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In a Satyam-style takeover, the National Company Law Tribunal (NCLT) allowed the government to take over the beleaguered Infrastructure Leasing &amp; Financial Services (IL&amp;FS) in an emergency court hearing convened on Monday evening. The court has also let a new six-member Board, headed by Uday Kotak, managing director of Kotak Mahindra Bank, take charge. The other directors include GN Bajpai, former Sebi chairman, GC Chaturvedi, chairman of ICICI Bank, Malini Shankar and Vineet Nayyar, both retired IAS officers, and Nandkishore, a veteran auditor.

The next hearing for the case at the NCLT is now on October 31, where the resolution plan and monetisation of the assets will have to be submitted by the new Board.

The court said that the mismanagement of the affairs of the company made it fit for invoking Article 241 (2) of the Companies Act-2013 that provides for the suppression of the existing board.

On Monday, the government has also ordered an investigation through the Serious Fraud Investigation Office (SFIO) into the books of the company.

The government moved an application against the existing officials of IL&amp;FS such as Ravi Parthasarthy, SB Mathur, Hari Shankaran and RC Bhargava, among others. A separate investigation will also be carried out against the top officials of the company.

“The company was well aware of the precarious situation but kept showing a hunky-dory picture to the shareholders,” said a government official.

“It’s an extraordinary situation in IL&amp;FS. The company is a sinking ship,” said the official.

Source: DNA Money

In a Satyam-style takeover, the National Company Law Tribunal (NCLT) allowed the government to take over the beleaguered Infrastructure Leasing &amp; Financial Services (IL&amp;FS) in an emergency court hearing convened on Monday evening.

&nbsp;


Uday Kotak led board to take over IL&FS in Satyam Computer scam like action   

A day after its shares were battered, Infibeam&nbsp;assured shareholders that it was looking into Friday’s massive fall at the company’s annual general meeting (AGM). On Friday, investors lost about Rs 9,200 crore as its shares dropped over 70% following rumours that spread on instant messaging platforms. The firm’s management has clarified in a note that the fundamentals of the company remain intact and that there is no information which is pending from the company’s side. One of the reasons for the fall was a WhatsApp message that raised concerns about the company’s accounting practices. There were also rumours in the market that its chief financial officer had stepped down.

“We would like to bring to your notice that the news on Hiren Padhya, CFO, Infibeam, leaving the company is completely incorrect,” the company told DNA Money in a statement. Infibeam, which went public in March 2016, provides software development services and other ancillary services.

At the AGM, Vishal Mehta, managing director, made the statement at the beginning of his presentation. Interestingly, shareholders refrained from raising questions over how the listed company lost 70% of its market value in a single day following rumours.

In his speech, Mehta assured shareholders that the company was looking into the matter.

Source: DNA Money

&nbsp;

&nbsp;

A day after its shares were battered, Infibeam&nbsp;assured shareholders that it was looking into Friday’s massive fall at the company’s annual general meeting (AGM). On Friday, investors lost about Rs 9,200 crore as its shares dropped over 70% following&nbsp;rumours that spread on instant messaging platforms.


Unbelievable, but true! Price paid for this WhatsApp message was Rs 9,200 cr!

The Union Ministry of Road Transport and Highways is unlikely to take a decision soon to reduce minimum land acquisition before bidding out a road project. The proposal is to reduce mandatory land acquisition requirement while starting the project to 50% from the present 80%. Minister of Road Transport and Highways Nitin Gadkari told DNA Money that there is a plan to reduce the threshold limit. “But no decision on the proposal will be taken for now,” Gadkari said.

In August this year, DNA Money had reported that Union government plan to reduce mandatory land acquisition threshold limit before commencing a national highway project will boost the pace of awarding of contracts. At the same time, it may also increase the total number of stuck projects apart from the funding challenges that may follow suit.

This proposal had also drawn cautious responses from industry players as well as analysts who felt that there will be an uptick in the number of projects, given the need to achieve the target by awarding road contracts under the ambitious Bharatmala Programme, but may bring back the same set of issues due to which the projects had got stalled during the earlier years.

“Lesser land available for more complex project would mean more road developers preferring to stay away from participating in the bidding process,” an analyst had said.

Already, most of the developers have a good number of road projects in their order-books that they are working to complete, and the latest proposal may result in a much more cautious approach by them while bidding for the project.

Secondly, they have been facing a slowdown in arranging for funds to finance their respective projects. Lowering the threshold limit would only increase the challenges for road construction companies.

Recently, Gadkari had spoken about slowdown in road financing. The bankers who have reservations in financing road projects, are willing to fund road projects being bid out under

Engineering, Procurement and Construction (EPC) mode.

If financing slows down further, the Union highways ministry will have to move towards EPC from the ongoing hybrid annuity model projects.

Source: DNA Money

The Union Ministry of Road Transport and Highways is unlikely to take a decision soon to reduce minimum land acquisition before bidding out a road project. The proposal is to reduce&nbsp;mandatory land acquisition requirement while starting the project to 50% from the present 80%.

