President of the Alumni As-

sociation. Mr. Veeresh Kumar (2011-13) and Ms Khushabu Soni (2013-15) have been appointed as the Secretaries. A Management Committee comprising of Mr. Mukul Garg (2010-12), Ms Divya Sharma (2011-13), Ms Avni Parmar (2012-14), Mr. Devam Sharma (2012-14) and Mr Ankit Savla (2013-15) has been constituted. The Director and Dean-Education, NIBM are the Chief Patron and Patron of the Association. The facebook page of the same has also been launched to make access easier to everybody and ensure that there is a constant touch between the students and alumni. The Alumni Association marks the beginning of a new journey for all of us. The message of the associa-tion is clear "Connect Today, Transform Tomorrow".

Address : NIBM Road, PO: NIBM, Kondhwe Khurd, Pune Maharastra Pune: 411048

Formation of Alumni Association

www.nibmindia.org

One of the first things that a fresher looks out for after enter-ing a degree college is Fresher's party. Seniors welcoming their junior counterparts and making them aware of the college is what every junior expects. The purpose however is to create a friendship which could be carried ahead in career and life.

The seniors batch of 2013-15 took up this mission and organ-ized the fresher’s party. The show unfolded with the intro of the Seniors in very humorous style between claps from the audience. The stage was set for the juniors to perform on the retro theme. “Shake it Like Shammi” The singing and danc-ing on the golden era songs was followed by fashion show with the entire 2014-16 batch walking on the ramp to show-case their style, attire and confidence in front of the huge turn-out.

With our Rajesh Khanna, Shammi Kapoor, Helen and Shar-mila Tagore walking on the ramp, nostalgia of 60s and 70s took over the gathering. To decide the winners of Mr. and Ms. Fresher, the fashion show was followed by balloon dance and some impromptu questions to assess the confidence, presence of mind and sense of humour of the finalists.

Miss Niharika Tyagi was judged as the Miss Fresher 2014 and Mr. Himanshu Bagga was judged the Mr. Fresher 2014. The evening closed with the well laid out and delicious dinner.

Welcome for Fresher Students