Friday, March 6, 2020

Art of the day

Given all the panic and pandemonium, we have something lovely to kick off your day: Haunting and gorgeous illustrations from a rare copy of ‘Alice in Wonderland’—painted by Salvador Dali! A reminder that there is still great beauty in this world of ours. Happy weekend! 

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The biggest news story today, explained.

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The collapse of YES Bank

Yet another big Indian bank is in trouble. The now ironically named YES Bank will be saying a big fat ‘no’ to its account holders’—all thanks to the Reserve Bank of India.  And here’s why.  

What happened? The RBI has clamped down on the bank, imposing a 30-day moratorium on all its external transactions. And it’s effectively taken control of the bank by “superseding” its board of directors.


What does that mean? As of last evening, the bank’s customers cannot withdraw more than Rs 50,000 until April 3. But certain exceptions apply if the funds are required for:

medical treatment of the account holder or their dependents; payment of school or college fees in or outside India; shaadi-related expenses; any other “unavoidable emergency.”


Why? A “serious deterioration in the financial position” of YES bank—coupled with its inability to raise money to save itself. The RBI also flagged “serious governance issues and practices in the recent years which have led to steady decline of the bank."


Translate that, please! Let’s break it down for you with an all-too-familiar timeline:

  • YES Bank was founded in 2004 by Kapoor & Kapur—as in Rana and Ashok. 
  • The bank’s main business was giving out big-ass loans to companies—which account for 90% of its outstanding loans. And it was the darling of investors, destined to become one of India’s largest private banks.
  • Except—as you may have noticed—India Inc has been defaulting on a lot of its loans, be it scoundrels like Nirav Modi or dead airlines like Jet. Also, this company policy didn’t help: “Even when other private sector banks would reject loans to corporate clients, it was YES Bank that came to their rescue,”
  • So YES Bank ended up with a whole lotta bad loans, given to out-of-cash borrowers like Anil Ambani. 
  • Also: non-banking financial companies (NBFCs) like Dewan Housing Finance Limited—which offer most of the same financial services like loans, but don’t accept deposits so aren't called banks. Think Muthoot Finance, Bajaj Finance et al.
  • NBFCs in turn are in big trouble because they too have a lot of bad loans on their books. Dewan put a lot of its money into something called IL&FS—which develops and finances major infrastructure projects across the country, and is defaulting on all its debts. (We explained the IL&FS crisis in greater detail here)
  • Now companies like Dewan can’t repay their loans to their lenders like Yes Bank. Point to note: these so-called ‘shadow’ banks accounted for 11.5% of its loan portfolio. 
  • Oh, and the fact that YES has given out 7.2% of its direct loans to real estate developers hasn’t helped either. In fact, the bank was flagged as the lender with the largest proportion of loans to “stressed borrowers” (read: broke). 


Sounds like s**tshow: Yup! YES’s safety reserves of cash kept dwindling. And everything it tried—including first hiding its bad loans, and then sacking CEO Rana Kapoor—didn’t help. YES Bank’s share price tanked 74% last year, and has dropped another 21% since. And much like the recently deceased Jet Airlines, the bank spent many months courting new investors, but with zero luck.


So now what? The RBI insists that there is no need to panic, and it has a “credible restructuring plan” in place. According to news reports, the plan “entails a capital infusion of Rs12,000-14,000 crore in the YES Bank, primarily by a consortium led by the country's largest lender State Bank of India.”


That’s good news, right? As an emergency intervention to save customers, yes. But it once again points to the deep-seated rot created by bad loans in India’s financial system. And it’s hardly any comfort that publicly owned banks have to continually bail out flailing private lenders. As a global research firm points out: “The bigger casualty is taxpayers as their money is being used to infuse capital in PSU banks [like SBI] time and again. In other words, it is the taxpayers who are bailing out YES Bank indirectly in our view.”


Learn more: If you want more:

  • You can read the RBI's full statement here
  • This Twitter thread offers the best gyaan on how to handle this 30-day moratorium if you are a YES customer.  
  • CNBC TV18 has an excellent timeline of how the ship went down at YES Bank. 
  • Business Today reports on how YES said yes to all the bad boys of India Inc.
  • Outlook Business deep dive profiles Rana Kapoor and his mismanagement of YES bank. 
  • Go deeper: Read our explainer on the IL&FS crisis (the real culprit behind these recurring financial crises)—or check out Indian Express which does an excellent job of explaining what it means for your mutual funds.


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Silently panicking each time your workmate sneezes

Your coronavirus update is here: And mercifully things seem mostly stable:


