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.

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- Financial Rounds

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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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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.

India's GDP growth @ 7.9%

India's GDP grew by 7.9% in the first quarter of the fiscal year 2008-09. This is still a decent growth rate considering CRR hikes, high inflation rate and other economic deccelerators that affected the economy in the quarter.

Here are the key economic indicator figures:

Agriculture: 3%
Manufacturing: 5.6%
Construction: 11.4%
Electricity, Gas and Water: 2.6%

More news here.

India Poverty Data

India Poverty Data published by World Bank; updated 23 Apr 2007.

According to the report, 29 percent of the population of India are below the national poverty line.

via End Poverty in South Asia

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