The Hindu Business Line : `Derivatives segment growing fast'

DERIVATIVES are the fastest growing segment in the treasury space, though its growth remains hampered due to the absence of big players like PSUs, Mr Partho Mukherjee, Head of Treasury, UTI Bank, said.

He told the 2006 edition of Indian Institute of Management, Kozhikode annual finance seminar, Arthanomics, how innovative products in banking evolved out of a need to provide customised solutions to demanding clients.

Mumbai could become the next commercial hub of Asia, provided there is a fine-tuning of regulations, he added.

The seminar, which had the theme `Towards Mature Financial Markets - The Indian Transition', had Bank of Baroda as the platinum sponsor and The Hindu Business Line as the print media partner and IndiaInfoline as the online media partner.

Good potential for life insurance: Talking about the key drivers in the growth of the insurance industry, Mr Anil Jhala, CFO of Birla SunLife Insurance, said that India offers tremendous potential, since the country still represents just 0.66 per cent of the $3.2-trillion global insurance premium market. Relying on demographic data he argued that a rising population, greater per capita income, improved regulatory mechanisms and more household savings could create a boom in the Indian life insurance sector.

Mr C.J. George, Managing Director of Geojit Securities Ltd, said the current bull run driven by FIIs has to be balanced with a counterweight of a large number of retail investors and domestic financial institutions. The secondary markets in India have grown in international stature and they are among the most efficient and transparent in the world.

Mr Manish Gupta, Head, Structured Trade, Citibank, gave a detailed overview of the new paradigm of lending, where the bank almost entirely mitigates the borrowing company's risk, by paying directly to the borrower's suppliers, and receiving payments from its buyers.

Giving the concluding address at the seminar, Mr Hemant Tanna, VP Investment Banking, ING Vysya, said external commercial borrowings was the single most important reason for India being relatively insulated from the South-East Asian crisis. He concluded the talk with a brief overview of project financing and mentioned how it was not just about cash flow predictions but rather about allocating the various risks associated with the project to the parties best suited to address these.

The event also consists of a paper presentation on the topic "Financing the Infrastructure Growth in India over the Next Ten Years," in which students from top B-Schools across the country are taking part.