&nbsp;


Hate bad roads? Modi government hints at relief, but there is a catch

Telecom companies, including new entrant Reliance Jio, which were using Aadhaar for KYC to add new subscribers, are in a fix after the Supreme Court (SC) ruling that unique identification number is not mandatory for new connections.

The apex court on Wednesday struck down Section 57 of the Aadhaar Act, which allowed private entities to use Aadhaar number to verify new subscribers.

Being a new player, Reliance Jio has been fully relying on eKYC through Aadhaar to enrol users onto its network.

According to estimates, over 60-70% of new subscribers get onto the mobile platform using Aadhaar eKYC.

A senior executive from a telecom player says that this would mean reverting back to the earlier system of physical verification will take a little longer ranging from 30 minutes to 4-6 hours.

and some changes in processes.&nbsp; “We have stores and executives covering all areas and it won’t be a problem to physically verify. Though, the time taken will increase now. This is also bound to increase our costs. But exact estimate will be known after few days”

Aruna Sundararajan, secretary, department of telecommunications, on Thursday confirmed that e-KYC system to register mobile users using Aadhaar have been stopped.

“We will meet UIDAI, Law Ministry official and telecom service providers to make sure we are in compliance with SC order and to see way forward. eKYC using Aadhaar has been stopped by the Supreme Court,” she said.

It is learnt that Department of Telecommunications (DoT) plans to soon come out with an alternative for digital verification e-KYC if it has not been done through Aadhaar. This will be worked out after taking legal opinion on the SC judgement whether Aadhaar is not mandatory or optional. “If it is optional, then operators can verify users using Aadhaar with their consent.”

Cellular Operators Association of India (COAI) director general Rajan Mathews said. “We shall await further orders and instructions from DoT on this matter. Our member operators as always will definitely comply with the law.”

Operators said they need more details on what documents would be accepted from subscribers as per ‘know-your-customer’ rules for verification in place of Aadhaar data.

Source: DNA money

Telecom companies, including new entrant Reliance Jio, which were using Aadhaar for KYC to add new subscribers, are in a fix after the Supreme Court (SC) ruling that unique identification number is not mandatory for new connections.

&nbsp;


Aadhaar, SIM linking: Getting one will be frustrating now; Airtel, Reliance Jio, Idea face this problem

State Bank of India (SBI) is tapping into the rising consumerism in the country to aggressively grow its cards business through its subsidiary SBI Cards. The company is issuing 10,000 cards a day, or about 2 lakh cards a month. It has 6.85 million cards in circulation, making it the second largest card issuer in the country after HDFC Bank.

Hardayal Prasad, MD &amp; CEO, SBI Cards, said, “We are aggressively growing our cards business while keeping the delinquencies under check, which is 2%; we are working to bring it down. Our thrust is to focus on the young employed youth who are aspirational.”

The number of credit cards is rising with the aspirational values of Indians going up. The customers, especially the younger generation, is relying on unsecured credit to buy the goods they desire. With the average spends on an SBI card at Rs 10,000 per month, the expenses are for dining, fashion, travel and retail.&nbsp;

“With mushrooming of online websites like Myntra, Amazon, Flipkart and many more online stores, the credit card becomes a convenient medium to purchase goods if you don’t have the money in your account,” Prasad added. A majority of the SBI Cards customers are 35 years and below.

The company is tapping customers from the market and also the 425 million customers of the bank to grow its cards business. In the last financial year, the company made a profit of Rs 390 crore, which is expected to go up.

Watch this Zee Business video

 
Tapping new customer segments has been a key focus area, said Prasad. The premium segments were tapped through SBI Elite cards and SBI Prime. For the first-time card users, the bank had SBI Unnati. For the online customers, there was simplyCLICK.

Source: DNA Money

The number of credit cards is rising with the aspirational values of Indians going up. The customers, especially the younger generation, is relying on unsecured credit to buy the goods they desire. With the average spends on an SBI card at Rs 10,000 per month, the expenses are for dining, fashion, travel and retail.&nbsp;


SBI account holder? Your bank is credit card happy! Want one too?

Bulls are watching the US Federal Reserve meeting with some trepidation. A day before the US central bank meeting and F&amp;O expiry, the benchmark equity indices ended the session in the red zone. After starting on a positive note, Sensex tanked 109.79 points, or 0.30%, to close at 36542.27 on Wednesday, while the broader Nifty settled at 11053.80, falling 13.65 points, or 0.12%.

“Worries over liquidity issues in the NBFC space demoralised investors in domestic markets. The market stayed on a cautious sentiment ahead of the Fed policy outcome and the higher oil price as major Opec producers declined to increase the output. Volatility in the global markets is likely to remain elevated in the short term, given the cancellation of trade talks between the US and China,” Vinod Nair, head of research, Geojit Financial Services wrote in a note.

