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Wednesday, October 16, 2019
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Video of the day

PM Modi just got owned by a beauty pageant contestant. While competing for the title of Miss Kohima, Vikuonuo Sachu was asked what she would say if given an opportunity to speak to the PM. Her answer: “If I were invited to have a chat with the prime minister of India, I would tell him to concentrate more on women instead of cows.” Lol! PS: beef is a staple ingredient in Naga cuisine. Watch the clip here.

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EVERYONE'S TALKING ABOUT...

The biggest news story today, explained.

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A monster-sized fraud at a small bank

Three weeks ago, a serious and astonishingly brazen fraud brought down the Punjab and Maharashtra Cooperative Bank. And it has destroyed the lives of its customers—three of whom have died in the last 24 hours. 


What’s a cooperative bank? These are small public sector banks that were created to help small businesses and farmers get loans. They are 'cooperative' in that its customers are also its owners. Most importantly: compared to larger banks, cooperative banks are more loosely monitored by the Reserve Bank of India. There are 1,551 such banks in the country, and PMC is one of the top five urban co-op banks. It has 137 branches and 51,000 members spread across seven states—but is most heavily concentrated in Maharashtra.


Ok, tell me about this fraud: The bank’s top management—including Chairman Warayam Singh and Managing Director Joy Thomas—colluded to hide Rs 6500 crore in bad loans (i.e. loans where the lendee has entirely defaulted). They hid these 44 loans by creating over 21,000 fictitious accounts, many in the names of dead people. 


A key point to note: Rs 6500 crore represents 73% of the bank’s total assets!


Why did they do this?  Ah, that’s where the story gets interesting.

  • The Rs 6500 crore were lent to a now bankrupt real estate firm Housing Development and Infrastructure Ltd. and other firms owned by the Wadhawan family. 

  • The bank had an extremely incestuous relationship with HDIL. Since the 1980s, the Wadhawans have stepped in twice to infuse capital into PMC each time it faced a liquidity crunch. 

  • Also: the HDIL group accounts for more than 60% of the bank’s transactions.

  • PMC Chairman Waryam Singh had a very close relationship with the Wadhwans. He was a board director at HDIL, and held 1.91 per cent stake in the company. In 2015, he stepped down from the board and became PMC chairman, but continued to hold his HDIL stake until 2017.

  • In other words, he had a powerful position at HDIL—at a time when the bank sanctioned multiple loans to his company. And he then continued to represent its interests even as the head of PMC. 

  • Point to note: MD Joy Thomas’ confession points the finger squarely at Singh. But there is sufficient evidence that both men also funnelled money into their own personal accounts. 

 

The most egregious bit: PMC continued to lend money to HDIL long after the company ran into serious financial trouble in 2013. It had started defaulting on its loans to other banks and was facing bankruptcy proceedings.

 

Why is this a big deal? Most of the money in the bank belongs to middle class customers. When the fraud was revealed, the RBI swooped in and banned customers from withdrawing more Rs 1000 over the next six months. After weeks of protests, that limit has now been increased to Rs 40,000. But that is little consolation to those who have lost access to their entire savings. Three of its customers have died over the past 24 hours. They include Sanjay Gulati who died of a heart attack. He had all his money in PMC—Rs 90 lakh—and had recently lost his job as a Jet Airways technician. Another casualty is a doctor who committed suicide. 


The bottomline: It is somewhat comforting to know that all the main culprits have now been arrested—including HDIL owners Rakesh and Sarang Wadhawan. But if PMC goes belly up, its customers will get a maximum of Rs 1 lakh in compensation. More importantly, its misfortune will have a domino effect on the many small banks which have deposited their funds in PMC. And this particular fraud is just the tip of a bad loan iceberg created by serious corruption in Indian banks. 


Learn more: Moneycontrol offers the most comprehensive deep dive into the PMC fraud. Dhruv Rathee’s video pulls together an explainer that places it in the larger context of banking in India. India Today summarises the lessons learned from this travesty, while Business Standard offers its solution to regulating co-op banks. This clip sums up the anguish of the PMC customer. Indian Express reports on seven PMC customers to bring home the human tragedy unfolding in plain sight. Economic Times explains what happens to your money if your bank does a PMC.

