Guest lecture on “Corporate expectations” by Ms. Priya Manoj in ISME, Bangalore

11th May 2012.Ms. Priya Manoj is the director and principal consultant, a senior HR professional with 18 years of experience in Sales and Human Resources. She started her career with HCL- Hewlett Packard in the sales functions. She has also worked as an HR practitioner in ICICI prudential. She has an experience of working in different organizations across the world practicing different HR functions. She excels in senior leadership coaching and development planning.

The session was very enriching. The focus of the lecture was on preparing students for the corporate. The session started with a video that energized each and everyone. She involved everybody that converted the lecture into an interactive session. In today’s competitive world, it is not so easy to be recognized. The most important thing is how you project yourself and how you brand yourself. This quality differentiates a person from rest of the people.

She discussed a very nice example of a sales person. The learning from the example was that how you create an opportunity for yourself and how to make a good customer relation. To be a successful professional, the most important thing that a person should focus on is identifying his/ her strengths and skills that differentiate that particular person from others. The person should also practice those skills to be the master on that. It is very important to be excellent in all functional areas. But process that should be adopted is to start with one functional area and being expert on that.

She also cleared the concept of employability. Employability is all about doing a job when you are satisfied with it and with your work environment and delivering your best to your organization rather than doing a job just for the money. To excel in work, a person must have domain knowledge. He/ she should have the knowledge of industry and market demand that a company expects from a candidate. This knowledge can be enhanced by doing a lot of research.

Ending the session, she also discussed the importance of HR in an organization. Like all other functional areas, HR is also important and valuable. HR is the basic building block of an organization. HR function is not only confined to recruitment process but also includes all the processes from managing people to managing the organization and helping to increase the profits of the organization.

Last but not the least, the session ended with an inspirational video highlighting on the point that “If you are determined to not give up, you cannot fail”.

By: Jyoti Gupta

ISME, Bangalore

Akanksha Pundir, from Erehwon Innovation Consulting in ISME, Bangalore.

On 4^th May there was a guest lecturer in ISME, Bangalore by Akanksha Pundir, senior consultant of Erehwon Innovation Consulting. She has over 15 years of experience across media, research, manufacturing and technology industries with firms such as Sony Entertainment Televisions, The Economist Group, NASSCOM and Microsoft.

It was a session specific on innovation and thinking beyond the monotony of routine. Being an exceptional speaker, she had the attention of everybody while she provoked the thinking process of the students beyond the ordinary. Many interesting examples and incidents were discussed where the stress was laid on daring to think the unthinkable and acting on it. Creativity and innovation was given a completely different definition during the session as she explained the commercialization of new ideas and creativity, so that they can be the shapes of new inventions and discoveries. Tata Nano was given as an example of ‘great thinking’ from India where a vision and a goal was attained with great finesse.

In today’s world with so much competition, only a person with an orbit shifter mindset can make a difference, she stressed. She mentioned some points that are essential for an orbit shifter mind set. Move from adjusting to reality to creating new reality. Change your attitude from processing focus to purpose focus. And ultimately, move from the zone of overanalysing things to actually experimenting things.

Another great concept was introduced known as the INJ, which is an acronym for the three modes that a person can bring to situations. First one is the Information seeking mode, where you understand and give. Second, is the new mode, where you discover ideas, alternatives and possibilities. And the J mode is the judgement mode, which includes conclusions and evaluations. The value you bring to the situations depends upon which mode dominates.

With inspiring stories of people like Erik Wiehenmayer who despite being blind, scaled all the highest mountains of all the seven continents, the guest speaker ended the lecture with more inspirational quotes.

By: Neeti Thakur.

ISME, Bangalore

Interest Rates on Retail Loans

 It has been a while since the Reserve Bank of India introduced the concept of Base Rate. This wassupposed to bring in transparency in a market where the determination of lending rates was opaque and arbitrary.  It looks like the Base Rate is not achieving much, and the banks are merrily continuing in their old ways, albeit in a new garb.
 

