MONDAY, 9 MARCH 2020 16 pages in 1 section www.business-standard.com MUMBAI (CITY) ~9.00 VOLUME XXIV NUMBER 146

How markets performed last week % Chg over Dec 31, ‘19 Index on *One- --———————————————————————————————————————————————————————— Mar 6, ‘20 week Local currency in US $ Sensex 37,577 -1.9 -8.9 -11.9 Nifty 10,989 -1.9 -9.7 -12.6 BACK PAGE P14 BACK PAGE P14 Dow Jones 25,865 1.8 -9.4 -9.4 Nasdaq 8,576 0.1 -4.4 -4.4 Hang Seng 26,147 0.1 -7.2 -7.0 WHEN MODI SIGNED OFF, AND 7 ARAMCO SLIPS 9%, Nikkei 20,750 -1.9 -12.3 -9.6 FTSE 6,463 -1.8 -14.3 -15.7 WOMEN ACHIEVERS TOOK OVER NOW BELOW IPO PRICE DAX 11,542 -2.9 -12.9 -12.3 *Change (%) over previous week Source: Bloomberg PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

5 NEW CORONAVIRUS CASES IN KERALA, TOTAL Rana Kapoor in ED custody, COUNT NOW AT 39 Foreign pension faces ~4K-cr kickback probe funds may soon 12 SHELL FIRMS, 2 UK LONDON-BOUND CBI BOOKS KAPOOR ASSETS, 44 PAINTINGS DAUGHTER STOPPED AND WADHAWAN ON get more leeway UNDER ED SCANNER AT MUMBAI AIRPORT CHARGES OF CHEATING SUBHOMOY BHATTACHARJEE New Delhi, 8 March The number of coronavirus cases rose to 39 in SHRIMI CHOUDHARY India on Sunday, after a couple and their son, New Delhi, 8 March Deep reforms are on the anvil in the who had flown from Italy last month and country’s pension market, with plans to evaded airport screening, and their two he Enforcement Directorate permit foreign pension funds to set up relatives tested positive in Kerala. The number (ED) has found that YES Bank independent pension trusts and make of novel coronavirus cases in the world stood co-founder Rana Kapoor and his the Pension Fund Regulatory at 105,836, including 3,595 deaths, across T family set up over a dozen shell Development Authority (PFRDA) the SECTOR SNAPSHOT 95 countries and territories. firms that were allegedly used for receiving sole authority to allow a pension product 2016 Dec 18 Dec 19 CAGR kickbacks to the tune of ~4,300 crore and into the market. This could entail a thor- AIRPORTS START STRINGENT invested in properties illegally. ough rewrite of the pension products over4 yrs SCREENING TO CHECK SPREAD P6> The agency arrested Kapoor, 62, early that insurance companies and some since ‘16 Sunday morning in connection with a mutual funds offer today in the fast- Number of subscribers (mn) money-laundering probe — three days expanding market for retirement prod- 12.23 25.41 32.69 27.85 after the Reserve Bank put YES Bank ucts in India. Contribution to NPS (~crore) under a 30-day moratorium and super- These are part of some 30 changes ON 95,849 22,6813 30,1851 seded its board. Kapoor was produced in a that the finance ministry is planning to 33.21 MONDAY Mumbai sessions court, bring in by amending the PFRDA Act of Assets under management (~crore) SPECIALS 118,810 291,060 401,152 EDIT PAGE 9 which remanded him in 2013. The amendment will also involve a 33.00 ED custody till March 11. change in the name of the regulator. Source: PFRDA data BUSINESS LAW END OF A LONG ROPE The agency told the court Instead of ‘Pension Fund Regulatory Regulating cryptocurrency: that Kapoor’s custody Development Authority’, the regulator The amendments will also help to On an uncharted path 13 > was required to investi- will be known as Pension Regulatory attract more foreign investors, who are Experts want the government and the gate the role of some companies run by his YES Bank co-founder Rana Kapoor being taken to a sessions court after being Development Authority. now allowed to invest upto 49 per cent in Reserve Bank to formulate light-touch family members, and are directly and indi- arrested by Enforcement Directorate, in Mumbai, on Sunday PHOTO: KAMLESH PEDNEKAR The word ‘fund’ will be deleted from the sector. Though government officials norms to help foster growth of this rectly controlled by him. the name because, as a government have often talked of plans to raise this evolving ecosystem, GEETIKA SRIVASTAVA “Kapoor obtained undue pecuniary THE DHFL ANGLE source explained, “The regulator is in limit to 74 per cent (in tandem with the & SUDIPTO DEY write advantage from DHFL (Dewan Housing | Bank gave loan | To cover this, DHFL gave | ~750 cr more given charge of the entire pension sector and insurance sector), the straitjacket of the Finance Corporation) in the matter of not just of the funds. The new name will pension rules is seen as a dampener. to DHFL against ~600 cr to Kapoor family to DHFL promoter > PERSONAL FINANCE investments in the debenture of DHFL ~3.7K-cr debentures firm against ~40-cr assets firm after default reflect this position better.” Turn to Page 3 Take charge of your by YES Bank, through the companies held financial life 11 > by his wife and daughters. It is also appre- While