Singapore’s Deputy Prime Minister Lawrence Wong announced in New Delhi on Tuesday (20 Sep) that the new high-level roundtable between Singapore and India will enable both countries to “strengthen their relationship across many fronts and find mutual benefits by working together”.
“We look forward to the India-Singapore Ministerial Roundtable as a new regular platform for both sides to meet on an ongoing basis to coordinate and oversee these new areas of cooperation,” said Mr Wong. He thinks India and Singapore can play a role together to secure a “more stable and prosperous Asia-Pacific”.
Mr Wong said Singapore has been discussing with India how to cooperate further and eventually decided on the roundtable as a platform to further enhance cooperation. He also found “striking” that business leaders from both sides are finding opportunities to work together, similar in areas that were discussed by the ministers. The business leaders on the Singapore side present at the business roundtable included Temasek chief executive officer Dilhan Pillay Sandrasegara, DBS Bank CEO Piyush Gupta and GIC CEO Lim Chow Kiat. All 3 are, of course, linked to the Singapore government.
In particular, Mr Wong talked about fintech start-ups in India. “If you look at what India has achieved with its digitalisation efforts and explosive growth of start-ups and fintech companies, there is considerable potential there,” he said.
“At the same time, Singapore is a financial centre. We also have been able to grow a vibrant fintech ecosystem within Singapore… it serves a much broader region. There certainly are possibilities for us to work together, for fintech companies to come together and explore.”
Confusing rules
Fintech companies in India do face regulatory issues. Just 3 months ago, India’s central bank, the Reserve Bank of India (RBI), suddenly decided to issue new rules cracking down on fintech companies (‘India’s central bank cracks down on fintech startups‘, TechCrunch, 24 Jun 2022).
RBI informed the fintech startups that it now bars the practice of loading non-bank prepaid payment instruments (PPIs) with credit lines. PPIs are essentially pre-paid cards. The move has now become a threat to the many fintech startups in India.
Several startups including Slice, Jupiter, Uni and KreditBee have long used the PPI licenses to issue cards and then extended them with credit lines, essentially offering loans to consumers. They then charge the consumers with high interests. RBI’s notice would now impact everyone including buy now, pay later firms that also use a similar method to offer loans to customers. “The rule is very confusing and strange,” criticised a fintech founder who wanted to remain anonymous for fear of antagonizing the RBI.
The founder added that this new move by RBI practically erases all the innovation that has happened in the past five years in the fintech industry, which has attracted over $15 billion in investments from the many VCs including Temasek. Fintech startups are convinced that those incumbent banks have lobbied the RBI to impose the new restriction on them.
Scandals in Indian startups
Then, there are scandals erupting in Indian startups. Just this year, the founder of BharatPe, one of India’s fastest growing fintech companies, was accused of embezzlement. The founder, Ashneer Grove, was accused of taking money out from the company into his own family pockets (‘Indian startup king Ashneer Grover loses luster after embezzlement accusations‘, 10 Mar 2022).
Staff at BharatPe have made multiple complaints against the management of the company. In a leaked audio recording posted anonymously online, a man who sounded like Grover, threatened a bank employee with death for not helping him get shares in a hot initial public offering. Grover denied the man was him.
He even hired his wife, Madhuri Grover, as the “Head of Controls” in the company. Her appointment frustrated many. Staff complained that she threatened a colleague with a salary deduction for making printouts at work and criticized people for the amount of coffee they drank in the office. She would also raise queries over relatively small things, like the price of a television or motorcycle intended as gifts for a merchant promotion.
Grover’s glitzy lifestyle also rubbed some of the employees the wrong way. He and his wife upgraded their modest home for a rented penthouse and renovated another luxury property. He purchased a Porsche and bragged to his staff that he had spent $130,000 on a dining table.
Soon, accusations that he stole from the company to fund his extravagant lifestyle appeared. Investors appointed PricewaterhouseCoopers and Alvarez & Marsal to investigate Grover’s management of money. In early March this year, BharatPe’s board released a statement accusing Grover, his family and relatives of creating fake vendors to siphon away funds and abusing expense accounts “in order to enrich themselves and fund their lavish lifestyles.”
Subsequently, Grover and his wife left the company.
Other troubled startups reported in the news recently include Trell, an e-commerce platform founded by Arun Lodhi, Pulkit Agrawal and Bimal Kartheek Rebba. All the cofounders are under investigation on grounds of financial irregularities which were uncovered by Ernst & Young of India.