Previously every bank had its BPLR or "Base Prime Lending Rate" which was different for each category of loan. Say you were taking a housing loan from PNB, you would be offered the loan at, say, PNB Housing Loan BPLR (13%) less an arbitrarily fixed delta, say in this case 3%, making the floating rate 10% for you.  Other loans would have a different PLR, and a different delta. Ditto for every other bank, each of whom had their own Base Rates.

What happened when RBI raised the interest rates by increasing the Repo rate by 0.5%? The bank would promptly reset its housing loan BPLR to 13.5% and send all its housing loan customers a letter informing them about the reset interest rate based on the formula "BPLR plus delta".  In this case your rate would rise to 10.5% (BPLR of 13.5% less 3% which is fixed for your housing loan).   What happened to new customers? Ideally, the bank would have liked to raise the rate for new customers as well, but competition being fierce in the housing loan market, it would be unable to do so. So the new customer would be offered the housing at BPLR less a delta of 3.5%, which is to say, at 10%!

RBI would keep raising the interest rates, and you would keep getting letters from the bank. Most borrowers would not even read their letters, or if they did, ignore them, since the implications are too hard to contemplate. Since the EMI's would not go up, people would not feel the immediate pinch. However, what actually happens in such a case is that the tenure of the loan keeps inching up – I know of cases where the loan tenure went up from 15 years to 25 years! 

One fine day, you the borrower would realize that another bank is willing to take over the loan at 2.5% lower than what you are paying, and you would approach your bank for prepayment, willing even to pay the 2% prepayment charge that was a standard part of any housing loan. This was when your bank would wake up and offer to reduce the interest rate on your loan by a like amount. For the banks, this is of course a far better strategy than to offer across-the-board reductions as and when the rates fall.

RBI realized that the "BPLR" was not serving any purpose since most loans were being lent below BPLR, and that there was no transparency in changes effected to interest rates when benchmark rates were revised.  So in July 2010, the BPLR was replaced by the Base Rate. The Base Rate, which each bank fixes, is a rate determined taking into account its cost of funds and other factors like cost of operations, CRR and non-performing assets.  This was supposed to usher in an era of transparency, though as to how, no one really specified.

The recent reduction in Repo rate by 0.5%, coupled with the CRR reduction that was announced before that is a good time to test what is happening. Most banks have not reduced their Base Rate at all (which says a lot about "transmission of monetary policy"!). SBI, among the couple who did, reduced its rates, but not as expected, by resetting the Base Rate, nor by effecting an across the board reduction in the "deltas".  It has announced that it has cut the rates for auto loans and SME loans (loans given to small and medium enterprises).

This raises several questions.  How do we know that the rates are actually cut, given that the deltas could be different for different customers, and different again for new customers? Why has the rate not been cut for other loans? If rates could be arbitrarily reduced for some loans, in future they could of course be increased in the same fashion. What is the guarantee that old customers are not getting cheated the same way as in the past, i.e., by new customers getting lower deltas? As to the answers, it is quite obvious – the system is not really interested in transparency – the old game continues in spite of the change in nomenclature.

How is it in other countries? In the US, all consumer and retail loans are linked to the prime lending rate, and the corporate loans are linked to the London Interbank  Offered  rate (Libor). In the UK, the Bank of England's base rate is the benchmark for consumer and retail loans, while for commercial loans it is the Libor.  The Indian counterpart of Libor is the Mibor (Mumbai Interbank Offered Rate) which is an overnight rate – there are no three-month or six-month rates yet. Developing that, and making banks use those rates as benchmark rates for all loans, is a long way away!

If you have any loans, whether a housing loan or a personal loan which you had obtained a year or two back, just check what the newer customers have got.  If you find that they are getting cheaper rates, you can approach your bank to get your interest rates reduced. They may do it, or they may not; but if they do it, it will be only after a lot of effort on your part, something that will prevent you from trying it too often.

