Publication: Dvara Research

Following the sessions by Dr. Isher Ahluwalia and Mr. Vikram Kapur, (covered in this post) the workshop participants discussed critical topics such as decentralisation and governance, political economy and institutional fragmentation, revenue generation and infrastructure financing, water and sanitation, capacity building, and land and city growth.

Mr N Vaghul, chairman emeritus of ICICI Bank, recently delivered the Talwar Memorial Lecture on the topic “The Future of Finance in India”.

The first IFMR Conference on Financial Systems Design was held at our office in Chennai on Aug 5-6, 2011. The objective of the conference was to engage in an in-depth conversation on the future of the Indian financial system and some of the underlying design challenges being faced in various markets.

Subsequent to our earlier posts detailing the three broad themes from the IFMR Financial Systems Design Conference 2011, Day 2 of the conference witnessed participants identify pathways to achieve the specific visions that were formulated across the sessions in Origination, Risk Transmission and Aggregation.

The structured finance approach has given MFIs access to a new class of debt investors, thereby reducing over-dependence on traditional sources of funds. This therefore enables risk transfer over a larger gamut of financial institutions and also provides access to mainstream capital market investors. The need for continuous and reliable sources of capital is critical for growth and sustenance in this sector.

In February 2010, I had the opportunity to visit Pudhuaaru KGFS in Thanjavur. This is a remarkable project which helps us see the interface between households and the financial system in a wholly new light.

The Draft Micro Finance Institutions (Regulations and Development) Bill 2011 (the Bill) seeks to cover all entities engaged in ‘microfinance activities’ under a single regulator (the Reserve Bank of India) and prescribes various rules for such institutions.

The Committee to Review Implementation of Informal Sector Pension (CRIISP) recently released their report focusing on National Pension Scheme (NPS), its design architecture, its performance till date and recommendations for increasing outreach and awareness about the product

In a conversation with Nachiket Mor and Bindu Ananth, Dr. Viral Acharya, Professor of Finance at the New York University Stern School of Business, speaks on issues centring around aggregation of risks in a financial system, with an emphasis on those particularly relevant to the Indian financial system.

Future financial services providers will be akin to general physicians, who bear great responsibility for the health of their patients. Such a prescriptive approach would minimise instances of unsuitable advice.