The rapid pace of change is keeping companies, individuals, even governments, paranoid about the next moment, next hour and the next move. They need to constantly rebrain and rewire, else they risk being left behind. Here are some watershed moments of 2018 that changed the course of India Inc:
Ban on Bitcoins/cryptos
After years of lobbing the ball between the various financial regulators in the country, it is the banking regulator Reserve Bank of India which finally took the decisive call on whether Bitcoins/crypto currencies are to be allowed in India. RBI's ban was upheld in July, 2018 by the Supreme Court of India. The move eventually killed a flourishing industry that was already doing business worth between Rs 100-200 crore per day and had over 4 dozen bitcoin/crypto exchanges. There's some hope though. The inter-disciplinary committee set up to examine bitcoins/cryptos is believed to be of the view that cryptos may be allowed-with riders. Will RBI bring back Bitcoins/cryptos in 2019?
Punjab National Bank scam
The $2.3 billion Nirav Modi-Mehul Choksi led Punjab National Bank scam shook up India's banking system to the harsh realities of economic frauds and runaway fugitives. It triggered a crackdown on banks that had still not automated their systems or linked their core banking software with the international SWIFT software; created new guidelines to prevent such frauds in the future and even banned Letters of Undertaking. Companies and banks had to rewire quickly to deal with the fallout. Exporters, specifically, needed to switch to costlier Letters of Credit to continue their business.
Fugitive Economic Offenders Bill 2018
The escape of the Modi-Choksi duo and the previous escape of Vijay Mallya together prompted the government to enact the Fugitive Economic Offenders Bill 2018 that aims to prevent such offenders from fleeing the country to evade the law. Their assets can now be confiscated expeditiously if they fail to present themselves before the law. This marks a turning point in India's economic offences history as offenders will feel the long arm of the law wherever they may be in the world.
The RBI circular in February that mandated all banks to report unpaid loans beyond 90 days as NPAs was a watershed moment in 2018. Not only did it raise India's NPAs by over 25 per cent in one shot (to over Rs 10 lakh crore), it was also the beginning of the end of an uneasy relationship between the RBI and the Centre. It triggered a string of unilateral initiatives by both the Centre (Sashakt scheme to defer bad loans) and the RBI (strict move against weak banks through Prompt Corrective Action rules). Neither side consulted the other. This spat led to the Centre invoking Section 7 for the first time in the central bank's history. A series of verbal duels and a tense board meeting finally led to the resignation of RBI Governor Urjit Patel.
Artificial Intelligence came into its own
Artificial Intelligence and data analytics came into their own in 2018. In India, new business models using AI began emerging in industries as diverse as HR, e-commerce and healthcare. Across the world, AI is beginning to get mainstream, not just through intelligent home speakers from the likes of Amazon, Google and Apple but also through driverless cars, automobiles and trains. China has joined the US in the race to be the world's premier AI tech nation. It even unveiled the world's first AI enabled news anchor in 2018. With its billion-plus population churning out enormous data-the lifeline of AI-China poses a huge challenge to the US dominance in AI. This race is set to ride into 2019 with equal vigour.
Facebook-Cambridge Analytica data scandal
The Facebook-Cambridge Analytica data scandal unearthed that CA had harvested data of millions of Facebook users without their consent. It was a moment of betrayal for Facebook users against the social media giant. The event led to a significant fall in the company's share price and the examination of Facebook founder Mark Zuckerberg by the US Senate. Facebook has since been involved in more data breaches through the year. The world's largest social media platform better watch out. Users may not take data breaches lightly in 2019.
Departure of top bankers
Hiding non-performing assets, keeping dodgy accounts and alleged impropriety led to the premature departure of several of India's high profile bank CEOs including Axis Bank's Shikha Sharma, Allahabad Bank's Usha Ananthasubramanian, ICICI Bank's Chanda Kochhar, and Yes Bank's Rana Kapoor. The departure of top bankers even culminated in the resignation of banking regulator RBI's Governor Urjit Patel following a string of differences with the Centre.
Walmart buys Flipkart
The world's largest retailer Walmart's decision to buy Flipkart in a $16 billion deal brought the famous Walmart-Amazon rivalry to Indian shores. The deal has intensified rapidfire investment to capitalise Indian entities to outlast each other in cash burn. However, a new press note re-defining the guidelines for FDI in e-commerce at the end of the year has spooked all foreign retailers as the Centre aims to curb indiscrimate discounting in the domestic market whose predatory pricing was allegedly killing local businesses. While this will be a setback for industry leaders Walmart/Flipkart and Amazon, it's a gaping opportunity for the laggards Snapdeal, Shopclues and others to bounce back.
Personal Data Protection Bill 2018
Srikrishna Committee report outlining India's Data Protection Policy caused an intense debate over the ownership, use and storage of data. The policy, however, has too many loose ends: an individual has no right to be forgotten; the clause asking for data to be stored locally has left a loophole; policy makes individuals liable for withdrawal of consent to use data; and violation of policy will attract lenient fines. With the government still to present the bill in Parliament, the discussions around how India will protect the data of its citizens is only just beginning.
After years of raging debate over the validity of Aadhaar for various services availed by the Indian citizens, it was the Supreme Court verdict in September that finally put the lid on the heated debate. The SC held Aadhaar constitutionally valid by a 4:1 verdict but barred banks and telecom companies from asking for Aadhaar from their customers. But it did make it mandatory to avail government benefits and to file Income Tax returns. Going by the Centre's intent to bring more legislations for Aadhaar, the debate around the controversial ID are far from over.