This article investigates the impact of commodity transaction tax, in effect from 1 July 2013, on the information linkages for the Indian commodity market. We use daily data on five sample commodities—gold, aluminium, copper, zinc, and crude oil from 1 May 2010 to 31 August 2016. MCX has been used as a reference commodity exchange for India, while we use COMEX and DGCX for gold, LME and SHFE for base metals, and NYMEX and ICE for crude oil for international comparison. Price discovery has been evaluated using static and dynamic cointegration procedures, while volatility spillover has been evaluated based on BEKK-GARCH and Diebold Yilmaz models. We find that CTT imposition has weakened the price discovery and volatility spillover process, thus reducing the price and hedging efficiency of the Indian commodities market. For gold and crude oil, the information linkages have been severely hampered, owing to their international character. For base metals, MCX takes greater time for information transmission. International information linkages seem to have been more adversely impacted, owing to lower cost competitiveness of Indian commodities market. The findings of the study are pertinent for the policymakers, commodity exchanges, and other stakeholders.
A wide array of credit risk management (CRM) practices have been followed by commercial banks since their inception. These practices have evolved over the years; new practices/strategies have been formulated, old practices have been updated/revised, traditional operations are being replaced by new sophisticated procedures. With such continuous evolution of CRM practices, CRM capability maturity of banks has also improved over time. Further, the role/importance and effectiveness of each CRM practice in determining the maturity of CRM capability is an important issue that needs to be addressed. A number of capability maturity models have been suggested in general for a business organisation. However, these studies focus on the assessment of overall business risk management maturity and do not offer any model to trace the path of evolution towards maturity in CRM capability in commercial banks. This article attempts to fill this gap by investigating into how commercial banks mature in their ability to manage credit risk in their advances portfolio. The objective of this study is to go beyond descriptive in terms of specifying practices, challenges and issues in each stage of CRM capability maturity and also be prescriptive in terms of recommended strategies and actions to move on to the next higher level of CRM capability maturity. The path of evolution of credit risk management capability maturity is illustrated on the basis of primary data collected from 35 Indian commercial banks (representing 70 per cent of the population) through a structured questionnaire in year 2007–2008. A comprehensive list of questions relating to major elements of CRM namely, ( a) CRM organisation, ( b) CRM policy and strategy; and ( c) CRM operations and systems at the transaction level; and ( d) CRM operations and systems at the portfolio level were included in questionnaire. The CRM index tool is employed to benchmark a given commercial bank’s approach to CRM against four standard levels of maturity. The statistical analysis of scores in four major elements of the CRM index for banks lying in different stages of maturity clearly brings out whether or not credit risk processes/techniques/tools/procedures are adequate, identifies realistic targets for improvement and shall enable bank management to frame concrete plans for evolving towards a higher CRM capability maturity level. This study, by drawing conclusions from empirical data, is unique and contributes to additional insights into the risk management literature in emerging economies.
The emergence of inter-organizational system has facilitated easy and fast flow of information among the trading partners. This has affected the business relations among the trading parties involved. Though the inter-organizational systems have helped a lot in improving the business relations, the vulnerability and the virtual environment of such systems raise the issues of trust that may affect the long-term business relations. This article makes an attempt to empirically examine the relationship between the levels of assurance with regard to deployment and implementation of relevant technology tools in addressing the identified technologyrelated trust issues and ultimately enhancing the perceived level of trust in inter-organizational business relations. The empirical evidence presented in this article is based on a survey of 106 Indian companies using inter-organizational systems for managing their business relations.
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