Mutual Fund CMOs, Are You Tapping The Stories In Lucknow, Ernakulam, Vadodara?

For the longest time, the Indian mutual fund industry was a story of latent potential as risk-averse Indians, even for their long-term savings, preferred the safety of bank deposits to the savvy of mutual funds. In recent years, that potential is starting to be unlocked as more investors gravitate towards mutual funds as a savings and investment habit. Where in India might be more money like that located?

It’s a business question for chief marketing officers (CMOs) of mutual funds as they try to find new markets and new investors. A dataset that can provide direction to that search is the district-wise data on deposits that India’s central bank releases on a quarterly basis, the last being as of June 2017.

This Reserve Bank of India (RBI) dataset carves India into 666 districts. For each district, it breaks down total deposits available with a scheduled bank into three categories:

Current deposits: Typically, used by businesses. For the sake of the question we are trying to answer, we will keep this aside, and focus on the other two deposit categories.
Savings deposits: Fluid money belonging to individuals.
Term deposits: Sticky money belonging to individuals and businesses.

Here are two takeaways from this dataset:

1. Metros matter: Much as India is growing beyond her big cities, its current economic nerve centres—and personal wealth—are still concentrated in and around the metros. There are only 12 districts where the total savings and term deposits exceeds Rs 100,000 crore. And they are spread across a wide range: from Gurgaon (Rs 103,772 crore) to New Delhi (Rs 1,009,694 crore).

In the map below, these are the yellow dots. Click on the legend to isolate them and mouseover on the dots to see which ones they are and their bank deposits. Other than the five main metros or their offshoots, there’s Hyderabad, Pune, Ahmedabad and Lucknow.
Mumbai and New Delhi stand out by a long way. The deposits in New Delhi, for example, are 9 times that of Lucknow and 4 times that of Chennai.

2. The 3 clusters: The map plots 169 districts that have deposits of above Rs 10,000 crore, divided into four bands. From the point of view of focusing marketing resources, there are 3 clusters that can be seen:

i) The capital cluster: Around Delhi, extending into Punjab, Haryana, Western Uttar Pradesh and Uttarakhand. This houses districts like Jalandhar (rank 26, Rs 55,779 crore of deposits) and Dehradun (rank 28).

ii) The Pune-Ahmedabad cluster: This belt runs from Pune to Ahmedabad, and passes through Mumbai—the biggest of them all—and touches several districts in Gujarat. This includes Vadodara (rank 17), Surat (rank 30) and Rajkot (rank 45).

iii) The Kerala belt: It runs along the length of Kerala, and branches off into Tamil Nadu at two points. This belt has 6 districts in the top 50, led by Ernakulam (rank 16), Thiruvananthapuram (rank 23) and Coimbatore (rank 29).

Then, there are smaller pockets, in terms of number of districts: for example, around Kolkata and Chennai. The question before mutual fund CMOs is this: are they maximizing the potential of these districts.

This data is also available as a time-series for the last 5 years for all districts, which can be used to identify stories of growth. If you are interested in an analysis of this data that is tailored to your needs, please contact us.

Read More

News in Numbers, Jan 5, 2017: What’s in your drink?


What is it? The number of impurities that a nanotechnology-based ‘dip-strip’ developed by a group of Indian researchers can detect in milk.

Why is it important? The test, which can be performed by anybody, is more affordable (mass production cost of each strip would be nearly 25 paise) and less time-consuming, and said to be a better alternative to the other tests such as infrared-based and chromatographic methods. Last year, the Supreme Court pulled up the food regulator for not taking enough action to prevent adulteration in milk and said that the government must revisit the Food Safety and Standards Act to revise the punishment so that it can act as a better deterrent.

Tell me more: A nationwide survey conducted by the food regulator in 2011 revealed that over two-thirds of the samples were found to be nonconforming to the prescribed standards and it was alleged that in some states, up to 100% of the milk samples were adulterated. The technology that has been developed can detect impurities such as urea, detergent, maltodextrin, sodium carbonate and hydrogen peroxide.



What is it? The number of observers the Election Commission (EC) will deploy in five poll-bound states – Uttar Pradesh, Manipur, Punjab, Uttarakhand and Goa.

Why is it important? These observers, drawn from the Income Tax (IT) department of the Indian Revenue Service or IRS (200), the Central Excise and Customs Department of the IRS (150) and other central services, are to check the use of black money and other illegal inducements during the polls. The tax authorities have also been asked to strengthen their Air Intelligence Units to check the flow of illegal cash and other items. The Financial Intelligence Unit has also been directed to inform the EC and the IT department of any suspicious deposits of cash in these states.

Tell me more: The EC announced the campaign election expenses limit per candidate for the five states on Wednesday – Rs 20 lakh Goa and Manipur and Rs 28 lakh in Punjab, Uttarakhand and Uttar Pradesh. Elections in Uttar Pradesh will be held in seven phases between February 11 and March 8, Punjab and Goa will go for polls on February 4, Uttarakhand on February 15 and Manipur in two phases on March 4 and March 8.


