 CLC and ULS Punjabi University Chandigarh. I welcome you all to yet another engaging session. COVID-19 has brought its own challenges, but the risk management, it's not during the COVID-19 itself, but the management itself is a task, but the risk management itself becomes a task. And the economy, once it is correlated with risk management as well as the economy, it gives a different pedestal to the entire thought process. And once during these testing and trying times, these issues are very relevant. And once we hear it from the persons experts, we will get the different insights from the bankers as well as from a chartered accountant. They all have created their own niche in their own way. Their insights are very peri-material for the growth of the economy and the management. They give their insights into all this. Amongst us we have Mr. Anir Kishoria, former Deputy Managing Director and Chief Risk Officer, State Bank of India. Mr. Navli Kundra, Consultant-Shivalik Mercantile Cooperative Bank. Earlier he was in the Oriental Bank of Commerce and Mr. Amaji Chopra, chartered accountant and former president of the ICAI, which is the premier regulatory body since we are primarily advocates. It is just like the Bar Council of India. And being the chairman of the same, it is akin to that. I'm just, for the purposes of the students, sometimes they feel that, what is this ICI? And for the short form it is just like, if we go to some other professional field and we say that he's the chairman of the BCI, he feels that what is BCI? Because people know more BCI rather than BCI. And Mr. Kishoria is currently the vice president of National Development Bank after rendering 38 years of service. All these three persons who are the keynote speakers are having the exposures to the various development programs such as the risk development. I can continue to read the resume, but I will say that it's better, one of the better way of management is that once we have speakers of great eminence, we should rather have their insights rather than just reading the resume because nowadays, gone are the days when one didn't know who the key speaker. Now it is, it is only at the click of the button, you feed the name, you will get the entire, what we say in Punjabi and all, all Janam Patri and Punli is out, what he has done, what he has not done. So amongst us, we are there. I can ask Mr. Amaji Chopra, who has been kind enough to ask them to come on the platform. He is the person I whom outside the platform quite keenly bank upon. What are the insights? What are the risk management? He's the person who can give the insights not only as a chartered contractor, otherwise. We will just unmute Mr. Amaji Chopra. So in this entire process, because we mute everybody, so they're unmuting, somehow the control is with us. So we only four people would be unmuted, except once we have the question and answer session that anybody who wants to ask the question can do that. So a glimpse of their entire insights may be given off Mr. Kishora and Naveen Kundra. And then we go on the topic. You can just give the theme, how we proceed, how we want to proceed with the entire show today. Yes, sir. Thank you. Thank you, Vikas Ji. But as you have yourself said that today, I can say the bio data of everyone is available on the click of a button. So I will not say much about their bio data as to what happened in their achievements. I know Anil Kishora Ji, and I must say he's one of the most outstanding bankers, particularly from the risk perspective. He has been the one who has actually led from the front so far as the Chief Risk Officer of State Bank of India, a person who is absolutely humble and down to earth. I think that's the biggest quality of a person when one rises to a particular level. And about him, I can say now he has been also designated as the Vice President of the New Development Bank, which is a bridge on which Mr. Kamath till recently was the President. And by rotation that seat has been actually present, but then the Vice Presidentship again comes to India. And Mr. Anil Kishora post is a retirement from SBI has been posted there. I think it's a great achievement. He has done the Nationally Proudly after being designated on that particular post. And I think when you hear from him, it will be coming from the horse's mouth because he has been dealing with this entire risk. Basically the banking has gone through such a turmoil in the recent times. And at that time, acting as the Chief Risk Officer of the largest Indian bank, I think it's a great credit for that matter. And so far as Mr. Navling Pundra is concerned, I think again a person who's always smiling. Let me put it that way. He was the general manager of credit before he actually retired from OBC. Again a very shrewd and astute banker, very meticulous banker from that angle. And again, he has handled virtually every position. So far as the banking is concerned in the public sector bank. And now he's acting as a consultant to the formation of the Shivalli Co-operative Bank. And I'm sure that that bank in the time to come will be heard more and more. So I think these two gentlemen, we'll be hearing and we'll be hearing about the various risks in the banking and what can be the risk to the economy if these risks are not properly married in the banking sector. I think that is all that I would like to say from here and now probably either you can request Mr. Anil Kishora. I can request Mr. Kishora. As you said, he's quite humble. I'm just reminded that they say that one has to be like a grass who is grounded but still firm with the roots. And same the persons who are, they are just like the trees which bear the fruit maximum. So they are supposed to be easy to carry the fruit. And once you have good speakers who can give insights, it's just like having tree with the fruits which you will enjoy and the shade as well. So having persons on a common platform where they give their inputs, not only how to control the risk, how to manage the life. It's not just simplicity that one has to learn the risk of management, management of economy itself. But once you hear a good person while he speaks, anybody who's a good speaker and having immense knowledge, he also tells you the management of life itself. And that is an art which only one learns by the observation of absorption. It is not what has to be specifically tell one, two, three, these are the points how you go back. It's only the absorption and absorption, which are the key to success. Over to Mr. Anil Kishore, I'm obliged and enamored by the way that you have accepted our invite. Thank you, sir. Yeah, good evening Vikas sir and Chopra sir. Chopra sir is in some ways my guru as well here. I have learned a lot from him in terms of risk management as well as certain product issues. Coming to the topic that we are going to discuss today, how do we manage the economy? How do we manage the risk in the post COVID-19 situation? Now, let us look at, I mean, we are all aware what COVID-19 has done. As I would like to put it, COVID-19 has been able to achieve in days what usually takes decades. So, decades have happened in days because of COVID-19. And what Kyoto Protocol of 2005 or Paris Agreement of 2015 could not do for the planet has been done by COVID-19. And it has restored some kind of balance and somehow the banking industry, the economy, all of us, since, let me take you back a little bit, since the discovery of a steam engine around the close of the 17th century, I think 1698 or so. The world has been looking for more and more growth. How do we get that kind of growth? So, a lot of mining, a lot of industrial activities, a lot of infrastructure, a lot of construction, real estate, all of that, funded by bank loans, funded by debt and to some extent, equity. Jump to around 1990, 2000. And we find that the internet was discovered and now we have internet of things and probably the humanity, all of us have started thinking that we have reached a situation where there is no limits to growth. COVID-19 has proved us wrong, that assumption is no longer valid. Probably there are limits to growth. When there are limits to growth, there are limits to what bank funding can do and cannot achieve. Right now, we find that all the banks have a lot of liquidity. You would be reading in the press that banks are sitting on piles and piles of liquidity. This averse, they don't want to lend. The situation is that nobody would like to borrow unless you have used for that money at whatever rate it is available. Now in the post COVID-19 situation, who do we lend to? How much do we lend? These are the issues which have come up. And unless there is demand, unless there is consumer interest in it, unless there are people flow there, like all the malls, cinema halls, theaters, restaurants, even gyms, hardly any people. So what will they do? Now the issue is some people are talking about that we need to reduce costs. We need to reduce our cost structure because in the current world, the revenue will not support a high cost. Yes, we can do that. As the demand slumps, you have to reduce costs. What does it mean? It will lead to job losses. If job losses are there, even if you have a very efficient economy and there are huge job losses, is it good for the society? So these are the issues which are dropping up now. And earlier we used to blindly apply models based on a statistical data. Now there is a situation where you cannot extrapolate the past into future. And probably COVID-19 has changed the course of economy as well as social trends for at least the next one, one century. And what we can visualize, let us look at the real estate industry, for example. Now, mega cities have come up and a lot of people, let's take the example of Mumbai. People come to Mumbai and they're willing to shell out a lot of money to buy two-bedroom or three-bedroom apartments which are actually matchboxes. 600 square feet sold as two-bedroom or two-and-a-half-bedroom apartment. In case banks are lending to these build-ups, what is the possible scenario? Possibly there will be no bias. People might like to migrate out of big cities and relocate to more livable cities. Will that happen? We don't know yet, but there is a strong probability. Today I was talking to some experts in the European market and they are saying that most of the genes are completely out of business or maybe for good. So we are living in uncertain times and there is no roadmap for that. There is no statistical model that we can use to navigate our way out of it. So what can we do? I find that in the audience today in our webinar, we have some legal experts and legal luminaries and as students as well. In case of law, there is something like Bayer Act and then you have case laws which are applicable to a specific cases where you apply your mind and you decide on specific solutions to a specific legal issues. That is where we have reached. It is back to fundamental situation. It is not about just looking at numbers and saying that I can lend you so much. We need to understand the business model completely in and out. We need to understand the revenue model, how you are going to generate that revenue. How, what is your process structure? What is the supply chain? What is the value chain behind it? All that needs to be understood in very, very clear terms before we can say that we would be in a position to manage risk in a concerted way in the post-COVID-19 point. So there has to be a lot of application of mind and to a specific cases and as I said, it is known on the about remembering the Bayer Act. It's the about remembering the case laws and each and every situation could be different and probably we are going to reach a situation where mindless lending will not be able to as per the growth of the economy. And the models, the business models might have to undergo complete change. In case you have outlets or in case you have costs, whether it's overcrowding, you will go and buy there. Maybe the digital economy will take precedence. Maybe the internet of things will take wings now. And all of this means that probably, although it is fashionable to say that there would be a shift of job profiles, there would not be requirement of a certain class of jobs, but you