Diksha Session
Date: 31st January, 2014
Speaker: Mr. V. George Anthony
Designation: Managing Director and
Country Head, UAE Exchange, India
Topic: Foreign Exchange and
Financial Services
Foreign exchange services require a very great amount of operational efficiency
and diligence in their activities. It is backed by robust system which does not
require any human intervention for operational activities. UAE exchange started
its business with its focus on Foreign exchange services. Mr. V. George Anthony
started the session with explaining about evolution of the company and
business. UAE exchange promoted by Dr. B R Shetty started in 1999. It has
scaled up its branch network to 333 by year 2013. These branches are located in
27 regions and 11 zones. The organization has set up its 12% branches in
unbanked regions. Currently they are working on starting new service to
transfer money via SMS. The main idea behind this is to be part of financial inclusion
initiative. It has steadily increased its employee base from 3219 in 2011-12 to
3220 in 2013-14. Mr. V. George Anthony
played key role in getting first FFMC licence in India for UAE Exchange.
UAE Exchange was established in India for
focusing on the remittance business. But the revenues from its remittance
business have come down from 98% to 10%. The company has diversified its
product portfolio by including related products where it can leverage on its
existing customer base. To mitigate risk of company in long run in financial
business you have to diversify your product range. It introduced loans which
they can cross-sell to the existing customers of remittance and travellers
cheque.
The range of loans provided is as below
- Gold loans
- Vehicle loans
- MSME loans
- Home loans
- Personal loans
Company has achieved zero default rates in personal
loans.
Company believes in diversifying in related
areas only and they cater to working class people who need loans. Another
addition in the product portfolio is mobile money transfer. This gives zero
risk to the business. All mobile transaction happens only when you prepay the
amount. It provides high security and easy transfer of money to remote areas
where people do not have access to banking services. Currently organization is
working on educating the mobile recharge distributors for money transfer.
The organization has two pillars of strength.
Its internal control and audit compliance and Risk management.
Internal control and audit compliance is
structured as
- Concurrent audit
- Internal inspection
- System based monitoring
- Compliance
- Grading of branches
- DVR monitoring
Major investment and labour goes in audit. We
have seen recently that many banks were fined for not having proper control on
KYC norms. UAE exchange had all the processes in place to carry out its
operations smoothly and they have set an example for that.
Following are the type of risk all the financial
institutes have to consider.
- Currency risk
- Credit risk
- Fraud risk
This risk has to be taken care of because many a
times branches under pressure of targets set by higher authorities ignore some
of the underlying risks. In financial sectors 20% growth is substantial. If
some company is growing at very large compared to this then you have to find
out from where this growth is coming? and How it is coming?
UAE does not allow its dealers to
explore the speculation arena in foreign exchange. Their focus has been on
providing transaction services only. All dealers have a cap of $200,000 for
carrying out operations. Foreign exchange market is very volatile and sensitive
and as the speculation arena is not the core business company does not allow
this. Organization does not take any risk and all the buying and selling are squared all the time.
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