Convergence Plus
Saturday, March 23, 2019
Paytm logs in to Forex, to start offering foreign exchange services soon

Paytm logs in to Forex, to start offering foreign exchange services soonAfter introducing savings, wealth management and a host of other services, Paytm is all set to foray into foreign exchange and cross-border payments as well under its payments bank entity, having already received the authorised dealership (AD Category II) licence from the Reserve Bank of India. Besides Paytm, other payments banks like Airtel Payments Bank and Jio Payments Bank have also received the licence, as mentioned by the central bank on its website among the list of licence holders. Even Fino Payments Bank is said to have joined the list recently. These licences help them take a step closer towards becoming full-service financial entities.

Though Paytm Payments Bank did not comment on the story, sources have told ET that the newly-formed bank is all set to start offering foreign exchange services, and going forward, could also enter into cross-border remittance services for its customers. “Having started with payments, Paytm is slowly diversifying into other financial services and foreign exchange conversion will be a starting point and eventually it could also try to venture into cross-border payments both outward and inward,” said a top executive of a payments company on condition of anonymity.

Foreign currency dealings are heavily regulated activities and entities have to be licenced by the RBI. While banks are classified under the authorised dealer (AD) I category, all others are licenced under the AD II category.

According to the central bank, authorised money changers can offer services of foreign exchange to foreigners travelling in India as well as Indians looking for foreign exchange before embarking on a trip abroad.

“With AD II licence, we will enable cross-border remittances at our branches and also offer foreign exchange services which we will look at in the next three months,” said Rishi Gupta, chief executive of Fino Payments Bank.

Gupta added that while the Mumbai-headquartered bank will offer outward cross-border remittances, for inward remittance, they have also applied for the MTSS licence.

Way back in 2016, Paytm had spoken about its plans to open up payments for Uber rides outside India for its Indian consumers in collaboration with Chinese payment giant Alipay but it had to withdraw such a product. Now with the bank slowly taking shape and armed with these multiple regulatory clearances and subsequent licences, it could open up various such features for its customers, according to industry insiders.

“The opportunity in cross-border payments is huge. So far, mainly banks have been dealing in cross-border payments, so there has been zero disruption, which gives a big opportunity for fintech players,”said Prajit Nanu, chief executive of Singapore-based InstaRem which offers cross-border remittance and recently launched its product in India. He put the market size at $6-7 billion annually for India. (Source: Economic Times)

Department of Telecom awaits foreign direct investment clearance for Idea-Vodafone merger approval

Department of Telecom awaits foreign direct investment clearance for Idea-Vodafone merger approvalDoT is waiting for DIPP to give clearance for raising the foreign direct investment (FDI) limit in Idea Cellular to 100 per cent before approving the merger of Vodafone India with the Aditya Birla group firm, as per official sources. "Only FDI clearance for Idea is pending before merger of Vodafone (India) with it. FDI limit needs to be raised in FDI for clearing both the deals of Idea -- sale of tower to ATC and Vodafone merger," a government official told PTI. Idea Cellular has sought to raise FDI limit in the company to 100 per cent. The official added that the Department of Telecom (DoT) had approached the Department of Industrial Policy and Promotion (DIPP) for its remarks around two weeks back and waiting to hear from it.

"Both the companies (Idea and Vodafone) will be asked to clear their dues before merger is taken on record. DoT has not calculated the final amount," the source said.

According to the standard operating procedure (SOP) for processing FDI proposals, all the ministries concerned are required to submit their comments within 4 weeks of the proposal. In absence of comments, it is presumed that ministries or departments have no comments to offer. However, FDI clearance in telecom sector also requires approval from the Home Ministry which should be granted within six weeks. In case it is unable to provide its comment within six weeks, it needs to indicate time frame within which it will provide the comments.

The merged Idea-Vodafone entity will have highest subscriber base of 41 crore accounting for over 35 per cent market share and second largest spectrum holding of 1,850 megahertz in the country. The merger is expected replace Bharti Airtel from its numero uno position which it has maintained in Indian telecom market with highest number of subscriber base at least since last one decade as per reports of the Telecom Regulatory Authority of India.

The debt of resultant entity is expected to be around 1.1 lakh crore as per debt situation of Idea and Vodafone India at the end of September 2017. The amalgamation will result in capex synergies, since it will eliminate the duplication of spectrum capacity and infrastructure related requirements.

Idea and Vodafone are separately paying rental for 6,300 mobile sites which will be synced for merged entity within two years. (Source: The New India Express)

Companies may redefine social media dos, don’ts
Companies may redefine social media dos, don’ts

Companies may revise their policies on the online behaviour of employees, even in their private capacity, as some comments face a backlash from social media users in the country, CEOs and HR managers said. For instance, Kotak Mahindra BankNSE 1.45 % sacked an employee in Kerala on Friday following a contemptuous Facebook post about the rape and murder of an eight-year-old girl that was met with furious condemnation. The bank, however, said it had terminated the employee due to “poor performance”.