recounting their own journeys, hended that Kapoor had misused his offi- “Prima facie, there appears to be gen- under progress. three achievers from the financial services cial position in several other transactions eration and laundering of proceeds of Sources said these firms used the kick- industry advise women on how to achieve and obtained illegal kickbacks directly or crime to the tune of ~4,300 crore by the back amounts to buy properties valued at COVID may delay roll-out indirectly through entities controlled by ‘accused’ persons under Prevention of ~2,000 crore. The current market value security in money matters him and his family members,” the ED Money Laundering Act (PMLA), 2002,” of the assets could be more than ~5,000 THE SMART INVESTOR said in the remand to court, which was the ED said, adding further investigation crore, said ED officials. Low on confidence & growth, seen by the Business Standard. into the money trail of the proceeds was Turn to Page 10 > of Vivad se Vishwas scheme pvt banks in for tough days 12 > DILASHA SETH Majority of private bank stocks are REVENUE SHORTFALL New Delhi, 8 March down 10-33% YTD, indicating Direct tax collection 2019-20 ~ trn % growth weaning conviction in the sector, Shadow over AT-1 bond mkt Vivad se Vishwas, the government’s flag- HAMSINI KARTHIK writes ship scheme for resolving direct tax dis- Budget Estimate 13.35 17.30 POLITICS & PUBLIC AFFAIRS Small banks may find it difficult to access capital MAN WHO SAID ‘YES’ putes, may get an extended deadline Revised Estimate 11.7 2.80 beyond March 31 on account of the coron- Brand Mamata unleashed 14 > TO A CHOSEN FEW Collection JASH KRIPLANI impact investments of unit holders unless the avirus outbreak and a late notification, 7.45 -6.25 Banglar Gorbo Mamata campaign is (April-January) Mumbai, 8 March regulatory stance on the bonds changes. When Rana Kapoor arrived for which is still to come. Income-tax (I-T) offi- Required collection aimed at creating a personality cult “The scheme is still in the draft stage but, if ED questioning on Saturday, he cers are saying most people will need time 4.25 20.00 (February-March) ahead of the West Bengal election, The ~1-trillion additional tier-1 (AT-1) bond mar- implemented, it would indicate a shift in regu- seemed a far cry from the to arrange for funds to participate in the AVISHEK RAKSHIT writes ket — also called perpetual bonds — is likely to latory thinking on these bonds. This will have hard-driving executive who scheme and coronavirus will make it Source: CGA, Budget see a heavy loss of investor appetite after an impact on appetite for these bond issues. In made YES Bank one of India’s tougher for some firms, and many at their STATSGURU Reserve Bank of India proposed writing-down 2017-18, some of public sector banks with weak largest banks. global headquarters are shut temporarily. bright because otherwise assessees will > Mapping bank mergers 4 the AT-1 bonds of YES Bank. Forcing bond- financial health and equity erosion were put SACHIN P MAMPATTA writes 4 > The Direct Tax Vivad se Vishwas Bill not get a fair chance to participate in the holders to take a 100 per cent haircut on the under prompt corrective action of the RBI, but was passed by the Lok Sabha on scheme, which will make it unfair to most. bank’s AT-1 bonds would lead to losses to the AT-1 obligations were still paid out fully,” said R Wednesday. Being a money Bill, it does not Besides, genuine concerns like COVID-19 tune of ~10,800 crore, estimates Acuité Ratings. Sivakumar, fund manager at Axis MF. “In the BANKERS’ TRUST require the Rajya Sabha’s nod. However, it need to be taken into account,” said a tax No edition It says such a move can drive away investors current scenario, we are seeing a different treat- will go to the Upper House, which can rec- officer. Another tax officer said firms were YES Bank rescue: India’s There will be no edition of the newspaper from such bond issues in the future. ment for these bonds.” Fund managers and > ommend changes, but it will be up to the approaching the I-T department on delays on Tuesday as the offices of Business According to the rating agency, the bulk of fixed income experts say the regulator’s treat- TARP moment? 8 Lok Sabha to accept those or not. After that in clearances from their headquarters Standard will remain closed the exposure to YES Bank’s AT-1 bonds is to ment to AT-1 bonds is a source of worry, as it can Why did the RBI have to take it would go to the President for assent before overseas because some were not func- on account of Holi. The e-paper of the mutual funds (MFs) and banks’ treasuries. be harbinger of how such bonds will get treat- the moratorium route to sew notification. This would leave assessees tioning at full capacity and others were newspaper can be accessed at Several MF schemes have already marked ed in the future, if the need for regulatory inter- the deal? Why now? Writes barely a fortnight to take part in the process. yet to decide whether they wanted to par- epaper.business-standard.com down their exposure to zero, which would vention arises. Turn to Page 10 > TAMAL BANDYOPADHYAY “The chances of an extension are very ticipate in the scheme. Turn to Page 10 > Ujjwala may get a facelift with refills at doorsteps SHINE JACOB New Delhi, 8 March

