India's Rising Inequality, PNB Fraud Follow Up, Ola Widens Horizons et al.

India's richest 1% get richer by 39% in 2018, as per a report by Oxfam India. Government removes two PNB Executive Directors in light of the Nirav Modi scam. Democrats float proposals to end the shutdown, but gaps remain.

 

Now to Today's Top Business News Stories in Our End Of Day Wrap Up:

 

PNB

Government removes two PNB Executive Directors in light of the Nirav Modi scam.
 

Sacked!: The government has sacked two Executive Directors at the Punjab National Bank for failing to use the global payments network SWIFT to detect the INR14,000cr Nirav Modi fraud.
 

Related: Mehul Choksi, one of the prime accused in the case has surrendered his Indian passport.
 

Backstory: Mehul Choksi was granted citizenship of Antigua and Barbuda in 2018. Since India and Antigua do not have a bilateral extradition pact, the Indian government has been trying to bring Choksi back under a law of the island nation that allows it to send back a fugitive to a designated Commonwealth country.
 

The Bigger Picture: Ministry of External Affairs revoked the passports of Choksi and his nephew Nirav Modi in relation to the scam last year.

 

EQUALITY

India's richest 1% get richer by 39% in 2018, as per a report by Oxfam India.        
 

Billionaire Raj: As per an Oxfam report, Indian billionaires’ fortunes increased by INR2,200cr a day last year, with the top 1% of the country's richest getting richer by 39% vis-a-vis a low raise of 3% in wealth for the bottom-half of the population. Poorest 10% of the population remains in debt since 2004.
 

Public Good or Private Wealth?: Globally, billionaires' fortunes rose by 12% or $2.5bn a day in 2018, whereas the poorest half of the world's population saw their wealth decline by 11% as per the same report.

 

FINTECH

Ola applies for Non-Banking Finance Company licence. 
 
Widening Horizons: In a move to diversify beyond its core business, ride-hailing platform Ola is believed to have applied for a NBFC licence. 
 

The Plan: As part of the plan, Ola seeks to:

  • Expand its short-term credit service
  • Launch a credit card in partnership with a bank
  • Sell insurance to its driver-partners as well as riders

 

Zoom Out: The move as such appears to be an addition to Ola’s strategic alliances undertaken in the recent past, expanding its push into delivery business across segments, which include its ongoing talks with Myra Medicines and its association with food delivery platform Foodpanda.

'Buy Now, Pay Later': Last year, Ola had partnered with Cashfree to launch a 'Pay Later' facility for consumers of its online merchants using which they can get 15 days of credit for an amount ranging from INR1,500-INR20,000. 

Likewise: In a similar vein, Ola’s backer Didi Chuxing has launched a suite of financial services including crowdfunding and lending, as it seeks to diversify its business.

US

Democrats float proposals to end the shutdown, but gaps remain.
 
What You Need to Know: As the government shutdown enters its fifth week, the White House and the Democrats float proposals to end the shutdown. However, these were largely turned down because:

  • They lacked a permanent solution for young immigrants who were illegally brought into the US as children
  • The White House has insisted that funding for the border wall be included in any spending deal that would reopen the government, which is inconsistent with the Democrats' ask 
  • In addition to the $5.7bn Border fund, Trump also proposed $800m in humanitarian aid, $805m in new drug-detection technology, 2,750 more border agents and law-enforcement officials, 75 new immigration judge teams, and a new system to allow Central American minors to apply for asylum in their home countries

Click here to know all that you need to about the US border in 7 charts.
 

Did you know the number of times Trump tweeted on Day 30 of the shutdown?:A whopping 40 times!

 

OPINION

Government to probe technical impediments causing the delay of resolution processes.

Under Review: As per an Economic Times report, in an attempt to expedite the resolution process of the top 12 defaulters, the government is set to review their progress under the Insolvency and Bankruptcy Code (IBC) calling for a meeting of resolution professionals and lenders of the defaulters to discuss possible solutions to bring these cases to a conclusion. 

India's Bankruptcy Code Had Teeth. Now It's Got Dentures: Read this interesting piece to know how the country’s revamped insolvency code is already on the brink of failure.

 

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