“Social media is redefining the boundaries of what is private communication and what is public—imposes new responsibility on management and rightly so,” said Ramesh Tainwala, global CEO at Samsonite International. Many companies, especially consumerfacing ones, maintain there is a fine line between what is acceptable and what is not. But comments should not be contrary to the belief of a company, neither should they be hateful or insensitive.

“Social media is a platform that is fast changing and we need to not just evolve around it but also be sensitive about every issue in the country,” said Kishore Biyani, founder of Future Group, the country’s biggest retailer. Last year, Facebook users in India crossed the 240-million mark.

India has become the largest audience country for the social media giant. The country has also emerged as Twitter's fastest-growing market in terms of daily active users. With these platforms exploding, companies are increasingly confronted with the consequences social media can have on company image. With every user an existing or potential consumer for companies, any disparaging comment could hurt brand image and even sales.

“In this day and age, all employees need to be sensitive about what they are posting on social media because of the ever-increasing impact and reach of social platforms,” Britannia MD Varun Berry said. “Every employee is, in a way, a brand ambassador of the company he or she represents— so responsible conduct on social media is a given.” While social media policy is already part of employee contractual terms, guidelines have to evolve further, companies said. This can also help put employers in a stronger position when they want to take action against employees doing things they don't approve of.

“A code of conduct of any company has to be a living document which must get updated from time to time to reflect the contemporary expectation of conduct by the organisation and its employees,” said Santrupt B Misra, head of group HR at Aditya Birla Management Corp. “As new facets of lifestyle and behaviours emerge as social trends, these living documents must capture the new realities.”

Unthinking use of such mediums can heighten the risk. “So sensitisation and informed usage have to be encouraged through structured education and interactive understanding of the dos and don’ts,” Misra said. Several people have lost their jobs globally after posting comments deemed offensive on social media. For instance, a Bank of America employee lost her job after posting a racist rant on Facebook nearly two years ago while another was sacked from internet firm InterActive Corp for a tweet that linked Aids with race.

Job seekers also need to be careful as recruiters are keeping track. “With people increasingly exposing themselves on social media, organisations are starting to scan potential employee profiles to watch out for any inappropriate content being posted by the candidates,” said Vibhav Dhawan, managing partner at executive search firm Positive Moves.

“Though the processes are not refined yet, going forward, social media behaviour will increasingly influence decision making by recruiters.” Employee messages should also feel connected to the brand’s values, something that is already established in HR policies. “We believe that all Godrejites are brand ambassadors of our company, both in their individual capacity, as well as together as a group,” said Sumit Mitra, head, group HR, Godrej IndustriesNSE -0.06 % and associate companies.

The group said its code of conduct that applies to all team members across geographies and details its business principles and guidelines about representing Godrej appropriately, across different platforms including social media, within and outside the company. (Source: Economic Times)

Samsung jumps on blockchain bandwagon to manage its supply chain

Samsung jumps on blockchain bandwagon to manage its supply chainThe world's biggest maker of smartphones and semiconductors may use the technology behind cryptocurrencies to manage its vast global supply network.

Samsung Electronics is considering a blockchain ledger system to keep track of global shipments worth tens of billion of dollars a year, according to Song Kwang Woo, the blockchain chief at Samsung SDS, the group's logistical and information and technology arm. The system could cut shipping costs by 20 per cent, according to SDS.

While companies around the world have said they're planning to deploy blockchain technology on everything from cross-border payments to tracking the life-cycle of supermarket chickens, Samsung Group is one of the first global manufacturers to take a serious look at using the distributed ledgers in its operations. SDS is working on the system for Samsung Electronics, the conglomerate's crown jewel.

"It will have an enormous impact on the supply chains of manufacturing industries," said Mr Song, who's also a vice-president at SDS. "Blockchain is a core platform to fuel our digital transformation."

Thrust into the spotlight by bitcoin's meteoric rise, blockchain technology has been touted as a breakthrough that will transform the way transactions are recorded, verified and shared. (Source: The Business Times)

Citizens don't want telecom towers in residential areas

Citizens don't want telecom towers in residential areasThe installation of mobile towers near schools, residential areas and hospitals is one of the biggest issues faced by the city residents.

They want the city corporation to ensure that mobile towers are either installed in commercial areas or in open spaces. However, the corporation authorities say that they have never issued permission for any mobile tower near schools and residential areas. They confirmed that it was against the rules to install telecom towers in these zones.

The installation of mobile towers near schools, residential areas and hospitals is one of the biggest issues faced by the city residents.
They want the city corporation to ensure that mobile towers are either installed in commercial areas or in open spaces. However, the corporation authorities say that they have never issued permission for any mobile tower near schools and residential areas. They confirmed that it was against the rules to install telecom towers in these zones.

