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< Back Indian Asset Management by Rishabh Keshiv Sehgal This report will cover various types of asset classes present in India, and deep dive into India's Asset Management industry with a comparison against global markets. ASSET CLASSES Investment belongs to one or other asset classes there are various types of asset classes present in India. There seem to be a variety of characteristics that can be used to categorize asset classes. You can categories them based on their intended use, including whether they are consumption assets like oil and natural gas or investment assets like securities. You can also group them by geography or industry, such as domestic assets, overseas or global assets, or emerging and advanced markets. Few asset classes are: Fixed income Equity Real estate Commodities Cash and cash equivalents Derivatives Alternative investments Fixed Income Fixed income asset class is the common asset class in our country as people have a lot of trust in this asset class. It is amongst the most ancient and respected asset classes. This asset class for instance includes Fixed deposits (FD) and Public provident funds (PPF). In this way the investor is allowing the bank to borrow money from the investor in exchange of capital protection and the bank agreed returns on the investment to the investor during a certain period of time. This is the most popular and common asset class as it includes zero percent risk though has less return. The investor gets steady returns on their investment in the due course of time. It also includes corporate and government bonds. Unlike equity market there are no cash flows involved in this asset class the amount of maturity is pre decided therefore having variation is profit or loss. Equity This asset class in India has recently gained its importance and popularity but still growing. This asset class is the mostly buying equities which means buying into a running business based on the number shares bought. This asset class is not as secure as the fixed income asset class rather lies on riskier side of the asset classes. When an investor buys a share of company the investor becomes the owner the respective percentage of the shares bought. Equity can be further categorized as small cap, mid cap, and large cap funds there are also multi cap funds and dividend yielding funds. Real Estate Real estate market is also a very old and popular asset class in India. Investor in India love to invest their savings in the real estate market. This asset class mainly focuses on plots, apartments, villas, commercial projects etc. However, the real estate market is not as risk free as the fixed income market it is somewhat unpredictable as it depends upon various factors around the country though it is the perfect way to park your savings with a long-term perspective. Commodities In this type of asset market, it ranges from goods that can be traded for instance Gold, silver, bronze, food crops, petroleum etc. This asset class is not meant for long term investment. The prices here vary with the law of supply and demand. Cash and cash equivalents This kind of asset class is also known as money market instruments. It is basically the idle money that is lying in the investors savings account. In this asset class the investor has transactional freedom as cash is lying idle in the savings account. This is mainly for investors who are scared to invest in the other asset classes. However, in the current scenario it cannot beat the inflation rate. Derivatives This type of financial asset has no value of its own. In this finance asset the price of the asset depends upon the underlying asset and there is high fluctuation. The underlying assets are usually equity shares, bonds etc. Alternative Investments This type of financial asset is not considered to be a part of the typical asset classes of stocks, bonds, debts etc. This type has a complex structure and various restricted rules. This kind of an asset is usually held by high net individuals as this asset class yields high profits. Hedge funds cryptocurrencies are a few examples of this asset class. MARKET SIZE The Indian consumer durables market is divided into urban and rural segments, and it is drawing international marketers. A big middle class, a relatively large affluent class, and a tiny poor class make up the sector. India is seen by multinational organizations as one of the primary markets from which future development would likely arise. A favorable population composition and rising disposable income would be the primary drivers of India's consumer market expansion. There are a few markets such as : Labor market Money market Commodity market Capital market Labor market: In India the labor market known for it being very cheap, the country also has English speaking highly qualified workers. These highly qualified workers in the country makes it the most attractive location for multi nationals to set up their offices .There are three segments in the labor market primary, secondary, territory. Money market: India as country deals more with borrowing and lending of its funds. The money market of this country depends upon several factors Commodity market: This market consists of exchange of goods comprising from wheat to silver and gold etc. Capital market: In this market, it deals with the assets of the country. In this market all companies whether private or government can raise funds it is upon them the funds can be short term or long term. This market consists of the bond market and the capital market. INDIAN MARKET GROWTH India s current GDP at current is expected to be around 232.15 trillion. Currently, while worldwide financial uncertainty clouds the picture, the World Bank predicts that India's GDP will rise by 7.4% in 2016–17, making it the world's fastest-growing big economy. In terms of growth potential, India also outperforms other rising markets. The country has a bright long-term future, thanks to a consuming class that is predicted to more than triple in size by 2025, to 89 million families. Liberalization has opened up new possibilities. The issue for policymakers is to manage growth in such a way that it establishes a foundation for long-term economic performance. Despite significant progress, India's transition into a worldwide economic powerhouse has yet to properly benefit all of its residents. There is a huge unmet need for essential amenities like water and sanitation, energy, and health care, for example, and red tape makes doing business difficult. Many of these issues have been addressed by the government, and the rate of change could go up in the future years if some efforts gain traction. Despite the fact that India's manufacturing sector lags behind China's, there will be significant chances to invest in value-adding enterprises and generate jobs. India's allure to potential investors will go beyond its low-cost labour: local manufacturers are creating competitive firms in order to tap into the enormous and rising domestic market. Further reforms and improvements in public infrastructure could make it simpler for all types of manufacturing enterprises, both foreign and Indian, to scale up and become more efficient. India will gain from twelve powerful technologies that will assist to increase production, improve efficiency across major areas of the economy, and drastically alter the delivery of services such as education and healthcare. According to our analysis, these technologies could add $550 billion to $1 trillion in economic value per year by 2025, potentially creating millions of well-paying, productive jobs (including positions for people with a moderate level of formal education) and allowing millions of Indians to live comfortably. Efforts by the public sector to address the five areas are now underway. India's ranking on the World Economic Forum's Global Competitiveness Report improved to 55 in 2015–16, up from 71 the year before. Officials are working to make the government more efficient by implementing technologies that can bypass typical infrastructural constraints. Aadhaar, the world's largest digital-identity programmed and a powerful platform for providing benefits directly to the needy, has now been registered by one billion Indian people. INDIAN REGULATORY CONSIDERATIONS According to the SEBI Act of 1992, SEBI is the primary regulator for all funds, asset management, and advising operations in India (SEBI Act). However, it is important to note that foreign investment and exchange control are regulated by the central government and the Reserve Bank of India (RBI), India's central bank established under the RBI Act, 1934. While the SEBI, RBI, and central government realms are generally defined, if there is a cross-border element, a regulated entity's activities may be reviewed by numerous regulators. An AIF, according to the AIF Regulations, is a privately pooled investment vehicle established in India that raises funds from investors and invests according to a defined investment philosophy for the benefit of its investors. The AIF Legislation do not apply to funds governed by the CIS Regulations, the MF Regulations, or any other Indian regulator-issued regulations. AIFs do not apply to the following items, among others: Employee welfare/gratuity trusts, holding businesses, and family trusts While domestic or foreign investors can invest in an AIF, each must commit a minimum of 10 million rupees, and an AIF must raise a minimum of 200 million rupees (with angel funds authorized to have a minimum corpus of 50 million rupees) in commitments from its investors before it can begin operations. AIFs have been divided into three categories with the goal of separating investment criteria while also providing a framework for regulatory concessions, if any, that are or may be granted by the authorities: Venture capital funds (including angel funds), 'SME' funds, social venture funds, and infrastructure funds are among the sub-categories of Category I AIF. Category II AIF: This category contains funds that do not fall into either Category I or Category III and do not use leverage or borrowing for anything other than their day-to-day operations. This category usually includes private equity and debt funds. Funds that use a variety of or complex trading methods and may use leverage, as well as listed focused funds, fall into this group. In India, mutual funds must be incorporated as trusts. The MF Regulations outline the qualifying requirements as well as the rights and responsibilities of the sponsor, trustee, manager, and custodian, as well as the wording of the trust deed and management agreement. The MF Regulations also govern economics, such as dividend payment, redemptions, and valuation, and mandate fees, expenditures, and commissions payable to intermediaries, as well as mandate norms and caps. Mutual funds primarily cater to retail investors by obtaining money from the public through the sale of units in their schemes (with a few exceptions for private placement for specific types of schemes). Because mutual funds are retail goods, they are heavily regulated, and the offer document must be detailed and include substantial disclosures. The MF Regulations impose constraints on the manager's operation and governance, requiring at least 50% of its directors to be independent of the sponsor or trustee. In addition to the general standards, specialized mutual fund strategies such as real estate and infrastructure debt have specific needs that must be met. REITs and INVITs (iii) REITs and INVITs both went into effect on the same day, with the same goals, and the rules have remained largely the same. The units of the REIT or INVIT must be offered to the public via an offer document, which is scrutinized by SEBI. This paper usually contains a lot of information. REITs and INVITs are not allowed to invest in other REITs or INVITs. Any scheme or arrangement in which investor contributions are pooled with the goal of making returns and the assets are managed on behalf of the investors is referred to as a CIS. In the 1990s, the CIS Regulations were enacted to prevent the rise of several unregulated private schemes. It is worth noting that the CIS regime has not been popular due to the associated constraints; there has only been one registration since 1999. The IA Regulations aim to regulate organizations that provide clients with investment advice and safeguard investors from mis-selling. In addition to the exemption for those only advising foreign customers, the IA Regulations exempt other regulated entities or those who provide advice incidental to their main activity from the necessity to get registration. The IA Regulations provide capital adequacy guidelines and other eligibility criteria to protect retail investors, including qualification and certification requirements that require designated personnel to complete NISM (National Institute of Securities Market) examinations. The Foreign Exchange Management Act of 1999, its subordinate regulations (the FEMA Regulations), and government and RBI circulars govern all foreign investment in India. Various aspects of foreign investment, such as entry methods, sectoral limits, and price rules, are governed by these regulations. The Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (the NDI Rules) were notified by the government on October 17, 2019, and they replaced the Foreign Exchange Management (Transfer of Issue of Security by a Person Resident Outside India) Regulations, 2017. Foreign investment in Indian AIFs is similarly governed by the NDI Rules. Offshore funds seeking to invest primarily in the unlisted space may choose to register as an FVCI under the FVCI Regulations because FVCIs receive certain benefits not available to FDI investors, such as free entry and exit pricing, exemptions from certain lock-in and public offer requirements, and a wide range of permissible instruments, including debt. However, this is limited to ten sectors, and investments outside of these must be made through FDI or one of the other avenues mentioned above. FVCIs, on the other hand, must meet specific investment criteria, including allocating at least 66.67 percent of their assets to unlisted equities or equity-linked securities. FVCIs are allowed to invest in both start-ups and established businesses. INDIAN ASSET DISTRIBUTION SYSTEM Indian asset distribution is varied into a lot of parts such as real estate , equities ,mutual funds etc. In the Indian market most of the people prefer to invest in the real estate market considering it to be a safe and a long term investment. The investors are moving towards the equities but at a very slow pace. INDIAN ASSET MANAGEMENT CURRENT TRENDS During the forecast period, the India Asset Management Market is anticipated to expand at a CAGR of roughly 14%. Out of the total assets in the business, the top 10 asset management companies (AMCs) in India own (AUM) worth INR24.46 trillion, or almost 80%. From INR23.59 trillion in November 2018 to INR26.94 trillion in November 2019, the assets handled by the Indian mutual fund industry have increased (based upon the average assets per month). The assets have increased by 14.21% since November 2018. The industry's yield (Total Expense Ratio) on AUM is expected to decline over time because of rising AUM and regulatory efforts to reduce costs for customers. The argument for sustained rise in profitability is made, however, by AUM growth with a favorable mix and continuing attention to enhancing operational effectiveness. The asset management sector in India has seen tremendous change in recent years. Individual investors have increased significantly and now account for roughly 58 percent of the AUM. With approximately 45 percent of the AUM now compared to 23 percent five years ago, equity has become a more prominent asset class. Increased penetration across the B15 cities, which now account for a significant portion of this shift. The India Asset Management Market is anticipated to expand at a CAGR of roughly 14% over the anticipated