Rs 14.97 lakh crore

What is it? The amount the banks have reportedly received in high-value currency notes of Rs 500 and Rs 1,000 as of December 30, the last day for depositing the banned notes.

Why is it important? This is nearly 97% of the total value of money (Rs 15.44 lakh crore) withdrawn from November 9, raising questions about the usefulness of the exercise of demonetisation. One of the major criticisms of the government’s move to withdraw these high-value currency notes has been that it would not help fight the black money battle. This could also mean that people have found ways to channel their money into the banking system though the Income Tax department has been conducting a nationwide drive against black money hoarders. Some have argued that money coming into the system is not a bad thing, because it’s now accounted for.

Tell me more: As of January 1, the department had reportedly detected undisclosed income of Rs 4,663 crore and seized Rs 562 crore (this included Rs 110 crore in new notes). This was a result of 556 surveys, 253 searches and 289 cases of seizures besides issuing 5,062 notices to entities for tax evasion and hawala-like dealings.



What is it? The number of one day international (ODI) matches cricketer Mahendra Singh Dhoni has captained, of which he won 110 – a win percentage of 59.57%.

Why is it important? On Wednesday, the skipper announced his decision to step down as the ODI and T20 captain of the Indian cricket team, a move that took many by surprise. He has captained India in 72 T20 matches, winning 41 of these. Popularly known as ‘Captain Cool’, he holds the record for most matches (331 across all formats) as captain of an international side and is the only captain to have won International Cricket Council trophies – ODI World Cup, World Twenty20 and Champions Trophy.

Tell me more: The 35-year-old batsman-wicketkeeper, who hails from Ranchi in Jharkhand, had made a similar shocking announcement to quit Test captaincy in 2014 midway through a tour of Australia. Test captain Virat Kohli is highly likely to be named to lead the Indian cricket team in other formats as well.



What is it? The number of human organs including the most recent discovery – mesentery, which has existed in the digestive system for centuries.

Why is it important? Although its function is not clear yet, with further research, it could help in the understanding and treatment of abdominal and digestive diseases. The findings say that it is also unclear if mesentery should be viewed as part of the intestinal, vascular (circulatory system), endocrine (collection of glands that produce hormones to control certain functions), cardiovascular or immunological systems because it has important roles in all of them.

Tell me more: The new organ, a fold of the peritoneum that connects the intestine to the abdomen, was earlier thought to be made up of separate parts. The discovery that mesentery is a single structure was made by Irish researcher J Calvin Coffey in 2012 and along with his team, he studied the part to prove that it should be classified as an organ.


Read More

News in Numbers, Nov 24, 2016: Home sweet home?


What is it? The percentage of Indian millennials that live with parents, according to a survey.

Why is it important? This compares with 60% in China, 35% in Australia and 63% in Asia Pacific, suggesting that cultural influence of regions on families is still a strong factor and/or the high property prices and rentals could be a reason. A quarter of the Indian millennials have no intention of leaving their family homes (this is the highest among the countries surveyed and is more than twice the global average at 12%) while 23% said they would move out within the next 2-5 years. Indian and Chinese millennials have the strongest intentions to buy a property, the former for mainly investment purposes while for the latter, stability is the primary reason.

Tell me more: The survey included 13,000 millennials (those born between 1986 and 1993) across 12 countries in the Americas, Asia Pacific and Europe.


Rs 21,000 crore

What is it? The amount that has been deposited in Jan Dhan Yojana bank accounts in the last 13 days since the government announced the withdrawal of Rs 500 and Rs 1,000 currency notes. These are zero-balance accounts opened to promote financial inclusion.

Why is it important? This raises questions about the sudden inflow of cash into such accounts where the maximum deposit allowed is Rs 50,000. The share of zero-balance accounts (an indicator of inactivity) has declined to 23.27% as of November 9 from 28.88% as on February 24. The Reserve Bank of India (RBI) said on Wednesday that the Jan Dhan Yojana bank accounts are being misused to help those who have hoarded money and has warned of taking strict action against those involved in such unauthorised dealings. Suspicious accounts in these accounts have come under the scanner of the Financial Intelligence Unit.

Tell me more: The RBI, in a circular, announced that banks would not accept old currency notes in Rs 500 and Rs 1,000 denominations in small savings schemes such as Public Provident Fund, National Savings Certificates, Senior Citizens Savings Scheme and Kisan Vikas Patra, with immediate effect. Post office savings accounts are exempt from this rule.



What is it? The interest rate offered on deposits by India’s first payments bank rolled out by Airtel in Rajasthan on Wednesday.

Why is it important? This is higher than the 4-6% interest rate offered by commercial banks on deposit, and it also beat online marketplace Paytm that was planning to launch its payments bank on the eve of Diwali last month. Being the first one in the market, it would be an indicator of how successful this new model of banking would turn out to be in the country. Of the 11 that have received payment banks licenses from the RBI, three have already backed out of setting up payments banks and of the remaining eight, only four have a clear business plan.

Tell me more: Airtel Payments Bank Ltd will run its pilot at 10,000 Airtel outlets in Rajasthan and it plans to expand its merchant network in the to 100,000 by the end of the year. Customers can open bank accounts at the outlets without any documents with the help of Aadhaar based e-KYC (Know Your Customer) and basic services such as cash withdrawal and deposits can be availed.