One good thing is that RBI has done away with prepayment charges on housing loans. This makes it easier to negotiate when it comes to housing loans, but for other loans where prepayment charges are usually to the order of 4%, even prepayment may not be a real option.

There was a brief period (in the years 2001, 2002) when interest rates had hit a low. Housing loans were available at 7.5-8%. Strangely fixed rate loans were also available at the same rate. A situation of low interest rates coupled with no fixed rate premium was brilliant for obtaining fixed rate loans. Those who obtained fixed rate loans or converted their existing loans to fixed rate loans, are the happiest lot!  Unfortunately, the situation today is that rates are quite high, and the fixed rate premium on housing loans is about 2%, making it a bad idea to take fixed rate loans. However, keep watching the market. It is possible that you could get a brief window where going in for fixed rate loans make sense. You can pay an additional charge and convert.

Currently, if you are in the market for loans, the best loan to take is a housing loan. The terms of repayment are good, and the interest rates are the lowest among retail loans. There is also another loan called "Loan against property" which has higher interest rates, and not-so-good prepayment terms, etc. but to me that looks the next best option, along with gold loans. When you are taking a loan you should also ask the bank about the option where a savings account with checkbook is linked to the loan account, and the interest that is charged is on the net balance (loan less  balance in "attached account"). This will enable you to in effect earn the same interest rates on your savings as that of the loan.

By

Posted By Dinesh Gopalan to Personal Finance, Investments, and other things

Guest Lecture on "Preparing better for Campus Placement" in ISME, Bangalore.

Mr Hirendra Badhiye was in ISME Bangalore for a Guest Lecture on 7^th April 2012. He is the Vice President, Employee Resources Northern Trust.

As it is high time for campus placement in ISME, there was a guest lecture on better preparation for placement. Before giving tips and suggestions for successfully performing in an interview, Mr. Badhiye talked about the current demand for MBA graduates in the industry today. He said “It is absolutely necessary for everyone to carve a distinct place for oneself in this highly competitive industry” The talent and skills should not be restricted only to the domain area knowledge but one should also be a multi-tasker and should be familiar with working in virtual teams.

An interview is the most crucial gateway to get into a desired organisation for a desired job profile. He stressed on three most important factors that an interviewer look for in the candidate, that are- competence, motivation and the right fit. Almost surprising to most of the freshers, he also mentioned that an interview is also about influencing the suitable candidates to accept the job. Hence, he proved that an interview is a two way communication channel and also an information sorting model.

Keeping things very objective and crisp, he mentioned all the competencies that companies look for in the interviewees. Intellectual horsepower, positive attitude, practical approach were some of the qualities, those were most highlighted. Passion for technology and negotiation & conflict management were also given equal preference.

While facing an interview, the candidates must have a thorough knowledge about the company they have applied to. Apart from that, the skill of answering the soft questions should also be developed. These questions should be answered without any conflict with any other part of the interview. While talking, one should be extremely conscious of the body language, posture, pitch of the voice and the facial expressions.

Mr. Hiren while giving the list of soft-questions advised the students to go prepared with the answers to usually asked questions like “Tell me about yourself” or “Why did you decide to interview with us” etc.

Group discussion and the importance of one, was discussed in the latter half of the lecture. He gave some tips on how to conduct yourself in a group discussion. Being assertive and never losing your cool in a GD works best, he pointed out.

The interaction with the students led to further discussions on the subject. It was a very crucial session for the students because of the coming up campus placements.

By: Neeti Thakur

President, Literary Club.

ISME, Bangalore

Guest lecture on Entrepreneurship.

Mr. Deepak Shankar,Director of Print360 was at ISME – Bangalore on 10^thApril, 2012.

He started his lecture by telling about his business which started in March 2011 in Bangalore. There was around 40lakhs of initial investment and his firm’s estimated profit at first was around 12lakhs.