time frame. Out of the total assets in the sector, the top 10 asset management firms (AMCs) in India own (AUM) worth INR24.46 trillion, or over 80% of the market. From INR23.59 trillion in November 2018 to INR26.94 trillion in November 2019, the assets handled by the Indian mutual fund industry have increased (based upon the average assets per month). The assets have increased by 14.21% since November 2018. The industry's yield (Total Expense Ratio) on AUM is expected to decline over time as a result of rising AUM and regulatory efforts to reduce costs for customers. The argument for sustained rise in profitability is made, however, by AUM growth with a favourable mix and continuing attention to enhancing operational effectiveness. The asset management sector in India has seen tremendous change in recent years. Individual investors have increased significantly and now account for roughly 58 percent of the AUM. With approximately 45 percent of the AUM now compared to 23 percent five years ago, equity has become a more prominent asset class. This move has been significantly influenced by growing B15 city penetration, which now makes up about 25% of the AUM. The year 2021 was challenging for fixed-income investors as excessive central bank liquidity pushed real rates even farther into negative territory. As global central banks normalise their monetary policies and rates and credit spreads tighten, we anticipate a recovery in the fixed-income market in 2022. In order to get ready for a change in the credit market cycle, forward-thinking investors are using Acuity Knowledge Partners' (Acuity) global fixed-income research capabilities. In 2021, developed-market equities have done better than emerging-market equities. The underperformance in developing markets was principally brought on by the underwhelming performance of Chinese equities as a result of the government's crackdown on internet businesses and the country's struggling real estate market. As Chinese equities provide a tempting opportunity in terms of valuation, we anticipate this tendency to change in the future. The limited research coverage and quality, high cost of a trained talent pool, and language barriers to coverage of these markets from international financial centres make investing in Chinese shares difficult for foreign investors. Acuity's on-the-ground research capabilities (more than 150 analysts in China) are used by international asset managers and investment banks to foster innovation and efficiency in their investment research operations and maintain a sustainable business model. ASSET MARKET IN OTHER COUNTRIES Remittances under the Reserve Bank of India's Liberated Remittance Scheme (LRS), which was launched in 2004, have risen steadily in India because of rising income and wealth. The amount being transferred has suddenly increased at an astonishing growth rate of about 80% year over year. As opposed to capital account transactions, such as remittance for investments, which are the categories that predominate the composition of funds remitted, travel, education, and maintenance of close family. With the unrestricted flow of information about international markets in the modern era, investors have seen the potential for growth in other areas. Diversifying one's holdings geographically is now seen as a crucial component of creating a strong portfolio. While investing in international markets may be a novel financial strategy for most, one shouldn't stray from the fundamentals. A portfolio needs to be planned out while keeping in mind the standard factors like the industry. When it comes to international investing, the majority of Indian investors tend to favour equities. Over the past two decades, we have witnessed the domestic mutual fund market change as it developed into the favoured method for equities investors, particularly for retail and wealthy investors. We think passively managed exchange traded funds (ETFs) are a more effective strategy to invest in stocks when it comes to global investments. This route is very well-liked, especially when it comes to. When it comes to international investing, the majority of Indian investors tend to favour equities. Over the past two decades, we have witnessed the domestic mutual fund market change as it developed into the favoured method for equities investors, particularly for retail and wealthy investors. We think passively managed exchange traded funds (ETFs) are a more effective strategy to invest in stocks when it comes to global investments. This route is very well-liked, especially when it comes to. COMPARISON WITH GLOBAL MARKETS As the Sensex hit 59,000 for the first time on Thursday, India surpassed France to take over as the sixth largest stock market in the world. The equity market capitalization of the nation increased to $3.44 trillion, surpassing France's $3.39 trillion, which represents the total market value of all listed firms. India's market capitalization first surpassed $3 trillion in May. Indian shares have soared as retail money has poured in, especially given the lack of other high-yielding investment opportunities, while many markets have been hammered by the Delta variant's spread and worries about the US Fed slowing down asset purchases. In terms of performance among the top 15 largest markets in 2021, India is the best. Since January 1, FPIs have invested approximately Rs 59,000 cr in Indian shares, while DIIs have invested Rs 22,600. The fascinating thing about US stocks is that since so many businesses have operations across the world but are listed there, you have exposure to both the US and the rest of the world. The many benefits offered by investment prospects in the US market are highlighted by Viram Shah, co-founder and CEO of Vested Finance, in this statement. Equities plummeted together globally as a result of the current coronavirus pandemic, with declines of between 20 and 30 percent. Investment diversification would have been advantageous and effective at this time. The S&P 500 had already made up all of its losses brought on by the coronavirus by June 8th, 2020. Meanwhile, the Sensex was still down 17%. The currency you use for trading and investing can have a big impact on your portfolio, both positively and negatively. When it comes to investing in US markets, they are crucial. Consider the Indian Rupee, which has consistently lost value in comparison to the US Dollar. This is a significant disadvantage because all investments made in Indian markets are made in INR, which causes their value to decrease over time. The dollar has gained 6 percent against the rupee only this year. The American Dollar is one of the main benefits of investing in US markets. Your investments grow in value along with it, even if your portfolio as a whole does not. The US markets continue to be home to all major firms that are leading their fields with new services while the Indian startup environment has been thriving. Since Indian law requires three years of continuous profits before a firm can go public, investors in India are unable to participate in growth stories at home. Most Indian investors are effectively barred from taking advantage of the chance to demonstrate their belief in novel business models because the story of many companies is one of postponed earnings for growth and market share. The US, however, has relatively flexible restrictions, making it possible for investors from throughout the world to follow the development of numerous creative models. Uber, Amazon, Tesla, and Facebook are just a few It is true that participating in two markets would necessitate consideration of two economic systems as well as numerous other external factors that affect these markets. This task may seem overwhelming and time-consuming to the ordinary investor. Some people might perceive declining returns in this endeavour and be willing to forsake the chance of greater riches in favour of putting forth less effort. By using ETFs to invest in US markets, which reduce risk through diversification, this issue may be allayed. However, for the typical investor, Indian markets still hold a little advantage in this area. Yes, the US and Indian markets each have advantages. But it's simple to understand how US markets show more promise in a contemporary investing environment with access to the global market. This is partly a result of their personality and love for other countries, as well as the fact that some of the most promising businesses in the world are based there. There is no doubt that the Indian market should continue to make up a sizeable portion of an investor's portfolio, but the US also makes a compelling case for inclusion in the portfolio of Indian investors. There has been a huge interest in investing in US equities due to the increase in retail investors wishing to participate in the stock market. The numerous stock markets around the world are examined in this article. Additionally, we look at a few crucial aspects to take into account before making an investment on the global stock market. But sadly for investors, they had to deal with a number of restrictions that are built into the stock market. The Indian stock markets have developed to become not only one of the largest but also one of the most sophisticated markets in the world as a result of numerous scams. The National Stock Exchange (NSE) and the Bombay Stock Exchange are the two principal stock exchanges in India (BSE). But these stock exchanges have started operating internationally. The Indian stock market is regarded as an emerging market and is popular among investors due to its potential to present promising growth possibilities. For a variety of factors, including maturity, low volatility, and returns, other stock markets around the world can be favoured. Most inexperienced investors diversify their stock portfolios among asset classes, market capitalizations, and industries. However, fortunately, in 2021, investors can diversify between nations, providing them access to various stock markets. The main motivation for diversifying one's investments across markets and nations has been to safeguard one's portfolio from hazards unique to one's own country as well as other regional calamities. Markets in India might be negatively impacted by changes to the political and economic landscape. Investors are shielded from these dangers by spreading their money across other markets. The currency and its corresponding exchange rates are another aspect to consider while investing in global markets. It is no secret that the value of the Indian rupee relative to the US dollar has been steadily declining for many years. To benefit from the profits earned as the Indian rupee declines, it would make sense to invest in American money. But by stepping it up a notch and purchasing US stocks, investors can gain even more from this approach. As a result, you can benefit from dividends, the growth of your assets through American enterprises, and the strengthening of the US dollar. Today, we have access to a wide range of goods and services because to globalisation. When it comes to equities, this is also obvious. One can go ahead and purchase stock in the company from India instead of just drinking Coke and Pepsi. Investors have access to global juggernauts on the US market, which makes certain Indian market leaders resemble midcap equities. However, this is not just applicable to blue-chip stocks. Before being permitted to list on the stock market in India, entrepreneurs must first demonstrate proof of three years of profitability due to the regulatory climate there. Comparatively speaking to their international counterparts, Indian marketplaces are recognised to have stricter laws and restrictions. In the US, these rules are more permissive, enabling investors to follow the development of an inventive firm. A lot of research must be done before making the decision to invest or not. Indian investors have access to a wealth of research and are familiar with the market's operations and trends. Investing in international markets increases the amount of study necessary, and investors must adjust to other markets. Investors now need to study several economies. On the other hand, traders must also adjust to the timings. As a result, investing in the global stock market requires much more research and work. Every stock market in the world has its own advantages and disadvantages, as well as investors, when it comes to investing. Before making an investment in a foreign market, investors must take these factors into account. You can invest in US equities using a variety of apps, like Groww, Vested, etc. Before entering the global stock market, we hope this essay has given you a better understanding. Previous Next

Meet Our Board of Advisors Rakesh Wahi Co-founder of Forbes Magazine, Africa & CNBC Africa. Mr. Rakesh Wahi is a visionary entrepreneur who has been involved with early stage investments in emerging markets for the last 30 years. He is a well- respected member of the investment community and has distinguished himself in the field of IT, telecommunications, media, technology and education investments in the CIS, Middle East, South-East Asia and Sub-Saharan Africa. Neil Maxwell Board Member of Cricket NSW and Chairman of SCG Cricket Neil has over 30 years’ experience in the sports industry. His latest roles have involved development of a sports rights acquisition strategy focused on securing the long-term commercial rights to key sports in the ANZ region. This has resulted in partnerships with the AFL, NRL, Cricket Australia, New Zealand Cricket and NZ Rugby Union (All Blacks). Neil has held senior management positions at New Zealand Cricket, Cricket New South Wales, the Melbourne Cricket Club, Lord’s Cricket Office as well as having represented NSW, Victoria, Australia ‘A’ and Fiji in cricket. He is currently a Board Member of Cricket NSW and Chairman of SCG Cricket. Neil was formerly a long-term Board Member of the Australian Cricketers Association. Post his roles within cricket Neil built and sold a sports marketing and sponsorship agency that managed the sponsorship portfolios of Sanitarium, Vodafone, Diageo (Johnnie Walker), Skins, Commonwealth Bank (cricket) and Travelex amongst others. In 2008, Neil was approached by the BCCI to recruit cricketers for the inaugural Indian Premier League. He was later appointed CEO of the Kings XI Punjab franchise where his role was to manage the start-up franchise. This included securing players and support staff through to creating ticketing programmes as well as developing and implementing a comprehensive commercial strategy. Neil has had business interests in the sub-continent for over 25 years and as result has an vast business network in the region. Raj Nair Chairman of Avalon Consulting & Avalon Global Research. Mr. Raj Nair has over 40 years of experience as a doer-manager, entrepreneur, advisor and mentor. This has given him exposure across functional areas, across industries and across countries. In his current role, Raj serves as – Chairman: Avalon Consulting, Avalon Global Research and Germinait Solutions Pvt Ltd. As a strategy consultant, Raj has helped companies across diverse industries in India, USA, Europe, and the Middle East to develop strategies, align strategy to vision, grow in competitive markets, restructure to make companies more customer focused and more. After working in consumer durables marketing at Murphy, and later as a Merchant Banker with Grindlays Bank for 6 years, he set up a Marketing Research and Advisory firm and followed that up with a Management Consulting company. He thereafter, co-founded a very successful Analytics company in 2000. In 2008, seeing the opportunity in text analytics with the advent of Social Media, he founded a technology company that would create IT products that help analyse what people are saying in the digital world. Raj is an Engineering graduate from IIT, Bombay and a Post-Graduate in Business Management, from IIM, Ahmedabad. He also holds a degree in General Law from the University of Mumbai.

