Bharatiya Janata Party’s member of parliament, Narendra Jadhav has made a strong remark on Chinese investors in India. According to him picking up stakes in Indian payments and NBFC firms by Chinese companies such as Alibaba in Paytm could pose a grave danger to national security.
The development comes just after Paytm’s argument with offshores payments firm over local data storage.
The nominated Rajya Sabha MP who previously served as a member of the Planning Commission of India and the National Advisory Council has clarified that Chinese authorities are asking for board seats and involvement in corporate decisions of multinational companies such as Alibaba.
Alibaba is a major stakeholder in Paytm, which has applied for NBFC licence. In this way, if Alibaba is allowed to dominate the NBFC sector, it could lead to predatory pricing as well as risk to a large amount of private and financial data.
He also said that these multinational companies chose NBFC over private banks because there is a restriction of at least 26 per cent local ownership in the banking system, as well as no individual investor, can own more than 10 per cent in it. On the other hand in NBFC there is no restriction in terms of foreign ownership.
While Paytm had picked up a stake in NBFC platform CreditMate, Alibaba is reportedly offering financial aid through its tie-ups with Aditya Birla Group’s NBFC arm, IDFC Bank, and Kotak Mahindra Bank.
Not only Alibaba, Shunwei Capital, the venture capital firm started by Xiaomi founder Lei Jun also showing interest in NBFC space through their recent investments in microlending platform KrazyBee and lending platform for salaried professionals, LoanTap.
Meanwhile, Paytm is also foraying in Japan with the help of Masayoshi Son-led investment giant SoftBank.
This is not the first time when a political party or group in India raised its voice against Chinese investors. Earlier, RSS-affiliated Swadeshi Jagran Manch had appealed to the government to disallow investment in companies such as Paytm, which is getting funding from China.
Apart from Chinese investors, these political parties/ groups have also raised voice against US dominance in the Walmart-Flipkart deal.
The development was reported by CNBC-TV 18.