The Fed is expected to increase interest rates for the third time this year as it publishes forecasts that are expected to bolster expectations for another move in December and a continued pace of gradual tightening in 2019. The Federal Open Market Committee is almost certain to raise rates a quarter point at the end of its two-day meeting on Wednesday to a target range of 2% to 2.25% - the highest level in more than a decade.

The Fed decision will also influence the Reserve Bank of India’s (RBI) next course of action, which will be announcing the bi-monthly monetary policy on October 5.

Among the Sensex pack, Tata Motors, Wipro, ITC, State Bank of India and Maruti Suzuki were the biggest laggards plunging as much as 4.20%.

However, the broader market staged a positive performance and both BSE Midcap and Smallcap inched up by 0.42% and 0.12%, respectively. Sectorally, BSE IT (-1.60%), FMCG (-1.44%), Teck (-1.36%), Auto (-0.99%) and Consumer Discretionary (-0.31%) were biggest losers.

Meanwhile, as per the provisional data, the FIIs sold shares of Rs 809.95 crore on Wednesday while the DIIs bought shares worth Rs 1,555.44 crore on a net basis.

With the Fed widely expected to raise interest rates, financial markets would watch if the two-day policy meeting could mark the formal end of the “accommodative” level of rates the Fed has used to support the US economy since the onset of the 2007-2009 recession.

Source: DNA Money

Bulls are watching the US Federal Reserve meeting with some trepidation. A day before the US central bank meeting and F&amp;O expiry, the benchmark equity indices ended the session in the red zone. After starting on a positive note, Sensex tanked 109.79 points, or 0.30%, to close at 36542.27 on Wednesday


Sensex, Nifty wait for this massive news, change in ''policy era''   

The telecom industry, which has been under financial constraint, may get some relief as the government plans to rationalise various levies being imposed on the service providers.

With a focus on 'broadband for all', the Cabinet on Wednesday approved the new telecom policy -- National Digital Communications Policy (NDCP) 2018-- as the country moves towards next evolution in technologies.

"Emerging technologies like 5G, artificial intelligence, machine-to-machine communications and Internet of Things (IoT) called for a new consumer- and application-centric policy. The government aims to improve the reach of telecom services and applications riding on the network," Telecom minister Manoj Sinha said after the Cabinet approval.

The policy lists out targets for the next five years, he said, adding, all the modalities will be decided within a year.

The telecom department plans to reform the licensing and regulatory regime to catalyse investments and innovation. Besides promoting ease of doing business, a review of levies and fees, including license fee, spectrum usage charges, and the definition of adjusted gross revenue (AGR) and rationalisation of universal service levy will be done. There is also a plan to rationalise license fees on fixed line revenues to incentivise digital communications.

Harsh Walia, associate partner, Khaitan &amp; Co, says the framework seems to suggest that Department of Telecommunications (DoT) is looking to revamp its image of a revenue-monger to a business-facilitator as charges, taxes and levies may be rationalised. "In particular, spectrum usage charges may now only reflect administrative costs. This will be a breath of fresh air for the industry, whenever implemented."

Rajan S Mathews, director general, Cellular Operators Association of India (COAI), said the most important and urgent requirement is to restore the financial health of the sector for which the policy document envisages the reduction in levies and ease of doing business. This will help the industry in achieving the goals and fulfilling the objectives outlined in the policy.

The policy also aims to recognise telecommunication services and infrastructure as an essential public utility. "This will not only aid proliferation of telecom services but also facilitate low-cost financing. The industry today is facing one of its toughest phases, and low-cost financing is the need of the hour for most service providers who are languishing in debt and unprecedented losses," Walia said.

The reduction/rationalisation of levies has been a long-standing demand of the telecom industry which has gained ground since last few years as the financial health of the operators declined following the entry of new player Reliance Jio in the sector. Since then, the mobile tariffs have plummeted putting pressure on profits and margins of the telecom players. The industry has been sitting on a cumulative debt of around Rs 5.6 lakh crore.

Apart from this, the other key objectives of the policy include creating four million additional jobs in the digital communications sector, providing universal broadband connectivity at 50Mbps and 1 Gbps connectivity to all Gram Panchayats of India by 2020; 10 Gbps by 2022. It aims to attract investment of $100 billion in the sector and expand IoT ecosystem to 5 billion connected devices

Currently, India has been ranked at 134 in the Information and Communication Technology (ICT) Development Index of International Telecommunication Union (ITU). The policy says it will propel India to top 50 nations in this index in next five years.

Telecom Commission, the highest policy making body of the department of telecommunications, has also been renamed as "Digital Communications Commission."

RELIEF TO TELCOS

<ul>
	<li>It aims for universal broadband connectivity at 50Mbps by 2020&nbsp;&nbsp;</li>
	<li>Telecom Commission has also been renamed to Digital Communications Commission</li>
</ul>

Source: DNA Money

The telecom industry, which has been under financial constraint, may get some relief as the government plans to&nbsp;rationalise&nbsp;various levies being imposed on the service providers.