would have another class of jobs where people would be in days. But as we know, unemployment is becoming a big problem and in case unemployment grows. And so the Western model that we have followed so far for economy, where it was all about urbanization as we understand now, in case we go ahead with that, what is the likely scenario for risk managers? Probably you will see a situation where it's already a reality in the Western world where a good amount of our GDP might get contributed by the business of psychiatrists and stuff like that. We don't want that kind of a society. So it's a very, very broad issue. And in my view, it is no longer the preserve or domain of professional risk managers. Everybody has to contribute to that. The dog legal system has to contribute to that. Chartered accountancy professor has to contribute to that. Farmers have to contribute to that because over the years, we find that the rural economy is kind of getting relegated. The real economy is getting relegated to the background. And more and more, we are focusing on the financial economy, stock market trading, commodity trading, all of this is fine. But for this to prosper, you need a very strong real economy base. And the model that people talk about, let's say Australia and US, that just about 2% or 5% of the people would be able to produce enough for the rest of the economy or the rest of the society may not be the right model. So this is time when we start thinking about it and we apply your mind, the concepts with specific cases, see how they are going to generate cash flows. And here again, earlier we used to have something like a scoring models, et cetera, which may not be very relevant now. We need more design, technology-driven tools, implements and models, which can read the indicators in conjunction, in combination and then come up with results. So risk management has kind of reached a situation where things are very, very uncertain. And we have to manage the very short time horizon in due, how the social trends will evolve in society will largely determine how our economy performs. And in my view, I do not think that it is going to be as the same business as usual. Probably the economy will change its course and we will have a more distributed kind of economy, which will be more balanced and with hopefully lesser inequality. And people have understood the value of life now. It is no longer a kind of mindless treadmill type of activity that will go on and on changing profits and profits and profits. So probably we'll also see that many of the listed companies might go private and that will be funded by private equity players. So as we believe in our Indian system, that the more you change, the more you remain the same and the world economy is cyclical, the earth goes through cyclical cycles, this is probably happening. So there could be divergent models, it'd be a different ACN model, which will not be exactly as the US model and the Western model. So we need to think through, we need to fly our mind collectively and use technology is the only way to kind of do risk management on the fly. And ultimately it is the normal common human prudence that will save us. Despite all the models and all the I've seen cases where bankruptcies have happened, big banks have failed and they have to be bailed out because not human prudence was given up. So we have to go back to that and apply your mind to each and every situation critically, individually and come up with individual solutions. So that's my initial remarks and I would like if you have any questions, any discussion more than open to discuss that and take the conversation forward. Thank you. Thank you, sir. The point well taken that each one, as we say that each one has to teach one. The same way if we say that the nation has to grow then everybody has to contribute in its own way. I'm just reminded that everybody says what the nation is doing. I'm just reminded of the famous quote that it was said that do not ask what the nation has done for you but tell what you are doing for the nation. So the same way as rightly and aptly put by you that during COVID-19 there are certain things wherein we are required to relook and revisit ourselves. I was just reading an article during these days of COVID-19. In 1665 when there was a plague they say that the best of the write-ups of Shakespeare were written by him as well as the Isaac Newton. During this time he learned this thing. It said that Isaac Newton conceived his most groundbreaking ideas during this time as well as Shakespeare when he was quarantined during the plague. He wrote King Lear and Macbeth and both the works from them speak volumes. So it is only how we reinvent ourselves during these testing times. One is that one can go into depression but one is to relook and revisit and then move forward. I will ask Mr. Naveen Konrachi to give his insights. Then we will take by the end of the time when Mr. Chopra also gives the insights. Then we have posted that around 650 or seven whenever is the appropriate time people will pose the questions on the chat box. Then we will take questions accordingly. If Naveenji kindly give your insights. I'm unmuting Mr. Chopra, I suppose you. Yes, Mr. Chopra. I think if anyone wants to ask the question to Mr. Chopra because he would be leaving for the meeting that I said. Then people can ask. Anybody can post the questions. So we will change the normal model. The questions can be posted despite the fact that we know that during the pressing times still one has a pressing engagements. It only shows the volume that his inputs are required everywhere. Not everyone is blessed because they say uneasy lies the head which wears the crown but the crown is also uneasy only of that person who gives the actual insights. Over to Mr. Lamreen Kodrab. Meanwhile, the questions can be posted on the chat box. Right, sir? Welcome. Thank you, Kaji. After hearing Mr. Anilji, I think he has given a broader view of what is happening and what has to be taken care of and how we have to rethink ourselves and tailor-made future requirements from the risk-managing perspective. So from my point of view, I would like to say that first of all, brief introduction by myself. I am, as Gopalji has already noted, that I retired from Oriental Bank, the Chief Risk Officer, and then I joined this Swalik Mercantile Cooperative Bank as a consultant and I am now the Chief Risk Officer. So, only about four and a half years of experience as Chief Risk Officer and the rest by banking experience of 40 years. Talk for today. And it is on the bank's risk-management perspective of sector-wise impact of COVID-19 on the Indian economy and industries. The risk-managing departments are analyzing the situation from this perspective and guiding their respective risk-managing boards to take appropriate credit decisions in the background of COVID-19. COVID-19 pandemic is defining global health crisis of our times and the greatest global humanitarian challenges the world has ever faced in this world war two. The virus has spread wildly all over the world and the number of cases is rising daily as governments work to slow its spread. India moved quickly implementing the proactive nationwide 21 days lockdown and further extending it and with the goal of flattening the curve and using the time to plan the sources responses adequately. Along with the unpercentred human at all, COVID-19 has triggered a deep economic crisis. The lockdown of nearly 130 crores of people and a large number of businesses are leading to disruptions and dislocations on a scale never imagined. Various agencies have revised the estimates of Indian GDP for the year financial year 2021. GDP growth projections for the GDP estimates provided by the agencies are the lowest in 30 years and again, they keep on lowering it because they are not finding any end to it so far. So COVID impact, 19 impact on the Indian economy, if you talk. Since global agencies are forcing downfall in the economy it will certainly impact adversely the Indian exports and imports. Share of total imports and exports in the Indian GDP is 23% and 19% respectively aggregating cross-country trade off 43% of the total GDP. Since the imposition of the complete lockdown domestic and international trade has come to a standstill affecting the business adversity. Furthermore, the equity market, debt market and foreign market are also badly hit by the sentiment across the world. Now I'll be discussing in brief all these sectors to understand the gravity. Imports, Indian imports primarily crude, petroleum gold, pearl, precious stones, petroleum products, telecom instruments, electronic components, industrial machinery, organic chemicals, active pharmaceutical ingredients, annual vegetable fats, oils, lexes, plastics, plastic articles, medical operators. These are the major imports we are having. The top five countries from here, Indian imports, major share are China. So India is reporting about 13.68% from China, USA 6.92, UAE 5.79, Saudi Arabia 5.54 and Iraq 4.35. These countries are badly impacted by COVID-19 pandemic and China was at the center of the pandemic which was now shifted to USC. China accounts for 45% of the total electronic imports. One third of the machinery and almost two fifths of the organic chemicals that India purchases from the world comes from China. Automative parts and fertilizers are the other items where China's share in India's import is more than 25%. So India's source is about 65 to 70% of the active pharmaceutical ingredients and close to about 90% of certain mobile phone parts of China. So if China is affected, our imports are affected. Similarly exports, India exports primarily petroleum products, mineral fuels, including oil, dams, precious metals, machinery, including computers, organic electric machinery, equipment, chemicals, iron and steel and pharmaceutical products. The top five countries where India's exports major share are the USA 15.88, UAE 9.13, China 5.07, Hong Kong 3.94 and Singapore 3.51. All the both countries where India exports are mostly badly impacted countries, particularly USA. So exports are also affected. Now we come to the equity market. The sentiment in the stock market across the world is gloomy. This is reflected in the frequent crashes in the share markets in all parts of the world. Financial markets in India are written as a result of the fallout in the global markets. The fall is in the line with the global benchmark indices as the domestic market usually tracks the major global indices and are highly volatile. It is likely to continue in the near future. Further, the overseas investors flying to the safety of dollar-backed assets from emerging market has less to the job call downfall in the Indian stock market. S&P BSE Sensex, which was 42,273 points as on 20th January is less than 34,000 as on date. So debt market. Due to slowdown in the economy, economic activity, the chances of recession as flagged by many economists and IMF, corporate debt securities are exposed to the credit spread, default and liquidity risk in addition to the interest rate risk. Since the outbreak of COVID-19, credit spreads in the market has already hardened and there is a possibility of credit spread hardening further in case situation prolongs, which will negatively impact the MTM. Further due to the adverse economic scenario, corporate debts could also trigger defaults on or there are possibilities of deterioration of rating standards. Additionally, during the crisis, liquidity crisis could also emerge. Thereby, market for the corporate debt securities could become thin and concerns might face problems in offloading the corporate debt securities. Now this is another challenge. In the last one year, 10-year-born yield was moving the range of 5.995 to 7.4 to 6, yield of 10-year-born as on 10th June is 5.77% Forex market. Indian foreign exchange reserves 11.98 billion during the week and in March 24, 69.9 billion. How are the same regained? On 29th May, 2020, the increase to 493.48 billion. So we have recovered on this front. The increase in the distribution on account of fallout COVID-19 has resulted in the foreign investor pulling out some working markets, including India. In the last one year, the dollar has