< Back Money, Banking and Finance by Ananya Jain Money and banking are necessary components of every current economic system, since they facilitate production and consumption activities, as well as financial transactions inside and beyond national boundaries. Since the end of the fixed exchange rate system (1946–1973), financial market transactions have increased in volume and scale globally, while the frequency and ferocity of financial crises have increased considerably. Money and banking are necessary components of every current economic system, since they facilitate production and consumption activities, as well as financial transactions inside and beyond national boundaries. Since the end of the fixed exchange rate system (1946–1973), financial market transactions have increased in volume and scale globally, while the frequency and ferocity of financial crises have increased considerably. The nature and function of money and banking in developed countries will be discussed. We will study the role of bank loans to production and consumption activities, using a global macroeconomic perspective on the inflation phenomena. This will emphasise the fact that banks are the source of financial crises, and that the regulations proposed or implemented at the time of writing should be extended by a monetary-structural reform of banks' bookkeeping in order to eliminate systemic risks and thus reduce the financial fragility. Money and banking are necessary components of all economic systems. Without money, products and services would be without a price, since there would be no objective means of determining their worth. Indeed, utility is a subjective, unquantifiable characteristic of every item. Its evaluation is contingent upon a variety of time-dependent individual preferences, rendering it hard to establish a socially objective measure of worth on the basis of continually changing subjective preferences over time and place. Money is a non-commodity, or the social form of value, in that it quantifies quantitatively in economic terms any generated products and services without being a measurable thing. Banks are consequently important since they provide the numerical methods of payment that are used to determine the worth of any goods transferred in the market. They so serve as monetary mediators, carrying out non-bank agents' payment orders until the latter are able to satisfy their financial commitments. Bank credit is inextricably tied to bank money creation: it enables borrowers of any bank to engage into a payment even if they lack revenue (either generated or borrowed from other non-bank actors). Thus, the credit lines that a bank extends to its customers enable them to pay in advance of receiving an income. This is a critical element of monetary production economies, since enterprises must receive credit from banks in order to cover their production expenses before they can sell their output and remit to the banks the "final financing" gained on the market for created products and services. Banks' financial intermediation is significantly facilitated by their ability to function as monetary intermediary in each payment they make on behalf of agents: only banks may create a credit line without having the required amount in the form of pre-existing deposits with them. Bank loans produce deposits, but non-bank financial organisations cannot make a loan without first liquidating pre-existing deposits. When bank credit generates new deposits across the banking system, the money-to-output relationship remains unchanged if and only if the increase in bank deposits is accompanied by newly created output. If bank deposits exceed the volume of production available for sale on the product market, this has a negative effect on the buying power of each money unit, putting upward pressure on the price level when agents dispose of their deposits on the market for created goods and services. However, this inflationary pressure may go unreported when monetary authorities analyse it using consumer price indices, while agents spend their extra bank deposits on a real or financial market whose values are not included in these indices. The financial crisis that erupted in 2007–8 was precipitated by this phenomenon: over the preceding decade, an increasing amount of credit granted by banks in developed economies was used to purchase real or financial assets, creating a spiralling dynamic that monetary authorities were powerless to contain, as they manipulated their policy rates of interest solely on the basis of consumer prices (rather than also asset prices) in an attempt to maintain stability. Encyclopedia of Life Sustaining Technologies (EOLSS) Financial market laws in place or being explored at the time of writing to avert another global crisis address a variety of issues arising from various sorts of conduct (such as greed and predatory lending) observed in the run-up to the 2007–8 financial crisis. However, the structural-systemic causes of this crisis cannot be resolved with a series of behavior-modifying regulations: a structural overhaul of banking is necessary. Given the fundamental contrast between money and credit, this article argues that the accounting structure of banks' balance sheets should permit the separation of payments for income-generating expenditures from payments for income-transferring activities. As the 1844 reform of the Bank of England imposed the separation of the latter into two distinct departments through which money emissions and financial intermediation were booked separately, there is a structural need to impose this accounting distinction on all banks – in order to avoid the emission of money in a credit operation that increases the amount of bank deposits available for purely financial market transactions. The next section discusses the fundamental characteristics of money and credit, which are both products of banking. The third part illustrates how money and production are integrated when enterprises pay their production expenses with a bank advance, resulting in a freshly created net income for the whole economy. The fourth part defines inflation macroeconomically, as the process through which money is created. The fifth portion examines the monetary-structural causes of financial crises, while the sixth section discusses the various financial rules that exist or are being proposed at the time of writing. The seventh part makes the case for banking structural and monetary change in order to avert future systemic crises. The concluding section summarises the important points made throughout this work. Credit and money In economic analysis, money and credit are often confounded. This is especially true in reality, since the operation of local and cross-border payment and settlement systems blurs this difference. Nonetheless, in principle and practise, money and credit should be kept distinct. As we will see later, this difference is crucial and sufficient for understanding what banks may and should do, as well as for designing proper laws to prevent money and banking causing inflationary imbalances that might result in financial crises. Since money was originally reified into certain precious metals (see, for example, Goodhart 2005), economists and a diverse range of scholars in other social sciences have been perplexed by the nature of money. Money is seen by economists via two lenses: metallism and chartalism. Money, according to the former, is a commodity that has often been represented by a precious metal such as gold or silver. By contrast, chartalism regards money as a social relationship that exists independently of any tangible manifestations: "Money is a 'claim' or 'credit' formed by social ties that exist apart from production and trade." VALUE OF MONEY: MEANING, HISTORY AND THEORIES OF VALUE OF MONEY Money's value is defined as its purchasing power or purchasing capacity. It refers to the number of products and services that a unit of money may purchase. Money's worth is inextricably linked to the pricing of products and services. Money is used to quantify the worth of other items. The worth of money may be determined by examining the prices of other items. Money's worth is determined by the pricing of the things and services it may be used to buy. According to the quantity theory of money, the amount of money is the primary predictor of its value or price level. According to this hypothesis, when the amount of money varies, the value of money changes as well. Irving Fisher pioneered the quantity theory of money's transactions method. According to Fisher, as the amount of money in circulation grows, the price level increases proportionately and the value of money drops, and vice versa. Fisher demonstrated his quantity theory of money via the use of his famous exchange equation: Other things being equal, i.e., if V and T stay constant, there exists a direct and proportionate relationship between the amount of money and the price level. Fisher justified his transactions approach to the quantity theory of money by making several assumptions, including the following: the velocity of money in circulation remains constant, the total volume of trade remains constant, the price level is a passive factor, and money is a medium of exchange. The theory has been criticised on several grounds, including that variables are not independent, that it is a simple truism, that it makes unrealistic assumptions about long periods of time, that it makes unrealistic assumptions about full employment, that it is a static theory that is technically incoherent, that it fails to explain trade cycles, and that it ignores money's store of value function. Marshall, Pigou, Robertson, and Keynes, among others, developed the Cambridge cash-balance technique at Cambridge University. According to this view, the value of money is determined by the demand for and supply of money. The cash-balance technique takes into account the demand for and availability of money at any given point in time. The strategy takes into account the desire for 49 money as a store of value rather than a means of exchange. According to the cash-balance concept, the value of money is defined by the demand for cash-balance at a specific moment in time. Marshall's original equation is as follows: M = KPY. The value of money (1/p) may be determined using this equation by dividing the entire quantity of products desired by the populace out of total income (KY) by the total supply of money (M). Thus, similar to Fisher's transactions approach, the cash-balance approach has been criticised on a number of grounds, including that it is a simple truism, that it ignores the speculative motivation for holding money, that it ignores investment goods, that it ignores the role of interest rates, that it ignores the influence of real factors, that it ignores the real-balance effect, and that it provides no explanation for trade cycles. Metallism and Chartism are not mutually exclusive Both metallism and chartalism have analytical flaws (see Rossi 2007: Chapter 1). For example, under the earlier theory, the difficulty persists (and is logically insoluble) because the commodities utilised as "money" have intrinsic worth, which should be quantified by another kind of commodity-money to prevent circular reasoning. As Ricardo's (1951: 43) life-long quest for a "invariable standard measure of value, which should be immune to the fluctuations to which other commodities are subjected" demonstrates, there is no such thing as an invariable physical thing: no commodity can have an invariable value because commodities must be produced, which occurs at variable costs due to a variety of factors, including w If money is really the standard of worth, it is not a commodity, since it would have to be assessed against another standard of value, which would be logically impossible without reference to a physical standard of value. The fact that no national accountant would ever include money in the basket of manufactured products and services used to calculate a country's gross domestic product (and thus global total output) empirically confirms the non-commodity status of money. Chartalism, on the other hand, has its own issues, such as the claim that the state may create debt (that is, fiat money) with inherent settlement authority. "This implies that the [US] government may acquire anything for dollars simply by creating dollars" (Wray 1998: ix). Indeed, each acquisition of commodities, services, or assets entails a final payment at some point in the future. Finality of payment entails, among other things, that "a vendor” The purchaser of an item, service, or other asset gets something of equivalent value from the seller, leaving the seller with no future claim on the buyer" (Goodhart 1989: 26). This, however, is problematic in the approach advocated by chartalists, because they believe the state obtains goods and services, including labour services and real/financial assets, as a counterpart to nominal tokens (that is, bank notes or coins) that the state "fabricates" at a low cost – just as metallists argue in support of the seigniorage view. This essentially means that if the state pays its purchases on any marketplaces by the issuance of a promise of payment, all agents selling goods to the state retain a claim on them. As Graziani (2003: 60) puts out, "[i]f a single promise of payment could serve as final payment, purchasers would be gifted with a seigniorage privilege, namely the power to remove goods from the market without making a payment." Thankfully, this is not the case in reality. Modern money is neither a commodity (as metallists assert) nor an acknowledgment of debt with inherent settlement power (as chartalists argue): it is merely a double-entry (hence numerical) device that banks provide to quantify the debt–credit relationship between the payer and the payee in economic terms. As example, a bank creates money whenever it executes a payment order for a particular client (another bank, a non-bank financial institution, a non-financial enterprise, the government, or a household). To be certain, every bank (central or commercial) issues money when it completes a transaction. It does this by acting as a monetary mediator between the payer and payee, crediting and debiting each of them with the amount of money units necessary to fulfil the appropriate financial obligation between them As see, the bank that executes the payment order issues a number of (x) money units (m.u.) both positively and negatively, crediting and debiting both the payer and payee in an instantaneous circular flow between the two banks. As such, money is neither a net asset nor a net liability: it is both an asset and a concurrent obligation, i.e., an asset-liability (Schmitt 1975: 13), whose purpose is to numerically indicate the subject of the relevant payment (see Cencini 1995). If this is the case, one must differentiate between money and bank deposits: the former is the method of payment used to credit a deposit to a payee's bank account; the latter is the method of payment used to debit a deposit from a payee's bank account. Encyclopedia of Life Sustaining Technologies (EOLSS) Indeed, deposits with banks provide their holders with a positive buying power, which derives from the payment that money makes to these agents in order for them to get paid for any given commodity they sold to another agency. To summarise, money performs transactions, but bank deposits fund them. Banks, on the other hand, produce only the "form" of the payment; the "content" must be given by the economy, despite the fact that a bank is capable of opening a credit line to any of its clients in order for the latter to pay on time. Allow us to do a more thorough investigation into this matter. Despite the theoretical and practical misunderstanding, the supply of money and credit are (must be maintained) different. "The supply of credit is the provision of a positive quantity of revenue and necessitates the presence of a bank deposit (a stock), while the supply of money refers to banks' ability to transport payments (flows) on behalf of their customers" (Cencini 2001: 7). According to proponents of the idea of money emissions (for a review, see Rossi 2006), "money is a flow whose immediate circulation is directed toward a stock of income (or capital)." Banks generate the flow but not the object, which is inextricably linked to manufacturing. That is, money and credit are not synonymous" (Cencini 2001: 3). Bank Assets Liabilities Loan to customer I +x million U.S. dollars Client II's deposit +x million yen When a bank's customer (I) takes a loan from the latter, the former is debited for the amount of the credit that this agent uses to pay another agent, who acquires the property right on a matching bank deposit. (Assume that there is just one bank in order to simplify the discussion without sacrificing analytical significance for the particular situation in issue.) As shown, the bank possesses a claim against client I that is offset by an analogous claim held by client II against the bank, which acts as a simple intermediary between payer and payee: the former's (client I's) position in this bank's accounts offsets the latter's (client II's) position. Client II's claim against the bank, in the form of a bank deposit, establishes this client's creditworthiness. This does not indicate, however, that the bank loans the quantity of (x) money units used in the payment. Indeed, the lending operation involves the two agents engaged in that payment: the payee (client II) extends credit to the payer (client I) through the bank, or the banking system, which acts as an intermediary, even if both non-bank actors are unaware of this financial intermediation (see Gnos 1998). When a bank issues money, it is neither a net creditor nor a net debtor of the economy, since it gets debited and credited with the quantity of (x) money units issued by the Encyclopedia of Life Support Systems (EOLSS) in a certain payment. Money and credit would not exist if the economic system was incapable of producing goods and services. Money and credit are certainly used to finance the creation, circulation, and final consumption of output. Therefore, in the next part, we will examine how output is created as a consequence of manufacturing and banking activity. Money Demand Interest Rates Money Supply When the central bank seeks to contain inflation by limiting the economy's money supply, it raises interest rates, resulting in decreased demand for money. However, this component results in poor investment, which results in job losses and a decline in national production. On the other hand, when the central bank wishes to stimulate economic and business activity in the nation, it allows commercial banks to make loans at low interest rates, increasing the economy's money supply. At this level, individuals have access to a greater variety of investment choices but have no or little savings. With lowering interest rates and increased money supply, customers rush to spend their money on various items and services, resulting in a rise in the overall price level; hence, inflation grows as interest rates fall. BANKING SYSTEMS Banks are often incorporated and, like any other