Soon, consumers might get an option to refill cooking gas cylinders for amounts as small as ~50-100 at their doorstep. The option can be exercised after the pro- posed introduction of mobile liquefied petroleum gas (LPG) vans across the country. This is among a slew of measures to be introduced by oil marketing companies (OMCs) to boost the num- ber of refills under the Pradhan Mantri Ujjwala Yojana (PMUY). Sources say plans are also afoot to extend par- tial loans to customers for cylinder refills. Encouraging the sus- tained usage of LPG has remained a challenge before oil marketers such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL), as consumers are reluctant to go for second refills under the scheme. According to a recent report by the Comptroller and Auditor General (CAG), the annual average refill consumption of 19.3 million PMUY consumers (who have completed more than one year) was only 3.66 refills in March 2018. Similar analysis for 31.8 million PMUY beneficiaries revealed that consumption declined to 3.21 refills annually by the end of 2018. “The focus is on increasing the number of small cylinders to encourage refills. In addition, loans will be extended for second cylinders, too, and refill vans will be launched to reach out to the homes of customers directly,” said an official source. Turn to Page 10 > 2 COMPANIES MUMBAI | MONDAY, 9 MARCH, 2020 >

IN BRIEF N CORONAVIRUS SCARE N HAL plans overseas logistics bases in Malaysia, Vietnam IT firms stare at delay in Price recovery State-run aerospace behemoth Hindustan Aeronautics (HAL) is has taken a hit: looking at setting up logistics bases in Malaysia, Vietnam, Indonesia, and Sri Lanka as part of initiatives bagging large contracts to woo the countries to buy India’s Tata Steel CEO light combat aircraft Tejas and ISHITA AYAN DUTT military helicopters. HAL’s Chairman and Managing Director Restrictions on movement and delayed decision-making seen as key reasons Kolkata, 8 March R Madhavan said it was considering building logistics bases in the four countries as it used a number of Russian-origin military aircraft DEBASIS MOHAPATRA The steel industry is hoping to reclaim peak prices by September and choppers whose serviceability is “very poor”. He said HAL was Bengaluru, 8 March CLIENTS MAY TURN on the back of a demand recovery. The only trouble could be now seriously focusing on boosting exports in sync with the CAUTIOUS the spiraling coronavirus outbreak. government's priority. PTI< inning of large deals and their T V Narendran, managing director and chief executive offi- n execution by IT services firms Delay in winning and cer of Tata Steel, said prices were being pushed up every month BSNL, MTNL ask Trai to W are likely to face delay in the executing large deals and the rise would have continued if the virus scare was absent. NCLAT dismisses DoT’s first half of this year due to the outbreak likely to impact IT firms’ “In March, too, we pushed up (the prices), but customers are exempt telcos with plea in Aircel licence of coronavirus. revenue growth pushing back,” he said. However, if the outbreak is contained mkt share up to 15% moratorium case According to outsourcing advisory n Shadow over global growth now, then prices should go back to earlier highs by September, experts, severe restrictions on the mobil- is expected to turn clients he said on the sidelines of the Confederation of Indian Industry’s The National Company Law ity of human resources as well as the cautious in their IT spends annual regional meeting of the eastern region. Appellate Tribunal (NCLAT) has likely delay in decision making by the Steel prices that had touched a low of ~32,250 per tonne in dismissed the Department of clients are seen as the key reasons. n Currently, travel, leisure the first week of November have been on the rebound since, Telecommunications’ (DoT) “Larger transformation deals take a and automotive verticals and are now at about ~37,000 per tonne. That, however, is still a plea citing delay in appeal lot of time for execution and focus. Due have been severely impacted long way off from last year’s peak levels of ~46,000 a tonne. against the NCLT order, which to coronavirus, it is clear that the teams