Modi govt set to change the way you use your smartphone

Banks will no longer be allowed to demand Aadhaar card from customers while opening new accounts. This will make the process of opening new accounts difficult as most banks were opening accounts just based on the Aadhaar number and biometric authentication, and a subsequent verification with the Unique Identification Authority of India (UIDAI) database.

Banks will now have to seek address proof, identity proof and other details and implement the old know-your-customer (KYC) norms for opening new accounts.

As per the Supreme Court verdict on Wednesday, all information collected from UIDAI may need to be deleted or delinked by intimating the customers. The data can’t be kept with the bank without the consent of the customer and for more than six months. This would mean that banks will have to start a delink project.

However, the Aadhaar may be used as an official document to prove the customer’s identity with his/her consent.

On an average, banks have already linked 60-70% of their existing accounts to the customers’ Aadhaar cards after the government gave a deadline of March 2018 to link all accounts to the Aadhaar. This had been kept on hold subsequently, pending the apex court verdict.&nbsp;

While upholding the validity of the Aadhaar card, the court has added some caveats. The five-judge constitution bench, led by Chief Justice Dipak Misra, struck down Section 57 of the Aadhaar Act, which allowed any “body corporate or person” or private entity to demand Aadhaar. Telecom operators were earlier asked by Department of Telecommunications to conduct Aadhaar-based verification of mobile phone connections.&nbsp;

“Much of the work trying to link bank accounts were already undertaken by the banks,” said a legal head of a public sector bank.

Aadhaar is 12-digit identification number issued to individuals by the UIDAI after storing their biometric data. The UIDAI, launched in 2009, uses Iris and fingerprint scans to obtain biometric data from applicants and stores it in a database.

State Bank of India said Aadhaar was a faster method. Rajnish Kumar, chairman of SBI, said in the sidelines of a press conference that Aadhaar has been “very convenient” for opening an account. “Today, on our digital channels, an account can be opened with an Aadhaar card within 5 minutes and the account becomes operational.”

Digital loan platforms like Faircent said that decision of the apex court will not impact their business. “Aadhaar was only an optional line for us so no impact,“ said Rajat Gandhi, founder of Faircent.

Kotak Mahindra Bank said it did not foresee any adverse impact on Kotak’s savings account opening growth because of the court ruling. “Aadhaar continues to be one&nbsp; of the six officially valid documents (OVD) available to customers for completing KYC requirements. Customers are welcome to use any one of the six OVDs of their choice for the purpose of account opening. We are also examining in detail the recent SC ruling in this regard and will be further guided by the same, and the RBI guidelines,” Virat Diwanji, president - retail liabilities &amp; branch banking, Kotak Mahindra Bank.

Source: DNA Money

Banks will no longer be allowed to demand Aadhaar card from customers while opening new accounts. This will make the process of opening new accounts difficult as most banks were opening accounts just based on the Aadhaar number and biometric authentication, and a subsequent verification with the UIDAI&nbsp;database.

&nbsp;


Want to open a bank account? Forget Aadhaar, this is what you need now

Loans against property witnessed a significant increase in serious delinquency rates, growing by 65 basis points (bps) to 3.04%, in Q2 2018, over the same period last year, said a report by TransUnion CIBIL. Delinquency rates rose modestly for home loans and credit cards and continued to decline for auto loans, personal loans and two-wheeler loans.

“Increased use of credit and the consequent balance growth is beneficial for the Indian consumer credit market, but maintaining relatively low delinquency rates is just as important,” said Yogendra Singh, vice president of research and consulting for TransUnion CIBIL.

For the same period, retail lending balances increased by nearly 27%. Personal loan balances (up 43%) credit card balances (up 42%) grew at the highest rate of all major credit products in the last year. Average borrower balance growth for both of these credit products increased nearly 14% in the same period. Retail lending includes auto loans, used car loans, home loans, loans against property, personal loans, consumer durable loans, education loans, credit cards, and two-wheeler loans.

Watch this Zee Business video here:

<iframe allow="autoplay; encrypted-media" allowfullscreen="" frameborder="0" height="315" scrolling="no" src="https://www.youtube.com/embed/K8yvcSOruZQ" width="100%"></iframe>

“Balances growth was largely driven by volume (number of accounts) growth that rose at least 20% for most major credit products. The retail lending sector continues to expand strongly, as consumers are seeking credit and lenders are making credit available. With delinquency rates generally remaining at controlled levels, this points to a well-functioning consumer credit market,” said Singh.

Source: DNA Money

Loans against property witnessed a significant increase in serious delinquency rates, growing by 65 basis points (bps) to 3.04%, in Q2 2018, over the same period last year, said a report by TransUnion CIBIL. Delinquency rates rose modestly for home loans and credit cards and continued to decline for auto loans, personal loans&nbsp;and&nbsp;two-wheeler loans.