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IN CASE YOU MISSED IT...

contemplating your fitness app in great alarm

Pakistan teeters on the edge of being blacklisted: The Financial Action Task Force—a global financial watchdog group—has long warned Pakistan for not taking sufficient action against terror groups. Islamabad is currently on the ‘Grey’ list’ but a recent internal evaluation report found that it has fully complied with only one of the 40 FATF recommendations to crack down on terror financing. The next step may send Pakistan on to the ‘Dark Grey’ list—which is like giving a nation one last chance to improve. Being blacklisted would trigger international economic sanctions which will devastate an already faltering Pakistani economy. (Associated Press via Times of India)

 

You may never use a fitness app again: once you read this Huffington Post investigation into the data collection practices of the likes GOQii and Healthifyme. It’s not just what they know but who they share that information with. We highly recommend reading it. (Huffington Post)

 

Google released the new Pixel 4 phone: but it won’t be sold in India. The reason: Google phones haven’t done well in the premium Rs 40,000-plus category. Therefore, its India strategy is to strip some of the premium features of its pricey phones and sell a cheaper version. For example: Pixel 3a. That’s unfortunate because Pixel 4—which boasts a motion-sense radar—looks pretty darn cool. Cnet has all the details. 

 

Flipkart’s got big, big plans: The online ecommerce company is expanding into all sorts of new areas. New biz #1: food retail. Flipkart plans to invest $258 million into a new subsidiary called Flipkart Farmermart Pvt Ltd. The CEO says the move to sell locally sourced produce will "boost Indian agriculture” and help “multiply farmers’ income”—making it sound better than the government's latest kisan yojana. Biz #2: Flipkart Video Originals, which the company describes as “bespoke snackable content” that is mobile-first and interactive. Oh look, movie and dinner with Flipkart.

 

Time to junk those Lululemon leggings? The upmarket athletic wear brand has a shiny, happy image but the workers who make its overpriced clothes are anything but. Factory workers at the Bangladesh factory owned by Youngone Corporation—which makes Lululemon clothes—are beaten and humiliated if they leave work early or break any rules. Female workers said they're frequently called "whores," "sluts," and "prostitutes" by their managers. Lululemon is shocked, shocked, shocked. (The Guardian)

 

The Talented Ms Jolly: For the past week, there has been a steady drip of news stories of a bizarre serial killer named Jolly Joseph. Over the past 14 years, she has killed her first husband, both his parents, his uncle, her second husband’s child and then wife—all poisoned by cyanide. Here, finally, is the big fat in-depth story that puts all the outlandish details together. (Hindustan Times)

 

Guess who’s unhappy with festive sales: Small kirana stores who have bitterly complained against the deep discounts offered by Amazon India and Flipkart. The government has since summoned both so they can explain themselves. (Firstpost)

 

Buckle up for a 20-hour flight: Qantas will be test-flying a nonstop flight from New York to Sydney—the longest ever plane ride in history. The human ‘guinea pigs’ include the pilots and a few dozen passengers who will be constantly monitored by scientists on board. The current record is held by Singapore Airlines’ 18.25-hour flight between Singapore and New York. (Bloomberg)

 

Humans think ‘cold’ is cool: New research shows that people associate cold temperatures with luxury. It’s the reason why we say ‘cold hard cash’ or describe diamonds as ‘ice’—and why Timex slaps its expensive watch on a block of ice in an ad. We find this both stupid (of us humans) and fascinating. (Fast Company)

 

The not-so-fresh air in Delhi: is back to being ‘hazardous’ again. And it is only October. (Indian Express)

 

Your dollop of sunshine items: includes the following:

  • The amusing news that Harbhajan Singh will be acting in a Tamil film titled, er, ‘Dickiloona’?!
  • This clip of the London police arresting an Extinction Rebellion protester dressed as broccoli. Sorry, but that costume makes the whole thing hilarious.

  • This funny list of euphemisms. Our favourite: Living impaired (dead). 

  • Who do you really want to see after scoring five gold medals and becoming the winningest gymnast in the world? This clip of Simone Biles reunion with her dog is priceless.

  • The most awesome mini-Sita ever.

  • This Instagram account entirely dedicated to dog noses. Want more pups? How about the best baby-sitter ever? Truly.

  • This Jane Austen-era quiz that is all good fun unless you are a Scorpio or happen to love polar bears. 

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SEX, LOVE ETC.

Everything we don't know about human desire

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All orgasms are not made equal 

We instinctively associate an orgasm with good (or at least satisfactory) sex. But new research suggests that there is such a thing as a ‘bad’ orgasm—even during consensual intimacy. This is a fascinating report that reveals the complicated relationship of both men and women with sex.


Read: The dark side of orgasms | PsyPost

Sex, Love etc 2

Dick pic, please!

This is an entertaining story about a young art student who decided to collect material for her next art project on Tinder—where she solicited 600 men for dick pics. Her story about her experience is definitely worth checking out. (NSFW warning: the link also includes illustrations of her work)


Read: 140 Dicks From Tinder (2019), Oil on Canvas | The Cut 

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