Chaayos raises $21.5m in funding round led by Think Investments. Urban unemployment rate rises to 9.7% in January. Petition in filed SC seeking ban on WhatsApp Payments pilot roll-out. Donald Trump unveils $4.8trn budget proposal.
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Room for Lending
The Reserve Bank of India (RBI) today announced that banks would not be required to maintain the cash reserve ratio (CRR) for five years on their deposits for an amount equivalent to loans given to the MSME (micro, small, and medium enterprises), housing and vehicles sectors between January 31st and July 31st.
This is likely to have “multiplier effects to support growth impulses”, the RBI noted in its recent Monetary Policy Committee bi-monthly meet. [BS]
Good to Know
Banks currently maintain 4% on their deposits as CRR.
A Mixed Bag
As per data released by the Centre for Monitoring Indian Economy (CMIE), India had an unemployment rate of 7.16% in January, significantly lower than the 7.6% recorded in December.
Devil is in the Details
Rural unemployment fell to 5.97%, down from 6.93%, in the previous month. However, urban unemployment rose to 9.7% in January, up from 9% in December 2019 - close to its recent peak of 9.71% in August 2019. Meanwhile, the quality of jobs both in urban and rural India has been deteriorating.
Infy Going Places
Indian IT giant Infosys has informed the stock exchanges that it will acquire Simplus, one of the fastest growing Salesforce platinum partners in the US and Australia for up to $250m.
Simplus is a leading provider and advisor in cloud consulting, implementation, data integration, change management and training services for Salesforce quote-to-cash applications with more than 4,500 projects.
The acquisition, which is expected to close during the fourth quarter of fiscal 2020, is expected to strengthen Infosys’ position as an end-to-end Salesforce enterprise cloud solutions and services provider, providing clients with the necessary capabilities for cloud-first digital transformation.
The deal is also expected to help Infosys expand its geographic presence as Simplus has offices across North America, Sydney, Melbourne, London, and a large delivery centre in Manila. [Livemint]
We Object, My Lord
An independent think tank, Centre for Accountability and Systemic Change (CASC), has filed a petition in the SC seeking immediate rollback of the WhatsApp Payments pilot project, which was approved by the National Payments Corporation of India (NPCI) last week.
CASC had previously filed a public interest litigation (PIL) before the SC against the launch of WhatsApp Payments, questioning WhatsApp and Facebook’s data localisation compliance and WhatsApp ability to handle digital payments. [Inc42]
No End in Sight
The deadly coronavirus outbreak in China has already claimed more than 1,000 lives (as reported by the Chinese media), and is showing no signs of abating.
A prolonged epidemic is not only expected to vastly hit businesses, trade and tourism, but also technological development.
India too could be vastly hit. Auctioning and roll-out of the much-awaited 5G spectrum may be hit adversely considering that Chinese vendors such as Huawei have been leading the charge on the 5G front. Devices ecosystem development will also be negatively impacted globally. [ET Telecom]
Share price of US wireless carrier Sprint has been up more than 60% in extended hours trading Monday after a WSJ report said that a US District judge is expected to rule in favor of its merger worth with T-Mobile. The decision is expected to be made public on Tuesday. [CNBC Markets]
Mixing Up with Chai
Tea cafe chain startup Chaayos has raised $21.5m in a mix of equity and debt funding round led by Silicon Valley-based Think Investments.
The company raised $18.5m of primary capital from Think Investments and other investors, and $3m of venture debt from InnoVen Capital.
The financing round also saw participation of existing investors, including SAIF Partners and Tiger Global.
The proceeds from the round will be used by Chaayos to strengthen its technology and expand the team. A significant portion of the funding will also be used for opening 100 new stores by the end of this current fiscal.
Tests Don't Lie!
Theranos Founder Elizabeth Holmes has lashed back against charges that she defrauded patients who used her company’s blood tests.
Holmes argued that allegations against her that she misled patients should be dismissed since they are too vague, considering that the government can’t prove that people who got inaccurate test results were actually harmed.
Meanwhile, prosecutors say that they’ve got plenty of proof that Holmes and ex-Theranos President Sunny Balwani duped patients into relying on technology they knew was faulty, and put some of those people in peril by providing false lab results.
A trial is scheduled for August in San Jose, California. [Bloomberg]
Donald Trump’s $4.8trn federal budget proposal for 2021 has been revealed to include proposals to slash billions of dollars in federal support from Medicaid, food stamps and other safety net programs for the poor, while largely sparing the Medicare program that benefits senior citizens. However, many of these controversial cuts are expected to be voted down by the Democrat-controlled US House of Representatives, especially after the bitter impeachment process vehemently polarised Washington. [AP]
Trump vs Bezos
The US House is not the only entity Trump could be sparring against in the near future. Amazon has asked a federal court to let it depose the President and Defence Secretary Mark Esper to determine if they intervened against offering Amazon a multibillion-dollar contract with the Pentagon.
The Joint Enterprise Defense Infrastructure project, or JEDI, was a cloud computing contract by the Pentagon to modernise its operations. Amazon Web Services was widely considered the front-runner for the $10bn contract, but it was instead awarded to Microsoft. Amazon challenged this decision in December alleging that Trump used “improper pressure” on the Pentagon to prevent Amazon from winning the contract in order to harm Jeff Bezos. [WSJ]
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