Customers left agitated as RBI places multiple restrictions on PMC Bank. India US trade deal falls off. BSNL may get a revival plan. WeWork CEO steps down following pressure from Board members and investors. US House speaker announces impeachment proceedings against President Donald Trump.
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Recap: The Reserve Bank of India (RBI) yesterday placed multiple restrictions on Punjab and Maharashtra Cooperative Bank Ltd (PMC Bank), a leading co-operative bank headquartered in Mumbai, on the back of rising defaults in the last six months.
As per the directive, PMC Bank cannot grant or renew any loans and advances, make any investment, and incur any liability, including borrowing funds and accepting fresh deposits. Besides this, the RBI has capped withdrawals at INR1,000 per customer for the six-month period.
PMC Bank has over 37 branches spread over seven states including Delhi and Punjab and deposits worth INR11,617cr.
The move has left PMC’s many customers panic-stricken and agitated, some of whom had parked their lifetime savings in the bank as it “offered higher fixed deposit rates than mainstream banks, and better customer service.” The Hindu BusinessLine
This Too Shall Pass: The Central Bank, however, has said that the issue of the directions should not be construed as a cancellation of the banking licence.
Meanwhile, amidst all the chaos, MD Joy Thomas assured the depositors that these irregularities will be rectified before the expiry of six months. The Wire
Nodding in Agreement: In a rare occurrence, Reliance Jio has agreed with its rivals Airtel and Vodafone Idea in stating that the 5G spectrum sale should be deferred till a use case is developed for the airwaves, which are priced “exorbitantly high”.
Previously: The Department of Telecommunications has said that it planned to auction 4G and 5G airwaves in December 2019 or early 2020.
Likewise, Jio also pushed for sooner functioning of 4G airwaves, to keep pace with surging demand for data and ease network congestion.
Zooming Out: Both Airtel and Vodafone Idea have said they would not buy 5G airwaves at the price recommended by the Telecom Regulatory Authority of India stating that it too expensive at over seven times the price for 5G bands in South Korea. ET Telecom
Do You Have a Plan!: Govt-backed, cash-strapped, Bharat Sanchar Nigam Limited (BSNL) is considering a mega expansion plan to raise capital worth INR12,000cr from the market.
The Department of Telecommunications (DoT) has been working on a revival package for distressed telcos BSNL and MTNL, which would include components such as voluntary retirement scheme, asset monetisation and allocation of 4G spectrum. Financial Express
Adios, Neumann: Adam Neumann, WeWork’s co-founder and CEO, has stepped down from his role and will serve as non-executive chairman of the Board. It was recently reported that some members of the Board and big investors – including SoftBank – were pressurising Neumann to step aside in order to salvage the company’s long-delayed IPO. Neumann’s ouster is strikingly similar to that of former Uber executive Travis Kalanick who had also been asked to step aside by frustrated Board members before the company’s IPO. TechCrunch
The Circle of Life: Once upon a time, WeWork was worth $47bn and about to go public. Then, its valuation plunged to $15bn and its IPO was postponed indefinitely. Once upon a time, Adam Neumann led a renowned co-working space company. Then, he was on a mission to “elevate the world’s consciousness”. The rise and swift fall of one of the most popular tech companies of our time reflects narratives about Silicon Valley speculation and about a company caught between conflicting business models. The Washington Post
Houston, We Have A Problem: India and the US failed to announce any trade deal during the late Tuesday meeting between Prime Minister Modi and President Trump in New York. Trump had previously expressed hope to reporters that both sides would “very soon” conclude a limited trade pact ahead of a comprehensive free trade agreement to be signed later. During the meeting itself, while Trump hailed his relationship with Modi and the two countries’ ties, a deal was not unveiled. Moneycontrol
In a New York Minute: Commerce minister Piyush Goyal, who was in New York for the talks, said that though a deal could not be reached, discussions would continue and that both leaders were optimistic about “reaching some kind of a trade agreement in near future”. Livemint
Pelosi vs Trump: Impeachment clouds have assembled over the White House. Allegations that President Trump pressurised the Ukrainian government to launch an investigation of Democratic presidential candidate Joe Biden have led to Nancy Pelosi, Speaker of the House of Representatives, to announce an “official” impeachment effort.
Can Donald Duck?: Pelosi has been pushed by fellow Democrats in the House and Senate to prosecute Trump ever since the Democrats took the House last November. But she withheld for a long time, arguing for patience until the Mueller report on the alleged Trump-Russia collusion was released and that impeachment was an unpopular with voters and politically unfeasible (while the Democrats control the House, Trump’s Republicans hold a comfortable majority in the Senate). WSJ
The Writing on the Wall: The impeachment proceedings against Trump will not be the first in US history. Previously, two US Presidents have been impeached: Andrew Johnson in 1868 and Bill Clinton in 1998 (both were impeached by House but not convicted by the Senate). There were efforts to impeach some other Presidents, most notably Richard Nixon who resigned before proceedings began.
Should Markets be Worried?: In case you’re wondering how markets will react to Congress’s impeachment proceedings against Trump, the answer is counterintuitive. In previous instances of such trials, the increased political bickering and uncertainty didn’t particularly hurt Wall Street. The biggest worries for investors in the near future are not likely to be the Pelosi-Trump clash but the US-China trade war and slowing global growth. Reuters
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