&nbsp;


Loans against property: Now, these borrowers shock the system

Telecom regulator on Tuesday proposed financial disincentives of up to Rs 10,000 for service providers for rejection of mobile number portability (MNP) requests on unjust reasons. MNP allows mobile users to change their service providers without changing their numbers.

“In order to discourage the wrongful rejections of the porting requests and adherence to the timelines specified for the various tasks, the provisions of financial disincentives have been made,” Telecom Regulatory of India (Trai) said.

Cellular Operators Association of India said in a statement that penalties are extremely blunt instruments to ensure compliance while calling for a partnered approach with Trai to ensure goals are met and difficulties ironed out.&nbsp;

“We believe MNP demand has peaked after the closure of Aircel, Telenor and Reliance Communications,” COAI said.

“If any access provider contravenes the provisions of regulation 6A and regulation 12� be liable to pay an amount� not exceeding Rs 10,000 for each wrongful rejection of the request for porting,” Trai said.

Watch this Zee Business video

<iframe allow="autoplay; encrypted-media" allowfullscreen="" frameborder="0" height="315" scrolling="no" src="https://www.youtube.com/embed/YYa7cqgn-io" width="100%"></iframe>

For violation of some of the other norms, a penalty of Rs 5,000 has been proposed.

Source: DNA Money&nbsp;

Cellular Operators Association of India said in a statement that penalties are extremely blunt instruments to ensure compliance while calling for a partnered approach with Trai to ensure goals are met and difficulties ironed out.&nbsp;


Have smartphone? Failed to port? Your telco to be fined Rs 10,000

For Ritesh Agarwal, promoter of Oravel Stays that runs the popular hospitality brand OYO, it’s a day to celebrate. On the day when he sewed up $1 billion via a fresh round of funding and made a grand entry into the unicorn club, he has also made a debut to the list of 831 richest Indians living today by Hurun Report India and Barclays.

Agarwal, who founded OYO in 2011 and made it among the most valued start-up companies in India with a $5 billion valuation, is the youngest Indian on the list.

The 95-year-old chief of MDH, Dharam Pal Gulati is the senior most person in the list.

Mukesh Ambani, chairman, Reliance Group of Companies, topped the list for the seventh consecutive year with total net worth of Rs 3,71,000 crore. With wealth increase of 430%, Krishna Kumar Bangur of Graphite India is the biggest gainer.

Hurun Report India and Barclays on Tuesday unveiled the 2018 edition of ‘Barclays Hurun India Rich List 2018’ - a compilation of the richest individuals in India having a net worth of Rs 1,000 crore or more. As per the report, the number of individuals featured in the 2018 edition has increased by a third to 831 from 617 in 2017.

Sector-wise, pharmaceuticals dominates with 13.7% of the list, followed by software &amp; services and fast-moving consumer goods with 7.9% and 6.4%, respectively.

The list was compiled on the basis of net worth of living Indians as on July 31, 2018, when the rate of exchange to the US Dollar stood at Rs 68.51. The list relates to Indians only, defined as born or brought up in India.

As per the report, cumulative wealth of the 831 individuals featured in the list stood at $719 billion - amounting to a quarter of Indian GDP of $2,848 billion (as per IMF estimate on 1st April 2018). 306 new entrants were added to the list in the 2018 edition while 75 of those featured in 2017, didn’t make it to the present edition. Individuals having a net worth of Rs 9,000 crore and more were featured in the top 100 rankings.

Mumbai emerged as the hub of the rich and famous - with 233 names hailing from the city; while New Delhi and Bengaluru accounted for 163 and 70 names, respectively.

Commenting on the report, Anas Rahman Junaid, managing director and chief researcher, Hurun Report India, said, “Amidst the huge political debate around India’s current economic scenario, Barclays Hurun India Rich List 2018 depicts that Indian businesses are booming. In fact, the number of Rs 1,000 crore+ wealthy Indians have nearly doubled in the past two years - from 339 in 2016 edition to 831 presently.

Source: DNA Money

For Ritesh Agarwal, promoter of Oravel Stays that runs the popular hospitality brand OYO, it’s a day to celebrate. On the day when he sewed up $1 billion via a fresh round of funding and made a grand entry into the unicorn club, he has also made a debut to the list of 831 richest Indians living today by Hurun Report India and Barclays.

&nbsp;


Hurun Rich List: Indians with Rs 1,000 cr soars; From OYO's Ritesh Agarwal to Mukesh Ambani, check out their wealth

OYO founder and chief executive officer Ritesh Agarwal on Tuesday made a major mark in the Indian start-up space when the new-age firm for booking reliable rooms announced raising $1 billion in the Series E round.

South Asia’s largest hotel chain with 125,000 rooms, OYO raised $800 million in the latest round led by SoftBank Investment Advisers (SBIA) through SoftBank Vision Fund.

Existing investors Lightspeed Venture Partners, Sequoia and Greenoaks Capital also participated in this round. The hospitality chain also confirmed receiving a commitment of an additional $200 million taking the total to $1 billion.