increased from 69.82 in April 19 to 75.68 as on 9th June and there is an increase of 8.40 in its value. Now I would like to talk on industry sector-wise impact of COVID-19 on Indian industry. Under the lockdown, economic liquidity has slowed down significantly across most sectors and the lockdown has adversely affected many sectors. The industry which may be impacted or analyzed, the analysis is based on the industry outlook provided by the crystal for the quarter ending March, 2020. Industry outlook is categorized into seven categories. Highly favorable, favorable, marginally favorable, neutral, marginally unfavorable, unfavorable and highly unfavorable. The industry outlook is updated on quarterly basis while comparing the industry outlook with previous quarter. It has been observed that there is a change in the outlook of 47 industries due to COVID. An analysis of the industry with their present outlook rise to marginally unfavorable and unfavorable have been analyzed in my talk. So we are only talking about today marginally unfavorable and unfavorable. Considering the pandemic situation, complete halt on export import, all types of commutation, manufacturing and service sector, lower demand and supply, lower consumption, analysis of the badly impacted industry under current scenario has been done. So it has been related to the recovery period. If the recovery period is short, this is what is envy stage today, which is a very dynamic situation. It can change at any moment. So today what has been thought of or it has been envy stage, if the recovery duration is zero to six months, the recovery period is considered as a short term and future impact on the impacted industries can be considered as moderate. If it is six to 12 months, then recovery period is termed as medium and the future impact is high. But if the recovery period is envisaged at more than 12 months, it will be termed as long term and the impact would be considered as severe. The economic activity, future impact on the industry is based on the government directions to resume the economy. The sample study along with the impact of pandemic on the bank's credit portfolio in view of industry outlook will be mentioned hereafter. The mismanagement departments of the banks have analyzed major industries, sectors, future impact, recovery period along with the reasoning and impact on their credit portfolios because each of the bank is now looking at their credit portfolios and how they are impacted and what is the future and how they should tackle this. So risk management departments, analysis and recommendations. The banks have circulated advisory to the field functionaries for conducting dynamic risk rating, immediately for the accounts pertaining to the affected industries and sectors. It has proposed that field functionaries to conduct dynamic rating in all verbal accounts in which internal rating is older than three months and where enhancement is being considered. Now this, I mean, the risk management can only see what tools are available with them and how best they can use in the present scenario. So dynamic risk rating for more than three months has been recommended and the banks are trying to carry it out. Credit risk management departments of the banks are closely monitoring the accounts pertaining to the affected sectors, especially the SMAs, especially mentioned accounts. Further credit divisions of the banks are closely watching on the downgrades in the internal as well as external ratings of the accounts with exposure above a cut of say in some banks 10 crores or 25 crores or wherever they feel comfortable. They are putting the limits and they are trying to get it examined and devising suitable strategy for continuing exposures to the affected industries. All accounts with COVID-19 emergency facilities have been sanctioned fund-based or non-fund-based or where non-fund-based facilities have been converted into the fund-based facilities are being monitored on the continuous basis. The banks are preparing some of the industry by study. As I mentioned earlier, I will be talking about the marginally unfavorable and the unfavorable category of the industry. As listed by the crystal. So it has identified 19 such industries which are unfavorable or marginally unfavorable. Number one is the cement industry. The recovery period has been termed here as median term. That means six to 12 months it will take to recover and the future impact is considered as high. Banks are also, I would also like to mention the banks are also considering their own stress assets in their respective trade portfolios. Supposing even if the industry outlook is negative or if future impact is high, but if their own portfolio is not showing any size of stress so they then can reduce the future impact on this. So instead of high, they can consider that moderate or likewise. Food processing including retail non-food items and wholesale non-food items. Here the recovery period is expected to be short term that is it is expected to recover in six months time. So the future impact has been considered as moderate. Text time, recovery period short term, future impact is moderate. Paper, medium term, that means six months to one year and future impact is high. Metals, iron and steel and other metals. Medium term, future impact is high. Automative, medium term, impact high. Leather, medium term, impact is high. Gems and jewellery, long term and with the result future impact is severe. Petroleum, medium term and future impact is high. Hospitality and hotels, long term, severe. Aviation, long term, severe. Engineering electronics, long term, severe. Lower, long term, severe. Chemicals, medium term, moderate. Woodland industry, medium term, high. Fertilizers, short term, moderate. Commercial real estate, long term, severe. Infrastructure, divided into three parts. Power, short term, moderate. Transport, long term, high. Telecom, long term, high. NBFC, medium term, impact high. So these are the guidance with the mismanagement department is giving to their respective committees of the board so that bank can follow a policy on that. So this mitigates proposed for the corporate credit verticals on the basis of the study are as under for seeking future direction. It is recommended to take the following actions after noting the future impact. Since the situation with regard to COVID is very fluid and changing fast, it is predicted for a period of six months only. If the situation changes faster than expected, both on negative and positive side, the RMD of the respective banks may review future course of action even earlier. Looking at the dynamic conditions. So what actions have been recommended? Generally, if the future impact is moderate, then the banks can take fresh exposures up to the ceiling of the industry on selective basis with IRR of B1 and above and external dating of B2B and above. High can take fresh exposures in the accounts having external dating A and above internal dating A4. Sphere can take fresh exposures in the accounts having an external dating A plus and internal dating of A3 and above. So these are the few measures the risk management departments are giving the guidance to the respective boards. So this by talk was a brief coverage on the role of risk management in taking critical economics in this critical economic situation and how they are guiding the business verticals to take appropriate action and CFR to minimize credit risk as far as possible by taking measures suggested by the department. Thank you. Mr. Chopra, Mr. Kishore is there or not? Because two questions have been posted for him. I'm unmuting Mr. Chopra. Meanwhile, I'm just unmuting Mr. Chopra. I'm doing that. Sir, Mr. Kishore, is he there? At least I've not been able to see him. Yeah, no, I'm also not able to see him because he had it at around 535. That's what you told me. So two questions are there so we can take it at the end of the normal wave. Yeah, yeah. That's not an issue. The insights given by Mr. Naveen are also in a short time he has given us the broad spectrum. It is just like though we say that there are dark clouds but the rainbow gives you the cheer. So once you have a knowledge given in a short capsule, that feeling itself during these times gives us a better way to look forward. It gives you a rainbow which invariably during the dark clouds are there. He has given as to how comparatively discussions have been there. I would ask Mr. Chopra to take the talk forward and we'll have the question answers. He will also give his insights being a chartered accountant, his firm under the name of GSA. It sets its own marks and he himself being the president of ICI plus Nakas and all those very different regulations. I was just going through his resume. I thought that even if one gets one particular aspect of this field that is sufficient. I'm just reminded that any good star or any good sports player having so many accomplishments to ask him that which is the best accomplishment that itself becomes very difficult for that person to choose. The same way if I ask Mr. Chopra what is the best thing you actually cherish. Undoubtedly he will say that moving for the nation for a better economy would always be there. But be that as it may, I would request Mr. Chopra to give the insights mean by how the participants were live on the Facebook. Anybody who wants to post the question, they can also post on the Facebook. We can take the questions from the Facebook itself. Over to you Mr. Chopra. Vikasji and Naveenji, Vikasji thank you very much, number one for the opportunity. And number two for all your kind words which probably arise more out of your affection than anything else. Naveenji as I said, I'm really thankful to him and to Mr. Chopra that at a very short notice, they both agreed to our request very frankly. And I must say that both of them have given a very, very broad perspective of the entire problem of the risk management and how it affects our economy. Very frankly, whatever Mr. Kundra has stated from the banks perspective, one is really thinking of where we are heading for. I think to me that is the major problem. You see to me, the risk management has always been, you identify the risk, you assess the risk, you try to mitigate the risk. I will give few practical examples and to me nothing can be more practical than COVID-19 itself, very frankly. The day the COVID-19 came to India, the government sat down, the cabinet sat down and decided that first they identified the problem. Yes, COVID-19 has actually arrived. I think that was the identification of the problem, identification of the risk. Risk is after all what? Risk is after all that if at all something bad can happen. It can be either to your wealth or it can be to your health or it can be to your economy. Wherever it can happen, I think you identify that kind of a risk. When the government sat down, the cabinet sat down, identified yes, COVID-19 is there and it can really affect the health of the citizens. Of course at that time, their consideration was, Jaan hai to jaan hai basically because they were thinking more from the perspective of or the risk of the health of the citizens up and down. So they said that okay, we'll go on going for the lockdown and they went in for the lockdown and when they again sat down and tried to find out that what is to be done. Now, this COVID-19 was not going and they assessed it further. They tried to really get the real feel of this particular problem, this particular risk and they identified that this COVID-19 is there to stay, it is not going out. So they kept on extending the period of lockdown subject to phased unlocking also. And recently now, they have unlocked most part of it except for the gyms, except for the malls and in certain cases even the malls have been opened if you ask me, the theaters. So certain things have not been opened, all other things have been opened because now they say jaan bhi or jahan bhi basically. So they are not trying to mitigate certain risks. What are those mitigation of the risks basically? They identified two kinds of risks, if you ask me. One was the risk to the health of the citizens and the other is the risk of the health of the economy. Now, when you talk of the risk of the health of