Deepak talked about the things that are required before starting any business. He talked about viability and how much growth rate and how much you can grow in the initial stage. He talked about growth and survivalof your business among competitor firms. He said that you must also look for profitability, investment and return on investment. If one will not take care about these three things, one can’t survive in the market. He talked about the technological aspect too.

He spoke about the kinds of hurdles you can face on starting a business. He discussed about legality, documentation and taxation. He explained that how taxation affects our business. He also talked about refunding, time to run, overhead control, protocol etc. He explained everything with a practical angle.

He talked about different kinds of sources available for finance. He explained various sources like self, private, bank, venture capital, angel, partners etc.

He said about what you should do, when you are doing business. He talked about working with dead lines, and one should anticipate competition, hiring right kind of people, and one should continue to keep analyzing work as a long term effort. Long term effort or persistent hard work is my personal favorite and I have gained immensely by applying it in my life too.

Towards the end, he talked about the Lingos. These are most important for all the entrepreneurs and each entrepreneur must follow these Lingos.

By: Vadodariya Nilesh Rameshbhai

(Student, ISME-Bangalore)

Guest lecture on Financial Services and Opportunities.

Peeyush Chitlangia from Finsiksha was at ISME Bangalore on 17^th April. Peeyush shared his 8 years of experience in financial services industry. He holds a management diploma from IIM Calcutta and currently leads Finshiksha.

The lecture started with some random questions about the current industry and he then related it to Financial Services as key data points. Broadly he covered some of the most important and essential part of Financial Services like :
Wealth Management
Equity Research
Analytics
Investment banking
Financial analysis

Peeyush talked about the growth trends when it came to Mergers and Acquisitions in India. He also discussed how web analytics helped companies like Flipkart. One of the most interesting topics that pulled the attention of many students was Analytics and Investment Banking he briefly discussed it with sync to the global financial services, and what opportunities we as individuals could explore.
Towards the end he covered the skills needed to get into these domains of Financial Services. Skills included relationship management, financial modeling, strong communication skills, sound knowledge of excel, statistics and overall business understanding. After the lecture many finance students were clear with their perception about the financial services industry.

Over all the lecture was very informative and it helped many non- financial students as well to get a glimpse of the industry.

By:
Ajay Tiwari
Souvagya Ranjan

Vice President of Symphony Services addresses ISME, Bangalore.

Mr. Sameer Duggal, Vice President of Symphony Services addressed the students of ISME, Bangalore on 14^th April 2012.

He talked about building successful career trajectory and the steps that can take any student from the campus of the college to pinnacle of their careers.

He stroked a chord with the students as he talked about the first jobs and the environment of the industry today. In this context he gave a typical job profile of market research in Symphony, different verticals and the career growth opportunities there.

Not losing the grip of the crowd of MBA freshers, his main focus was on expectations of today’s interviewers from the interviewees.”Breakthrough needs break within” he pointed out. This can only be done with self introspection, and gradually you can chisel yourself to success. Getting the right skills, perspective and the attitude is essential in today’s competitive world. But, most importantly the attitude of not letting go should be developed to fulfil your dreams.

In simple seven rules he explained:

1. Have something in you by which you will get noticed and it will sure get you paid you more too.

2. Put your energies in one place that will get you focused and perform well.

3. Execute well.

4. Network and create a distinguished brand value for yourself.

5. Express in order to impress.

6. Learn to manage paradoxes.

Through these points he stressed upon developing the skill sets and to have an open mind to invite as much learning as possible. He gave special focus on the importance on clear communication and having smart goals in your life.

Interaction with the students led to discussion on leadership and success stories of great people like Steve Jobs and Narayan Murthy. “A balance must there be between short term happiness and long term benefits, it pays you the most in the long run”, he said.

Winding up the session he expressed the importance of humility above everything in life.

By: Neeti Thakur.

ISME, Bangalore