The year 2018 has been quite an eventful one, from banking frauds that have marred the sector to the aviation industry reeling under huge losses. The soaring petrol rates and the fall in the Rupee also acted as major dampeners to the Indian economy. In August, Sensex inched closer to 39,000, but due to a massive fall in November, the BSE benchmark index slipped below the 35,000 mark. New Regulations for RBI? Narendra Modi Government Set to Change Functioning of RBI, Say Reports.
However, towards the end of the year, there was improvement seen as government intervened and announced to cut the petrol and diesel prices by Rs 2.50 per litre. The US giant, Walmart, entering the Indian e-commerce space by buying a majority stake in Flipkart, has acted as a major fillip.
The government this year also proposed a new set of regulations for the functioning of the Reserve Bank of India so that it can closely supervise the functioning of the Central Bank. Reportedly, the new regulations are aimed at making the RBI, a board-managed institution.
It has been quite a tumultuous year for the banking industry, from being hit by one of the largest scams, to top management from private sector banks exiting their profiles. The year started with diamond merchant Nirav Modi and his uncle Mehul Choksi escaping the country after defrauding Punjab National Bank (PNB) through fraudulent Letter of Undertakings (LoUs) and digging a hole of 13,800 crore transaction fraud in the state lender's pocket. The fugitive diamantaire who is believed to be in the UK has recently written to Enforcement Directorate explaining why he cannot return to India. Nirav fears that he will be lynched by his former employees, whose dues are yet to be cleared, and by landlords whose rents are pending, shareholders and customers who have suffered losses due to the action against him. Nirav Modi Writes to ED, Says 'Can't Return to India', Fears Being 'Lynched'.
In October, Chanda Kochhar quit as ICICI Bank MD & CEO and the Board accepted Kochhar's request for early retirement. Sandeep Bakhshi succeeded Kochhar, whom the bank appointed for a term of five years. Kochhar continues to be under heavy scrutiny of several Indian and foreign agencies for alleged irregularities in her dealing with certain borrowers in the Videocon loan case. It was further alleged that Videocon Group pumped money into NuPower Renewables, a firm owned by ICICI Bank CEO's husband Deepak Kochhar. Chanda Kochhar May Face Penalty of Rs 25 Crore If Found Guilty in Videocon Loan Case, SEBI Can't Ask Her to Resign.
Ashok Chawla, Chairman of Yes Bank also resigned from the bank's board after his name came up in the corruption chargesheet by the Central Bureau of Investigation.
The last nail in the coffin came in the final month of 2018 when Urjit Patel quit as the RBI Governor and was replaced by Shaktikanta Das.
The entire aviation sector is facing a turbulent time. This year, we saw several IndiGo Airlines getting grounded on the back of faulty engines, reporting a loss for the first time. A similar situation prevailed for Jet Airways, as they failed to pay the salaries of their employees on time and ended up cancelling more than 30 flights daily to revive itself from the cash-crunch situation. Jet Airways Cancelling 20-30 Flights Daily Due To Cash Crunch; Private Carrier Yet To Pay Salaries Of September.
In October, debt-ridden national carrier Air India was provided with Rs 1,000 crore from the National Small Savings Fund by the government. Air India was forced to ground 19 planes due to lack of spare parts in August. This led to cancellations of several flights and a huge loss to the revenues. In addition to this, the sector was filled with negative news that about the harrowing experiences of passengers. From IndiGo illtreating a middle-aged person to Jet Airways facing partial hearing loss after cabin pressure dropped suddenly, these continued to hog the limelight.
The biggest news in the e-commerce sector was Walmart buying a majority stake in Flipkart. The US 16 million dollar acquisition is considered to be the costliest in the e-commerce sector. Sachin Bansal sold off his 5.5 per cent stake in the company at an amount of US Dollar 1 billion. Flipkart-Walmart Deal: Sachin Bansal and Binny Bansal Get Income Tax Notices.
Experts termed this strategy as a clever one, because it gave the world's largest brick-and-mortar retailer, access to an e-commerce market that Morgan Stanley estimated to be worth $200 billion in a decade's time. This was a well-thought-out strike by Walmart to fight with Amazon in India.
Binny Bansal, Flipkart co-founder and group chief executive officer (CEO) resigned from the company, following an allegation of ‘serious personal misconduct’. Paytm employees, including Secretary was held for blackmailing Paytm Boss for Rs 20 Crore.
Rupee Vs Dollar
The Indian currency touched a record low of 74.48 in October against the US dollar. It was one of the worst performing major emerging market (EM) currencies in 2018 and the worst in Asia-Pacific. The rupee is down about 8 percent against the US dollar. Rupee on a Free Fall Against Dollar! Here is How the Indian Currency Stands in Comparison to Its Neighbours.
The common man was burdened with the rise in petrol and diesel prices this year. It was then that the government was forced to intervened and they announced to cut petrol and diesel prices by Rs 2.50 per litre with immediate effect. As of October 4, the price of petrol hit the Rs 84 per litre mark in Delhi while diesel cost went Rs 80 per litre in Mumbai. It had crossed Rs 90 mark in Maharashtra town. Petrol, Diesel Prices Hiked For 10th Consecutive Day in India, Remains Costliest in South Asia: List of Fuel Rate in Neighbouring Countries.
The coming year is a crucial year, as General Elections are due to be held in April or May 2019.