n If summer contains the The industry was concerned with the inventory build-up in State-owned BSNL and MTNL held that the spectrum and are going to be distracted for at least the spread of virus, H2 of 2020 China, he said, and whether have told Trai that tariff fixation licence of debt-ridden Aircel next quarter. Hence, these big deals, it would be consumed in the should be applicable only on cannot be taken away during which are increasingly becoming the likely to see revival in growth home market or have to be telcos with more than 15 per the insolvency resolution backbone of (revenue) growth will be exported. Hence, the cent subscriber base in a service period. PTI< delayed,” said Peter Bendor-Samuel, Bendor-Samuel said. time of initial discussion to closures Southeast Asian market had area, while those with lower or founder and chief executive officer of Large deals have become the main- between the key executives from the client reacted the most and prices negligible user base should be DLF’s proposal to outsourcing advisory firm Everest Group. stay of revenue growth of IT biggies in organisations and vendors. Once the deals had dropped there. “But if exempt from the purview of All IT services companies have already recent years. For instance, Infosys, which are signed, transitioning of the works from you looked at Europe and minimum floor price. It is raise ~1,000 crore widened their travel restrictions from has guided for double-digit growth in its clients to offshore locations also require India, steel prices hadn’t pertinent to mention that BSNL gets approval China to many other nations, revenues in the current financial significant employee movement. “When dropped. It would have kept has about 10.3 per cent market including Italy, France, year, has bagged $7.3 billion there is a shadow over the prospects of going up much faster. share in all India mobile Realty major DLF said a panel Singapore, South Korea, and worth large deals in the first nine global growth, clients will be cautious in Southeast Asia was more of subscriber base. PTI< constituted by its board has Japan. Several of them have months of this financial year. The their spending. Apart from it, even restric- a short-term reaction and approved a proposal to raise up to even imposed a restriction on Bengaluru-headquartered firm tion on movement of key resources to China also took a number of “If you look at Europe and Volkswagen expects ~1,000 crore through issue of non-essential travel to the US, had bagged $6.28 billion worth of client site for executing a large contract steps to kick-start its econo- India, steel prices hadn’t SUVs to account for non-convertible debentures. In a which accounts for 60 per cent large contracts in the previous fis- can also pose some challenge for IT firms,” my,” he said. dropped. It would have filing, DLF said the finance revenues of Indian firms. CORONAVIRUS cal of FY19. said Pareekh Jain, a IT outsourcing advisor “If you leave the virus out, kept going up much faster. 60% sales by 2024 committee constituted by the “We are seeing projects post- OUTBREAK Similarly, market leader Tata and founder of Pareekh Consulting. we were seeing green shoots Southeast Asia was more board of directors has approved poned in travel, leisure, and Consultancy Services (TCS) has According to Hansa Iyengar, senior in the economy. Things were of a short-term reaction the issuance of listed, secured, fashion (segments). We are also seeing bagged large deals worth $18 billion dur- analyst at global consulting firm Omdia, if picking up in multiple and China also took a redeemable, and NCDs. PTI< clients in all industries cancelling meet- ing April-December period of this finan- further spread of the virus is contained, the areas,” Narendran said. number of steps to ings, restricting travel, and in some cial year. Though Wipro didn’t give spe- business could come back to normal in the The recovery was mostly kick-start its economy” HMSI plans local instances, closing their campuses. This cific numbers for large deals, it also had second half of 2020. “Provided the virus is in the construction sector, V NARENDRAN, disruption is going to have a negative significant wins, including a $1.5-billion contained and summer stops the spread which typically accounts for MD & CEO, Tata Steel production of impact on growth, with significant pause contract from Alight Solutions, in FY19. of the contagion further, H2 (of 2020) will 60-62 per cent of steel end- premium bikes in new contracts in the next quarter,” Large contracts take months from the likely be business as usual,” added Iyengar. use mix. The commercial property segment had been strong, Volkswagen expects at least 60 “but residential was the only area which was still