Title- In February, NSE Indices had announced that on account of Yes Bank being excluded from Nifty 50 and Nifty 100, it was being included in Nifty Midcap 150, Nifty Midcap 50, Nifty Midcap 100, Nifty MidSmallcap 400 and Nifty Midcap Liquid 15 from March 27.
Author- Yashika Agrawal.
Introduction- Yes Bank Ltd (Yes Bank) is a provider of retail and corporate banking and other financial solutions. It offers a range a range of accounts, cards, loans, deposits, privilege banking, NRI services, cash management, trade finance, merchant acquiring, institutional banking, agri banking and digital banking solutions.
Objective- Calculation of beta of Yes bank and its significance.
Literature review-
1) Central bank-
The financial system of a country comprises entities engaged in transactions involving financial instruments in money, capital, and foreign exchange markets. This sector has strong linkages with other sectors of the economy like external, fiscal and real sectors. The apex financial institution in every country is its Central Bank and the State Bank of Pakistan functions as our Central Bank. The conduct of monetary policy and financial stability oversight are among the core functions of the central banks. Monetary policy’s major task is to contribute to sustainable economic growth through maintaining low inflation, and financial stability oversight means reducing vulnerability to the financial fragility and preventing the financial crisis. Major concern of this article is to discuss the role of the Central Bank in enhancing and maintaining financial stability. A financial system is called fragile if there are unsound asset structure of financial institutions (reflecting, for example, subsidised credit and insider loans); changes in relative prices, including interest rates and exchange rates, that are influenced by viability of borrowers; and weaknesses in structure of financial institutions, including weak prudential regulation and supervision, that facilitates unnecessary risk taking.
2) Blockchain-
Blockchain technology is a core, underlying technology with promising application prospects in the banking industry. On one hand, the banking industry in China is facing the impact of interest rate liberalization and profit decline caused by the narrowing interest-rate spread. On the other hand, it is also affected by economic transformation, Internet development, and financial innovations. Hence, the banking industry requires urgent transformation and is seeking new growth avenues. As such, blockchains could revolutionize the underlying technology of the payment clearing and credit information systems in banks, thus upgrading and transforming them. Blockchain applications also promote the formation of “multi-center, weakly intermediated” scenarios, which will enhance the efficiency of the banking industry. However, despite the permissionless and self-governing nature of blockchains, the regulation and actual implementation of a decentralized system are problems that remain to be resolved. Therefore, we propose the urgent establishment of a “regulatory sandbox” and the development of industry standards.
Reference-
1) Hanif,M.Nadim(2002), “Yes, we need a Central Bank,’’ Daily Business Recorder, Karachi.
2) Ye Guo & Chen Liang, 2016. “Blockchain application and outlookin the banking industry,” Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-12, December.
Data collection- Data collected from 1st April 2022 to 31st March 2023.
Data analysis-
Beta: 0.64458118
N: 50
F: 0.865443022
R^2: 0.245779342
Conclusion- Beta obtained is 0.64458118 which is less than 1, therefore it is good for long term investment.