National Institute of Bank Management, Pune

(An Autonomous Apex Institute Established by RBI & Banks)

( Registered as a Society under the Indian Societies Registration Act 1860
Recognized as a scientific and Industrial Research Organization by Department of Scientific
and Industrial Research, Ministry of Science and Technology, Government of India )

Latest Issue

July-September 2020-21
Volume XLIX
No. 2

Editorial

Contents

 

Impact of Trade Liberalisation on Tea Industry in India (1964 to 2017)

Parashram Patil
Muhammadriyaj Faniband

We examine the impact of trade liberalisation on Indian tea industry specific factors, namely, area under cultivation, production, productivity, import and export during 1964 to 2017 period using regression method. We divide data into two sub-periods. The pre-liberalisation and liberalisation period is from 1964 to 1991 and the post-liberalisation period covers the period from 1992 to 2017. We find that tea area under cultivation is not changed after the trade liberalisation. Further, we reveal that tea production and productivity are not affected in the post- trade liberalisation period. Moreover, empirical evidence indicates that trade liberalisation has a significant and positive impact on tea import. However, we note an insignificant impact of liberalisation on tea export. The causality between productivity and cultivation area, import and export does not exist.
 

Stock Markets, Macroeconomics and Financial Structure of
BRICS Countries and USA

Pradiptarathi Panda
M Thiripalraju

Financial institutions, financial intermediaries, market microstructure, macroeconomic pictures, financial market regulators and financial instruments are the different important components of the financial environment of a country. An efficient and effective financial environment requires smooth functioning of the whole financial system of an economy. This study provides a broad overview of financial environment of BRICS countries and USA with investment opportunities in BRICS countries. We have considered the market depth, market microstructure, portfolio weights, CAGR and several macroeconomic indicators to assess the investment climate. For data analysis, daily, monthly and yearly data have been considered in this study. Our detailed analysis finds that BRICS countries are a good destination for investors.

 

Dynamics of Contagion and Spillover Effects: Further Evidence from
Major Equity Markets

Rakesh Shahani
Fahad Umar

The present study investigates dynamics of contagion and spillover of volatility amongst stock markets of five economies ; US , UK and Japan and two Asian emerging economies viz. India and China. The period of study is eleven years; January 1, 2009-December 31, 2019 and the data is daily closing prices of their stock market indices. The study makes a distinction between contagion and spillover whereby a shock is considered spillover if its impact is seen with a lag of one period only, while contagion is a residual transmission (Masson, P (1998); Dungey, M and Martin, V L (2007)). The results revealed substantial contagion and information flows from one market to another, be it developed or emerging. Further although US markets still decides the direction of markets, the importance of other markets has increased over the years. Further, US market on its own now appears to look for clues from both developed and emerging markets including India and China. The two emerging markets of Asia, India and China observe a lot of co-movement in returns with spillovers being linked to the developed markets. The study also tested for pre-conditions of stationarity, autocorrelation and heteroscedasticity.

 

Cooperative Banks and Deposit Insurance

M R Das

The Deposit Insurance Corporation (Amendment) Act, 1968, required DICGCI to register all the 'eligible co-operative banks' [as defined in Section 2(gg) of the DICGC Act] as insured banks. At March-end 2019, 1,941 cooperative banks were registered with the DICGCI with their insured deposits at Rs. 3,800 billion which constituted 11.2 per cent of the total insured deposits of all the insured banks. Compared to commercial banks, extent of protection was substantially high in respect of cooperative banks. During 1998-2019, premium collected from cooperative banks grew at an average annual rate of 15.3 per cent (commercial banks: 19.0 per cent). Up to March-end 2019 since its inception, the DICGCI has settled claims of 351 cooperative banks with the amount of claims settled at over Rs. 48,000 million. The current flat-rate premium system has led to under-pricing of risks (to the DIF) in respect of the cooperative banking sector. Ceteris paribus, this encourages more aggressive behaviour by cooperative banks. Therefore, DICGCI should quickly act on implementing a risk-based premium system. Two DIFs – one for commercial banks and the other for cooperative banks – needs to be instituted. The paper adds to the existing limited research on Deposit Insurance in India and especially, in relation to the cooperative banking system.

 

Book Reviews

 

The Story of Indian MSMEs: Despair to Dawn of Hope

B. Yerram Raju

Konark Publishers, 2019, pp 224, Rs. 750/-

Reviewed by Prof Amol Randive, Research Scholar and Assistant Professor, Management & Head – Industry Connect & Career Support, Vishwakarma University (VU), Pune.

 

Sales People don't Lie

Roshan L Joseph

Sage Publications Pvt Ltd, India, 2018

Reviewed by Dr Elizabeth James, Assistant Professor, National Institute of Bank Management, Pune.

 

Evolution of Banking System in India since 1900

O P Chawla

Hard Cover, First Edition: 1st July, 2019; Sage Publications India Pvt. Ltd., New Delhi-110044, India; Price: Rs. 1095. Pages: 332.

Reviewed by Dr V S Kaveri, Former Professor, National Institute of Bank Management, Pune.

 

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