shaky and auto per cent of its sales in India to Honda Motorcycle and Scooter wasn’t showing any great signs of recovery.” But there wasn’t an come from the SUV segment by India (HMSI) plans to locally inventory build-up like September-October last year. The recov- 2024 amid the market globally produce some of its imported ArcelorMittal fears impact on profits, sales ery in the domestic market had prompted steel firms to cut moving away from sedans. premium bikes from the next fiscal exports. By September, with the launch of BS-VI cars, the Volkswagen is planning to roll to make such products more PRESS TRUST OF INDIA steel-making facilities. during the Ebola virus dis- demand in the auto segment would also be clear, he said. out three more such vehicles in affordable and thereby garner New Delhi, 8 March “The recent increase in cas- ease epidemic. the next 12-18 months. PTI< volumes, an official said. PTI< es outside China is worrying “There can be no assurance De-risking supply chain Amid the deepening fear and increases the risk of a glob- that other epidemics, includ- The outbreak could also be an opportunity for India, said across the world, global steel al pandemic and a much larger ing the recent outbreak of the Narendran, as it accelerated the de-risking of supply chains Vogo eyes revenue run rate giant ArcelorMittal has negative impact on the global coronavirus in China, will not that originated in China. “It had started with the trade issues expressed apprehensions of its GDP. The Company is moni- adversely affect ArcelorMittal’s between the US and China and now with this virus there would of $120 mn, bets big on EVs sales and profitability getting toring the situation closely and ongoing operations, produc- be even more reason for people not to be overdependent on impacted in 2020, in case the in particular in Italy, as, should tion targets and expansion one country,” he said. Tata Steel, which sources consumables Vogo, a bike and scooter sharing start-up, virus spreads widely through the virus spread more through plans, if any, in other markets from China, had undertaken a risk assessment exercise and is working on increasing the number of Europe, particularly in Italy. Europe, this will likely have a in which it operates,” the com- alternative markets like Turkey and Brazil were tapped. “We vehicles on its platform to about one lakh The Luxembourg-head- material impact on our sales pany said. did an assessment of the critical items and placed alternate as it aims to more than double its revenue quartered company is the and profitability in 2020," the The firm said the epidemic ArcelorMittal said it expect- orders. The cost impact is not significant. For a particular item, run rate to $120 million in the next one world’s largest steel produc- steel behemoth said. may affect ArcelorMittal’s ed Chinese steel demand to it may be 10 per cent, but overall it could be 1 or 2 per cent.” year. The Ola-backed company, which er with steel-making opera- The company said the epi- operations in certain regions grow in 2020 within a “range From the next financial year, Tata Steel would start pellet operates in Bengaluru, Hyderabad and Mysore, is also betting on tions in 18 countries on four demic may affect of +0.0 per cent to +1.0 per cent and cold rolling mill as part of Kalinganagar expansion plan. electric mobility and aims to have 20 per cent of its fleet as EVs. “In continents, including 46 ArcelorMittal’s operations in how its projects were impact- (versus estimated growth of The focus will be on taking the capacity at Kalinganagar from the last 12 months, we have scaled the number of vehicles on the integrated and mini-mill certain regions and cited of ed in Liberia in 2014 and 2015 +3.2 per cent in 2019). three million tones (mt) to eight mt, said Narendran. platform from 200 to 20,000 and the plan is to increase this further to one lakh in the next 12 months,” Vogo CEO Anand Ayyaduraisaid. He further said the company will deepen its presence in Bengaluru and Hyderabad, and is also exploring entering cities like Ahmedabad and Vijayawada. PTI< BIAL lines up over $2 billion for new projects