the economy, it was very important that the government is losing revenue every month. The government used to collect one lakh of the GST and almost a similar amount of the corporate taxes. Now, if the government is losing virtually every month, more than two lakh crore rupees and out of that certain portion goes to the states also particularly out of the GST, naturally the states are also suffering, the center is also suffering and naturally the programs of the government are also suffering. So then they tried to find out how to mitigate that risk. So one of the things was that you unlock, part of the risk can be actually, you can take care of. They provided you certain measures, that's talked of social distancing, they talked of putting the masks, they talked of sanitizing your hands with the sanitizers. This is best way to really look at how the risk can be mitigated. I'm not talking from the commercial angle, I'm talking of the COVID-19 itself, how the government really went in for risk mitigation. And then when they unlocked part of it, they started mitigating the risk of non-collection of the review. One of the things which I can say jocularly also, people say that the greatest heather to the health is probably Daru or the liquor for that matter. But the government opened it first of all. And you could see the kind of cues which were there for purchasing the liquor for that matter. Because the people whose health itself was going to be impacted, they were not trying to mitigate their risk of the health. But government also was not willing to mitigate the health of the people to that extent. The risk of health, risk to the health of the citizens to that extent because they were more worried now about the economy part also. So mitigation to an extent was partial. If you really ask me, it was not full mitigation of the risk. And then what has happened is in the bargain that certain things which the government could not assess in the first stage itself, you identified the risk of the COVID-19, but you could not identify the risk of one thing that if you locked down, I think that is where the government actually faltered. All the state governments faltered and the central government to an extent faltered in that particular case. They never assessed the risk of migration of labor from the cities. They could never imagine that there could be such huge migration of labor. And what happened in the bargain that we have all seen, they could not mitigate that particular factor under those circumstances, that risk was never mitigated because that risk was not identified to begin with. They tried to take care of it by direct benefit transfers, specifically through DBT, that certain amount is transferred to the people, but that certain amount which is transferred to the people will be made use of them when they reach that particular account. If they cannot reach that particular account, that benefit cannot be taken. And when you could see the queues, you could see the, I can say the crowd at the Nandvihar bus stop in Delhi, for that matter, the people who wanted to go back to their homes. And ultimately they came up with the plan to mitigate the risk by running the trains. But now they have mitigated the difficulty. I will not say the risk. They have mitigated the difficulty of the people in reaching their homes by providing for the buses, by providing for the rails, but the mitigation of the risk has not taken place so far as their health part is concerned, and so far as the economy part is concerned. The reason being, when I deal with both these parts, their health and economy, while I'm talking from this particular perspective, I'm talking from this particular, about this from a very different perspective. We have seen what happened in the trains, the way the food was provided to them, the way the fights actually occurred, even for the water bottles in those particular trains. So the risk of the health was never taken care of, risk to the health of the migrant labor was not taken care of. At the same time, all these people who have left daily, who have left the major cities, whether it was Mumbai or this was any other state, where they're, which are actually the industrial towns, whether this was Noida or this was Gurugram for that matter, from wherever this migrant labor has actually left. No, industry is going to suffer because this migrant labor is not going to come back so soon. There's no way that it is going to happen. The government did try, and it's not trying that they should be brought back somewhere or the other. The industry is willing to offer them the wages which they have never seen earlier. The industry is willing to bring back these people through the planes, et cetera. But I think it is going to take time. The industry is going to suffer further. So what I mean is, why I took this particular example, you identified the risk. You assessed the risk, but your assessment was not proper at that particular point of time. But you could, because you could never take into consideration the impact of the migration of the labor or their sufferings basically in there. But what happened in some of these states was, and I think the state governments are fairly and squarely responsible for it, that they could not make sure of the fact that the proper facilities, proper accommodation, proper food was actually given to these people or proper wages were allowed to these people to survive in those conditions. So naturally the migration had to take place. And the kind of migration that we have seen under all these circumstances that people were walking on roads, people have cycled their ways 700 kilometers and odd to their respective places. I think that was absolutely phenomenal. That was absolutely absurd if you ask me on the part of the various state governments. Ultimately the governments woke up to that particular situation and tried to mitigate that risk by providing the transport services, by providing the rail services. But in that case also, they failed to assess the risk to their health. They failed to assess the risk to the industry production which is to be caused to them. I think in the very first phase itself, the migrant labor should have been kept at the places, should have been made to stay at the places where they were. And if the government could not take care of that, both central states, I want to blame for that. And I think more of these states are to take the blame for it rather than the center. I think that is where the things went wrong. And today we are ending up in a situation if you ask me that in a place like Delhi, whatever the state government may keep on saying, after all it was for the state government also to assess the entire risk. The state government failed to assess the risk that to what extent this particular thing is going to happen. Today, the Deputy Chief Minister of Delhi, if both wakes up and goes on to say, he stands up and goes on to say that by the end of July, there could be 5.5 lakh of the cases. I think this speaks volume of the failure of the state government for that matter. You just can't. And then if this is going to be the figure, where are the bets in the hospitals? So you have not identified. You identified the risk, but you did not assess the risk properly. And you could not mitigate that risk properly. In the very first instance, it was suggested by certain organizations that you could take the playgrounds of these schools. You could take certain other places wherein the bets, believe me, Vikasji, I personally feel, if the government had made an appeal to the people, because one bet costs about the lack of a rupee, there are enough of organizations, there are enough of people who would have been willing to actually buy out these bets for the various places. Even if temporarily, whatever arrangement got to be made in the playgrounds of the various schools, the bets facility should have been created. It has not been created. And what happened on 31st of July? It is a horrifying situation to be in. And this is not only in Delhi. I think if I talk only of Delhi, this will be the biggest blunder on my part. This is going to be the position in Maharashtra. This is going to be the position in Tamil Nadu. This is going to be the... And figures today, to my mind, I'm very clear on that. These are all understated. The reason being for the last four or five days, we are looking at the figures which are more of a barter price, as we talked informally also. When I say barter price, the figures have been coming 9987, 9983, 9997. They just don't want to touch 10,000 somewhere, because 10,000 gives you a different impression altogether. And I think in the next three days, we will become number two in the world, probably. We are going to surpass UK in any case. We may not surpass Brazil, but we are definitely going to surpass UK. And we will become number three at least in the entire list of the cases, infected cases, so far as coronavirus systems are. So what one is trying to say is that coronavirus, COVID-19, has exposed the risk management system in the country itself, if you ask me. Where is the disaster planning? I don't think that I see that kind of disaster planning which should have been there, both at the central level or at the state level, because when it is going to peak now and we don't know when it is going to peak. If you want my honest opinion, luckily the death rate is very low on an average. It is about 2.8, which we talked of, but in certain states it's very high. I was shocked yesterday to look at the figures of UK. In UK, the death rate is very, very high comparatively. Their recovery rate is very slow. They recover out of more than 260,000 cases. Their total recovery is hardly 1400. I think that is where, and their deaths are much, much huge. And we can't take solace from there, but I think that's one thing that we have to be very clear. Probably the coronavirus, now what is being talked of is that the coronavirus that they have taken is from Europe, which is far more severe. And we have taken it from California, probably which is lesser severe. And that is why, and probably the people have been talking, the doctors have been talking, since we have been all injected for the BCD, et cetera, that risk is already covered in our childhood. And that is also one of the risk mitigations probably. When our child is born, the kind of injections that he takes, basically, the risk is mitigated at the very first instance, because the parents identify the risk, the doctors identify the risk, and the risk mitigation actually takes place at that particular point of time. Now coming back to the broader perspective of the risk identification, assessment mitigation, et cetera. I think Naveen Ji has talked about the banks. I will say that so far as the banking is concerned, this is, to me, it's a mind-blowing situation to be in. The entire banking system is flooded with liquidity, if you ask me. This is what Kishore Sahib also talked about. The RBI released more than 3.8 lakh gold rupees, so far as the liquidity was concerned. But are we willing to lend it to them? And why we are not willing to lend them? I think that's very important to be understood. One risk which the government never identified was that if you let loose the machinery of CVC and CBI and CNAG, after the banking industry, the morale of the banking industry goes down and people are not willing to lend in those situations. We may or may not agree to that situation, but the fact of the matter is that unless you boost the morale of the banking industry, unless you tell them that there is always a business risk, after all, the banking runs the business risk of lending and not being able to recover certain percentage, maybe 2%, maybe 3%, maybe 4%. Of course, some of our banks have done absolutely reckless lending and where the defaults were as high as 16%, NPS went up to 16%, NPS also in case of certain banks. That was reckless. Absolutely no doubt. Whatever is to be done in those cases, that should be done. But so far as genuine business decision of the bank that are concerned, my humble appeal to the government is, we should try to distinguish between the genuine decision and the in-genuine decision. And if we can create that confidence