business, must maintain a specific level of capital (money or other assets). Banking rules require banks to maintain a minimum capital ratio of 121. Banks get funds via the sale of capital stock to shareholders. The capital stock paid by shareholders becomes the bank's operating capital. To safeguard the bank's depositors, the operating capital is placed in a trust fund. In exchange, stockholders get certificates attesting to their ownership of bank stock. A bank's operating capital cannot be depleted. Dividends to shareholders must be paid only from the bank's earnings or excess. Shareholders' legal connection with a bank is determined by the provisions of the capital stock purchase contract. Certain rights accompany an investment in a bank, including the ability to see the bank's books and records and the right to vote at shareholder meetings. Shareholders may not sue a bank directly, but they may launch a stockholder's derivative litigation on behalf of the bank in certain circumstances (sue a third party for harm caused to the bank when the bank is unable to litigate on its own). Additionally, shareholders are often not personally accountable for a bank's debts and actions, since the corporate structure restricts their culpability. However, shareholders are not immune from responsibility if they agreed to or accepted the advantages of prohibited banking activities or criminal conduct by the board of directors. Money has a key position in our culture. Money is defined as a unit of exchange that is widely accepted as a medium of exchange. Money has a variety of tasks; it serves as a medium of trade, a unit of account, a standard for delayed payments, and a store of value. Initially, when society was basic, commerce was straightforward. It was a barter system in which products were exchanged for goods. For example, trading of rice for shoe by two persons. Barter was the term used to describe this exchange of commodities for goods. Numerous obstacles and inconveniences existed in this system of trading. It necessitated a double concurrence of desires. Money developed throughout time and took on numerous forms, beginning with animal money and ending with electronic money today; the various stages of money evolution are as follows: animal money, commodity money, metallic money, paper money, super money, and electronic money. Money has a variety of functions: it serves as a medium of exchange, a unit of account, a standard of delayed payment, and a store of value. Money is utilised to trade goods and services because it is widely accepted as a payment method. All commodities and services have a monetary value. Additionally, it functions as a store of value. Money, income, and wealth are distinct concepts that are not synonymous. In contrast to income, which is a flow variable, money is a stock variable that can be measured at any moment in time. Money is one component of wealth. Wealth is a larger term that encompasses both physical and financial possessions. Money has a dynamic effect on an economy, either boosting or impeding economic growth. It has a significant impact on the community's productivity, revenue, employment, consumption, and economic wellbeing. Economic planning, which is a necessary component, is feasible at both the micro and macro levels with the assistance of prudent financial planning.This is made feasible by financial resources. Money serves as the pivot for economic activity such as production, consumption, trade and commerce, and government functions. Money has restrictions, for example, it cannot be used as a store of value during periods of hyperinflation. It is to blame for social disparities and corruption. The credit card notion is also eroding its significance as a money concept. MONEY MARKETS Financial markets are classified into two types: money markets and capital markets. The money market is the segment of the financial market that deals in borrowing and lending short-term loans, often for less than or equal to 365 days. The money market deals with short-term funds up to one year and financial assets that are near replacements for money. The money market enables producers and consumers of short-term funds to meet their separate investment and borrowing needs at an efficient market clearing price. Apart from serving as the government's banker, the central bank (RBI) also controls the money market and publishes rules governing its activities. Apart from that, a money market is a system in which banks and financial organisations engage in short-term monetary operations such as money demand and supply. There are two types of money markets: organised and unstructured. Additionally, the unorganised money market is referred to as an unlawful money market. The Organised Money Market is not a unified market; rather, it is a collection of marketplaces. The call money market is a leading indication of the money market's liquidity status. The RBI intervenes in the call money market because it is inextricably linked to other parts of the money market. The DFHI trades Treasury bills, commercial bills, certificates of deposit, certificates of participation, short term deposits, call money market, and government securities.While it is not an established money market, it is the largest among developing nations. It has both a regulated and an unstructured money market concurrently. The structured bill market is uncommon in the Indian money market. Although the RBI attempted to establish the Bill Market Scheme in 1952 and then the New Bill Market Scheme in 1970, India continues to lack a properly organised bill market. The call money market is a marketplace for very short-term debt. While the Indian money market is regarded to be the most sophisticated among developing nations, it nevertheless has a number of flaws, or 141 faults. Numerous financial products such as Treasury Bills, Commercial Bills, Certificates of Deposit, and Commercial Papers are available in the Indian money market. The Stock Exchange: The stock market is a marketplace for the trading of stocks (common stock, a portion of a corporation's earnings and assets used as collateral for money contributed by individual investors to the firm) of various companies. Prices are determined by the market demand and supply of a company's shares. Increased share price implies that the corporation is operating in compliance with the rules, regulations, and commitments made by the directors to each individual shareholder. Market for Foreign Exchange: FEM is the market place where currencies are transacted from one nation (say, PKR) to another (say, US$). Foreign exchange has a significant influence on a country's economic standing. When 1 US dollar equals 52 Pakistani rupees, Pakistan sells less to other nations because Pakistani items are more costly for overseas purchasers than when 1 US dollar equals 86 Pakistani rupees, as they get less Pakistani rupees for one US dollar. On the other hand, when 1 US dollar equals 52 PKR, Pakistan imports more from foreign nations because Pakistani importers must pay less Pak rupees to get dollars than when 1 US dollar equals 86 PKR. What Is the Point of Studying Banking and Financial Institutions? Financial System Structure: Finance is a term that refers to the management of money and finances. Businesses need such capital for long-term investments and day-to-day operations. Individual families save and lend their money to such firms indirectly. Banks, insurance companies, mutual funds, investment banks, savings banks, and financing banks are all types of financial intermediaries that accept household deposits and lend them to businesses and consumers. In exchange for families' savings, it pays reduced interest to households but charges high interest to businesses or consumers for loans. The spread between these two rates represents financial intermediaries' profit. Financial Institutions such as banks and other financial institutions: Banks are depository entities that provide loans and take deposits. Banks include central banks, commercial banks, investment banks, finance banks, savings banks, lending associations, credit associations, mutual funds, pension funds, and insurance companies, as well as other similar entities that function as brokers between lenders and borrowers. Banks collect collateral and complete additional legal paperwork as an assurance that they will get their money back. Banks often give consumer loans alongside industrial loans, however consumer loans have a higher interest rate than industrial loans due to their non-productive character. Innovation in Financial Services: Innovation entails the enhancement of existing systems or processes. Banks are innovating nowadays with a variety of financial tools and alternatives, ranging from information technology to e-finance. People used to withdraw money by writing a check, but now they use ATMs. Account balances may be seen on a personal computer. Consumer finance, which includes automobiles, housing, marriage, and other services, is a component of this invention. Foreign commerce through L/C or TT, as well as domestic trade via DD and TCs, are also novel concepts. Banks now provide insurance, operating financing, partnership, educational loans, and locker facilities as a means of attracting consumers and increasing their revenues. What is the purpose of studying Money and Monetary Policy? Money is defined as anything that is widely recognised as payment for goods or services or as a means of debt repayment. Economic variables vary as a consequence of changes in the money supply in the economy, and so monetary policy is critical to the economy. Money and Economic Cycles: The business cycle is the constant shift in the firm's position from boom to bust to depression to recovery and then back to boom. During a boom, the economy has a substantially larger money supply, increased production, and aggregate output. The labour force is employed, and the unemployment rate is lower. With a greater rate of interest, money supply shrinks, and national output and production decrease, resulting in a higher rate of unemployment during a time of economic decline. When an economy is in a depression, unemployment is very high and interest rates are extremely high, resulting in a small money supply and a low level of national productivity. Finally, when the economy recovers, money supply grows in lockstep with increased production and output, resulting in a low unemployment rate. This cycle is repeated indefinitely. Inflation and Money Inflation is the rate at which the prices of goods and services in the economy continue to increase. The aggregate price level or price level refers to the average price of products and services in an economy. Individuals, corporations, and the government all bear the brunt of such price increases. The most likely reason of this inflation is a rise in the economy's money supply, which raises people's purchasing power and consumption trends. When a large number of individuals rush to purchase a certain item or service, the price of that item or service increases, resulting in an increase in inflation throughout the economy. In general, the price level and money supply move in lockstep. The inflation formula is the rate of change in the price level compared to a base years ETMs price, which is what we investigate while creating index numbers. Countries with a greater inflation rate need a larger money supply, and vice versa. â€Inflation is always and everywhere a monetary phenomenon, ( Milton Friedman asserts). Money and Rates of Interest: Interest rates on bonds and bank loans vary in response to changes in the economy's money supply. With a greater money supply in the economy, interest rates will be lower; with a smaller money supply, interest rates will be higher. Thus, interest rates and money supply are two critical components of every economy's monetary policy. Monetary Policy Conduct: The central bank of an economy, such as the SBP, manages the money supply and interest rate in order to develop a prudent and growth-oriented monetary policy that ensures that all economic variables move in the direction of the economy's growth and prosperity. Fiscal Policy and Monetary Policy are inextricably linked. Monetary policy is the process of controlling the quantity of money in the economy in order to maintain a desired level of inflation, national production, and other economic variables, while fiscal policy is the government's choice about its income (taxes) and expenditures (development expenditures). The budget deficit is the difference between the government's spending and receipts. The budget surplus is the difference between the government's income and expenditures. During times of fiscal deficit, the government borrows developmental loans from the central bank, financial intermediaries, the IMF, the World Bank, the Asian Development Bank, and other financial organisations to satisfy its financial obligations. Additionally, a budget deficit leads in a rise in the money supply, which results in an increase in interest rates. Normally, surpluses and deficits are expressed as a percentage of GDP, or the economy's aggregate production. MONEY'S SIGNIFICANCE IN A CAPITALIST ECONOMY Money has a significant impact on the economy of any nation by boosting or even destroying it, stifling economic development regardless of the economy's nature. Nevertheless, in a capitalist society economy, in which resource allocation, output, and distribution of national dividends are all integrated the market mechanism, i.e. the forces of demand and supply, determines this. Money is a critical part of this system. It has a considerable impact on production, income, employment, and "consumption and consumption." Economic well-being of the society at large; economic planning as a necessary component is feasible at both the local and macro levels with the aid of prudent financial planning enabled by the following equation. Money Consumption Economic Development Money is a medium of exchange that facilitates investment, employment, and economic progress. Money boosts consumption via its buying power and as a store of value. economic development via investment, employment, and economic development. Consider the following ideas, which emphasise the dynamic nature of money: Various people specialise in different things in a monetary system. Results in the identification of two critical features, namely occupational specialisation and division. This resulted in the globalisation of the market with a organised framework. Households and businesses have an effect on two critical economic concepts, namely savings and savings and investing are mutually exclusive. leads to an equilibrium state of income, production, and employment. Savings are better mobilised when they are transformed into investments with the assistance of financial institutions. The modern monetary system enables the government to invest in social infrastructure. It also aids in the redistribution of income and wealth via economic and political measures via taxes and spending. In comparison to other types of investments, such as savings accounts, bonds, government securities, and treasury bills, In comparison to common stock, inventory, and real estate, money is the most liquid asset, since it contains two characteristics - fundamental determinants such as capital certainty and shift ability. That it may be readily transformed to another kind of asset without sacrificing value. A property of an asset guarantees that the commodity is easily exchangeable. Unlike other financial assets, money is completely liquid.time deposits and savings deposits with commercial banks and other financial institutions are referred to as near-money. banks, postal savings deposits, unit trusts, bills of exchange, and treasury bills are all examples of financial institutions. government securities, savings bonds and certificates of deposit, and life insurance plans Transferable credit instruments, investment trust shares, joint stock company shares, and transferable credit instruments These types of financial assets are also extremely liquid and may be simply exchanged, converted to money without incurring considerable loss by selling and depreciating them. INTERNATIONAL BANKING Since the 1980s (see Gilroya and Lukas, 2005; Neto, Brandao, and Cerqueira, 2008), when the banking sector's second merger and acquisition wave crested, cross-border mergers and acquisitions1 have been the primary form of banks' foreign direct investments. We conclude that various empirical specifications are used to examine the relevance of various firm-specific informational and performance factors, banking sector-specific regulatory and structural factors, and financial and legal institutional factors to the financing status of small and medium-sized enterprises in transition economies. The findings provide substantial evidence in favour of the information-based theory. To begin, all of the elements that led to more transparent enterprises are significant and favourably associated with the financial situation of SMEs. In comparison to the accounting methods of businesses, company performance is relatively insignificant. International Accounting Standards-compliant businesses have an easier time obtaining lower-cost borrowing. This indicates these enterprises' competitive edge when it comes to obtaining international bank loans. Similarly, organisations with external auditors have less funding barriers. Additionally, big enterprises and firms with a greater proportion of foreign ownership gain from informational advantages and easier financing in comparison to smaller firms and organisations with a lower proportion of foreign ownership. Second, things that assist mitigate the negative effect of information asymmetries all contribute to the improvement of SMEs' financial condition. Rather than that, issues that increase worries about information asymmetries enhance SMEs' funding difficulties. The study discovers that a more concentrated banking industry results in fewer funding barriers for SMEs. Small businesses operating in highly concentrated marketplaces have more access to both long and short term bank loans and pay cheaper interest rates. The findings are explained by the fact that creditors with higher market power are more forthcoming and have a larger motivation to spend in getting information about private firms. SMEs situated in nations with a larger concentration of foreign bank ownership face greater access barriers and higher borrowing costs. These are also a consequence of international banks' difficulties when it comes to relationship lending to opaque small enterprises based on soft data. It is shown that SMEs face bigger funding difficulties in nations with more market potential. One reason might be that bigger markets are more appealing to foreign investment. According to the above arguments, foreign investment does not always result in increased credit. If these foreign investments are funded domestically, the result may be a natural crowding out of domestic investments, particularly in transition countries with more severe information asymmetries and heavily foreign-owned banking sectors. As confirmation, the data indicate that