XIM Bhubaneswar Organizes National Finance Summit

XIM Bhubaneswar Organizes National Finance Summit

Dr. Ramana set the tone for the discussion as he put forth the questions on how to innovate in Finance, what is illiquidity, and how the corporate sector can manage liquidity and profitability. This discussion was taken forward by Mr. Kaza Sudhakar, who outlined the various measures taken by RBI to manage the current scenario by reducing CRR from 9% to 5% and slashing SLR,

Repo and Reverse Repo rates to inject liquidity in the markets. He observed that furious financial innovations, a tsunami of credit, deteriorating quality of deals and disregard for fundamentals have brought about this current downfall. He suggested that some restrain in spending, a judicious mix of less capital intensive products, right pricing strategy and reduced inventory using JIT are some methods to survive and thrive in the current crisis.

Prof. Pulin Nayak observed that Capitalism is a form of "creative destruction" prone to booms and busts. It is in these times of bust that we face problems of illiquidity and need a third party to bring in counter cyclical economic policies that can end this recession. This can be done by government intervention with fiscal policies and giving a strong role to entrepreneurs to come up with physical and financial innovation.

Mr. Naveen Kapoor brought forth his knowledge and experience in the power sector to explore the problems of illiquidity in this industry. He emphasized the need for financial and technical innovation, as the power sector continues to be haunted by 33% transmission and distribution losses, collection inefficiency and skewed tariff structure in this sector.

Mr. Neil Chakravarti addressed the problem from an operational point of view, noting that "cash is king", conservatism with transparency is the best approach to follow, and that sometimes innovation lies in simplicity.

The last speaker of the day, Mr. Arun Pingaley observed that the illiquidity in the markets was not due to lack of funds, but due to lack of trust. The banks are reluctant to participate in mutually beneficial transactions, which is detriment to the growth of the economy. He suggested innovative measures like Pension liability revamp, Asset monetization by sale and lease of toll roads, adoption of Islamic banking, reemergence of covered bonds like RCMBs, tri party repo and Hybrid SIV as measures to counter illiquidity.

The session was summarized by Dr. D. V.Ramana, and Prof. Banikanta Mishra, faculty member at XIMB presented the vote of thanks and mementos to the speakers on the stage.

Concluded.

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* Contributed by -
Madhukar Subramanian,
Co-ordinator, IlluminatiX,
The Media and PR Cell,
XIM Bhubaneswar.

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