in the banking industry, I think this liquidity can be made use of and whatever risks that we are running today of running into the negative GDP, probably that could be overcome in those cases. Very frankly, whether you talk of banks, you talk of manufacturing companies, you talk of exporters, you talk of trading, you talk of professional firms, all these organizations have the risk factors. But believe me one thing, Vigas ji, I personally feel the kind of risk identification that I have seen in a Banyan in Chandni Chowk. When I say this, I really mean it. Or in a Marwadi, I've never seen in any of the professionals managed groups, if you ask me. Because a Marwadi will be able to tell you what is the exact risk. Whereas we keep on talking about the risk management process. We keep on talking about the risk identification, risk assessment, risk mitigation. But what happened to Lehman brothers for that particular matter? Three months before nobody knew what is going to happen to Lehman brothers. Three months before nobody knew what is going to happen to Enron. Three months before nobody knew what is going to happen in ILFS. None of the board members actually knew. And each one of them, very frankly, had absolutely the same top class, so-called top class, I'm putting it in inverted commerce, so-called top class risk management system. But whether any of those organizations were able to identify the risks. It is not important to have a system. It is important to implement that system, or run that system and run it effectively and efficiently. I personally feel all over, I think whether it is Europe or it is states, or it is India or it is anywhere else, may not be in China for that matter. Because China is a absolutely different way the economy is run. All over other places, I think it is more of decorative, so far as the risk management systems are. Otherwise, I think our Indian Marwadi businessmen can identify and assess, and I mitigate his risk much better than anyone else for that matter. I'm not saying that this risk management system should not be there in the organization. But what I say is, if these risk management systems are there, after all in ILFS, if you ask me, we had the risk management, but we did not have the meetings of the risk management committee for three years. And I don't want to name the chairman of that particular risk management committee, the top most person in this country for that matter. I will not like to name the person in a webinar for that matter. But what I'm trying to say is, all these organizations have their systems, but those systems is more important whether they are run the way they should be run, or this is not on the way these are being run. And when these systems you implement and you don't run it properly, it results into huge losses as it happened in ILFS for that matter. Can you think of a situation where the risk management committee is there? The normal leverage ratio should not be exceeding six times, basically. And in that case, on the consolidated basis or consolidated basis in ILFS, what I am given to understand, their leverage ratio could have been as high as the 23. I think this is absolutely absurd. And nobody asked for it at any given point of time. We all talk of banking. Bankers themselves in a very large number of cases are to be blamed for certain things, believe me. Because the loans are not going haywire, just otherwise it is because we did not actually implement the systems which were actually given to us for managing our risk. After all, why we talk of the monitoring of the various advances in the banking system? It is only to cover that particular risk. But if the people do not verify the inventories, if the people do not even take the financial statements from the parties, if the people do not even look at what is being given to them, then whatever system you run, you talk of monitoring of the advances, the monitoring system absolutely failed. I can tell you of a particular case where the finished product was being sold at 1300 rupees per kg. And it's work in progress was being valued at 2400 rupees per kg and the limits were being granted against 2400 rupees per kg. So who is at fault? It is not anyone else. It is the banking system itself at fault. But the point I'm trying to make out here is the systems may be there, but rather those systems are being run, those systems are being implemented, those systems are being checked for the purpose of running efficiently and effectively. I think to me that is far more important. I will also like to come back to another thing that this entire banking part which is being talked of today, the economic package of 20 lakh toll which was announced by the government. Now one way about that, if at all this package has to come, the package should be able to boost the economy, boost the sagging morale of the industrialist. One of the tough task was that in during the lockdown period particularly and at least a month thereafter. When you have absolutely no turnover, I will give you one example. During the month of February, 2020, not even a single car of any brand has been sold out in the country. And if the people were made to produce in that particular period without selling, how could they afford to pay those wages? I think certain concessions should have had come from the government directly to the industrialist. But I think we all know the situation. So far as the funds of the, as I said, that government has already lost of more than 6 lakh crore rupees because of the revenue. So probably the government also finds itself in a very different kind of a situation post-COVID-19 that it is falling short of. And then if at all we talk of deficit financing to the government, and I think I may be, I may stand corrected by Kundrata if I'm wrong. If the government has to actually boost the economy, if the government has actually to come with some kind of infrastructure funding, the government needs to resort to deficit financing. And if you resort to huge deficit financing, you will have to risk to growth with the inflation also at the same time. Though people like us may think that it may be possible to risk to the growth and rather it is imperative to risk to the growth with the inflation because that the growth is more important than anything else. But then at the same time, if you resort to too much of deficit financing, your currency rating goes low in the world. And then what happens in those circumstances? Already the rupee which Kundrata has already brought out where our rupee stands, we have the dollar I don't have to say. But the effect of the matter is that the position today is that if the government does not pump in money into the infrastructure politics, the one good thing that the government has done is that 40,000, that we are talking of gold rupees to the MREGA scheme, I think that's absolute because the way the unemployment does reason. I think Mr. Anil Peshawara talked of unemployment. If we are unable to control the unemployment, there could be social unrest also. There could be social problems. So to me, what is more important for the government immediately to ensure because that risk identification has to be there. One of the paramount risks in the economy today is the spread of the unemployment. And if the unemployment suppress beyond a particular point, the social problems come in. I think the government will do well. I think they have already said that 40,000 crores will be given besides whatever was planned earlier in the budget for MREGA so that people can be deployed because someone said at a given point of time that to avoid employment, you should put the people to dig the holes and then to fill it them again so that they are not actually, because if you are not having any work, your mind is devils mind basically. So I personally feel that one of the most important factors today in the economy is to make sure that there's no unemployment spreading. If the unemployment suppress which has already happened, when more than unemployment, I think so far as professionals are concerned. So far as labor is concerned, it's unemployment. So far as professionals are concerned, it is both unemployment and under-employment. I think there also we are running the risk. Whether these are chartered accountants or these are lawyers, I think we are all running the risk of under-employment. Our fees are going to be cut and fees are going to be cut substantially. The companies are faced with the risk today and I think that's one of the risks that we will have to mitigate against. With the collection, there is bound to be a very slow recovery so far as the collections are concerned. And on the other hand, the government has enhanced the scope of the MSMEs. They have enhanced the limits for the MSME sector for that matter. If you enhance these scope for the MSME sector, if you bring more MSMEs into picture what is going to happen? That every industry is bound to make a payment to the MSME within 45 days. And if you don't make the payment within 45 days, you have to make the payment along with the interest. From there, does the payment will be made with interest? If you are making 70% or 60% of the sector as MSME, if each one is to be made payment in 45 days irrespective of the recovery that you make, I think that's going to be a problem area in the time to come. I think Kundras have talked of certain sectors. You look at hospitals, you look at hotels, you look at aviation industry, you look at the tours and travels for that particular matter. These are the sectors which are going to be wiped out. Some of the companies will be wiped out if you really ask me. There is absolutely no hope for them in the future. We as chartered accountants are actually struggling to find out which of these hotels, which of, after all, Oyo is gone. If you really ask me, Oyo is in a deep problem today because you need to have tourists to be kept going. Even if you open the aviation industry today, you say, okay, planes can fly. People are not going to travel. People are not going to travel for the next six months, believe me. I have been the one who has been a frequent traveler all over the country. Today, if somebody tells me that you have to travel for a lecture, I will say, I am better off with a webinar rather than with a seminar. I will not like to meet the people. I will like to meet the people only through this. I will like to contact the people through this because more important ultimately is, as they say, everyone is scared of death. So to me, what is more important is the life. If the life remains, we'll be able to see the people again. And if the life is not there, who sees whom? I think all this industry, aviation industry, the tours and travels, the hotel industry, they are going to be wiped out. The three industries which will continue to flourish in this post-COVID-19 period will be pharmaceuticals, will be power distribution for that matter, if you really ask me. The government has already funded them. Even from the angle of whatever payments they have to make to the power generating companies. So power generation as well as power, you can say transmission is going to be one of the key areas. And telecom industry. We could never assume the webinars through the Zoom like this. And what is happening today is virtually every, if not every day, every second, everyone is on some webinar or the other. So telecommunication industry is going to grow. Today, the school students all on, are all on telecommunication basically. They are studying through the internet. So this is another industry which is going to grow. So far as the textiles, et cetera, is concerned, so far as the food industry is concerned, I think the future of this country. If at all we need to actually, you can say mitigate the risk to the economy, we need to put our emphasis on the agricultural sector. In our case, 60%, more than 65% of the total tax collection come from the service sector. There were, we are still an agrarian society. If you ask me, you look at how many people live in the rural areas, whatever entire emphasis are shifted to the service sector. I think we have to bring back the agricultural sector as a main economy. The food industry, et cetera, is the future of this