T E NARASIMHAN minal and related infrastruc- a 24 per cent increase in non- an outlet mall and a 5-star Chennai, 8 March ture for an incremental aero revenue on the backdrop hotel. A first of its kind large Net office space leasing investment of approximately increase in passenger growth, concert arena in the region, on Fairfax-backed Bangalore $1 billion, taking the capacity availability of additional space, approximately 6 acres of land, International Airport (BIAL) of the airport beyond and the increasing propensity has been awarded to a consor- may fall 14 %: JLL India is planning to invest around 90 million passengers by of passengers at the airport to tium and is expected to be PRESS TRUST OF INDIA 40 million sq feet mark $2.2 billion in new projects, 2038,” said Fairfax. make purchases. completed in 2021. New Delhi, 8 March backed by significant pre- which will help the country’s Fairfax India has invested BIAL will also monetise Bangalore’s historical pop- booking or pre-leasing of third-largest airport handle $653 million to acquire 54 per around 460 acres of land ulation areas are getting con- Net leasing of office space space by occupiers,” JLL about 90 million passengers cent of BIAL, which implied adjoining the airport that can gested, so the city is expanding could decline by up to 14 per India said. The net absorp- by 2038. Indian-Canadian bil- equity value of approximately be developed. The first devel- in the airport’s direction. BIAL cent this year to over 40 mil- tion for the year 2020 will be lionaire Prem Watsa-owned $1.2 billion for the whole com- opment will be a 775-room 3 anticipates significant upside, lion sq ft across seven major much higher than the annual Fairfax India holds 54 per pany. The valuation (includ- and 4-star combination busi- over time, from monetisation cities on estimated fall in average for the last five years cent stake in the Airport. ing foreign currency transla- ness hotel. The project has of this real estate, said Fairfax. supply, according to global which stood at 35 million sq In 2018, BIAL invested tion) of Fairfax India’s interest been awarded to the Taj Group Fairfax floated Anchorage property consultant JLL. ft, it added. around $1.9 billion to expand in BIAL increased by $726 of hotels. A retail, dining and Infrastructure Investments For 2020, JLL India They said pre-leasing or its designed capacity of million in 2019 to $1.4 billion, In 2018, BIAL had invested about $1.9 billion to expand its entertainment village will Holdings (AIIHL), in June 2019 pegged net office space leas- pre-commitment of office 20 million passengers to implying an equity value of capacity in 2021 to about 50 million of passengers come up on around 23 acres of as its flagship investment ing at over 40 million sq ft space remained strong about 50 million in 2021. Plans $2.7 billion. land. The third development vehicle for airports and other and new supply at 47.5 mil- despite slowdown. “The have also been adopted for the BIAL’s revenues for 2019 winding up operations in 2019, Going forward, besides will be business parks over infrastructure investments in lion sq ft. JLL tracks office strong pre-commitment second phase of the second declined by nine per cent to passenger traffic grew by increasing aero revenue, BIAL approximately 130 acres of India and plans to eventually leasing of seven major cities activity is an indication of the terminal, and related $211 million, largely due to a 35 around four per cent over the is looking at increasing non- land that will be jointly devel- transfer all of Fairfax's shares — Delhi-NCR, Mumbai, strength of the Indian market. infrastructure for an per cent drop in aero revenue previous year to about 34 mil- aero revenue, including cargo oped in phases through a com- in BIAL to AIIHL. Bengaluru, Chennai, Hyde- Moreover, it bears testimony incremental investment of and PAT declined 44 per cent lion passengers and cargo han- handling, ground handling, bination of land lease, joint In December 2019, Fairfax rabad, Pune and Kolkata. to the rising importance of about $1.2 billion, to take the to $54 million. However dled only dropped 1 per cent fuel sales, food and beverage development and own devel- India signed a definitive agree- “Despite an expected realty in the business plan of capacity to about 70 million growth in non-aero revenue in the face of an economic sales and duty-free shops opment models. ments with an investor where- decline of office space supply corporate occupiers,” JLL passengers by 2028. partially offset the loss. slowdown that resulted in a 3 among others. In addition to this, approx- by it will transfer 43.6 per cent in 2020, net absorption is India CEO & Country Head “Most recently, BIAL Despite Jet Airways, BIAL’s per cent drop in air cargo vol- Last year, the drop in aero imately 12 acres of land will be of BIAL out of the 54 per cent likely to clock a robust over Ramesh Nair said. added a plan for a third ter- second largest customer, ume in India. revenue was partially offset by used for the development of that it owns in BIAL to AIIHL. ‘Technical and complex’: Firms rush to file SBO details as deadline nears The ministry examining “We have almost reached transferred ownership of business to a increase in capital without any act on saturation. It is one of the most discretionary trust, which makes it