enterprises with a higher proportion of foreign ownership had an easier time obtaining finance. Additionally, in nations with a higher proportion of foreign bank ownership, SMEs face greater lending limits. Additionally, an inverse relationship between institutional development and market potential is seen. The findings indicate that only by enhancing a country's institutional development to a certain extent can the negative effect of market potentials be countered. That is, only when institutional development is sufficient to compensate for information asymmetries, such that the informational advantages of foreign-owned enterprises or large, transparent firms can be neutralised, can larger market potentials, which in this study equates to increased foreign entry, benefit SMEs equally. At the present stage of transition markets, a bank-based financial system is shown to outperform a market-based financial system. Banking sectors that are more established lead to increased access to credit and lower financing costs. Small businesses in highly established banking sectors get a greater proportion of their loans from formal sources. Indeed, a greater stock market capitalisation ratio does not improve a firm's access to or cost of funding, but rather lessens its reliance on formal sources of financing. The findings indicate that bank regulatory policies have a considerable influence on SMEs' 95 access to both short- and long-term bank loans, as well as on loan arrangements, and consequently on enterprises' financing status and patterns. More precisely, it is shown that broad regulatory constraints on banks and the emergence of financial conglomerates encourage enterprises to circumvent banks and seek money directly from stock markets. Increased constraints on bank operations and ownership of non-financial enterprises encourage banks to take risks by lowering lending criteria and compensating with greater interest charges. Restricting non-financial enterprises from holding banks exacerbates SMEs' troubles obtaining long-term loans from banks and increases interest rates and collateral requirements. Multiple bank regulators encourage cautious lending by banks and help some SMEs by lowering financing costs. Multiple bank regulators, on the other hand, hurt other SMEs by worsening their difficulties obtaining bank loans. Bank regulatory procedures that impose stricter limits on how much information banks must disclose to the public contribute to SMEs' ease of access to more structured loans, which is consistent with the private interest position. Additionally, it is shown that more independent bank regulatory agencies result in both increased barriers to accessing bank loans and increased costs of getting bank loans for SMEs. Additionally, it is discovered that legislative constraints on minimum capital ratios may encourage banks to engage in riskier activity while facilitating enterprises' access to credit at a greater cost. Regulators' constraints on capital composition, on the other hand, may drive conservative conduct on the part of banks, even if they worsen enterprises' troubles obtaining loans. MONETARY STANDARDS AND PRESENT CURRENCY SYSTEM OF INDIA A monetary standard is a collection of monetary arrangements and organisations that manage the money supply. There have been two distinct sorts of monetary standards/regimes throughout history: those based on the convertibility of all forms of money into currency, most often specie, and those based on fiat. According to game theory, an international monetary system that is successful both between and within nations requires a time-consistent credible commitment mechanism. The Characteristics of a Sound Monetary Standard: 1. Simpleness 2. Economical elasticity 3. Convertibility, Legality, and Automatic Operation: 4. Economic Growth: Additional Characteristics: 1. Numerous varieties of monetary standards 2. Standard of Commodity or Metallic Standard 3. Inconvertible 'managed' paper standard, sometimes referred to as a Non-Commodity Standard or Fiat Standard. CORPORATE GOVERNANCE Corporate Governance (CG) is the set of rules, procedures, and controls that govern a firm. The conflict of interests between ownership and management is addressed by CG standards. Based on the separation of ownership and management in corporations, agency theory asserts that management's interests do not necessarily correspond with those of shareholders. Management, as the agent of the shareholders (the principle), may not always act in the best interests of the principal, as noted by Fama and Jensen (1998). Agency expenses arise from aligning management and shareholder objectives. Globalisation, financial fraud, and corporate indifference to causes other than profit have all influenced corporate governance standards. The global financial crisis (2007) was the latest in a long sequence of events that shifted the stakeholder battle lines. This article examines corporate governance and its impact on MNC operations. Though agency theory is essential to CG discussions, legislation and implementation have been tailored to many criteria. Now we'll look at how the CG notion has evolved and how it relates to the business structure. Corporate Governance and Institutional Investors: While shareholders have a voice in the activities of a firm, they may opt to vote with their feet by selling their stock position and driving down market value. In the 1980s, shareholder activism arose in the United States. Because of their huge stakes (60 percent of total equity investment in OECD nations in 2000), seats on boards, and access to strategic choices, institutional investors are seen to have a moral obligation to demand good governance. In contrast to geographically scattered, uneducated, and sometimes indifferent individual investors, institutional investors have the ability to take an active interest in CG due to their fiduciary capacity and experience in investment decision-making. 'Involved' institutional investors, such as CALPERS and Norway's pension fund, apply market discipline and help to maintain deep capital markets. Even in the West, institutional investors do not always take on the responsibility of enhancing corporate governance. In the 1990s, US pension funds backed shareholder recommendations from religious groups; hedge funds, on the other hand, tend to interfere and effect management changes to safeguard their interests, which may or may not have governance ramifications. Institutional activism is often conducted "behind closed doors," and its corporate governance-enhancing motivations and outcomes are difficult, if not impossible, to determine. Corporate Governance and Capital Markets: There is convincing evidence that good governance makes excellent economic sense, with firms with better CG having superior triple bottom lines and being rewarded by the market with greater values. Capital flows towards nations where CG standards are believed to be greater (and enforced). Not by chance, such nations tend to have robust capital markets. CG may be evaluated on two levels: i. Whether a country's law safeguards components of stakeholder rights, such as creditor, investor, and environmental protection. ii. Whether companies in the nation are forced to comply with capital market authorities and accounting organisations in terms of increased openness and disclosure. Capital market growth and CG advancements are inextricably linked. In a nation with a shallow, weak, and undeveloped capital market, there is minimal relationship between business performance and market value on one side, and corporate governance on the other. As a result, there is no motivation for firms to pay greater attention to, adopt, and engage in CG-enhancing behaviour, and for countries to pass corporate governance-enhancing legislation. As a result, there is a higher onus on rules to implement CG efforts at the company level. As capital markets improve, share prices increasingly reflect the performance-enhancing advantages of effective governance. CG transitions from a regulatory imposition to a voluntary involvement. At the national level, this results in lower capital costs, a larger ratio of stock market capitalization to GDP, higher business values, and a lower risk of financial crises. CG is about more than simply openness, disclosure, accountability, and ethical business practises. It also has an impact on the bottom line. According to the Kumar Mangalam Birla Committee (2000), there is a correlation between CG levels and corporate success, with well-managed businesses with high CG having higher values. Since the Cadbury Committee Report was published in 1992, the OECD has issued various non-binding guidelines on CG and corporate social responsibility, as well as the UN's Global Compact (1999) and binding CG rules on corporate governance stipulated by stock exchanges. Several major financial services firms pledged to follow the Equator Principles, while others reaffirmed their support for the Millennium Development Goals. INVESTMENT BANKING, ENTREPRENURIAL & CORPORATE FINANCE An investment bank is not a traditional bank. It does not provide savings or recurring bank accounts, nor does it give loans. In plain words, it is a bank that assists enterprises, governments, and other nonprofit organisations in obtaining finance from investors. Regular banks do the same thing by lending Accountholders' money. In other words, investment banks function as a financial mediator between enterprises and other major organisations, bridging the gap between the demand for and supply of capital. Indeed, the phrase "investment bank" is rather misleading. Often, assisting businesses in raising finance is simply one component of a much larger process. The primary premise around which an investment bank is built is to bridge the gap between a client's demand for cash and the availability of capital, as well as to bridge the gap between advise seekers (clients) and advice providers (the bank). By and large, investment banks in India are institutions that earn money via the capital market, venture capital, or private equity. Entrepreneurial finance encompasses a wide range of capital sources, and the majority of academic work in this topic is clearly divided by capital source (Cosh et al., 2009). Accordingly, entrepreneurial finance encompasses a wide range of subtopics, including financial contracts, financial gaps, capital availability, public policy, and international disparities resulting from differences in institutions and cultures (Cumming, 2012). Because these subjects are broad and complicated, most research on entrepreneurial finance often concentrate on just one of them at a time (Cumming, 2012). Corporate finance is a subset of finance that focuses on the financial choices made by businesses and the tools and analysis used to make these decisions. Corporate finance's fundamental objective is to increase a company's value without incurring undue financial risks. The major role of a corporation's management is to maximise shareholder wealth, which translates into stock price maximisation. ECONOMIC FLUCTUATIONS AND THEIR IMPACT ON ECONOMIC GROWTH STRUCTURE Inflation is a sustained increase in the overall level of goods and services prices in an economy. Inflation occurs when the costs of gasoline, diesel, and vital commodities such as rice, wheat, and cooking gas increase and consumers must pay more for the same products and services. It is a condition in which there is a plenty of money but a scarcity of products and services. Consumer Price Index, Producer Price Index, Wholesale Price Index, and GDP deflator are all examples of inflation measures. Keynes defined inflation as an increase in the price level that occurs after the stage of full employment. He differentiated between two sorts of price increases: those that accompany an increase in production and those that occur without a concurrent increase in output. Deflation is defined as a condition in which the prices of essential services and products fall over time. Inflation is the polar opposite of this. Deflation happens when the supply of products exceeds the supply of money, which fits these four characteristics.  Deflation is caused by four fundamental factors: growth deflation, cash-building deflation, bank credit deflation, and confiscatory deflation. When aggregate demand exceeds aggregate supply, an inflationary gap is created. It refers to a scenario in which demand exceeds available supply at current pricing. Deflationary gap is the inverse of inflationary gap, which occurs when aggregate supply exceeds aggregate demand. The report concludes to portray an independent yet interconnected relation between the industries of money, banking and finance after looking at the general, economic and fundamental regulations and workings of the same. Bibliography - Yves Balasko, Katherine Shell (1981). II: The case of pure trading with money under the overlapping-generations model. 24, 112-142 in Journal of Economic Theory. [This article argues that the government provides paper claims that agents utilise as a store of value and a means of repaying debt commitments.] - Pfaff Pfaff (2001). Monetary Policy: Objectives, Institutions, Strategies, and Instruments. Oxford: Oxford University Press. [This book presents an in-depth examination and explanation of monetary policy, with a particular emphasis on the US Federal Reserve System and the European Central Bank.] - Bosse B (2001). Banking and finance are circuit theories. Banking and Finance Journal, 25, 857-890. [This article discusses the integrated roles of banking and finance inside any producing economy's monetary cycle.] - Xavier Bradley (2001). The Bank Act of 1844 provided an early example of banking departmentalisation. Laboratory of Monetary Economics Working Papers 5, Centre for Banking Studies and Research [This article reconsiders the Bank of England's division into two departments in light of money's endogeneity and argues for a commercial bank-level division along similar lines.] - M. Brunnermeier, A. Crockett, C. Goodhart, A. D. Persaud, et al (2009). Financial regulation's underlying concepts. The Geneva Economic Reports 11 [The contributions to this study expand on the macroeconomics of financial regulation in order to address a number of issues that were exposed starkly during the global financial crisis of 2007–8.] Money, Income, and Time: A Quantum-Theoretic Approach. Cencini, A. 1988. The London and New York offices of Pinter Publishers. [This book provides a novel perspective on the nature of money by demonstrating the logical and empirical inadequacies of classic monetary analyses using a quantum-theoretical method.] - A. Cencini, National and International Monetary Theory, 1995. London & New York: Routledge. [This book examines the functioning of domestic and international payment systems macroeconomically, using the theory of money emissions.] - A. Cencini (2001), A New Approach to Monetary Macroeconomics. London & New York: Routledge. [This book proposes a novel approach to monetary economics, based on the accounting character of money, in order to better understand the reasons that contribute to monetary disorders and to provide new cures to prevent them.] - Mr. R.W. Clower (1967). A re-examination of monetary theory's microfoundations. Western Economic Journal, Volume 6, Number 1, pp. 1–8. [This article defines a monetary economy as one in which one or more commodities may be exchanged directly for another, giving the intellectual groundwork for explaining the presence of a "cash-in-advance" restriction.] - Encyclopedia of Life Sustaining Technologies (EOLSS) (1911/1931). Fisher, I. Money's Purchasing Power: Its Determination and Relationship to Credit, Interest, and Financial Crises New York, Macmillan. [This book discusses the buying power of money in relation to the overall price level and extends this concept to the study of historical changes in that purchasing power.] - Theodore Friedman (1974). A theoretical framework for monetary analysis, pages. 1–62 in Milton Friedman's Monetary Framework: A Debate With His Critics. University of Chicago Press, R.J. Gordon (Ed. ), Chicago. [Milton Friedman presents his version of the quantity theory of money in this contribution, integrating Fisher's difference between real and nominal rates of interest with Keynes' observation that market rates of interest are determined by speculators.] - C. GNOS (1998). Income and output are Keynesian identities, in Historical Perspectives on Macroeconomics: Sixty Years After the General Theory, pp. 40–48. Fontaine, Philippe, and Jolink, Alexandra (Eds). London & New York: Routledge. [This work demonstrates how Keynes's concept of effective demand is related to an income distribution theory in which profits are a redistributed part of factor income earned by companies through their mark-up over factor cost.] - C. A. E. Goodhart (1989). Uncertainty, Money, and Information London and Basingstoke: Macmillan, 2nd edition v. (first published 1975). [This textbook discusses the microeconomics of money and banking and discusses a variety of monetary policy concerns, including the transmission mechanisms of a central bank's action.] - C. A. E. Goodhart (2005). What is money's fundamental nature? 817-825 in The Cambridge Journal of Economics. [This article is a review of Geoffrey Ingham's The Nature of Money, and it argues in favour of the chartalist argument that fiat money originated with the state's authority to collect taxes.] A. Graziani Graziani Graziani Graziani (2003). The Monetary Theory of Production is a theory of production that is monetary in nature. Cambridge, England: Cambridge University Press. [This book is a rebuttal to standard monetary economics, stating that the functioning of any money-using economic system can be described simply in terms of the credit circuit that banks give in order to carry out production.] - Thirty-Nine Group (2009). Financial Reform: Establishing a Foundation for Financial Stability The Washington Group of Thirty (DC). [This paper focuses on ways to reform the global financial system in order to improve its capacity to maintain a fair level of stability. It contributes to the debate among policymakers and the international financial community about a range of pertinent issues, including redefining the scope and boundaries of prudential regulation, its organisational structures, including the role of central banks, and the need for increased international coordination in these policy-relevant fields.] Critical Essays in Monetary Theory, J.R. Hicks, 1967. Oxford: Oxford Clarendon Press. [This collection of articles casts a critical eye on monetary theory, critiquing more mainstream monetary ideas.] - The Nature of Money, G. Ingham, 2004. Cambridge: Polity Press [This book argues that money is not a neutral veil, as orthodox economics maintains, but rather a social relationship that exists irrespective of the creation and exchange of things.] - A.M. Innes (1913). How do you define currency? 