country. And the one risk that we are running, you see there may be a, people say that there is enough of liquidity in the market. But if you go to a shopkeeper, he says there is a liquidity crunch. Banks are flooded with liquidity, but not the shopkeepers, believe me. That's the situation. I think the government will have to identify how to overcome this particular problem. The reason being that there is no buyer in the market. Then if somebody goes to a jewellery shop, you don't find the jewellers, you talk to one, any of the jewellers, and I think Mr. Pundra talked of that the impact is going to be long-term. People are going to sit on cash. People are not going to open up their wallets. So that is the biggest risk so far as the business is concerned. So to my mind, what is more important at the end of the day is that somewhere or the other, whatever we may continue to say, what is more important is to identify, to assess, to mitigate the risk of liquidity creation in the market as a whole. Liquidity only in the banking sector is not going to help you under any circumstances. NDFCs are starved of funds. Whatever anybody may say. Of course, no, what is happening is that they are able to sell their portfolios and then recover somebody from the bank, and then they are able to, they are trying to actually infuse that further into the system. But otherwise, NDFCs have been starved of funds in the recent times. So I think as we move on, it is going to be something different. And frankly speaking, I don't see any new project coming up. Our startup, the greatest risk that this come the country faces today is we don't have the projects, the new projects coming up. And I think that's for the banking industry to also identify how to really bring the new projects into picture. The startups are going to die out because they don't have the money. They don't have the wherewithal to survive for the next three to six months. There's no way that it can happen. So probably somewhere that those of money, the liquidity must flow to the right channels. If at all these risks are to be mitigated. Unless we do that, I don't think it is going to happen. So far as various companies are concerned, I think one of the clauses I have, which is going to be involved very, very, I think at RIMP, you can say at a large scale, is the force method. Wherever people are in the rental premises, particularly in the malls, and the malls are not functioning. And the people know I'm talking of a risk, identification, assessment, and mitigation. Now, wherever the agreements have been entered into without a force measure clause. Number one, it is still to be decided whether it is a natural calamity or not. But look at those agreements where the force measure clause has not been put in. What kind of a risk identification was done by anybody or risk assessment was done by anybody? So I think this is again a classical example that when we do something, we should be looking at all kinds of risks which can arise to us in future. Today insurance companies are at a loss. They don't know what to do because if they have to really get into the profit, the loss of profit policies in the manner that these have been prescribed, I think the kind of claims which will be flowing to them will be absolutely a different amount. They never bargain for this kind of a situation in the earlier cases. If I look at my own profession, if you ask me, I think we always say as chartered accountants, I tell you how we try to identify the risks, how we try to assess the risk, how we try to mitigate the risk. I will just give one example and that is where I will stop for that matter. We always, when we go out for any audit, we try to understand the business. What are our risk areas in this particular business? What are the points which will be material for us to really take up so that the material misstatements don't occur in these financial statements? What kind of sample I should be picking up for the purpose of audit? We should be able to capture the majority of the transactions, all kind of transactions. What kind of sample in a particular head should be picked up so that I don't run the risk of the material misstatement? I also try to pick up. I try to establish the maturity levels. Basically, what size of transaction should I pick up? Which will cover my risk. I plan the audit because if I don't plan, I plan to fail for that matter. Then I generate audit evidence. Why do I generate the audit evidence? Why do I collect the audit evidence? I have to tell my professional brothers, I collect the audit evidence only for one reason, that if tomorrow something goes around to the unit, and if at all some professional case comes against me, I should be able to save myself against that, showing that I had done my job professionally. I had exercised all dubious and care which was expected of me for that matter. And then I try to follow all auditing standards basically. I try to seek external confirmation from the creditors, from the debtors, from the parties to whom the advances have been given. Why do I do it? Basically, to make sure that whatever is being reflected in the books of account here as the balances, the same balances are actually due, either to them or to us. So that is the way I try to cover my risk. I identify that particular area and I try to actually cover up that particular risk in those cases. So my humble request to everyone is, you see today the banks are faced with the risk of that if you lend it now under the present circumstances, there is going to be a risk of defaults. Re-logging. So Mr. Naveen, there's some problem with the Mr. Chopra he's trying to log in again. And this is one issue which we have learned that despite the fact we were all talking of what difficulties would be perceived. This is another classic case of the fact that we perceive in a different way, we conceive in a different way, but delivery is in a different way. Meanwhile, since you are a banker, as Loni Kotham says, what can be the possible disadvantages of the banks being merged in the context of employees and what could be the advantages? I take a step further. See the banks, first of all, we have to go to the background of why the banks have been merged. The background is just to make the banks bigger. So as they say, the bigger ship, because it's difficult for a bigger ship to sink, so that was the intention behind the mergers. It was being tried for quite, this is quite long, but probably there was a lack of critical will or whatever. And so many arguments were given in favor and against that. Finally, the government, this government took the decision and now they have merged the banks. Merge and your identities are, this is a reality now. And the question is on the disadvantage to the staff. See, this government realized that it's a pyramidal structure and in such structures, there will not be so many opportunities for the staff. And if staffs feel demotivated, they may not cooperate in the mergers, which was absolutely necessary. So what they did, they said that we will give the best of the perquisites out of the merging entities to all the employees. So, there has been a merger of Oriental Bank, PNB and United Bank. So if United Bank is giving certain perks to its employees, which PNB or OPCs are not giving, so that will be adopted. Similarly, any perquisite which PNB is giving, which is better than the other two, that will prevail. So there will be a willing situation for everybody. So this was the first advantage, encouragement to the staff. Second thing was that they created a new post of Chief General Managers. Because they thought that that will give a fillip to the top management employees. So then they get another opportunity, which they would not have got in their own banks. So that was introduced and that gave a lot of boost to the employees. So many people are promoted as Chief General Managers. So another, you can see that they did. But eventually, they will have to come up with the VRS. Because you will observe that in a single market, there are three branches, one of PNB, one of OPC, one of United. So it is no point in carrying all these three branches, carrying forward. So two will have to be closed and merged with the one. That is the place where the costing will come for the banks and the staff will become surplus. So they will have to come up with a voluntary retirement scheme where the staff will be forced to take the VRS. So that eventually, I mean, this is going to happen and this is where I find that there will be a disadvantage to the staff. Otherwise, to begin with, they are given all the advantages. Anything else on this? Vikas Ji, I am back. Are you able to hear? I am able to hear, but I don't know, Vikas has gone mute, I think. I think they have gone on mute. There is something wrong with the connectivity. No, no, it's not. I said that the control of the entire muting and muting is at the other end. So I was just saying that once your screen was frozen, I said that this is another example that sometimes we perceive in another way. But the conception is another way and the delivery is another way. But this again shows that once Mr. Chopra is giving a delivery on risk management and economy. So what was the risk management was that he should have a second backup and he showed that once you have a second backup that it shows that you can move forward out of the things. But if you don't have that, I was just reading once. It said that if invariably we say that the plan A fails, then what to do? He says that there are 25 more alphabets than you have to work on the 25 alphabets. So Mr. Chopra has said that at least A has failed, but B has failed. So it was fine. One question I have just received from the WhatsApp. Either of you can answer and then it can be buttressed by other way. That would be I think the better way to go about. This is by Simran Gandhi. How will our economy achieve accessibility in online education for so many students? How? Online education for so many students. How will our economy achieve? You see, let's say one thing very clearly because there are still problems in achieving this connectivity. Because I can tell you of Karnataka because of some problems because earlier the schools started even with the KG level and the other levels and they started connecting with the students and then they started showing, playing various games with them. So the connectivity and the pressure on this internet started happening. So now the Karnataka government has said that so far as the children up to I think class 5 is concerned, you will not get into any of the internet, these online studies for them. So, but I can tell you one thing, COVID-19 has done a great job for us and I always believe in one thing in my life. Every adversary has got an opportunity. This COVID-19 has connected us through the internet beautifully. There's no doubt about it. But yes, there are problems. I can tell you I was in a budget meeting yesterday somewhere. There were a lot many issues. So far as the connectivity, sometimes the sound would go off, sometimes the video would go off. But still we could ultimately conduct that meeting. And today every AGM is happening through the virtual mode. Your webinars are taking through the virtual mode. Your board meetings are happening through the video mode. Your audit committees are happening through that. Education is also happening. The teachers have to be trained actually in that particular direction also and the students also. The only factor that I find is that somewhere or the other, like in Delhi, Mr. K. Trival at one time had actually promised that there will be free Wi-Fi to everybody, which has not happened, if you ask me. If the government can provide free Wi-Fi, then the downtrodden people can also learn through this internet. I think that's very important. That way they have to spend about 2,000, 2,500 or 3,000 rupees to take the Wi-Fi connection, which is a burden on that. I think somewhere or the other we have to make sure that that burden should not be on the poor people. Otherwise this education through internet is a boom if you really ask me. Sir, another question is by Professor Aras Tharu. India is shifting from mixed economy to the capitalism. That