  • World tally: Total number of cases around the world: 98420. Total fatalities: 3385. The UK registered its first death.
  • India angle: Total number of cases in India: 30. We’ve added one more case, a man from Ghaziabad who travelled to Iran. But India now has a number of “community cases”—i.e. the virus is spreading within the community to people with no history of travel to infected areas.
  • The Delhi government is shutting all primary schools just to be safe. And the government is readying a plane to rescue 1,200-plus Indians stranded in Iran—where the death toll is now 108. 
  • The United Nations estimates India will lose $348 million in exports—and that’s not bad compared to the EU ($15.6 billion) or the US ($5.8 billion). 
  • But likely to pay a very steep price: The already fragile Indian aviation industry. Quartz has that story.
  • Trump, er, speaks: Meanwhile, Donald Trump in his infinite expertise has declared the new fatality rate (3.4%) announced by the WHO as a “false number.” The reason: He has “a hunch” that “thousands or hundreds of thousands of people.. get better, just by, you know, sitting around and even going to work.” He also said that the disease will just “disappear” like “a miracle.” See that signature Trump clip here.
  • The good news: A number of scientists say Trump is sorta right. They point out that “four of five people will get better on their own and may need nothing more than drugs like paracetamol for fever and cough.” 
  • Xenophobia alert: Euro News reports on the rise of xenophobia and racism as one of the nasty side effects of the outbreak. A related India story: A Chinese national locked himself up in his Noida flat and refused to come out because he was afraid of being lynched by the building’s residents. FYI, he tested negative for the virus, and was suffering from a common cold.
  • Do you have it? And if you have the sniffles, Elemental offers a detailed guide on how to tell if you have a cold, the flu or something a whole lot more serious. 
  • Mask madness: The OTT face masks on the London metro are totally at a WTF level. Also silly: the Modi-themed masks being distributed by the BJP in Bengal. 
  • Point to underline ad nauseam: face masks offer no protection from the disease because the virus doesn’t travel through air. In fact, because you are more likely to keep touching your face, the risk of infection is higher. Related handy gyaan: New York Times tells you how to stop touching your face.
  • Showing the right spirit: Iranian doctors and nurses who are dancing on the frontlines of the epidemic. Check out the smile-inducing collection of clips.
  • On the lighter side: We now have coronavirus-themed porn (link is to a story not the smut… lol). Also: Watch Chinese hairdressers giving their clients a ‘long distance’ haircut. Plus: Responding to Australia’s great panic over toilet rolls, a local newspaper helpfully printed an eight-page insert that can be, um , repurposed. Finally: Best Amazon-related virus joke.


A sports-related survey of Indians: shows that 64% of us don’t play any kind of sport, and that number is even lower among women (29%). And contrary to Bollywood stereotypes, not-North Indians—specifically  Tamil Nadu (54%) and Maharashtra (53%)—top the list of states in terms of sports participation. In Punjab and Haryana, that number is 15%. The really dismal stat in the survey: 50% could not name even one Indian woman athlete. (BBC News)


The Amazon forests cannot save us: Humans breathe in oxygen and exhale carbon dioxide. Trees do exactly the opposite. And that relationship has worked like a dream until now. A new study shows that tropical forests are rapidly losing their ability to suck CO2 out of the air: “The uptake of carbon from the atmosphere by tropical forests peaked in the 1990s when about 46bn tonnes were removed from the air, equivalent to about 17% of carbon dioxide emissions from human activities. By the last decade, that amount had sunk to about 25bn tonnes, or just 6% of global emissions.” (The Guardian)


In related climate change news: Another study reveals an overlooked and scary effect of climate change: It is escalating violence against women around the world. (Deutsche Welle via Indian Express)


A healthy cure for anxiety: What we eat has a huge impact on how we feel—not just physically but also emotionally. A new study found that people who consume less than three daily sources of fruits and vegetables have a 24% higher risk of being diagnosed with an anxiety disorder.  The lead researcher adds :“This may also partly explain the findings associated with body composition measures. As levels of total body fat increased beyond 36%, the likelihood of anxiety disorder increased by more than 70%.” Hmm, but does that factor in toxic and continual fat-shaming? (PsychCentral)


The ‘Wardrobe Update’ Pop Up: Here’s all the fashion gyaan we found intriguing. 

  • Mel Magazine takes up a critical, life-defining issue for men: “Nobody knows where men’s pants are supposed to sit in the first place. For men, pant sizes are measured according to inseam—i.e., the length of your inner leg up to your crotch—and waist size. Which seems simple, except there’s one li’l issue: Where the fuck is your ‘waist’?”
  • As per Vogue, the fringe is back, and it’s everywhere—on jackets, handbags, even cushions! Well, as long as it doesn’t make a comeback at the hair salon...
  • The Guardian explains why the days of ‘men’s’ and ‘women’s’ perfumes are numbered. Say hello to gender-free fragrance! 


Stuff that makes you go WTF: includes the following

  • Spot what is horribly wrong with this ad for Girnar tea. 
  • We had zero idea that Jughead had an identical twin called Souphead, and he’s coming soon to a ‘Riverdale’ episode near you. Oh, Archie’s comics! We never knew ye!
  • Is there anything creepier than doll versions of our biggest Bollywood stars. As this photo gallery proves, the answer is a no!
  • An Indian gecko managed to smuggle itself into the UK by stowing away in the luggage of a Brit couple. It is currently in “quarantine” but “doing well”—unlike many human illegal migrants, no doubt.


Cool stuff we learnt online: include the following 


  • Quartz explains why a Hermès bag is a better investment than an expensive piece of art or even a fancy watch.
  • The Face looks at Instagram’s race to kill wildly popular nostalgia accounts that feature celeb photos of yore. 
  • Mashable is here to let you know that it is okay to never, ever read the books you’ve Instagrammed. 
  • Tunku Vardarajan in Politico lists 12 people and things that have ruined Indiaa list designed to piss off folks on all sides of the political divide. 
  • Indian Express profiles visual artist Enora Lalet who is in the country, showcasing her amazing food-inspired ‘portraits’. Of course, the story has one measly photo of her art. So we found an entire gallery of her dazzling work for you.


Your daily quota of sunshine items: includes the following:


  • Fish playing underwater football in an aquarium.
  • The most stylish and expensive ($369) lunch dabba in the world. 
  • Katy Perry’s newly released Never Worn White’ video—which marks a whole new way to announce a celeb pregnancy.
  • A new single from Dixie Chicks after 14 years!
  • Will the Insta-inspired matching outfit madness never end? Behold macho men and their dogs—in matching Hawain shirts 🤦‍
  • A Lufthansa pilot drew “a very rude image” with his flight path just before he landed in Germany. The airline insists the image is “completely coincidental.” 

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