part of SBO? Further, in a group web loopholes in law, complicated laws introduced highly difficult to establish the SBO. structure, undertaking disclosure on anywhere in the world. It is highly “If the managing trustee of such a every change is almost impossible,” may extend date again technical and complex but we have trust is a corporate body, then we have Singhi said. achieved a flawless system,” a senior to find the natural person...Bulk of Company law experts have raised RUCHIKA CHITRAVANSHI government official said. issues have been resolved...We will issues such as whether in case there New Delhi, 8 March The rules were notified in line with clarify this one soon,” the official are more than one SBO, the holding of the recommendations of the Financial added. such owner be aggregated or More than 65,000 companies have Action Task Force to combat money In a discretionary trust, the share of identified separately. made their filings for significant laundering and financing of terrorism. beneficiaries is not determined. The SBO rules aim to strike at beneficial ownership (SBO) since the Experts have pointed several Therefore, the rule says that all multilayers and offshoring of funds introduction of the law two years ago, challenges that the law faces such as trustees will be SBO, which experts say done by companies through a chain of government sources said. foreign shareholders not willing to is not right since they don't have corporate vehicles. To plug gaps, the ministry of disclose details of ultimate ownership rights over trust property. There are two ways to establish the

corporate affairs (MCA) will soon issue shareholder on fear of action by ILLUSTRATION: AJAY MOHANTY There is also a hesitation to make SBO. One is a significant beneficial clarifications to establish the ultimate Indian authorities, in case of non- The rules were notified in line with the recommendations of the Financial Action such disclosures as the details of SBO owner at 10 per cent shareholding at owner in cases involving vehicles such compliances or other issues. The MCA Task Force to combat money laundering and financing of terrorism are available for public inspection, the reporting company level and as a discretionary trust. is examining the loopholes in the law experts say. majority holding through the Notified by the MCA in 2018, the SBO and will consider if the deadline needs amendments, technical issues in the planning to address is that of According to the current rules, the ownership chain. But the more rules went through major revisions in to be pushed again beyond March form, and date extension have added discretionary trust and establishing ultimate owner needs to report every complex mechanism is the SBO who 2019. The deadline for making the filing 2020. to the confusion,” said Ankit Singhi, the ultimate owner in terms of a change in its shareholding after the can exercise significant influence or has been extended four times since, “Rules are complex and have left partner, Corporate Professionals. natural person. There are instances initial disclosure. “What if control in any manner other than with the latest being March 31. many issues unanswered. Frequent One of the areas the government is where a promoter’s families have shareholding is changed due to through direct holding alone. MUMBAI | MONDAY, 9 MARCH 2020 COMPANIES 3 . < Realty and infra drove Aramco slips 9%, now below IPO price buyouts in ’19: Report

Shares down 15% since start of the year; RAGHAVENDRA KAMATH billion. “A large portion of them latest crash comes after three-year pact Oil traders brace for another Mumbai, 8 March were buyout deals which is a significant divergence from the between Opec & Russia ended in acrimony round of hefty price decline The buyout deals in real estate earlier trend, where a large and infrastructure sectors number of investments in real REUTERS closed 8.3 per cent lower. Asian oil traders are bracing for another round of hefty price falls were 2.5 times of other asset estate sector were credit invest- Dubai, 8 March Aramco’s record IPO in on Monday in key benchmarks Brent and Dubai after the classes, said a new report by ments,” the report said. December gave it a market world's top exporter Saudi Arabia slashed prices, reigniting a audit and consulting firm EY According to the report, Shares of Saudi state oil capitalisation of $1.7 trillion, market share battle among key producers. Global price marker and the Indian Venture buyouts in real estate have risen company Aramco slumped making it the world's most Brent dived more than 9% on Friday to $45.27 a barrel, its Capital & Private Equity from 0.4 per cent in 2015 to 3.6 below their initial public valuable company. biggest single day loss in 11 years. Late