Mr. Jatindra Mishra, HR Head – South, Reliance Retail Ltd (Group Concern of Reliance Industries Ltd)November 1, 2011
Finance for non-finance executives of Hindalco IndustriesNovember 14, 2011
KIIT School of Management, KIIT University (KSOM), a constituent school of KIIT University, Bhubaneswar, successfully organized its 2nd National Finance Conclave based on the theme “Risk Management in Financial Sector: Challenges and Opportunities.”
Top notch professionals from the corporate world were the resource persons in the deliberations and helped to gain insights into the entire spectrum of risk management in the financial sector. Risk Management is a discipline which is at the core of every financial institution. It starts with identification and measurement of risk and then goes into monitoring, reporting and controlling risk at last. In today’s competitive world, one of the important goals of the organizations is to optimize risk-reward trade-off. Expanding business arenas, deregulation and globalization of financial activities, emergence of new financial products and increased level of competition have necessitated a need for an effective and structured risk management in financial institutions.
The Conclave was introduced by Prof. Ashok Kumar Sar, Dean, KSOM who talked about the importance of managing risk in today’s scenario. The inaugural ceremony saw a large number of participants including executives from corporate and public sectors, academicians, students and faculty members. Among the eminent speakers who attended the Conclave and shared their rich insights were corporate leaders like Mr. S. Ananthakrishnan, Executive Director of IDBI; Mr. Arun Singh, Principal Accountant General of Odisha; MR. L. P. Agarwal, MD & CEO, PNB Investment Services Ltd.; Mr. P K Parida, Executive Director, NALCO; Mr Amitabh Mohanty, Head – Fixed Income Fund, Reliance Mutual Fund; Mr. Narendra Patra, VP & Head – Money Markets & Funding, Global Markets, Treasury, AXIS Bank; and Mr. Amitabh Chakraborty, MD & CIO, Kitara Capital.
Prof. Sar introduced the topic of the conclave, expounding on various aspects of Risk Management in Financial sector, briefing about the rules that formed the sub-themes for the subsequent sessions. He talked on the joint work of the Institute of International Finance (IIF) and Ernst & Young in 2008, 2009 and 2010. A broad set of principles of conduct to provide guidance and support to the industry as it corrects course and continues to navigate through the evolving economic, market and regulatory environment have evolved from this work. These principles of conduct are in 7 areas, viz., 1.Risk management, 2.Compensation policies, 3.Liquidity risk, conduit, and securitization issues, 4.Valuation issues, 5. Credit underwriting, ratings, and investor due diligence in securitization markets, 6. Transparency and disclosure issues and 7. Systemic risks and market monitoring group issues.
Mr. S.Ananthakrishnan, the keynote speaker for the conclave, said that the fundamental of life is risk and without risk, there can be no progress and earning money. He talked about the various risks that bank face regularly and about the Basel committee in Switzerland which prescribes the standard for risk management following which the RBI has set down guidelines for bankers in India. He concluded his speech by stressing that there should be a culture of risk management in banks from top to bottom constituting a risk governance framework.
Mr. Arun Singh spoke about the various risks with special reference to compliance risk and credit risk. He talked about the norms and standards set in the financial sectors. According to his opinion risk weighted assets should be assigned higher weightage. He even threw light on the Ricker’s Commission and RBI rules.
The discussion was continued by Mr. L.P.Agarwal who emphatically hailed Bank’s role as an intermediary. He also threw light on Bank’s day-to-day transaction and most importantly, client services. He particularly talked about the BASEL committee and its directives in the line of banking regulations and BASEL-II committee’s recommendations for the International banking capital structure framework. He further stressed upon the Credit Adjusted Performance Management (CAPM) and its importance in Investment banking sector to mitigate potential risks.He laid stress on capital charge calculation and its utility in the times of Risk.
The event continued with eminent speaker like Mr. P.K. Parida, who talked about the various crises NALCO has faced and how it was able to handle those bad times properly and came out of it to become a Navaratna company. He also spoke about the various achievements of NALCO and threw light on the risks and treasury management, international finance, interest rate and exchange rate related risks.
Mr. Amitabh Mohanty enlightened the young students and experienced corporate executives alike on how to manage Risk in Asset Management with a clear emphasis on managing the funds in corporate sectors and banks as well. He said that managing funds and resources in an organization speak the volume and market reputation for that organization.
Mr. Narendra Patra beautifully quoted that the “Corner stone of the Risk Management is that not to do anything which goes beyond the understanding of the Investors” in the closing session of the conclave. While stating an example on “sky-diving”, he advised the gathering to take risk that must be supplemented by certain robust mechanisms to tackle risk-averse situations.
Final session was handled by Mr. Amitabh Chakraborty, who addressed the audience, taking the discussion further on the realms of risk management avenues and pros and cons of the situation. He talked about the short term liquidity and how to monitor it effectively. He suggested on diversifying the investor portfolio or the investor should not totally invest in the private liquidity firms to minimize the risks and talked about the possible benefits of it.
In the valedictory session, Prof. Sar summarized the proceedings, highlighting the role of the risk management initiatives and characteristics in Financial Sector covering the entire spectrum, viz; commercial banking, development banks associated financing of large infrastructure projects, mutual fund, treasury operations in export oriented manufacturing firms, private equity firms and mutual funds.
The sessions of the conclave were ably moderated by Prof. Saroj Kr Routray, Conclave Coordinator; Prof. Jyotirmay Mohanty and Prof. S B Mishra, with the able support of the other members of the faculty.