Snapshots

N. S. Vageesh

*Structural changes underway, albeit slowly. The low levels of automation being addressed through CVC prompting. High labour costs sought to be controlled through VRS plans.

*Government recapitalisation likely to be limited to weak banks. Slew of capital-adequacy-driven equity offers from banks on the anvil. Markets unimpressed with Government's offer to reduce stake to 33 per cent.

*Economic slowdown raises concerns over earnings growth and asset quality. Further deterioration consequent to trade liberalisation feared.

*Interest rate outlook remains uncertain.

*Focus shifting to transaction processing rather than deposit growth or credit growth as spreads keep getting narrower.

*Sharp growth in new lending instruments such as commercial paper, debentures.

*Renewed emphasis on retail market for asset build-up through housing loans, personal loans.

*Competition stiffens as financial institutions enter the banking domain.

*New areas of business opening up through insurance and pension funds. However, only a few banks are entering the business directly. The remaining are likely to function as distribution agents.