The Corporate House of Cards

The telecom industry and data has been one of the hottest topics of late. The data war dates back to 2016 when  Reliance Jio  Infocomm Ltd., half-owned by India’s richest man, Mukesh Ambani entered the market and relentlessly undercut Vodafone and the other leading carrier, Bharti Airtel Ltd.  Vodafone Idea has been struggling to keep its head above water and is lobbying for government intervention to correct a market that’s been skewed by freebies thrown around by Ambani’s Jio. Back in the day most telecom companies operated under the presumption that data was going to remain an expensive commodity. Basically, they were convinced that they could charge customers exorbitant rates to provide calling and internet services and that this would continue to be the status quo for the foreseeable future. So they sold expensive plans, offered bare minimum services and were happy to continue enjoying their time. On the other end, they were also overpaying for almost e...

As news reports of scams pour in one after the other, it is becoming clear that credit administration in India’s public sector banks is a near-sham. With the Punjab & Maharashtra Cooperative (PMC) Bank adding to another crisis in the banking sector in India, an economic fallout seems quite within our reach. The 5 pager confession letter of the now suspended MD of PMC Bank Joy Thomas shows how the 2 organizations helped each other survive for over 3 decades. The roots of the PMC saga date back to 1986 when the Wadhawans threw a life jacket for the drowning PMC Bank. The brothers’ duo Rajesh and Rakesh Wadhawan infused a capital of 13 lakhs and bailed out the bank of the negative net worth position. In another turn of events, during the 2004 cooperative banks’ crisis, the bank found itself trying hard to keep head above water, as the customers panicked to withdraw their deposits. The company’s liquidity position was deeply bruised with these moments of crisis. This was ...