The funds, according to the company statement, will support its efforts to further strengthen its market position in India and China, and support international expansion.

According to Agarwal, OYO Hotels has grown to become the most preferred brand in both economy and mid-market segments in a short span. “We have already started expanding our presence to newer segments, with OYO Home, OYO Townhouse and more recently Palette Resorts by OYO. We will continue to explore newer businesses while remaining focused on both organic and inorganic growth,” said Agarwal, a 24-year college drop out from Bissamcuttack, a census town in Rayagada district, Odisha.

Watch this Zee Business video here:

<iframe allow="autoplay; encrypted-media" allowfullscreen="" frameborder="0" height="315" scrolling="no" src="https://www.youtube.com/embed/K8yvcSOruZQ" width="100%"></iframe>

In the last 12 months, the company has increased international footprint to countries like China, Malaysia and Nepal. Its most recent foray was in the UK market.

“With this additional funding, we plan to rapidly scale our business in these countries, while continuing to invest further in technology and talent. We will also deploy fresh capital to take our unique model that enables small hotel owners to create quality living spaces, global,” said Agarwal.

Source: DNA Money

OYO founder and chief executive officer Ritesh Agarwal on Tuesday made a major mark in the Indian start-up space when the new-age firm for booking reliable rooms announced raising $1 billion in the Series E round.

&nbsp;


SoftBank, others hand over $1 bn to OYO chief Ritesh Agarwal

Non-performing assets (NPAs) of the government-run banks are on a decline as the recoveries of the loans have picked up, finance minister Arun Jaitley said after chairing a review meeting of the public sector banks (PSBs) in the national capital on Tuesday.

Describing the past years as challenging for the banks, Jaitley in a press conference said that recoveries were slow as a large amount of their lending was held up in NPAs.

But now “the impact of the Insolvency and Bankruptcy Code (IBC) is visible. The consequences of the Code are aiding better recovery. It’s not just due to the resolutions taking place in National Company Law Tribunal (NCLT) but also because the promoters are paying up for the fear of the IBC,” Jaitley said, adding the IBC Section 29A had forced defaulters to pay up.

Jaitley asked the chief executives and top management of the PSBs attending the meeting to take effective action against the frauds and wilful defaults.

Expressing satisfaction over credit growth, Jaitley said that the credit has significantly moved upwards, as recoveries are better and the lending ability is much better. “We are passing through a phase of good growth. Consumption has moved up, growth is good, and therefore, banking activity is bound to pick up,” he said.

“The review took note of the continued improvement in banking in terms of highest ever recovery in the last quarter, pick-up in credit growth to 13.5%, growth in MSME lending to 10.5%, the highest Provision Coverage Ratio in over five years, and higher operating profits,” the government said.

The government is expecting a recovery of Rs 1.8 lakh crore this fiscal, up from Rs 74,562 crore during the previous year.

Source: DNA Money

&nbsp;

&nbsp;

Non-performing assets (NPAs) of the government-run banks are on a decline as the recoveries of the loans have picked up, finance minister Arun Jaitley said after chairing a review meeting of the public sector banks (PSBs) in the national capital on Tuesday.


Fear forcing defaulters to pay, says Arun Jaitley; he explains why

Impressed with her peers going ga-ga over "sharing'' cars, 30-year-old banker Manisha Bhatia booked a hatchback for her holiday to Shimla. The self-drive vehicle was to be picked from and dropped back to Chandigarh airport. But at the scheduled hour, neither the vehicle nor any personnel from the car rental was to be seen. After making frantic calls to the company's call centre, she realised the vehicle was damaged by a previous user and she had to make alternate arrangements. The rental company had neither updated her through a SMS or a phone call. "This caused panic and sent us scouting for an alternate vehicle at the last minute, wasting precious holiday time and causing stress." Bhatia has now decided to stay off car rentals, especially while travelling intra-city.

Similar to Bhatia's experience is that of 22-year-old student Medha Pandey. She was to rent a cobalt blue gown for her brother's sangeet ceremony from a clothing rental. The dress did arrive, but it was a tad too long for her height and of a material that appeared translucent when worn. "Despite having keyed in the right size, the dress was a mismatch in terms the right fit and was translucent. I had to discard it the last moment, and run to the nearest boutique to buy one.''

Renting over buying is great. But millennials show great caution nowadays.

Recent times have seen a surge in rental brands like Airbnb, Uber, and Rent the Runway globally; and brands like Ola, Liberent, Furlenco back home. Over $23 billion in venture capital funding has been pumped into rental companies since 2010. Taglines like access over ownership, renting over buying and buzzwords like collaborative consumption and peer economy have been flying around from all sides. Consumers of all age groups, and especially millennials, were euphoric over the concept of gaining instant and "hassle-free'' access (albeit temporarily) to high value products of their choice. Sharing was promoted as a concept that helped consumers travel by luxury cars, or wear designer dresses, or stay in offbeat places – all at a fraction of what it would cost to buy and own. A BCG survey shows amongst those using shared services, 67% Indians said well-priced, convenient offers could make them give up ownership altogether. But consumers are slowly realising that it's not all satisfactory.