377-408 in Banking Law Journal, May. [The author claims in this article that money is based on double-entry accounting, rejecting the metallist conception of money as a physical medium of trade.] - Fonds monétaire international (1998). Prospects for the World Economy Washington, D.C. : International Monetary Fund (DC). [This study presents a typology of financial crises, identifying currency, banking, foreign debt, and balance-of-payments problems.] - Fund monetari international (2009). The Financial Crisis's Lessons for Future Financial Institutions and Market Regulation, as well as for Liquidity Management Washington, D.C. : International Monetary Fund (DC). [This article draws many lessons from the 2007–8 financial crisis for financial sector regulation and oversight, as well as central bank liquidity management.] W. S. Jevons (1875). Money and Exchange Mechanisms. London, Appleton: [The author claims in this book that money is a market creature, arising from a search process conducted by market players seeking to eliminate the double-coincidence-of-wants limitation that significantly impacts and restricts barter transactions.] - Encyclopedia of Life Sustaining Technologies (EOLSS) (1930-1971) J.M. Keynes Money: A Treatise (Vol. I The Pure Theory of Money). London: Macmillan John Maynard Keynes's Collected Writings, Vol. V The Pure Theory of Money: A Treatise on Money. London and Basingstoke: Macmillan [In this fundamental work, the author defines money as an admission of debt and identifies many forms and ideas of money.] - A. P. Lerner (1947). Money is a state-created commodity. 37, no. 312-317, American Economic Review. [The author argues in this article that the validity of money is contingent upon the state's willingness to accept it as payment for taxes and other financial obligations owed to the state by the populace.] - Mr. B.T. McCallum (2004). In economies with little or no money, monetary policy is difficult to implement. 9, pp. 81–92, Pacific Economic Review. [The author argues in this article that although money will not evaporate in the future, the amount of central bank money may continue to fall, which will not imperil monetary authorities' control over overnight interest rates.] - Knapp Menger (1892). Concerning money's origins. The Economic Journal, vol. 2, pp. 239–255. [This article discusses that money is created via trade, as agents seek the most convenient and widely accepted medium of exchange on the market.] - Fuselage Panzera (2011). Price stability and financial imbalances: revisiting the macroeconomic framework in the aftermath of the financial crisis of 2007–2008. Fribourg-based university. Mimeo. [This article calls for a rethinking of the macroeconomic stability paradigm. Macroprudential measures and a countercyclical tax on private debt may be effective tools for restraining excessive credit growth and smoothing asset price swings.] - S. Rossi, F. Panzera (2011). Risks and solutions associated with "too-large-to-fail" financial institutions. International Journal of Trade and Global Markets, Vol. 4, No. 3, pp. 311-327. [This paper proposes a structural reform of banks' accounting with the goal of perfecting it in order to achieve the competitive advantage that comes with a more robust financial sector.] - R. D. Ricardo (1951). Political Economy and Taxation: Fundamental Principles Cambridge, England: Cambridge University Press (first published 1817). [This landmark work establishes the concepts of "political economy," or macroeconomic analysis in current parlance, in contrast to so-called "economics," which departs from microeconomics and views macroeconomic magnitudes and phenomena as the product of aggregate forms of behaviour.] - L. -P. Rochon, S. Rossi (2010). Economic and financial crisis of 2007–2009: a monetary circuits-based analysis European Journal of Economic and Social Systems, Vol. 23, No. 7, pp. 7–23. [This introduction to a series of articles included in this special issue shows that the economic and financial crisis of 2007–9 was caused by systemic occurrences and failures.] A New Macroeconomic Analysis of Money and Inflation Cheltenham and Northampton are both home to Edward Elgar. [This book critiques standard inflation studies, stating that the widely held view of money and output as two distinct and independent things cannot account for either the buying power of money or its fluctuation over time.] The theory of money emissions, pp. 121–138 in A Handbook of Alternative Monetary Economics. - Edward Elgar: Cheltenham and Northampton, P. Arestis and M. Sawyer (Eds.). [This article surveys the theory of money emissions and examines domestic and international monetary problems through the lens of this theory.] Theorizing and Applying Money and Payments London & New York: Routledge. [This book discusses the characteristics and functions of money and banking in local and international payment systems.] - Theodore Schmitt (1975). A unifying theory of currency, both domestic and foreign. Albeuve - Castella [This book proposes a reform of the international monetary system by providing a new theoretical explanation for the nature of national currencies and expanding on it.] - B. Schmitt, 1984, Inflation, deflation, and capital deformities. Paris and Albeuve: Economica and Castella [This is a foundational study in the branch of macroeconomics known as quantum macroeconomics. It develops a synthesis of classical, neoclassical, and Keynesian perspectives on money, income, and capital, explaining production and capital accumulation within this new theoretical framework.] - Encyclopedia of Life Sustaining Technologies (EOLSS) Mseccareccia Seccareccia Seccareccia Seccareccia Seccare (2011). Financialization and commercial banking change in Canada. Post-Keynesian Economics Journal. Forthcoming. [In this paper, the author explains how, as a result of financialization, the role of commercial banks has shifted away from the critical relationship between banks and non-financial firms and toward a complex series of unstable relationships between banks and non-bank financial institutions.] - Nicolai Wallace (1980). The model of fiat money with overlapping generations, in Models of Monetary Economies, pp. 49–82. Federal Reserve Bank of Minneapolis, Minneapolis: J.H. Kareken and N. Wallace (Eds.). [The author argues in this contribution that fiat money is a pointless invention within a fixed time frame, since there would be no desire for money. As a result, the author proposes an overlapping-generations model to account for the real-world presence of a money demand.] - L.R.Wray (1998). The Key to Full Employment and Price Stability is to Understand Modern Money. Cheltenham and Northampton are both home to Edward Elgar. [The author argues in this book that full employment and price stability are not mutually exclusive policy objectives since both may be achieved via a policy mix that incorporates functional finance and the endogeneity of bank money.] Previous Next

Acerca de Skill Development Through our skilling initiatives we aim to work with the Government of India and MNCs to provide skilling to urban and rural communities across India. Through this vision, we seek to work with Anandilal Podar Trust to contribute and give back to our nation. The Anandilal Podar Trust, established in 1921, the flagship philanthropic initiative of Podar Enterprise has 100+ years of outstanding services towards society at large. APT has been running multiple schools, colleges, Private ITI, Sports Complex and have been front runners in setting up schools and vocational training for the differently abled. Since 2014, APT has engaged with National Skill Development Corporation (NSDC) , under the Ministry of Skill & Entrepreneurship as PIA for projects like Star, PMKVY. APT also empanelled under Rajasthan Skill & Livelihoods Development Corporation (RSLDC) for implementing skill based training in the healthcare sector. Our objective is to impact the lives of underprivileged youth by providing them skill, employment and livelihood. We have been implementing partners for large scale government projects including: PMKVY and RSLDC. We engage with corporate sector and PSU's as their preferred partner for implementing CSR Projects across pan-India. We work with marginalized youth, women, specially-abled, school & college drop-outs in both rural and urban India. Our industry-connected skilling model will create a visible impact on the lives of over a million uneducated & unemployed youth who enter the workforce each year. We also aspire to give back to society and contribute to India in becoming the Skill Capital of the World . We are working with the Sector Skill Council for People with Disabilities in states like Maharashtra and Rajasthan to train disabled candidates (hearing, sight and locomotive disabilities) and are employing them in various sectors like logistics, telecommunication, etc. Our Focus Sectors Are – Logistics, Telecommunication, Technology and Energy

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Acerca de About Anandilal Podar Trust In 1921, Mahatma Gandhi, the Father of the Nation called on the nation to donate Rs. 1 Crore to the ‘Tilak Swaraj Fund’ - to help liberate India. Due to British oppression, there was considerable apprehension to make donations. It was then Shri Jamnalal Bajaj approached Shri Anandilal Podar, a noble-hearted businessman, to help drive the initiative. Shri Anandilal Podar readily donated Rs. 2,01,00 to the fund and this formed the foundation for the Trust. To contribute to education in a young India, great visionaries and philanthropists: Pandit Madan Mohan Malviyaji, Shri Jamnalal Bajaj and Shri Anandilal Podar came together to establish the Anandilal Podar Trust in 1921. It is of utmost pride that Mahatma Gandhiji himself, was the Chairman Trustee of the trust. Anandilal Podar Trust is honoured to be the only private trusteeship that Bapuji ever accepted during his life dedicated to Independent India. Following in this noble vision, the Trust has been committed to giving back and providing quality education to learners in rural and urban areas across the nation. The Trust has established over 37 charitable schools, colleges, management institutes, hospitals, vocational training centres across India - including the first Institute of Management in Rajasthan, bearing the Podar name. Currently, over 30,000 students are studying in these institutions as the Anandilal Podar Trust continues growing to enrich more lives and contribute to lifelong learning. 35+ Institutions 20,000+ Skilled 2,00,000+ Educated

< Back Finance, Banking and the Economy at large by Divyes Chakravarty Gain an understanding of how money, banking and the financial system intersect and work. The different concepts, principles and intricacies of money and more. Macroeconomics: Macroeconomics is the branch of economics that studies the behaviour and performance of the economy as a whole. It focuses on aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation. Macroeconomists employ aggregate measures such as gross domestic product (GDP), unemployment rates, and the consumer price index (CPI) to analyse large-scale consequences of individual decisions. The two main areas of macroeconomic research are long-term economic growth and shorter-term business cycles. Microeconomics: Microeconomics is the study of individuals, households and firms' behaviour in decision-making and allocation of resources. It generally applies to goods and services markets and deals with individual and economic issues. Microeconomics studies how prices are determined in the marketplace. Manufacturers and customers initiate forces that we term them as supply and demand accordingly and it is their interaction within the marketplace that devises the price mechanism. It is also known as Price Theory as it deals with the determination of the price of commodities and factors. Financial Systems: A financial system is a collection of institutions which allow the exchange of funds, such as banks, insurance companies, and stock exchanges. The financial system exists at the corporate, national, and global levels. Borrowers, lenders, and creditors are exchanging current funds to finance ventures, either for consumption or productive investment and seeking returns on their financial assets. Furthermore, the financial system includes sets of laws and policies used by creditors and lenders to determine which projects are funded, who fund the projects, and the scope of the financial deal. Risk Management: Risk management is the process of identifying, assessing and controlling financial, legal, strategic and security risks to an organization’s capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters. A successful risk assessment program must meet legal, contractual, social and ethical goals and monitor new technology-related regulations. By focusing attention on risk and committing the necessary resources to control and mitigate risk, a business will protect itself from uncertainty, reduce costs and increase the likelihood of business continuity and success. Three important steps of the risk management process are risk identification, risk analysis and assessment, and risk mitigation and monitoring. Risk Identification: Risk identification is identifying and assessing threats to an organization, its operations and its workforce. For example, risk identification may include the implementation of a robust cybersecurity system to prevent malware attacks. Risk Analysis: Risk analysis involves establishing the probability that a risk event might occur and the potential outcome of each event. Risk evaluation compares the magnitude of each risk and ranks them according to prominence and consequence. Risk mitigation: Risk Mitigation refers to the process of planning and developing methods and options to reduce threats to project objectives. A project team might implement risk mitigation strategies to identify, monitor and evaluate risks and consequences inherent to completing a specific project, such as new product creation. International Banking: International banking refers to the practice of providing financial services across international boundaries. Banks provide services such as accepting deposits, issuing loans, facilitating payments, and offering investment products to customers around the world. International banking allows businesses to access capital from global markets and make investments overseas. It also enables customers to make transfers between foreign countries without having to use local currency exchange services. International banking services are beneficial for businesses as they provide access to a wider range of financial services than domestic banks can offer. This includes foreign currency exchange, international remittances and transfers, trade finance, and access to global markets. Additionally, by utilizing the expertise of international banks, businesses can take advantage of local knowledge to invest in the best markets around the globe. Investment and Corporate Finance: Investment and corporate finance are essential components of the financial landscape. Investment involves allocating capital with the expectation of generating returns over time. It encompasses various activities, including analysing markets, evaluating investment opportunities, managing portfolios, and assessing risk. Corporate finance, on the other hand, focuses on the financial decisions and strategies within a company. It involves managing capital structure, raising funds, making investment decisions, and maximizing shareholder value. Both investment and corporate finance play crucial roles in driving economic growth, facilitating business expansion, and optimizing financial resources. They require expertise in financial analysis, valuation, risk assessment, and strategic planning to make informed decisions that align with business objectives and deliver sustainable financial performance. History of Money: Before money, we used the barter system i.e. trading by goods and services. Metals objects were introduced as money around 5000 B.C. By 700 BC, the Lydians became the first in the Western world to make coins. Metal was used because it was readily available, easy to work with, and could be recycled. Soon, countries began minting their series of coins with specific values. Since coins were given a designated value, it became easier to compare the cost of items people wanted. Some of the earliest known paper money dates back to China, where the issuing of paper money became common from about 960 AD. With the introduction of paper currency and non-precious coinage, commodity money evolved into representative money. This meant that what the money itself was made of no longer had to be of great value. Representative money was backed by a government or bank's promise to exchange it for a certain amount of silver or gold. For example, the old British Pound bill or Pound Sterling was once guaranteed to be redeemable for a pound of sterling silver. For most of the 19th and the early part of the 20th century, the majority of currencies were based on representative money that relied on the gold standard. Representative money has now been replaced by fiat money. Money is now given its value by government fiat or decree, ushering in the era of enforceable legal tender, which means that by law, the refusal of "legal tender" money in favour of some other form of payment is illegal. Nowadays, even virtual currency is used. As digital representations of money, this type of currency is stored and traded using computer applications or specially designated software. The appeal of virtual currency is that it offers the promise of lower transaction fees than traditional online payment mechanisms do and is operated by decentralized authorities. Corporate Governance: Corporate Governance refers to how companies are governed and for what purpose. It identifies who has power and accountability, and who makes decisions. It is, in essence, a toolkit that enables management and the board to deal more effectively with the challenges of running a company. Corporate governance ensures that businesses have appropriate decision-making processes and controls in place so that the interests of all stakeholders (shareholders, employees, suppliers, customers and the community) are balanced. Governance at a corporate level includes the processes through which a company’s objectives are set and pursued in the context of the social, regulatory and market environment. It is concerned with practices and procedures for trying to make sure that a company is run in such a way that it achieves its objectives while ensuring that stakeholders can have confidence that their trust in that company is well founded. As the home of good governance, the Institute believes that good governance is important as it provides the infrastructure to improve the quality of the decisions made by those who manage businesses. Good quality, ethical decision-making builds sustainable businesses and enables them to create long-term value more effectively. Entrepreneurial Finance: While corporate finance focuses on existing businesses and the challenges they face to deliver returns to their investors and increase shareholder value, entrepreneurial finance is the study of value and resource allocation. It is centred around new businesses and the owner’s challenge to acquire the funding needed to test whether the business can become financially