was the first question. Yes, and please give your insights to the shifting government to PPP. PPP would be that public private partnership. I would like Kundra sir to supplement me later somewhere. You see what happened under Mr. Narsimha Rao. I think the unsung hero of Congress, if you ask me. I always consider him to be a unsung leader of Congress. He is the one man who changed the complexion of Indian economy. He has changed the course of the Indian economy. See if it had come from BJP, it was expected of BJP to do it. Actually to shift from socialistic pattern of society to capitalistic pattern of society. We always used to talk when I used to study B.Com between 1968 to 71. We always used to learn in Sundram's book or in any other book that we are a mixed economy. And we always used to say that if you walk in the middle of the road, you are bound to meet with an accident. Very frankly, either you walk left or you walk right. So when Mr. Narsimha Rao came in, he actually introduced something by opening up the economy that capitalism can be assured in to an extent. But at the same time, the public sector also continued. There is no doubt about it. But today if you ask me, we are in for a period where the public sector entities are being sold out. If you ask me, the banks are being merged into one. I'm not saying that the banks are being sold out or are being privatized. But it is a matter of fact that PSUs are up for sale in certain PSUs. But most of the strategic PSUs will continue to be there. So we are still in a little bit of a socialistic pattern. But I think we are moving towards the capitalistic pattern. And when we talk of this triple peak, basically, public partnership mode, I think what has happened in the bargain is that the land is being given, some resources being given by the government and the other resources being brought in by the private party. But if you really ask me, there also it is the resource of the government only. If you ask me this entire airport which was built in Delhi, it was not out of the funds of, you can say GMR. After all these were the bank funds and banks were all again PSUs for that matter. Yes, the GMR brought its own contribution to the extent that he could have availed the loans. But if you ask me, the major money came from the public sector banks, which was again the public money. So if we say that triple peak only means that we are moving towards the capitalism, no. But to an extent, yes, the reason being that who has what, 30 years or 25 years that you build a road today, you build a bridge today. And then after 25 years, it will be shifting back to the government. Who knows what is going to happen after 25 years or 30 years. I and you will not be there at that particular point of time to see that. And whether the clause may be applied or somebody will be going to the court, who knows what is going to happen. But yes, to an extent, it has enriched a lot of private sector if you really ask me. But at the same time, the government didn't have the money, very frankly. And the roads could not have been improved. The roads have improved only because of the PPP for that matter. The airports have improved because of the PPP. So that point that PPP is, I remember that once we used to go abroad, the general common feeling of any Indian as usual is that it is always easy to criticize. Not only in Indian, it is easy to criticize the government rather than raising a government. We always used to say that the airport abroad is so good, but whereas in India, it's not good. Now it's other way around, people say that if you go to Mauritius, I've been to Mauritius, the Mauritius airport, as I was Indian, you cannot compare. So the airport gives you a sense that why you are leaving, that you are leaving a very good country maybe for a week. Sir, that leaves things. I want to add one thing here with us, that late minister Arun Jaitley, the finance minister and I think one of the best brains that BJP had ever, used to say that we have already reached the international level so far as the airports are concerned, but we are yet to start with so far as the railway stations are concerned. So I think the next has to be on a PPP mode if you really want to ask me to improve the railway stations if they can. Sir, before taking questions, let's assume for a moment, like we had a movie of Anil Kapoor saying that for 24 hours you were given a decision. Let's think that you are given what three good decisions you will take that according to you can give the economy further moving. Number one, I don't think that it is going to happen in any case. No, I'm not saying it's a presumption that sometimes a good insight can be taken by anybody. I think one thing is very clear to me, but it's more important is the bureaucracy's role has to go down somewhere or the other. I think the bureaucracy has become very strong in this country and bureaucracy does not allow certain things to happen for certain reasons that they know only best for that matter. The other thing that one needs to do is to really make sure that the money and I think to an extent the government is trying, the money actually reaches the people whom it belongs to very frankly and for that, when I'm trying to focus on that, I will like to focus on the agricultural sector a lot. And the third thing that I will like to make my emphasis is the reduction of the unemployment because I personally feel this unemployment is the pain of many other problems which we are not even able to see today. That is the most risky job because you are a lot many social unrest problems can come in if the unemployment persists in the country. So somewhere or the other, you have to really give weightage to, you have to focus on your poor strengths. We broke that, which was our cottage industry where our labour intensive work used to be. We broke that and we went to those capital intensive units where labour is less basically. I have no grudge against the capital intensive industry but I think the unemployment is rising as a consequence of certain factors. We need to rein in the unemployment otherwise we are going to face other problems which we cannot even foresee today. One question is by Advocate A Murono, how risk management works? What are the ways to work on that? In banks? In both ways. You will have the insights of both ways. First Mr Naveen can give on the banks, then we will ask Mr Chopra to give on the economy. See risk management in the bank is basically based on one document that is known as ICAP, that is internal capital adequacy assessment process. So what is capital? Capital is basically to absorb the shock of the losses. If we are adequately capitalized, then even if our loans go bad, we have enough capital to take that shock. So what capital we are having? What are our projections for the year? Means how many deposits we are going to have and how many advances we are going to lend and what NPS we have at present and how much recovery we are expecting in that and how many more NPS we are expecting. That planning is done initially immediately after the closing of the books. That is 31st of March. Immediately after that in the month of April, the management gives a guidance that this is what they are going to do and this is a planning and strategy for the year. From there, the risk management takes over. Based on that, they prepare this internal capital adequacy assessment process, this document where they calculate the capital required for the growth. Whether we will be earning enough profits and that by the surplus, we will be adequately capitalized. What will be our operational risk? How much capital will be consumed by the operational risk we are carrying and how much capital will be consumed by the market risk? Because presently as per Bessel and as adopted by our reserve bank, the banks are calculating capital on the three risks only. That is credit risk, market risk and operational risk. Based on our strategy, based on our planning, that risk is prepared and then we see that how much risk we are giving to a particular department. If we are telling them that, okay credit, we are giving you this much of capital, so now you have to have the risk weighted assets according to that capital, like how much you will lend in the retail sector because the retail, they attract lesser capital, the risk weighted assets are low here because there is, guys, they are low because the risk is low. Similarly, for large corporate advances, it is higher than what kind of advances you are going to take. Like if you are going to take, you are going to lend only to triple A companies, here the capital requirement is only 20%. So with lesser capital you can lend more and lending more and that to save lending means you are earning more profits. So based on that, the risk management initially, they prepare this document and present it to the board and get it approved. And then it is distributed to the business heads. Okay, this much capital you have to work according to that so that our capital remains intact and whatever capital requirement is there as per vessel that is achieved at the end of the year. This is how, then one thing more I would like to add here is then when the reserve bank comes for supervisory evaluation process, there they base their own assessment or their own audit on our ICAP document. And then they start seeing that if we are projected that we will be having NPAs of a particular number or a particular percentage by the end of quarter or end of September or end of December whether we are following it, I mean, are we adhering to it or otherwise like our NPAs are going much beyond that fingers. So they will realize that where this bank is heading towards. Whether that means what we have planned, whether we have stick to it, whether we have monitored and whether the bank has, I mean, how strong are the bank's policies, how strong are their corporate governance. It all is judged by what we have planned and how we are going in the year. So that is how the risk is managed and the risk management, I'm telling you for general topic, I mean, it's very easy to see that higher the risk, higher the profit, lower the risk, low profits. So if the bank is giving the advances to the highly rated companies, the banks are going to earn very little interest just at our MCLR. But then the probability of default in such advances is quite low. But if we are going to give the advances to low rated companies like double B, there are risk rate is 150%, we may get higher interest, but then the probability of default is much higher. So I mean, that is what we face eventually. So it is proper corporate governance of the banks. If they are there to the ICAP, there is no problem that is properly identified, mitigated and these are such issues. I hope I've been able to explain because risk management itself is a very, very vast subject. I have to explain what it is from the banks perspective. The insights have been good. They say that a person who is good, even if he gives it in the capsule, capsules give the right impetus to the entire thought process. Mr. Chopra, what would be your input to this? No, I will only say because you asked me to talk about the economy. Yes, sir. See, any government will like to make sure that how the growth can take place because here when Mr. Kundra talked of, he talked of the profitability of the bank very frankly and not taking too much of risk with the advances. In the case of the government, the government has to actually budget the growth. What will be the growth in the GDP numbers and what kind of growth will make sure that there are no distortions of income basically and wealth? Though it has not succeeded in India, very frankly, if you ask me, the richer has become richer, the poorer has become poorer over the last decades. It's not one. No government has been able to really re-enact it. The inequalities of income and wealth have actually increased. These have not come down despite the high increase in the per capita income of the country. The other thing that the government has to make sure, while aiming for the growth, is that there is no unemployment which is created. Somewhere or the other, the unemployment has to be re-enacted. They have also to consider