Is the Indian customer or retailer mature enough to understand what he is buying into? And is the seller making the right disclosures, giving the right education to the target market, or are they operating under pressure of competition to sell?
As the markets evolve, regulators will put down reasonable policies in place on the whole issue of appropriateness. We have seen some of that come in, particularly in credit and Forex derivatives, enforced by the Central Bank. There is a draft circular in place right now.

Lots of people in B cities have lost money in commodities. Do you have any advice for the common man?
I think he has to be careful. Unless there is strong institutional framework in the physical commodities markets, the challenge will continue. There is a need for change in disclosures of companies – an issue on which the Institute of Chartered Accountants needs to work on. Financial institutions must have strong, robust risk management themselves. Some changes are also required in the accounting norms for companies, who are dealing in derivatives. The big challenge in the Indian commodities markets is the physicals. It is important for the Indian market to build strong commodities firms in the physical world as well; most of the commodities firms are still unorganized. The evolution of the commodities futures market is linked with the evolution of institutions who deal in commodities, cash, and futures.

In India there is no Over the Counter (OTC) market and very few people get access to it. Do you believe in the next three to four years regulations will evolve?
We have a reasonable OTC market in foreign exchange. One needs to be careful about how much one wants to broaden, because there is also a question of

appropriateness. One has to balance it with the right product for the target market. Complex exotics are available to a much wider set, but it also comes with very high risks.

What is your mid-term view, three to six months, on the stock markets, interest rates and currency?
I think interest rates are now inching up. It should not be surprising if one year deposit rates are in the range of 9%. On equity markets, I would say that I am very bullish secular. Within the next 6 months, there will be periods of sharp volatility which may look like deep corrections. Currency will be reasonably range bound, I would say, it may be in the range of 44 to 46. But it is very dangerous to make such projections.

Do you think manufacturing can do what IT has done for India? Is India’s success linked to what China will do or not do?
No. That China has done well is a good thing. It spurred India. You need competition. I don’t think we need to compartmentalise India. Look at India in totality. The walls between manufacturing, agriculture, and services are blurring. The only sector where Indian efficiency has not shown enough results is agriculture. Indian manufacturing and services are world class.

What are the current job opportunities in the financial sector?
The scale of opportunity in the financial sector is phenomenal. There is no need to get obsessed with a little corner which looks glamourous. The opportunity is much broader, much more widespread. There is much more depth coming in each segment of financial service. The financial sector is going to be a huge part of India’s market cap in the next five years.