sustainable. All entrepreneurial ventures which are reliant on funding to get started must ask how much money can and should be raised, at what point in the journey, and which sources of funding are viable. Raising money can be a drain on time and existing financial resources, so entrepreneurs must do their research into the routes most likely to result in positive outcomes for their business model and industry. Sources of entrepreneurial financing are: Venture Capital: This type of entrepreneurship financing is often reserved for start-ups and small businesses which have the high-growth potential for long-term success. Venture capitalists don’t always provide investment in the form of financial funding, as this can also be provided to a business in the form of technical or managerial expertise. Angel Investors: Angel investors are typically a group of entrepreneurs or former executives who have amassed personal wealth through a variety of sources. These high-net-worth individuals provide venture capital and often co-invest alongside a trusted associate into the same or similar industries in which their experience lies. Crowdfunding: Crowdfunding is when a business or new venture is presented online with a summary of the business plan, to raise money from individuals. Initial Public Offering: An IPO is the first time a company sells its shares to the public in a bid to raise money. This form of financing is used by businesses of all sizes and at all stages and requires a lot of preparation, bureaucratic hurdles, and paperwork. This means that it is a risky option for start-ups as it can take a long time and incurs costs throughout the process. Appendix: Macroeconomics: Investopedia's "Macroeconomics" section ( www.investopedia.com/terms/m/macroeconomics.asp ) Microeconomics: Khan Academy's "Microeconomics" course ( www.khanacademy.org/economics-finance-domain/microeconomics ) Risk Management: "Principles of Risk Management and Insurance" by George E. Rejda and Michael McNamara International Banking: The Bank for International Settlements' website ( www.bis.org/topics/banking.htm ) Investment and Corporate Finance: CFA Institute's "Corporate Finance" section ( www.cfainstitute.org/en/programs/cfa/curriculum/investment-foundations/corporate-finance ) History of Money: "The Ascent of Money: A Financial History of the World" by Niall Ferguson, The British Museum's "History of Money" section ( www.britishmuseum.org/learn/schools/ages-7-11/history/money ) Corporate Governance: The International Corporate Governance Network's website ( www.icgn.org ) Entrepreneurial Finance: "Entrepreneurial Finance: Strategy, Valuation, and Deal Structure" by Janet Kiholm Smith, Richard L. Smith, and Richard T. Bliss Bibliography: https://cleartax.in/g/terms/financial-system#:~:text=A%20financial%20system%20is%20a,%2C%20national%2C%20and%20global%20level . https://www.ibm.com/topics/risk-management https://study.com/learn/lesson/international-banking-services-overview-function-examples.html#:~:text=International%20Banking%20Structures-,What%20is%20International%20Banking%3F,to%20customers%20around%20the%20world . https://www.investopedia.com/terms/c/corporatefinance.asp https://www.investopedia.com/articles/07/roots_of_money.asp#:~:text=People%20bartered%20before%20the%20world,of%20payment%2C%20including%20virtual%20currencies . https://www.cgi.org.uk/about-us/policy/what-is-corporate-governance#:~:text=Corporate%20governance%20is%20the%20system,accountability%2C%20and%20who%20makes%20decisions . https://online.wlv.ac.uk/a-guide-to-entrepreneurial-finance/#:~:text=What%20is%20entrepreneurial%20finance%3F,of%20value%20and%20resource%20allocation . Previous Next

< Back Technological Advancements in Solar Power Generation by Samyukhta Kannan Bell Laboratories created the first silicon solar cell in 1954. This breakthrough sparked a flurry of new discoveries in the field of solar energy. Solar energy is the radiant light and heat from the Sun that is captured and used in a variety of methods. The technological advancements since have shown the growing potential to use this as a reliable energy source. INTRODUCTION Solar energy is the radiant light and heat from the Sun that is captured and used in a variety of methods, including solar power to create electricity, solar thermal energy, including solar water heating, and solar architecture. It is an important source of renewable energy, and its methods are roughly classified as either passive solar or active solar, depending on how they capture, distribute, or convert solar radiation into solar power. The meaning of active and passive solar power generation becomes very important. To harness the energy, active solar techniques such as photovoltaic systems, concentrated solar power, and solar water heating are used. Orienting a structure to the Sun, selecting materials with favourable thermal mass or light-dispersing qualities, and designing rooms that naturally circulate air are all examples of passive solar techniques. Bell Laboratories created the first silicon solar cell in 1954. This breakthrough sparked a flurry of new discoveries in the field of solar energy. In the 1960s, the space industry was the first to use solar technology to create electricity for spacecraft. The first artificial earth satellite, Vanguard 1, was powered by solar cells. It was the oldest instance of a man-made satellite in orbit, clocking in at a massive 6 billion miles. TECHNOLOGIES Photovoltaic The photovoltaic effect is depicted on a band diagram. In the depletion or quasi-neutral areas, photons transfer their energy to electrons. These transition from the valence to the conduction bands. Electrons and holes are propelled by a drift electric field Edrift, which produces generation photocurrent, or by a scattering electric field Escatt, which produces scattering photocurrent, depending on their location. Alexandre deciphered the photovoltaic effect, or how to generate an electric current in a conductor exposed to direct sunshine. Later, scientists conducted more advanced research in order to use PV technology, which can directly produce power. Electricity can now be used, stored, or converted for long-distance transmission. PV devices are capable of converting sunlight into electrical energy. A "cell" is a single PV device. PV cells are often constructed from various types of silicon. A single PV cell is typically tiny and can provide roughly 1 or 2 watts of power. To boost the output of PV cells, they are linked together in chains to form bigger units known as "modules" or "panels." Modules and panels can be used separately or in groups to construct arrays. To complete a PV system, one or more arrays are connected to the electricity grid. Solar PV is primarily installed on rooftops of homes and businesses nowadays, and it directly creates electricity from solar energy. Solar thermal technologies turn the sun's energy into heat, which is then converted into electricity. Floatovoltaics Floating solar or floating photovoltaics (FPV), also known as floatovoltaics, is the installation of solar panels atop a structure that floats on a body of water, generally a reservoir or a lake. Silicon panels are becoming less expensive and more efficient by the day. Photovoltaic panels put on reservoirs and other bodies of water, according to experts, provide even more efficiency as well as a slew of other advantages. The fundamental advantage of floating PV plants is that they do not require any land, except for the little areas required for the electric cabinet and grid connections. Their cost is equivalent to that of land-based plants, yet they give an excellent option to prevent land consumption. Floating PV plants are more compact than land-based plants, have simpler administration, and are easier to build and decommission. The major aspect is that there are no fixed structures, such as the foundations needed for a land-based plant, therefore their installation is completely reversible. Another advantage is that the partial covering of basins can minimise water evaporation. This outcome is determined by the climate and the fraction of the covered surface. This is a significant advantage in dry climates such as portions of India since it saves around 30% of the evaporation of the covered surface. This may be bigger in Australia, and it is a highly desirable quality if the basin is utilised for irrigation. There are several other advantages to the new floatovoltaic technology. A big floating platform may be readily manoeuvred and can also do vertical tracking. This can be done without wasting energy or without a sophisticated mechanical equipment as in land-based PV plants. The cost of outfitting a floating PV plant with a monitoring system is minimal, and the energy increase can vary from 15 to 25 percent. Installed capacity worldwide in MV.: Floating solar farms can help with water management in addition to providing clean solar energy. They prevent water loss due to evaporation by restricting air movement and blocking sunlight from the water's surface. Furthermore, floating solar farms reduce the generation of harmful algae, cutting water treatment expenses. Furthermore, the water beneath the solar panels keeps them clean and reduces energy waste. The presence of water naturally indicates the use of gravity energy storage, particularly in conjunction with hydroelectric basins. Other methods, however, have been investigated, with compressed-air energy storage devices being proposed in particular. However, there are certain challenges that are associated with this technology. Electrical safety and the long-term dependability of system components is in question. Operating on water for its full-service life, the system must have greatly higher corrosion resistance, especially when built over salt water. The floating PV system must be able to endure wind and high waves, particularly in off-shore or near-shore deployments. Maintenance complexity is also to be considered. In general, operations and maintenance tasks on water are more difficult to conduct than on land. Photovoltaic noise barrier In 1989, Switzerland showed an effective method of noise reduction using solar modules. Later, the solution was implemented in a number of additional European nations. Different solar noise barriers may be developed based on highway characteristics, barrier structure, barrier height, and other factors (environment etc.). Modules are attached to the main barrier (wood or solid barrier) in a variety of methods, including vertical, inclined fixed as a zigzag construction, and so on. Perovskite solar cell The mineral calcium titanium oxide, which was the first perovskite crystal found, has the same structural structure as perovskite. A perovskite solar cell (PSC) is a form of solar cell in which the active layer is a perovskite-structured substance, often a hybrid organic-inorganic lead or tin halide-based material. Perovskite materials like methylammonium lead halides and all-inorganic cesium lead halides are cheap and simple to make. Perovskites are a type of material with a similar structure that exhibits a number of intriguing features such as superconductivity, magnetoresistance, and others. Because of their unusual structure, which makes them perfect for allowing low-cost, effective photovoltaics, these readily produced materials are viewed as the future of solar cells. They will also be used in next-generation electric car batteries, sensors, lasers, and other applications. A perovskite solar cell is a form of solar cell in which the light-harvesting active layer is a perovskite structured compound, most typically a hybrid organic-inorganic lead or tin halide-based material. Advantages Metal halide perovskites have unique features that make them appropriate for use in solar cells. Perovskite materials may be employed not only as a light-absorbing layer but also as an electron/hole transport layer due to its high extinction coefficient, high charge mobility, long carrier lifetime, and long carrier diffusion distance. Raw materials and production technologies (such as different printing techniques) are both affordable. Ultrathin sheets as thin as 500 nm may absorb the whole visible sun spectrum due to their high absorption coefficient. Using this compositional flexibility, scientists may create perovskite crystals with a wide range of physical, optical, and electrical characteristics. Ultrasound machines, memory chips, and, most recently, solar cells all use perovskite crystals. When these properties are combined, low-cost, high-efficiency, thin, lightweight, and flexible solar modules may be created. Perovskite solar cells are being employed to power low-power wireless circuits used in ambient powered internet of things applications. While perovskite solar cells have grown extremely efficient in a relatively short amount of time, they still face a number of obstacles before becoming a viable commercial technology. However, State-of-the-art PSC technology has a long way to go before it is commercially viable. PSCs are weak and durable, in addition to having a low electrical conversion efficiency. Furthermore, they contain trace levels of lead, which is harmful to the environment. BIPV solar technology Traditionally, solar is installed on the roof of a building, which is known as building-applied PV. However, more architects are learning how to integrate solar cells and modules into items such as curtain walls, roof tiles, and railings. BIPV stands for building-integrated photovoltaics. BIPV is an exciting new technique in solar energy generation. The concept is to naturally combine solar power plants with building design. These integrated solar systems may minimise the consumption of fossil fuels, save money on materials and power, and add architectural flair to a structure. The elements utilised in BIPV construction can not only generate power, but also protect the building from rain and wind, as well as increase thermal and acoustic insulation. They may also be utilised for a variety of purposes such as facades, rooftop canopies, and balconies. They can aid in GRIHA (Green Rating for Integrated Habitat Assessment), India's green building rating, by minimising solar heat gain on a building and thereby lowering the temperature of the building, resulting in decreased air conditioner demand. Because industrial buildings and organisations are reported to consume over 40% of all energy, BIPV might turn out to be a sustainable option that can help reduce greenhouse gas emissions. Some of the potential applications for BIPV technology in buildings include: Tile: Photovoltaic modules can be used to replace cement or clay tile on a building's roof. Solar radiation can flow through electric tiles, although they are virtually indistinguishable from regular roof tiles. Roofing Roll Coverage: A thin-film laminate that combines the qualities of bitumen covering and the solar battery is the ideal soft tile or roofing coverage substitute. Wall Panels: Instead of traditional wall panels, modern architects are increasingly employing solar batteries as façade panels. Windows (Glazing): "Solar Windows" are transparent thin-film solar batteries that can be adhered to glass, however their poor productivity is an issue. However, efforts are presently being made to integrate photo-electric components directly into the glass itself. All of these BIPV modules may be simply installed as rooftops, facades, curtain walls, carports, and parking lots in residential, commercial, and industrial structures. BIPV systems can either be connected to the utility grid or intended to operate independently.Many BIPV module manufacturers in India can provide BIPV modules that can replace conventional construction materials while also delivering utility-grade power. Semi-transparent BIPV modules manufactured by HHV Solar have created new landscapes in green construction. Other firms, such as Navitas Solar and Maglare, specialise in the glass panels of BIPV modules that can replace glazing parts of the building, while Novergy Solar, a BIPV solar panel expert, provides a wide selection of BIPV solar panels that can be integrated with the design of the structure. This game-changing technology elevates solar power and sustainable living to new heights. It enables architects, designers, and clients to incorporate hi-tech features into traditional building designs, transforming the structure into an appealing energy-generating structure. Solar Skins The adage "looks don't matter" is rarely applicable in the solar sector. Solar panels are typically designed to be visually appealing. The finest companies provide panels that are visually appealing and blend nicely with most traditional rooftops. However, when placed on rooftops, as is frequently the case, the majority of solar panels on the market do not integrate well with the majority of rooftops. They make their presence known on roofs in potentially unsightly and distracting ways. Sistine Solar was developed in 2012 by graduate students at the Massachusetts Institute of Technology (MIT). They sought to expand the effect of Industrial and UX Design into the solar technology sector and produce superior product aesthetics, which they claim might lead to increased sales. The fruits of their labour led to the solar skin When exposed to sunlight, solar skin is a flexible, translucent material that is very thin yet very effective at creating an electrical current. Consider it a thick strip of saran wrap that can be placed to practically any surface—the exterior of a house, a car, a utility pole—almost anything! The applications might be expanded to include consumer electronics as well. Soon, solar skin for your smartphone will be available, and charging it will be as simple as placing it in direct sunshine. Solar skins are not the same as solar panels. They are very long-lasting graphic film appliqués that are tailored using a proprietary algorithm to aesthetically merge with an existing or new array of solar panels in ways that complement the roof aesthetic without compromising solar panel efficiency and productivity. Solar skin contains billions of small photoelectric particles known as 'Quantum Dots.' When these particles are exposed to photons, which are the primary constituents of sunshine, they get excited. The problem with solar skin up to this point has been its low efficiency. However, researchers at the University of Queensland have discovered a means to increase this efficiency by 25%, resulting in solar skin with an overall efficiency rating of 16.6 percent. This indicates that 16.6 percent of the potential solar energy exposed to the solar skin is efficiently transformed into electricity. High-efficiency solar panels, on the other hand, are around 19-22 percent efficient. This implies that solar skin is rapidly reaching "prime time" for commercial and residential applications. Solar fabric When exposed to light, photovoltaic (PV) cells embedded in solar cell fabric create energy. Traditional silicon-based solar cells are costly to produce, inflexible, and brittle. Thin-film cells and organic polymer-based cells, while less efficient, may be made fast and cheaply. They are also malleable and may be sewn onto cloth. According to a New