that the inflation also does not take place. They have also to consider that somewhere or the other, the areas which are underdeveloped or undeveloped, these are also actually developed under certain circumstances. The gender bias should also go away in certain circumstances. So when government plans for the growth, government plans to grow from different angles basically. There cannot be one recipe to it, if you ask me. That is why when the budget is presented, the budget is presented from the agricultural sector angle, the industrial sector angle, the service sector angle, even to look at the backward areas angle to make sure that you invest in the space also so that you are able to keep pace with the world for that matter. You have to make sure that you are able to keep your security intact, you are able to invest in the defence also. So what is more important is the government will have to plan its growth along with its collections and the disbursements, the entire expenditure. And then to make, to come to a point where they feel that the deficit financing does not go beyond a particular point, whichever is good that they consider. Like in India, I think of late, we have been actually trying to reduce the deficit financing as much as possible. Though in the coming year, if you ask me the new budget, I don't really have higher deficit financing because you require more money today to go ahead with it. So what money, when the government looks at it, the government looks at various risks. The government looks at that if you close down something, the unemployment may be created. You need to create employment also. You cannot risk inflation also though you are feeling today that the deficit financing should happen. But they know that the risk is that the inflation will take place. So they will not like the inflation to take place in those circumstances. So the government has also, in the case of the banks, if you ask me, the government has not given money to the banks. The government has only said that we are willing to guarantee the loans to the MSMEs to the extent of 3 lakh crore rupees because the government should have the funds to give it to the banks. I think that's very, very important. The government has to actually do the risk management with regard to its own resources also. That you cannot give more than what you have. So to my mind, the government under the circumstances, these are very, very trying circumstances if you ask me. And the government has tried its level best. Of course certain matters may not be conducive to the industry or to the growth of the economy right now under the COVID-19. But I think the government couldn't have done better because the government must have the money to give. You see one of the respect, I will give you one example. Worldwide the crude prices have come down. And come down even on one of the days the crude prices went to negative if you ask me. But in India the crude, the petrol prices and diesel prices have actually gone up. These have not come down. Because the government levied more of the taxes in the bargain to make sure that because if the people are already used to rupees 70, the government feels that you are used to rupees 70 per litre of the petrol or diesel for that matter. No, what the government is trying to do is to utilize that particular money for the developmental activities which the people may not even come to know under those circumstances. So I think the government does its own risk management by the various means which we may not be able to understand in the short run. And I think the classical example that you keep on raising the duties of the petrol, you don't allow it to come down because people psychologically are tuned to a particular price and you utilize that particular higher duty towards the development of the nation. Thank you for the insights. Three things before we wrap up, the questions can continue, the show can continue. As you rightly said, it's very easy to criticize anything but the art of balancing that the economy is also doing well, the risk management also done well. It's an art, it looks very easy. It's just like, I'm reminded though a large number of people say that you always connect something with the sports. It is just like a player comes on the last death overs and he's asked to bat. If it doesn't hit a stroke and he's out, he says that he was too slow. If he's out because he's trying to make a six, people say that he was foolish that why did he go for a six when it was required that it is cautious. So actually the one who's at the helm of the affairs, he knows what are the critical points which have to analyze because they say at the back of maybe I am discussing, you are discussing, Mr. Levine is discussing or anybody on the common platform or for a public to discuss, it looks very easy. I'm just reminded from one of the famous quotes, it said that if to do was as easy as to say then poor would have lived in the palaces and horses would have flown. So the discussions can lead us to a positive conclusion, your discussion Mr. Kundra, Mr. Kishoria. We can move positively. These discussions do lead to a positive directions, but they say that if the thoughts become your words, the words become your action. So until and unless we don't actually decide on a particular aspect, it is very, very difficult for us. But it has been a wonderful session. Questions are still pouring in but still to maintain the balance as we say that risk management and economy. One has also to be prudent in a webinar that we shouldn't take the webinar to that extent that eventually only three people are listening and we are not moving ahead. The positive directions are what have to be considered but always be considered in the right way. Otherwise the questions will keep on, change upon as to whether the government was right or not. Whether the economy was bad or not. As you rightly said that the migratory labor, yes, you are right. No newspaper, no magazine was initially envisaging. When it actually catalyzed our snowball, then they say it is easy to criticize then actually perform. I will ask Mr. Lavneen before we part what are the stakes on this thing and then from you and then we will actually wind up. Mr. Lavneen, what is your take? How do we move forward? What do you see in the future? See, I would like to say here that the government will have to open up its purse. They will have to invest in the infrastructure. They will have to spend rather I would say. So that actual money flows into the market. People are employed. If they are employed, they will have their own demands. They will spend, they will spend. The government should not bother about the deficit financing at this stage. Because spending is more prudent at this stage rather than speaking to the goal of deficit financing. Because government can spend a lot more and supposing they open their purse and then there is a lot of development in the infrastructure side. Lot of people, lot of many people will be employed. Economy will grow. So they will go for their own loans. They will go for housing loans. So unemployment will create a lot of problems for the economy as well as for the banks I would say. Because people, an unemployed person, they cannot pay their installments or EMI's. So employment will generate a demand that will give growth and the things will flow. Government right now should just open up their purse. They should spend left and right and see that the comfort is achieved in the economy. Mr. Chopra, your next. No, I think what Kundaraj is saying may be fine. But the government needs to have money in any case and the government will have to balance it with the inflation risk also at the same time and the currency risk internationally. To my mind what is happening today is that the government is really banking upon. That's my take basically. We are heavily banking upon one thing and some of the industries from China would shift to India. Now these can be US companies, these can be European companies, these can be any other company for that matter. A lot of investment will take place so far as the FDI is concerned. They are all banking upon this. If we are not able to reform our labour laws, land laws, taxation laws, which are conducive to the foreign investment, I am really afraid that we might lose this particular opportunity. Earlier also when China's demand was actually because of the power cost, because of the labour cost, at that particular point of time when Chinese economy withered, the entire demand was met internationally by Vietnam, by Indonesia and Bangladesh. Countries like Bangladesh and Vietnam have taken over actually so far as the meeting of the demand, the index sales, etc. is concerned compared to us. I think India needs to reform itself with regard to labour laws, with regard to land acquisition laws and with regard to the taxation laws. There has to be a certain thing in the laws. You just can't keep on changing the laws too frequently. I think that's my take today with these three, maybe 300 companies, maybe 150 companies, maybe 200 companies, if these can shift from China to India, I think Indian economy after 5 years would be different and we would be discussing something absolutely positive about the Indian economy. That's my take on Indian economy. So far as spending is concerned as on deck, I am not very sure whether the government is really going to open up at first because if it was to be done, it should have been done in the 20 lakh crore actually stimulus in which it does not appear to be. There is an opening up of first to the extent of about 3 to 5 lakh crores, basically others is only a guarantee sort of situation of the liquidity which has been created by the Reserve Bank of India. There's no money which has been pumped in by the government except for the about 4 lakh crores. That's all I would like to say. Thank you very much. Thank you. The session, because of your inputs from all three of you, has given us a food for thought and for everyone who is the participant, we are thankful to the participants because a good stimulus thought actually gives a stimulating mind and stimulating minds can only create a better nation. Tomorrow we have a session by Honourable Mr. Justice, Katie Sankaran, former judge of the Kerala High Court. He has already come on this platform. Tomorrow, as they say, that it's somewhat related to the economy, the topic would be delivery, restraint to delivery and removal of resistance. That is, you have a decree, but how to go about it? It is just like we have the money, but how do we push forward? So those insights from Justice Katie Sankaran, I would ask everyone that one should join the session. They will give it to the participants. I am thankful on behalf of Beyond Law CLC and so as we started off this session, you said that this has, these COVID-19 has brought a different platform. You know that we all, at least we got connected through a case of a high court and thereafter we were always discussing, so we should meet together and who thought that on a virtual platform would be the first meeting and not actual physical meeting. So it also shows that if there is a will, like they say, inshallah, but he thought that at least you have not been able to meet, so we should connect through a virtual platform and through you, you became, as they say in Mahabharat Sutradha to get connected to Mr. Lavine Kundra and Mr. Anil Kishoria. We are on behalf of Beyond Law CLC and ULS Punjab University Chandigarh. We are quite thankful for giving the insightful things, how to manage the risk and how to be economy. They say once who is economical, even if it is a cricket, the economical bowler is the most prudent. So the same way, if you have a good chartered accountant and a good banker who can give a good impetus, we will all, I am quite sacrosanct that the economy would be robust and what you said after five years, I believe that if all goes well the way you say that China and all, once we have a belief, the belief is the hope and hope is the actual action, which could have been like this. Thank you. Once again, all the participants, stay connected, stay blessed, stay healthy, right sir? Thank you very much. Thank you very much. Thank you. Bye.