Rs 7.5 lakh crore

What is it? The combined market capitalisation of the larger listed Tata Group companies on November 23.

Why is it important? This is down by Rs 1.16 lakh crore from Rs 8.7 lakh crore (as on October 24) before the ouster of former chairman of Tata Sons, Cyrus Mistry and the subsequent spat between the group and him. All the group companies have been impacted with the most erosion seen in TCS, Tata Motors, Titan and Tata Steel in absolute terms. However, in percentage terms, Indian Hotels, Voltas, Tata Global and Tata Chemicals have taken the maximum hit. Retail investors have lost about Rs 11,000 crore since the day Mistry was fired. The S&P BSE Sensex, an index of the 30 most financially-sound and large stocks, declined by 7.5% during this period (about half of Tata’s).

Tell me more: With the market regulator looking into any possible breach of corporate governance norms and listing regulations and the spat showing no signs of any abatement, it remains to be seen the extent of impact this issue has on the stocks’ value.


Rs 6 lakh crore

What is it? The total deposits received by the Indian banking system since Rs 500 and Rs 1,000 notes ceased to be legal tender.

Why is it important? An impact of demonetisation, banks have deposited Rs 4.1 lakh crore with the Reserve Bank of India (RBI) as of November 23 under the liquidity adjustment facility (a monetary policy where banks can borrow or lend money to the RBI with government securities as collateral). This is the highest liquidity absorption ever by the apex bank, surpassing the Rs 1.7 lakh crore deposited in May 2009. This is likely to put pressure on RBI’s government securities worth Rs 7 lakh crore and it may have to look at offering other collateral against the bank deposits.

Tell me more: With excess liquidity in the system, deposit rates have already been slashed by 5-100 basis points (a basis point is one-hundredth of a percentage point) by many Indian banks, which are likely to pull down lending rates as well.


Read More

News in Numbers, June 2, 2016: Call drop data in 11 cities, India’s first rail university…


What is it? The number of cities that will get access to call drop data in the next 15 days.

Why is it important? The naming and shaming strategy is expected to push telcos to improve their service quality, and keep the drops below 2%. Earlier, the Supreme Court struck down the telecom regulator’s recommendation of imposing penalty on telcos. Now, it is reportedly seeking the authority to do so from the government.

Tell me more: On Wednesday, the Telecom Regulatory Authority of India released the call drop data for Delhi. Airtel’s 2G and 3G call drop rates have deteriorated in May when compared to those last September while Vodafone’s 2G call drop rates improved (though still above the permitted 2% limit) and on its 3G network, it remained constant at 1.4%.



What is it? Percentage of loans given by public sector banks (excluding the State Bank of India and its associates) of the total as of March 2016.

Why is it important? It’s down from 50.06% in March 2015 and the lowest in over 12 years. The shrinking market share is likely to expedite consolidation in Indian banking industry. Recently, the Minister of State for Finance Jayant Sinha said India would have 8-10 competitive public sector banks “when the dust settles”.  

Tell me more: This is an effect of the central bank’s mandate asking lenders to clean up their balance sheets by March 2017, which led to categorising more loans as bad, increase in provisions and net losses, and deterioration in capitalisation levels. In terms of deposits too, public sector banks lost their market share – from 50.95% in March 2015 to 48.32% in March 2016.


Rs 865 crore

What is it? The cost of setting up India’s first railway university in Vadodara, excluding land costs.

Why is it important? The railway university, which would offer MBA, B.Tech, M.Tech degrees, and diplomas is aimed at transforming India into a global centre for research and development in railway engineering and management. Indian Railways is the largest rail network in Asia and the world’s second largest under a single management.

Tell me more: An internal report by the Railway Board last year had suggested the setting up of rail research centres and introducing railway-related subjects in existing universities instead of setting up new ones. The National Academy of Indian Railways in Vadodara is the apex training institute for all Railway officers.


Rs 20,000 crore

What is it? The cost of building a common Secretariat on Lodhi Road in Delhi to house various ministries (excluding a few key ones) and departments.

Why is it important? This move is likely to make inter-communication between ministries and departments easier and quicker and would also help the government in tackling shortage of office space, which often pushes them towards high rentals.

Tell me more: The proposal by the Central Public Works Department would be presented to Prime Minister Narendra Modi for his approval. This includes razing down of residential complexes of 4,000 families who will be provided with alternate housing.



What is it? The number of Delhi University (DU) teachers who have been protesting against some recent changes in University of Grants Commission (UGC) rules since May 24.

Why is it important? This affects the evaluation of answer sheets of around 1.3 lakh undergraduate students. They are protesting against the increase in number of working hours, difficulty in getting promotions, especially for Assistant Professors, and the likely loss of jobs for approximately 5,000 teachers, especially those in ad hoc positions.

Tell me more: The UGC has called for a meeting of all stakeholders on June 6 to discuss issues including the basis on which teachers are promoted and their workload and if the issues are not resolved then, it could lead to a delay in DU results and sessions.

Read More