Confession is the theme of this week's wrapup because outside of that bombshell letter from the Managing Director of PMC bank, there wasn't a whole lot happening this week.
Hiding in Plain Sight
On Monday we talked about the new privilege accorded to MSMEs and their bad loans. The contention was simple. A good number of Medium and Small scale enterprises haven’t been paying back their loans of late. In an ideal world, banks would declare these loans as non-performing almost immediately and classifying the company as a defaulter. However, after the Finance Ministry’s recent ruling, banks won’t have to declare them as bad loans. Also, the MSME’s will be given more time and leeway on how they plan to pay back their dues.
And we wanted to see how all of this ever made any sense. If you want the inside scoop you should go read the full thing ASAP.
How to lose ~5700 Crores in one day?
On Tuesday, the focus was Indiabulls Housing Finance, an old darling of the investor community but one that’s quickly falling out of favour even among its most ardent supporters. This is largely due to the fact that the company’s future now seems to be inextricably tied with another private sector bank called Lakshmi Vilas.
Why? you ask.
Well, Indiabulls has been planning to merge with Lakshmi Vilas in the hope of accessing a full-fledged banking license. Unfortunately, Lakshmi Vilas seems to have found itself in RBIs bad books at the most opportune moment and the merger looks like it could be jeopardized any moment now. And that is a major problem. If you want to access the full story, go ahead and click here.
The Letter that shocked the country
On Wednesday all the talk was about the big confession from the now-suspended Managing Director of PMC bank. After deconstructing how the top management carefully duped depositors by loaning money to a bankrupt real estate firm, the MD was seeking repentance. However, it was a 5-page rambling confession and we wanted to break it down. So we posted a 3-minute version by cutting the clutter and rewriting the thing without the obfuscations. It’s a must-read if you want to know how PMC bank was systematically looted by a small group of very powerful people
The Ringer Wars
On Thursday, we picked a very interesting topic-Ringer time. In an attempt to cut their costs, Jio has been reducing ringer time in the hope no one would bat an eyelid. Unfortunately, that wasn’t the case. As soon as the other telco guys found out what’s happening they got in the act and started cutting their ring times as well.
The same day we also tried to simplify a very difficult topic surrounding the Japanese Bond sell-off. There’s absolutely no way we will be able to explain the whole thing here without a serious deep dive. So you’ll have to check out the full story here.
Bring down the rates
On Friday, the RBI cut interest rates by 0.25% and we wanted to ask the most important questions. Is the rate cut effective at all and if it’s not, what’s the point of this whole exercise?
Once we got through with that, we had to talk about Samsung and its plan to shift its manufacturing base to India. Considering Huawei and Xiaomi have completely rattled the South Korean giant back in China, it obviously makes sense for them to focus on their other big market and honestly, it’s probably one of the first few positive stories that we’ve done in a while. So yayyyyy!!! Anyway, if you haven’t read the whole newsletter do it now. It’s pretty neat.
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And that’s it from us today. We will see you next week. Ciao!!!
