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Jottings: Rajan Got It Right

The prospective merger between private life insurers HDFC Life and Max Life is expected to open the floodgates for more such deals

Photo Credit : Umesh Goswami

When Mint Road went in for an asset quality review (AQR) nine months ago, some in India Inc said it was too fast, too soon, that banks would stop lending. And fingers were pointed towards Reserve Bank of India (RBI) governor Raghuram Rajan for being hasty and harsh. The latest RBI Financial Stability Report (FSR) says gross non-performing advances rose sharply to 7.6 per cent of gross advances at end-March 2016 from 5.1 per cent in September 2015 due to re-classification of restructured advances in the AQR. It would be wrong to say that NPAs went up — what really happened they were recognised correctly. That’s why the overall stressed advances rose only marginally to 11.5 per cent from 11.3 per cent during the period due to a reduction in restructured standard advances ratio from 6.2 per cent in September 2015 to 3.9 per cent in March 2016. Hope the next man in at Mint Road will continue with the good work.
— Raghu Mohan

A Blow For Startups?
Nikesh Arora’s sudden exit from Softbank has sent shockwaves into the Indian startup ecosystem. After all, Arora, as president and COO of Softbank, was considered the key person behind many of the investments in Indian startups. Softbank invested about $1.5 billion in Indian startups during Arora’s tenure at the Japanese company. There are now concerns about the future of the investee companies. However, Arora has said there are other people in the team to carry the work forward. It appears that while Arora’s exit will have some short-term impact on the existing portfolio companies, the long-term impact will really be on the future investments.
— Ayushman Baruah

Is Consolidation Around The Corner?

The prospective merger between private life insurers HDFC Life and Max Life is expected to open the floodgates for more such deals. While public sector behemoth LIC continues to control the life insurance market, there has been a mushrooming of private life insurers in the country. Even then, life insurance penetration in India is abysmally low at 3.4 per cent of the GDP, whereas in countries such as Hong Kong and Japan, it is over 10 per cent. The merger of HDFC Life and Max Life, among the top four private insurers, is likely to pose a threat to the smaller private insurance, and may push them to effect mergers of their own to retain their market share. Are we talking of consolidation here? Watch this space!
– Paramita Chatterjee

Real Exercise Or A Charade?
Should voice calls made using the Internet be regulated? Or effectively, should WhatsApp, Skype and other apps be regulated? The Telecom Regulatory Authority of India (TRAI) has posed such questions in its consultation paper so that it can kick-start the process of recommending its views on the subject to the government. TRAI wants to know which aspects of conventional telephony regulation should apply to Internet telephony service. Should there be a licensing fee mechanism for ISPs if they are allowed to provide unrestricted VoIP services? Should there be mechanisms to introduce location data to VoIP calls made to emergency helpline numbers? However, TRAI offers a different logic behind its consultation process. It maintains that Internet telephony helps provide low-cost calling service and may be the future. Is there more to it? Considering the recent dispute between private telecom players and BSNL which launched its new service allowing STD and local calls using a mobile application, it certainly seems so!
— Ashish Sinha

Scarecrows On The Way
This year the FICCI-Pinkerton India Risk Survey sailed into public domain on a day on which Prime Minister Narendra Modi chose to underscore his government’s commitment to a congenial business environment in his first television interview since he assumed office. Close on the heels of his government’s announcement of easier foreign investment norms in some core industries, Modi promised to usher in the long awaited Goods and Services Tax regime. So, what is holding up investments by India’s home grown industries? The Ficci-Pinkerton India Risk Survey points to risk perceptions in industry stemming from “strikes, closures and unrest” — particularly the two community unrests over reservations. ‘Information and cyber insecurity’ continues to dog corporate confidence for the third year in a row. But, ‘corruption, bribery and corporate frauds’, perceived as the topmost risk by corporate India in 2015 and 2014, has slipped to the fifth position in this year’s survey.
— Madhumita Chakraborty

The Price Is Privacy
Norton by Symantec has released its report, the Norton Mobile Survey, detailing security and privacy stats for smartphone users in the current scenario of smartphone usage, particularly when 65 per cent of Indians who access the Internet now do so from their mobile phones. The report shows that Indian consumers face a situation of skyrocketing malware and privacy violations with lowering alertness and care to complete the equation. With users picking up their device an average of 41 times a day mobile security is a big concern especially as of 10.8 million apps analysed by Symantec’s Norton Mobile Insights in 2015, 3.3 million were malware, a 230 per cent increase from 2014. For Indians 34 per cent threats were of viruses and malware and 21 per cent involved the misuse of credit cards and bank account information. Equally alarming, 19 per cent involved access to personal information. While users are careless when giving apps permission to access camera, contacts, microphones and more on the device, it’s also true that the most frequently used apps ask for these permissions leaving users uncertain about when exactly they need to deny permission, thereby offloading the app. An issue that the app industry needs to address urgently
— Mala Bhargava

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