QBiz: Air India Sale Delayed Indefinitely; Aadhaar Issue for NBFC
Here are the top headlines from the world of business.
1. Air India Sale Delayed Indefinitely, May Be Cancelled
The government has put the Air India privatisation on deep freeze citing the tough environment for the aviation industry, weeks after its attempt to sell the national airline flopped.
“The aviation sector globally is going through a difficult time due to high crude oil prices. So, it is not the right time to sell stake in Air India,” aviation minister Suresh Prabhu said in an interview on the sidelines of an event in New Delhi on Tuesday, 19 June.
“We will review the proposal when the situation improves,” he added.
The move may force the government to continue infusing capital to sustain the money-losing airline. It will also make the government’s target to garner Rs 80,000 crore through disinvestment in 2018-19 more challenging.
2. Probe into 80,000 Shell Firms Hits Dead End as Govt Fails to Trace PANs
The probe into 80,000 shell companies struck off by the Registrar of Companies (RoC) in the first lot has hit a dead end. The government had not been able to trace the Permanent Account Numbers (PANs) of 80,000 companies, which was hampering investigations, officials of the corporate affairs ministry said.
“Banks were asked to furnish the transaction data of these shell companies. But they did not respond despite multiple reminders. Banks have told us that without PAN card details, it was not possible to track these companies,” one of the officials said.
PAN is compulsory for any transaction above Rs 50,000. So far, the government has transaction details of only 73,000 companies. These companies deposited Rs 240 billion at the time of demonetisation.
(Source: Business Standard)
3. Indian Government Open to Consider RBI Demand for More Powers
Interim Finance Minister Piyush Goyal said on Tuesday, 19 June, that the Indian government was open to discussing a Reserve Bank of India demand for greater powers to regulate state banks, though he did not believe this was needed.
Last week, RBI Governor Urjit Patel told a parliamentary committee that the bank needed more regulatory powers, referring to the current dual control of the RBI and government over state banks.
Patel had said in March that the regulator had “very limited authority” over State-run banks and called for reforms to allow the central bank to effectively police such lenders in the wake of a $2 billion fraud.
4. Aadhaar Virtual IDs Becoming a Real Problem for NBFCs
The Unique Identification Authority of India’s (UIDAI’s) plan to make non-banking financial companies (NBFCs) use Aadhaar Virtual IDs to authenticate customers from 1 July has put these firms in a fix.
The government introduced 16-digit virtual IDs in a bid to address privacy concerns around sharing Aadhaar numbers at the time of authentication. While agreeing that protecting privacy is a good move, NBFCs point out that using virtual IDs will give them access to limited details about the customers, which may make lending more difficult.
Earlier, the Aadhaar data of all customers were synced with credit bureaus, which allowed NBFCs to do eKYC without the need for physical verification, said a digital strategy officer of a top NBFC.
5. ‘India Becomes the Fastest-Growing Market Globally For High Net Worth Individuals’
Despite adverse impact on GST implementation, India saw a 20 percent increase in both the number of dollar millionaires and their wealth in 2017 to emerge as the fastest growing market for high net population, a report said on 19 June. The report, which comes amid growing concerns over social ramifications of asymmetry in wealth distribution, said the number of high net worth individuals grew 20.4 percent to 2.63 lakh people, while their collective wealth grew 21 percent to over USD 1 trillion. “India was the fastest-growing market globally,” the report by French tech firm Capgemini said.
6. Sensex, Nifty Fall For Second Day As Trade War Looms
Indian equity benchmarks fell for second straight day after trade tensions between US and China escalated.
The S&P BSE Sensex fell 0.74 percent or 261 points to 35,287 and the NSE Nifty 50 index declined 0.83 percent or 89 points to 10,710.
Equities across the globe came under selling pressure after China vowed to retaliate 'forcefully' against President Donald Trump’s threatened tariffs on another $200 billion in Chinese imports.
"With China announcing retaliatory measures, global trade war appears to escalate," Shailendra Kumar, CIO at Narnolia Financial Advisors, told BloombergQuint in an email reply.
7. Interest Rate on PPF, Other Small Saving Schemes May Go Up
There could be some relief in store for investors in small savings schemes. The interest rate on small savings schemes, like the popular Public Provident Fund (PPF), is expected to be revised higher, in line with a rise in bond yields. The government at the month-end will decide on the interest rate for the next quarter (July-September).
The interest rate on PPF has been kept unchanged since January at 7.6 percent. Interest rates on small savings schemes like post office deposits, National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and Senior Citizens Savings Scheme are linked to government bond yields of similar maturities.
8. Pradeep Parameswaran Named Uber’s India Head
Uber Technologies Inc has elevated Pradeep Parameswaran as its new India and South Asia head, at a time when the world’s largest cab-hailing service is looking to double down on its investments in the country, as it looks to grab market share from local rival Ola.
Parameswaran takes over from Amit Jain, who has been tasked with heading Uber’s entire Asia Pacific business, including areas such as Australia, New Zealand and North Asia. Jain’s elevation was part of a broader strategy that indicated Uber’s intention to focus on markets such as Australia and take on Ola, which also recently launched its service in that country.
Parameswaran, a former McKinsey executive, joined Uber India in January last year and was head of operations.
9. Former RBI Deputy Governor Rama Subramaniam Gandhi joins Paytm as Advisor
One97 Communications, which runs Paytm, has appointed former RBI Deputy Governor Rama Subramaniam Gandhi as an advisor.
Gandhi will bring his years of knowledge and experience on payment systems, regulations, compliance and corporate governance, the company said in a statement. Gandhi was a member of the first Monetary Policy Committee. He has also been the head of two regional offices of the Reserve Bank and held a charge as the Director of the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad, it added.
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.