Reimagining loans disbursements by banks

Banks could  explore  tie-ups with a reputed consultancy organization/s, to handhold some of their corporate loan borrowers, to enable them make effective and efficient use of the loans, as well as guiding them towards path of desired progress.

The associated consultancy organization/s can keep the relevant bank/s, posted regarding the overall progress of such loan borrowers from time-to-time, so that there are no negative surprises when it comes to repayment of such loans. 
  
Those corporate loan borrowers which agree to avail such services by such reputed consultancy organization/s, can possibly be extended loans at a preferred rate of interest, due to relatively low risk element of defaulting or turning into NPAs, whether due to genuine reasons or otherwise.
 
Thus, while such a tie-up can prevent some corporate loan borrowers of such banks, from turning to NPAs, thus proactively addressing "twin balance sheet" problem, it would also help such loan borrowers avoid insolvency related procedures, which may even threaten the very existence of their respective business.

On a positive note, some of such borrowers can also be hand-held towards a better path to progress, which over a period of time could also benefit the relevant bank/s, by giving them confidence to increase their exposures to such entities with relatively lesser degree of risk. This would also ultimately significantly contribute towards our overall economic progress, via giving a boost to employment and aggregate demand.
 
And for the associated consultancy/s, the benefit would chiefly be in terms of greater market penetration, besides adding to its revenues through consultancy fees from that bank/s, as well as from those corporate loan borrowers which agree to avail of their services.  
  

Economic Revival - Some Perspectives

Wish the media also prominently highlights which all sectors or businesses are hiring in great numbers.

Just by focusing on layoffs with every passing day, the fear psychosis even among those corporate honchos who are doing very well in their respective jobs, is likely to be aggravated, thus inducing them to save more and more, in order to "protect themselves" in case they too fall into tough times.

How do we expect our economy to revive, when the discretionary spending or propensity to consume, is being compressed mainly due to fear psychosis triggered by such kind of media reports?

A sermon to all those unicorns which were earlier riding high on the irrational exuberance, due to astronomical valuations caused mainly by easy money. Focus on "Value" and not on "Valuation" now. And, identify successful CEOs or other senior managers who have had proven track records in their respective corporate journeys, but have now "hung up their boots" just because they have crossed their retirement age. Get them on board with active roles to effectively shepherd your ventures, by offering them some equity stake, in return for their services.

Questions on Corporate Governance at ICICI Bank etc

From a Corporate Governance perspective regarding the alleged scam at ICICI Bank, involving it's former MD and CEO, her husband, and the Videocon Group promoter, some questions beg an answer:

a) If indeed there were some well-defined procedures laid out at ICICI Bank, for disbursal of loans beyond a certain threshold value, like in this case to few Videocon group entities, then were the same followed by the members of the credit committee which sanctioned the loans? Irrespective of the fact that Ms. Kochchar was a part of that committee, and did not disclose her husband's business relations with Videocon Group,

b) If Yes, then how come was there any violation of established procedures, and if No, then how come none of the other members of that credit committee are in the dock?,

c) Was this particular loan sanction subjected to inspection by the Internal Auditors of ICICI Bank, and did they make any adverse observations? If Yes, then was this report further elevated to the Board via its Audit Committee, and if Yes what was their observations, and what action did the board deem appropriate? If No, then again it can be deemed that such sanction of loans was well within the established procedures,

d) As and when it was evident that these loans to Videocon Group were about to turn into NPAs, did the credit committee follow the established procedures as laid out for any other such assets turning into NPAs? if yes, then it should have been documented, and submitted to the Board via its Audit Committee,

e) It has been reported that the RBI also conducted a probe, and didn't find anything wrong with the process of loan disbursements. If this is indeed true, then was this not a credible proof of the entire procedure of loan disbursements being above board?

f) And finally, Videocon's investments of Rs. 64 crores in Deepak Kochchar's 'NuPower Renewables'. How was this investment decision arrived at, and did it pass the scrutiny of the Board of Videocon Group, or was it just one individual's decision? Secondly, was this amount invested from the loan amounts from ICICI Bank received by Videocon Group, or was it from other source which had nothing to do with the receipt of such loan amounts? And, above all, which other banks/financial institutions had exposures to the Videocon Group at the time when ICICI Bank decided to sanction such loan amounts? Did any of them even raise a red flag before regarding the finances of the Videocon Group?

While it is assumed that our investigative agencies have done a very meticulous job while investigating such an alleged scam, yet answers to above would greatly serve the interests of 'Corporate Governance' in any financial or other institution, dealing with pubic money.

Reimagining Luxury Hotel Chains

To get the necessary edge in the highly competitive hospitality space, besides their other strategies, luxury hotel chains could also consider evolving to ‘lifestyle service providers’.

