Monday, September 15, 2008

WallStreet crumbles

- Lehman Brothers, files for bankruptcy.
- Bank of America to save Merrill Lynch from the same fate by buying it for $50 billion.
- AIG looking to raise capital; also to avoid the same fate.
Complete coverage by WSJ.

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Saturday, September 13, 2008

Indian Industrial growth rate at 7.1%

The Industrial Production Index grew to 7.1% in the month of July far exceeding expectations set from 4 to 6%.

This is indeed great for the economy which has been performing badly for a few months now. As a result of the unexpected growth rate, the Industry demanded a rate cut in interest rates to enhance investments further.

More news here.

Thursday, September 11, 2008

Indian Inflation at 12.1%

India's inflation rate dips to 12.1% for the year ended August 30 2008.
This is the third consecutive time that inflation has declined. But the same was 3.2% the same time last year.

The drop in fuel prices over the couple of months would soften inflation further. More news here.

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- How is WPI inflation rate calculated in India?
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Tuesday, September 9, 2008

Financial Products Information

Information is of highest value in the world of finance, especially when we have an umpteen number of finance related products and services available at our finger tips and would want to choose one from those. The ubiquitous internet gives us all the information we need, but being so large also has certain side effects, as the information we seek in the internet would be as scattered as it can be. That is where having a single platform or website for accessing all the information we need helps. is one such website, where information related to finance can be read.

The portal contains thousands of articles related to the finance area, which is arranged into various categories such as loans, credit cards, mortgages, savings and accounts, insurance, stock markets etc. It also tells us of various financial products and services available around. And the best part is one can do a comparative analysis of various products and services, for example to compare mortgages, and select the best out of the set that fits his or her need. And for those who do not want to buy anything, but just want to know of the latest news in the world of finance, there are separate sections dedicated for the latest finance news.

The credit card section of the site lists down the most popular credit cards available in the market. Also there are various comparison tables in the credit cards section, which are based on features of a credit card such as balance transfer, cash back and rewards, air miles etc. Each comparison table lists down providers of cards having the selected feature. The site also provides credit card quotes. The insurance area is detailed in the site using which we can select quality insurance policies having minimal cost. In both these cases, we can apply for the product right from the website.

The site is updated with latest contents (news, articles etc.) everyday and to keep us updated of new content, they have an RSS feed in the website. Readers can subscribe to this feed in their feed readers to get to know of new articles as soon as something is posted in the site. The site also has a weekly newsletter to which the readers can subscribe to just by entering their email ids. This would useful for those people who wants themselves to be updated with the latest happenings in the finance world but don’t have enough time to visit the site everyday.

Sunday, September 7, 2008

A career in Finance through CFA

The Chartered Financial Analyst (CFA) is a globally recognized self study degree program for anyone aiming at investment related professions. It is conducted by the CFA Institute. Candidates who have completed the course are highly valued by the industry and are preferred for key positions in companies.

The CFA exam has three levels, I, II and III. One has to pass all the three levels and meet some other requirements (professional and ethical) to become a CFA charter holder. The exam for Level I takes place twice a year (in June and December) where as that for Level II and III happens only once in a year (in June only).

If one writes the Level I exam in December and continues through to Level II in June of the next year and Level III in June of the following year, without failing in any of the levels, the minimum time period in which the CFA levels can be completed is 1.5 years. The exam is of moderate difficulty and it requires quite a dedication from the candidate’s part to get through. However, there is no limit to the number of attempts one can make in any of the levels.

The fees for applying for the exam ranges from around 1000 US Dollars to 1400 US Dollars, depending on when you are registering, as there are discounts on early registrations. The study materials and one online sample exam are included in the registration fees.

One note of caution! This CFA designation given by the CFA Institute is not to be mistaken as the CFA in India given by ICFAI (which they got through some court litigation) that is not valued outside India like the former. In fact, due to the litigation, the CFA Institute is not conducting the CFA exam in India until the court gives a ruling in their favor.

So as of now people in India have to go outside the country, to nearby locations such as Srilanka, Nepal, Singapore etc. to take the exam. I hope the court understand the situation and allow the CFA Institute to conduct the CFA exam in India. But whatever it is, the CFA exam is something an aspiring financial analyst should definitely go for.

Good Reads
- Financial Rounds

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Friday, September 5, 2008

Financial tidbits

As the world economy continues to remain blunt, in the US the subprime mortgage lending crisis is still not over despite statements from the renowned in the field stating it to be over. From this news,

Standard & Poor’s Leveraged Commentary and Data reported this week that the default rate — the percentage of leveraged loans in default — rose to a five-year high of 3.3 percent in August. At the end of last year, the rate was a tiny 0.24 percent, or about one of 400 loans.
Back in India, this news (India’s external debt jumps 30.4% to $221 Bn in FY08), though it appears appalling prima facie, might not be that bad because the increase is on account of increased borrowings by the corporate from outside and weakening of the dollar. In fact, the government’s debt in total external debt has decreased from 28.4% to 25.6%. Increased borrowings by the corporate, also called External Commercial Borrowings (ECB) could indicate an increase in investments done by Indian corporate inside India and abroad, which is actually good for the Indian Business.

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Wednesday, September 3, 2008

What is a Core Banking System?

Core Banking System or Core Banking Solution is a term that we hear very often these days. For IT and Banking folks, this term doesn’t need any explanation but for those who want to know a bit, here’s a brief overview of what it means.

Previously a bank’s core operations such as keeping a ledger of various transactions, maintaining customer information, interest calculation of loans and deposits, adjustments to accounts on withdrawal and deposits of funds etc. were done manually. With the advent of ICT (Information & Communications Technology), efforts were done to automate various banking processes using software applications so as to make them simple, efficient, effortless and cost effective. Thus, the platform where ICT is used to perform the core operations of a bank, like those mentioned above, is known as Core Banking System.

In Core Banking System, software applications record transactions, maintain customer information, calculate interest on loans and deposits etc. The data, instead of huge ledgers, are stored in backend databases in digital form. Now, the same software can be installed in various branches of a bank and can be interconnected through the internet or telephone lines to form a core banking network of the bank. The advantage, a customer can operate on his account from any branch of the bank and if the bank owns Internet Banking or ATM facilities, then the customer can operate on his account from virtually anywhere.

Thus, Core Banking System has radically changed the way in which banks function. The greatest advantage of having a Core Bank System is that new features and functionalities can be easily added to the system that customers will have a whole lot of services that they can use. Electronic funds transfer between banks, online trading in the stock markets etc. are examples of this, which were unheard of in banks pre Core Banking System era.