Scientist article, researchers created a small cylindrical cell by building a PV cell in the layers around a fibre. Solar gathering is no longer restricted to rooftops and poles; it may now operate quietly and unobtrusively from ordinary things. Humanitarian help can benefit from flexible solar cells. The PowerShade, a temporary shelter invented by PowerFilm, Inc., can generate one kilowatt of power. This might be useful for powering emergency equipment in remote locations on short notice. Konarka Technologies makes a thin film polymer-based PV cell that is sewn into a cloth. Further research on nanocrystal PV cells will be required to make these cells even smaller. In principle, nanotechnology might allow cells to gather a wider range of photons, boosting efficiency while shrinking. Konarka is collaborating with other institutions on this. Photovoltaic noise barriers (PVNBs) Photovoltaic noise barriers (PVNBs) are a hybrid of noise barrier and photovoltaic (PV) systems. Noise barriers are physical barriers that are used to reduce noise levels between noise sources and sensitive receptors such as hospitals, schools, and residential areas. Solar cells are used in photovoltaic systems to convert light energy directly into electricity. PVNBs, which were first used in Switzerland in 1989, are now seen in a number of nations where transportation authorities have tried to reduce noise while also producing renewable energy. The research on PVNBs, the most of which is many years old, largely agrees that there is tremendous potential to create solar electricity using both current and proposed new noise barriers. A highway noise barrier is a physical barrier built between the highway noise source and the noise sensitive receptor(s) that reduces noise levels near the receptor in decibels (dB). Noise barriers include stand-alone walls, berms, and combined berm/wall systems made of various materials such as soil, wood, concrete, and metal. They dampen noise by reflecting it back across the roadway or requiring it to take a longer route over and around the barrier. Although they do not fully eliminate noise, noise barriers often lower total noise levels by 5 to 10 dB, essentially cutting traffic noise in half. The photovoltaic noise barrier (PVNB), also known as the solar noise barrier, is a mix of noise barrier systems and photovoltaic (PV) systems that employ solar cells to directly convert light energy into electricity. PVNBs can be either retrofitted into existing noise barriers with PV modules (i.e., solar panels) or integrated into the construction of new noise barriers. The noise barrier acts as a substructure for PV modules in both scenarios. The most typical PVNB solution is top-mounted, retrofit designs that provide extra area to an existing noise barrier structure. SOLAR: A PROMISING FUTURE Previously, solar energy was solely generated by ground-mounted or rooftop panels. However, as a result of the developments outlined above, solar will become lighter, more flexible, and applicable everywhere. Imagine you had all of this technology and you go to another city. You can buy food from a solar-powered food cart, eat it while driving down a solar-powered highway, and charge your phone with solar-powered clothing. This is how the near future seems! In fact, many additional revolutionary household solar solutions are in the works or will be available in 2022. Perovskite solar cells, which might soon be used to make solar paint, are one of the most promising new technologies. Previous Next

Here to educate India. Podar Eduspace Our mission We aspire to reduce unemployment by creating a knowledge ecosystem where students and young professionals can upskill to stay relevant in this dynamically changing job landscape. Podar Enterprise Podar Enterprise has relentlessly pursued its vision to make a difference by contributing to India’s interest at home and abroad. Established in 1909, the group today represents a 100-year legacy of trust, quality and reliability - in India and internationally. Read more Anandilal Podar Trust To contribute to education in a young India, great visionaries and philanthropists: Pandit Madan Mohan Malviyaji, Shri Jamnalal Bajaj and Shri Anandilal Podar came together to establish the Anandilal Podar Trust in 1921. It is of utmost pride to us that Mahatma Gandhiji himself was the Chairman Trustee. Read more Podar Eduspace Podar Eduspace is the educational pillar of Podar Enterprise focusing on student programs ranging from research, volunteering, skill development & advisory to educational institutes. Read more Our People Meet the people who made all of this possible. Read more Meet our Board of Advisors Our Board Meet our Board of Advisors. Read more

< Back Emerging Technology Trends in Finance by Rian Sanghavi This research paper explores the profound impact of emerging technology trends on the finance industry in the 21st century. It delves into key technological advancements such as big data, blockchain, machine learning (ML), and artificial intelligence (AI), examining their applications in finance and accounting. The paper investigates how these technologies are reshaping traditional methods in financial management and accounting, emphasizing the advantages and potential challenges. In conclusion, a comprehensive summary and analysis present a nuanced perspective on whether these new tech trends benefit the industry or require careful consideration. 1. Introduction In the 21st century, the financial industry has witnessed a transformative wave of emerging technologies. This paper aims to investigate and analyze the impact of these technologies, providing a comprehensive understanding of their applications in finance and accounting. The focus areas include big data, blockchain, machine learning, and artificial intelligence, exploring their evolution, adoption, and implications for the financial sector. 2. 21st-century Relevant Tech Trends Big Data: The advent of the digital age has led to an unprecedented generation of data. Big data, characterized by vast volumes of structured and unstructured information, has become a game-changer in various industries. In finance, big data analytics plays a crucial role in risk management, enabling real-time analysis of market data. It facilitates improved operational efficiency, personalized customer experiences, and strategic planning. The sources of big data are diverse, ranging from transaction processing systems to social networks, and its applications extend beyond finance to sectors like healthcare, manufacturing, and transportation. Blockchain: Blockchain, a decentralized and distributed ledger technology, ensures transparency, security, and immutability in digital transactions. While initially associated with cryptocurrencies, blockchain has transcended its origins. It finds applications in supply chain management, where it enhances traceability and reduces fraud. In healthcare, blockchain enables secure and interoperable sharing of patient data. Intellectual property protection, provenance tracking, and smart contracts are additional areas where blockchain is making a significant impact. Machine Learning (ML) and Artificial Intelligence (AI): Machine learning, a subset of artificial intelligence, focuses on training computer systems to learn and improve from data without explicit programming. ML algorithms analyze large datasets, identifying patterns and making predictions based on learned behaviors. The applications of ML are diverse, ranging from recommendation systems and fraud detection to natural language processing and autonomous vehicles. Artificial intelligence, encompassing a broader range of technologies like natural language processing and computer vision, has left an indelible mark on various industries, including healthcare, finance, manufacturing, customer service, and transportation. These technologies continue to evolve, contributing to the digital transformation of businesses and society at large. 3. Application in Finance Traditional Approach to Financial Management: The traditional approach to financial management, which emerged in the 1920s, was rooted in the objective of earning more funds to foster business growth. This approach, often synonymous with corporate finance, prioritized maintaining accounting and legal relationships, sourcing funds from diverse channels, and addressing episodic rather than day-to-day financial challenges. Cash management was a critical component of this traditional method, ensuring the company's ability to meet daily obligations. Advantages of Tech in Finance: The evolution of financial management approaches, globalization of commerce, and increased reliance on information technology have given rise to modern finance. Fintech, a portmanteau of financial technology, encompasses a spectrum of technologies aimed at improving and automating the delivery of financial services. The integration of technology into financial services has witnessed significant acceleration, particularly driven by factors like the COVID-19 pandemic, which expedited the shift to online financial transactions. One notable aspect of this technological evolution is the accessibility of the stock market. Companies like Robinhood have democratized stock trading, offering commission-free trades through mobile apps. While this accessibility has increased market participation, it has also raised debates about potential trading frenzies and the need for scrutiny to ensure balanced markets. Cryptocurrencies, with Bitcoin as a prime example, have continued their volatile journey. The digital currency has not only attracted investors but has also permeated popular culture, capturing the interest of high school students worldwide. The pandemic has accelerated the adoption of online financial transactions, pushing the boundaries of online banking, payment systems, and other digital financial services. The tech trends influencing the financial future include increased accessibility to stock markets, the rise of fintech companies, and the continued volatility of cryptocurrencies. In the realm of financial services, the adoption of software solutions has become widespread. Financial technology (FinTech) firms leverage these solutions to enhance efficiency, speed, and customer experience. The success stories of companies like Ant Financial in China underscore the pivotal role of technology in reshaping the financial landscape. Benefits of technology in financial services are multifaceted: Coverage: Mobile connectivity technology has expanded the reach of open banking services. Unlike the traditional banking system limited to big cities and towns, signing up for financial services today is as easy as a few clicks on smartphones or tablets. The geographical barriers have been broken down by technology, enabling broader coverage. Convenience: Technology brings unparalleled convenience to users. Almost everything, from signing up for services to making inquiries, payments, accessing loans, and transferring funds, can be done through mobile banking technology. User-friendly mobile applications, exemplified by companies like Square Inc, eliminate the need for physical visits to banking premises. Speed: Financial technology solutions operate swiftly. Transactions are completed in seconds, a crucial aspect in today's fast-paced world. This stands in contrast to the days it used to take for traditional banking systems to process transactions. The speed of financial technology is a vital asset, especially in a world where time is of the essence. Safety: Addressing safety and security concerns in the financial services sector, technology has developed fraud and breach detection methodologies. The risk inherent in the traditional banking system has prompted the implementation of robust security measures in the digital realm, ensuring the safety of funds and private data. Customer Experience: Overall, financial technologies have significantly enhanced the customer experience. Smart contracts, mobile payment systems like Venmo, credit card platforms such as PayPal, and chatbots have made clients' lives more straightforward. Artificial intelligence technologies, driven by big data, enable personalized experiences. Reduction in human error and the ability to handle most queries online contribute to an improved overall customer experience. The transformation brought about by technology is evident in the financial services sector. The integration of artificial intelligence, machine learning, and data analytics has revolutionized the industry, making financial services more accessible, convenient, and secure. 4. Application in Accounting Traditional Accounting Methods: Traditional accounting, often referred to as "accrual basis" accounting, calculates profits based on when invoices are sent or received, irrespective of the actual flow of money. The approach involves meticulous record-keeping, including business assets, stock valuation, and other financial transactions. Tech Advancements in Accounting: The accounting industry has undergone a significant transformation in the last few decades, primarily fueled by the introduction of computer-based accounting software. These tools automated the record-keeping process, eliminating the need for manual ledger systems. The 1990s saw the rise of desktop accounting software, which offered increased accuracy, reliability, and efficiency in managing financial data. The subsequent shift to web-based and cloud-based accounting solutions marked another leap in the evolution of accounting technology. Cloud-based platforms provide users with real-time access to financial data, enabling collaboration among team members, accountants, and clients. This shift to the cloud has been instrumental in breaking down geographical barriers and facilitating seamless communication in a globalized business landscape. Robotic Process Automation (RPA) has emerged as a powerful tool in automating repetitive and rule-based tasks in accounting. RPA technology employs software robots to perform routine tasks such as data entry, invoice processing, and reconciliation. This automation not only improves accuracy and efficiency but also allows human accountants to focus on more complex and value-added activities. Artificial Intelligence (AI) and Machine Learning (ML) are at the forefront of the latest advancements in accounting technology. AI-driven systems can analyze large datasets to identify patterns, anomalies, and trends. In accounting, this capability is harnessed for fraud detection, risk management, and predictive analytics. Machine learning algorithms continuously learn from data, enabling them to enhance their accuracy and predictive capabilities over time. The integration of AI and ML in accounting software also brings sophisticated data analysis capabilities to the forefront. These technologies can sift through vast amounts of financial data, providing valuable insights for strategic decision-making. For example, AI-powered analytics tools can analyze customer behavior, predict market trends, and offer recommendations for optimizing financial performance. 5. Accounting Trends to Watch in 2023 Automation and AI Integration: The trend of automation and AI integration in accounting is expected to continue gaining momentum in 2023. As technology advances, routine and time-consuming tasks will be increasingly automated, allowing accountants to focus on higher-value activities that require critical thinking, analysis, and strategic planning. This shift is poised to enhance the overall efficiency of accounting processes, reducing the risk of errors and improving decision-making. Cloud-Based Accounting: The popularity of cloud-based accounting solutions is projected to persist and grow in 2023. Cloud technology offers several advantages, including real-time access to financial data, collaboration among multiple users, and enhanced security measures. The flexibility and scalability of cloud-based accounting make it an attractive choice for businesses of all sizes, allowing them to adapt to changing business environments and regulatory requirements seamlessly. Focus on Sustainability and ESG: Environmental, Social, and Governance (ESG) considerations have become increasingly important in various industries, and accounting is no exception. In 2023, there is a growing emphasis on integrating sustainability and ESG factors into accounting practices. This involves not only reporting on financial performance but also assessing and disclosing the environmental and social impact of business activities. Accountants are expected to play a key role in developing frameworks for measuring and reporting on sustainability metrics. Advisory Services: The evolution of technology in accounting is reshaping the roles of accountants. With routine tasks becoming more automated, accountants are expected to shift towards providing advisory services. In 2023, the focus on advisory services is likely to intensify, emphasizing the importance of financial planning, risk management, and strategic advice. Accountants will be positioned as strategic partners, leveraging their expertise to guide businesses through complex financial decisions. 6. Conclusion In conclusion, the technological landscape has significantly transformed the finance and accounting sectors in the 21st century. The exploration of big data, blockchain, machine learning, and artificial intelligence has revealed their multifaceted applications and profound impacts on traditional approaches. While these advancements offer unparalleled benefits, careful consideration is essential to mitigate potential challenges. The financial industry's future lies in embracing these technological trends, adapting to change, and continuing to provide value to clients in this dynamic environment. The nuanced analysis presented throughout the paper suggests that the new tech trends are generally beneficial but require prudent usage for sustainable growth in the industry. As we move into 2023, the fusion of technology and finance is poised to shape a future where accessibility, efficiency, and innovation coalesce to redefine financial services and accounting practices. The industry's success will hinge on its ability to navigate the evolving technological landscape, leveraging advancements for positive transformation while addressing challenges responsibly and ethically. Previous Next

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Podar Conversations A flagship series of mentoring talks by Podar Eduspace, bringing together industry CEOs and veterans with decades of leadership experience. Follow our events calendar to join the next scheduled talk. You can listen to the previously held conversations in the video links provided below. March 2022 - Podar Conversations with Rakesh Wahi, Co-Founder of Forbes Africa Magazine and CNBC Africa In this conversation, Wahi talks on "Lessons on Entrepreneurship and Leadership: From a Soldier who Dared to Dream" through his business experiences all around the globe April 2022 - Podar Conversations with PD Singh, Managing Director and Head of Corporate Banking, J.P. Morgan In this conversation, P D Singh talks on "Lessons on Leadership and Banking" through his 25 years of experience in the Finance Industry