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Hype versus reality

The sharing economy equals big money. PricewaterhouseCoopers has estimated the sector to grow in terms of global revenues from around $ 14 billion in 2014 to a stupendous $335 billion by 2025, propelled by car and room sharing, sharing of household goods (like furniture), crowdfunding and audio-video streaming. Market disruptors like Uber and Airbnb, currently valued at $72 billion and $31 billion, respectively, will steer the sharing economy.

But growth prospects apart, consumers are steadily experiencing the grey shades of this novel phenomenon. Guests being turned away from Airbnb accommodations and Uber/Ola drivers being rude and ruthless are grievances that surface time and again.

And this is to do with the fact that the hosts/drivers are not technically "employees'' of the rental brands who are "mandated'' and "obliged'' to keep the customer first.

"Service providers at companies like Uber are not considered as company employees, and because of this reason are not held to the rigorous set of standards as full-time employees. But in the absence of strict, formalised training programmes, people are likely to be affected by personal biases, which will in turn affect the way they provide service to consumers based on their characteristics. For instance, recent research has documented racial discrimination occurring at Airbnb – where rental requests of racial minorities were more likely to be denied,'' says Tami Kim, assistant professor, University of Virginia's Darden School of Business.

But whether or not the service provider is an employee of the rental brand, the consumer at the end of the day is seeking value for money.

"Renting improves accessibility. But whether a consumer is renting something or buying, he/she is incurring a cost and is therefore authorised to get products/services of the highest quality and in a desirable fashion. A consumer must get value for the money," says Bejon Misra, founder, Consumer Online Foundation, a registered body with Competition Commission of India.

Consumer no longer king

The sharing economy is covertly transforming market dynamics that held the consumer with the highest regards. Disruptors including Airbnb, Uber and Rent the Runway are not "owners'' of any assets or inventory, but marketplaces that "connect hosts and guests through a high-tech platform.'' And since the brands do not own, but only connect, the consumer slowly ceases to be the "king'', and starts existing as just another ''responsible stakeholder'' in the value-chain, say experts.

"The market is shifting from less B2C (brand to consumers) to more C2C (consumers to consumers)," says Rashi Mittal Nair, co-founder and CEO, WOOP, a platform to grow trust via brand advocates. She adds that marketing budgets today are a testament to the C2C approach, given more businesses are now investing in ways to get consumers to recommend their brands to other consumers. Nair says the consumer is no longer a king that "needs to be served, but a friend that needs to be helped. Yes, the consumer is at the mercy of their host. But the host is also at the mercy of the consumer. The brand-consumer relationship is democratised.'' 
Kim believes that consumers in the sharing economy are more at the whim of the service provider. "This could act as a double-edged sword. On the one hand, this new relationship dynamic may benefit firms by motivating consumers to behave better (unlike in the past when companies struggled to keep ill-behaved consumers in check because of the 'consumer is king' sentiment). But on the other hand, firms may be eroding consumer trust by making consumers feel as if they are not receiving the level of service that they deserve as customers."

Lack of standardisation

The sharing economy does not operate in a structured fashion where standardisation of (goods) and services is the norm. Kim says one major downside of this sector is not being able to maintain consistency in the quality of service that consumers receive.

According to Aditya Loomba, joint managing director, Eco Rent A Car, many challenges boil down to trust between users and the platforms, which is vital in the sharing economy as people are putting their possessions in the hands of strangers. "Customers are encouraged to take chances with cabs/hotels they book as usually the sharing economy does not guarantee standardisation. Though the new-age platforms assure convenience and better value for money, creating trust through an online platform can be a little tough,'' he says.

"There are no established best practices that mandate adhering to certain standards. Especially in a fragmented market like India, there is a pressing need for a regulatory mechanism to ensure shoddy products or services do not infiltrate the supply chain,'' says Misra.

However, certain experts feel the lower standardisation is bound to occur in a sharing economy and is true of other marketplaces as well. Says Nair, "The lower standardisation of products/services is accompanied by increased personalisation and affordability. When things get too standardised, they also get monotonous. The consumer of today is more attracted by variety and accessibility."

According to Rajiv Dingra, founder and CEO, WATConsult, a digital and social media agency, even in a hotel, a guest is at the mercy of the service staff and "yes you can complain to the brand management. But ultimately, every hotel even from the same chain doesn't have standard servicing levels across the world. The same way every Airbnb experience or Uber experience can't be the same".