In 2016, the state urban development department had come out with draft guidelines for installation of telecom towers, but they are not followed in the city. The MCC and the district administration have allowed the service providers to set up telecom towers everywhere, including on houses, near schools and hospitals, some residents allege.

Dr Raghu, a physician, said when compared to other major cities in the state, mobile towers are being installed without any guidelines in Mysuru city. "We can see them in every nook and corner of the city. In a city like Bengaluru, residents don't allow service providers to install towers in residential areas fearing health issues. But here these towers are installed on each and every building. Even near many schools and hospitals," he said.

"There may not be any scientific record to show that mobile towers affect health. But it is always better to install them in commercial zones," he said. Even general public echo similar sentiments. According to Raghava Sharma, a resident of KR Mohalla, hundreds of telecom towers have been set up in residential areas across the city. "Majority of these towers are installed on residential buildings. House owners don't bother about community health at all," he said.

When contacted, T B Kumara Naik, deputy commissioner (Revenue), Mysuru City Corporation, said, "We have not given permission for any telecom tower. We are not collecting tax also. The state government had issued draft guidelines, but were withdrawn for revision,"(Source: Times of India)

Vodafone, Idea may let go of over 5000 employees

Vodafone, Idea may let go of over 5000 employees The ongoing merger process of Vodafone India and Idea CellularNSE -1.37 % could see about a fourth of the telcos’ combined 21,000-strong workforce lose jobs in the next few months as the companies look to save on costs, eliminate duplication and improve efficiency, people familiar with the matter said.

Both companies — which are making losses amid huge revenue pressure and acombined debt of some Rs 1,20,000 crore —have been advised by the nodal team handling the merger to shed at least 5,000 employees in the next couple of months.

“The retrenchment has to happen swiftly because in times of margin pressures in a debt-heavy industry, both companies do not want to start new operations burdened with excess manpower,” said a senior executive aware of the development.

The merger, which has received all clearances except from the telecom department, is expected to close sometime in May. Sources have told ET that those who fall into the bottom quartile in the performance assessment during this appraisal season will be asked to go and profiles that have a mirror image in the two firms, including divisions such as supply chain and procurement, will also face the axe as the telcos want to create a costefficient merged firm without any flab.

“The numbers may exceed 5,000 since duplication will be in large numbers,” said an industry expert aware of development. It will be tough for those getting the axe to find jobs within a vastly shrunk telecom industry that has already let go of at least one lakh employees. While Aditya Birla Group, which owns Idea Cellular, declined to comment, the diversified conglomerate with operations across cement, retail, textiles and financial services among others has in the past accommodated some of its retrenched employees in other group companies.

Responding to queries from ET, a Vodafone spokesperson said, “This is pure speculation and totally untrue. The two companies have not received final merger approvals and so the leadership teams of Vodafone and Idea continue to compete in the market and manage their businesses separately. No decisions have been taken about the workforce of the merged entity, although it is fair to assume that employees will benefit from the opportunities that arise from working for a significantly larger operation.”

Idea and Vodafone currently employ roughly 11,000 and 10,000-plus people, respectively, and analysts have said that a key to the success of the combined entity is their ability to be nimble, expand networks and price their offerings competitively. Cost efficiency will be a key element for the success of the merged entity in a brutally competitive market.

Analysts said rivals Bharti AirtelNSE -0.60 % and Reliance Jio are looking to poach Vodafone and Idea’s subscribers at a time the two firms have their focus on completing the transaction, analysts said. Despite financial pressures, the merged entity needs to keep spending top dollar to expand and deepen its 4G coverage — which is lagging both Airtel and Jio — and further set the platform to upgrade to 5G in future, highlighting the need to keep their operations lean, they said.

“The merger will improve their earning per share (EPS) and reduce debt to equity, but there are operational costs. For that, one needs to have higher cost efficiency, and manpower will be the first to go,” said Sanjiv Bhasin, the executive vice-president for markets and corporate affairs at brokerage IIFL.

“With most work done online, telcos need to employ far fewer people now than they did earlier and this is best time to let go of extra workforce,” he added. The combined entity will be the largest mobile phone operator in India — replacing Bharti Airtel — with almost 42% customer market share and 37% revenue market share. Last month, the two sides announced the top leadership team of the merged company, to be headed by Balesh Sharma as chief executive officer. Both telcos are expected to post meek results for the March end quarter.

Listed Idea Cellular’s losses are set to widen, primarily hit by the cost of servicing its mounting debt besides price competition amid falling revenue, a case likely to be mirrored by unlisted Vodafone India as well.

But Idea and Vodafone have sold or are selling their captive towers besides trying to sell their respective 11.5% and 42% stakes in tower company Indus Towers to raise funds. The Aditya Birla Group has recently infused Rs3,250 crore into Idea, which will also raise a further Rs3,500 crore via a preferential share issue or a rights issue. Correspondingly, Vodafone Group is infusing Rs7,390 crore into its India operations, which along with the Idea fund-raising, will be used to pare debt. (Source: Economic Times)

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