Some of the action plans could include:
 
a) Creating a 'lifestyle ecosystem', by exploring strategic alliances with leading brands across both related and unrelated categories. Such as: reputed international airlines, multiplexes, apparels and other top-end fashion related players, premium car manufacturers, healthcare providers, beauty and other top-end grooming products/services etc. Besides cross-promotions on a quid-pro-quo basis, key objective should be to synergize their respective learnings and competencies, to better understand and collectively create that 'WOW' factor for their respective target audiences,
 
b) Enriching their rewards program by exploring participation with such partner brands, to delight their esteemed clientele,
 
c)  Reimagining guest relationships, by organizing orientation sessions both online and offline, based on the guest feedbacks from various channels, and providing updates on the latest offerings across service offerings and properties. This could be a further booster for ‘value for money’ feature for such hotel chains, thereby furthering the loyalty factor,
   
d) Conceptualizing gift cards, positioned as ‘unique stress busters', which can be redeemed at any of the properties of such hotel chains, and for any service with special top-ups to live up to such positioning. Top-ups could also include some special offerings from the participating brands of the lifestyle ecosystem. Assuming an attractive lifestyle ecosystem is place on a quid-pro-quo principle, every individual patron of such gift cards, would have additional attraction of special offers extended by participating brands in the ecosystem,
 
e)  Monitoring the usage of such gift cards, and providing feedback to the respective organizations which patronize such cards for their employees/business partners etc, regarding usage patterns, to enable them better target such gift cards to the intended beneficiaries. . Also eliciting feedbacks from such patron organizations, regarding the utility of such gift cards as perceived by their beneficiaries. Such two-way feedbacks can serve as a win-win-win proposition  for such hotel chains, participating brands, and for patron organizations, and
                                     
f)  Last but not the least, driving cost-efficiencies across the value chain, and enhancing value for the stakeholders, through a unified digital tool for such luxury hotel chains, on the lines of ERP/CRM/SCM. and with predictive analytics features built in. End objective should be enablement of necessary economies and efficiencies in the entire hotel chain, besides facilitating better understanding of both expressed and latent needs/desires of their esteemed clientele,

And so on....

FTX Implosion and Future of Crypto Currencies

Does FTX implosion imply obituaries for all crypto currencies? No, rather it implies the need for strict regulations of crypto exchanges. The key reason behind this implosion appears to be using client funds kept with this exchange, to shore up the balance sheets of a promoter owned trading firm "Alameda Research".

If this is indeed the reason, then no way does it reflect even remotely in the crypto currencies per se. Rather, it calls for strict regulations of the crypto exchanges to ensure investors' interests.

The sovereign currencies world over have taken a hit in varying proportions, vis-a-vs the US dollar due to liquidity tightening by the US Fed, and followed by other central banks, The crypto currencies have taken much higher hit due to the same reason, and more so as they are still a nascent asset class.

FTX saga has been a wake-up call for all the regulators. And going ahead, such crypto exchanges would be subjected to strict regulations and checks. Secondly, with the inflation expected to stabilize in the medium term, and the central banks expected to take a breather on rate hikes, investor confidence is likely to return, and the crypto currencies a would certainly find their own level akin to stock markets.

Yes, coming to million dollar question of what would be the status of such crypto currencies vis-a-vis sovereign currencies? No way can the monetary authorities anywhere, would allow them to pose a threat to their respective sovereign currencies. At best crypto currencies would be an asset class akin to gold, and perhaps used as a medium of exchange in the emerging meta verse world.

Layoffs at Twitter Inc

If Elon Musk could afford to pay $44 billion for Twitter, could he not have afforded to hold on for a while, and give some time to the employees to turn around the company as per his vision? After all, they were working as per the vision of the previous Bosses, to keep their 'kitchen fires burning'.

Alternatively, if Elon Musk was convinced at the time of acquisition process, that he will have to get into such mass layoffs, he could have negotiated hard to pay only $44 billion-X amount, while announcing that the rest amount, would be spent on grand severance packages, for all those who had to be retrenched.

This way, he would have set a new benchmark in ESG, and would have heightened his personal brand equity astronomically, resulting in much greater loyalty from Twitter's external stakeholders like advertisers etc.

It remains to be seen how the external stakeholders now view Twitter Inc.

Reimagining luxury car makers

Luxury car makers aiming to dominate the top-end segment of the market, need to reimagine themselves as lifestyle services providers, to differentiate themselves from other players in the auto sector.
 
Some key strategies could be as follows:
 
a) Empowering their premium customers to feel special, by enabling them to select special appearances (both external and internal) of their cars, via various feasible options on their apps or website,
 
b) Rewarding their premium customers via rewards program on every transaction – from buying a car to getting it serviced, and from buying accessories to even referrals,  
 
c) Enriching the rewards program by exploring opportunities for cross-promotions with some leading brands, which cater to the aspirations of same premium customers. Such a strategy would enable better fulfilment of overall aspirations of such premium customers,  
 
d) Initiating “Customer as a co-worker” step, to elicit feedbacks as well as suggestions from their premium customers via an app or website. Valuable suggestions could be implemented and duly appreciated. This should enable further strengthening of the brand value of such luxury car makers,
 
e) Individuals/families/establishments/corporates owning more than one model of such car brand, could be categorized under special categories, say for example - “Bronze, Silver, Gold, Platinum” etc depending on the value/number of cars they own, and privileges under each category be worked out accordingly, and
 
f) Re-imagining customer relationship, by organizing orientation sessions both online and offline, based on the feedbacks from company authorized workshops. Besides #wewantyousafe campaign, focusing on the critical importance of safe driving practices, simple precautions to address common defects/problems found in cars which come for servicing/repairs etc could be key topics for such orientation sessions. This would be a further booster for ‘value for money’ feature for such car brands, and which in turn would enhance the loyalty factor via ‘word-of-mouth’ publicity.  
  
And so on....