Sharing or monopoly

Take a close look at the brands that ''control'' the sharing economy. These "disruptors'' are indeed "disrupting'' the market by bringing in monopoly through acquisitions of smaller rivals, in an attempt to kill competition, feel experts. Airbnb is known for making consistent buys, including those of upscale vacation rental site Luxury Retreats, trip-planning service Vamo, etc. Uber recently acquired Jump, a bicycle sharing start-up. Ola meanwhile gathered strength in the past by acquiring another cab aggregator TaxiForSure and more recently, Ridlr, a public transport ticketing and commuting app. There's been talk of an Uber-Ola merger in India.

Currently, these two brands control 90% of India's cab market, which is touted to reach $14.3 billion by 2022. "If a merger happens between these two brands, it would complete the monopoly where consumers will be at the receiving end of the spectrum," warn experts.

Misra says the sharing economy can bring in monopoly and consumers can lose in terms of a fair market that is driven by transparency and competition. "The brand that monopolises can control pricing and offer less for more money. A consumer-oriented market needs healthy competition, which is not really seen in the sharing economy."

Experts say since the sharing economy is here to stay, consumers should be prudent, instead of getting elated with the "renting'' concept. "Embrace the sharing economy and all the positives that it carries along, but remain alert and forever on guard to prevent feeling exploited,'' warn experts, adding that millennials should also build their asset base over time and invest in "productive ownership'', instead of only and always seeking rentals.

Renting a nightmare?

$335 bn Global sharing economy may grow to by 2025

$14 bn Its size in 2014

$72 bn Valuation of Uber

$31 bn Valuation of Airbnb

$14.3 bn Size domestic cab market may touch by 2022

$23 bn In venture capital funding has been pumped into rental companies since 2010

Staying vigilant

Since the sharing economy is here to stay, consumers should be prudent, instead of getting elated with the “renting’’ concept. Embrace the sharing economy and all the positives that it carries, but remain alert and forever on guard to prevent feeling exploited, experts say

Similar to Bhatia's experience is that of 22-year-old student Medha Pandey. She was to rent a cobalt blue gown for her brother's sangeet ceremony from a clothing rental. The dress did arrive, but it was a tad too long for her height and of a material that appeared translucent when worn. "Despite having keyed in the right size, the dress was a mismatch in terms the right fit and was translucent. I had to discard it the last moment, and run to the nearest boutique to buy one.''


To rent or buy? Sharing economy rises courtesy Uber, Ola, Liberent, others, but millennials wary

YES Bank’s shares are likely to tumble today as Citigroup and IDFC Securities slashed their ratings on the bank a day after Reserve Bank of India (RBI) asked its chief executive Rana Kapoor to step down after January 31. On Wednesday, the central bank rejected the lender’s request to extend the tenure of its promoter and CEO Rana Kapoor by three years. RBI has asked the bank’s Board to find a replacement. The 61-year-old Kapoor owns over 10% in the mid-sized bank.

Citi and IDFC Securities believe that Kapoor’s imminent exit might make raising fresh capital as well as growing deposits and fee income harder for the Mumbai-based lender.

On Wednesday, YES Bank stock closed at Rs 318.50, down 1.44% from the previous close. Intra-day, it touched a 52-week high of Rs 404 and a low of Rs 285.

Citi has downgraded the stock to ‘sell’ from ‘buy’ earlier and cut the target price by 39% to Rs 270. It said the premium attached to the bank’s shares for CEO Kapoor “can go away”. While senior management is competent, Kapoor played a significant role in building the company. “Lender might have to defer capital raise, which could slow down growth,” it said.

IDFC Securities downgraded the stock to ‘underperformer’ from ‘neutral’ and cut target price to Rs 230 from Rs 350. “Kapoor’s departure will lead to a slowdown in loan and fee growth, which can lead to a sharp fall in valuations. Fresh capital and high net-worth deposits will become difficult to raise,” it said.

Meanwhile, Moody’s Investors Service on Thursday affirmed the ratings of YES Bank, a day after the RBI move. The firm has also maintained the outlook on the ratings as stable.

The overall issuer rating continues to stand at Baa3, said Moody’s, adding that all the other ratings on the bank have been affirmed.

“YES Bank’s profitability is strong, and Moody’s expects that the bank can maintain low credit costs over the next 12-18 months,” the global rating firm said in a note. It added that the growth in both the interest and non-interest income will help the city-headquartered bank maintain “solid profitability”.

However, it warned that while the bank’s current asset quality metrics are strong and superior to that of peers, its “aggressive growth strategy poses asset risks”.

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If the bank is able to maintain the present asset quality ratios and reduce credit risk concentrations, its share of low-cost Casa (current account savings account) deposits improves without affecting the margins and profitability is sustained, Moody’s said the bank’s rating can move up. However, an increase in non-performing assets or decline in earnings can lead to a downgrade in ratings, it added.

(With inputs from agencies)

&nbsp;The RBI rejected the lender’s request to extend the tenure of its promoter and CEO Rana Kapoor by three years. RBI has asked the bank’s Board to find a replacement. The 61-year-old Kapoor owns over 10% in the mid-sized bank.


DNA Money Correspondent