Arthanomics 2006: Annual Finance Seminar Held at IIM K
On "Towards Mature Financial Markets: The Indian Transition"
Post-event Press-release

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The next speaker to take the stage was Mr. C. J. George, MD, Geojit Securities, who gave a very candid view of how the primary markets in India really functioned. He first gave statistically backed information and many examples to show how the Indian secondary markets (Exchanges) were among the most efficient and transparent in the world. But he said there was a need to make the IPO market more friendly to the retail investor.
To balance the lopsided Bull Run driven by FIIs, a counterweight of large number of retail investors, and domestic FIs (Financial Institutions) was essential, he stressed. Talking about the menace of benami accounts, he related that if the government can ensure supply of Electronic Voting Machines (EVM) to remote villages, even if they had to be carried on elephants, then it can certainly take steps to prevent misuse of the exchange markets by vested interests.

Mr. Anil Jhala, CFO, Birla SunLife Insurance, gave the next talk on Key Drivers of Growth in the Insurance Industry. He started with a historical overview of the insurance market, from the first company in 1818 till the IRDA act of 2000, which opened the field for private players. He said that India represents only around 0.66% of the $ 3.2 trillion global insurance premium market, and has much potential for growth. He emphasized this point through demographic data; saying that a rising population, greater per capita income, improved regulatory mechanisms, and more household savings, the Life Insurance sector would witness a boom in the next few years. Referring to pension schemes, he said on a humorous note, that the risk now is not dying early, but living longer. With interest rates at extreme lows, young people will have to invest astronomical amounts of money to be assured of a safe future, post-retirement. He stressed that Life Insurance was a measure of social security and one of the most important long-term sources of funds for the government.

The second day's proceedings started with Mr. Partho Mukherjee, Head, Treasury, UTI Bank, talking about currency and interest rate derivatives. He outlined how policy, the yield curve, liquidity of the underlying markets, the players and volatility play an important role in shaping the framework for a sound derivative market. The absence of potentially big players like the PSUs make the derivatives markets rather nascent. Yet derivatives remain the fastest growing market in the treasury space. He was confident of Mumbai becoming the next commercial hub in Asia, provided there is a fine-tuning of regulations. He explained with an example how innovative products in banking evolved out of a need to provide customized solutions to demanding clients.

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Contributed by -
Media Cell,
IIM Kozhikode.