on Saturday, Saudi Arabia Association (IVCA.) per cent in real estate deals. offering (IPO) price on The deal was the culmina- slashed its official selling price (OSP) for April for all its crude In 2019 , buyouts in real In 2016, 2017, and most of Sunday for the first time since tion of Crown Prince grades to all destinations. The producer also planned to raise estate and infra were 2018, large number of they began trading in Mohammed bin Salman’s in April its production to more than 10 million barrels per day $11.6 billion while in Deals were investments in real December, after Organization efforts to open up the energy (bpd) for the first time since May 2019. A trader with a North other assets it stood at worth 2.5x estate were driven by of the Petroleum Exporting giant to outside investors and Asian refiner said the ‘crazy’ price cuts could lead Brent to $4.6 billion. “While co- other asset credit platforms funding Countries’ (Opec’s) pact with raise funds to help diversify Aramco’s record IPO in December gave it a market capitalisation test $40 a barrel soon. REUTERS nsistent growth in buy- classes residential and com- Russia to restrict oil supplies the economy away from oil. of $1.7 trillion, making it the world’s most valuable firm outs has been a major mercial developments, fell apart. But buyers of the shares driver of the overall growth of capitalising on lack of tradi- Aramco shares closed 9.1 were largely Saudi retail and ond day of trading, but has break will slow oil demand between Opec and Russia limits on its own production. PE/VC investments for the past tional modes of funding for the per cent lower at 30 riyals institutional investors as the eased since then. from China and hurt the glob- aimed at supporting the mar- “Aramco is under pressure three years , there was a slight real estate sector, which was a ($8.00), their sharpest one deal found little interest The shares have fallen al economy. ket ended in acrimony when because of the failure of the difference in nature of the deals fallout of the rising bank NPAs day percentage fall, and beyond the Gulf. more nearly 15 per cent since Oil prices have also Moscow refused to back deal,” said Marie Salem, head in 2019. Unlike in 2017 and 2018, and liquidity constraints in below the IPO price of 32 The stock hit an intraday the start of the year amid con- slumped, and fell further on deeper production cuts. Opec of institutions at Daman where the growth in buyout NBFC sector. riyals. The Saudi market high of 38.70 riyals on its sec- cerns the coronavirus out- Friday after a three-year pact responded by removing all Securities. activities was in traditional “However this trend started PE/VC asset class, 2019 saw shifting towards buyouts in growth in infrastructure and 2018 and 2019 with the likes of real estate asset classes,” it said. Blackstone and other large buy- In 2019, 59 per cent of total out funds lapping up portfolios 3 Infosys employees Alrosa to cut diamond supply value of investments in real of premium yield generating estate was buyouts, it said. In assets across commercial, retail, DILIP KUMAR JHA are monitoring the demand sit- across the world (including 2019, investments in real estate warehousing and industrial real arrested for taking Mumbai, 8 March uation to take a final decision.” Alrosa’s diamonds), estimates 20 went up by 33 per cent at $6.1 estate segments,” it said. The Alrosa board met in per cent decline in its exports of bribe from taxpayers Russia’s leading rough diamond Russia late last week to take a polished diamond this year. miner Alrosa will cut supply to final decision on the rough dia- With the coronavirus spread PRESS TRUST OF INDIA match the falling demand due mond supply. The decision resulting in washout of the New Bengaluru, 8 March to the coronavirus epidemic. assumes significance as coron- Year celebrations in China that Confirming the develop- avirus has spread to over 80 witnesses jewellery sales of Three Infosys employees ment, Jim Vimadalal, director, countries. It led to lockdown of approximately 20 per cent of the attached to the Income Tax Alrosa India, said, “We have shops and factories in China, entire year’s volume, the department’s Centralised decided to trim supply to match one of the world’s largest manu- January-March quarter export Processing Centre in Bengal- the global demand, which is cur- facturers and consumers of dia- from India is expected to be hit uru, were arrested for allegedly rently subdued. The quantum mond jewellery. severely. taking bribes from taxpayers of rough diamond supply cut India, which processes every for speedy processing of their would not be significant but we 11 out of the 13 diamonds mined More on business-standard.com refund, police said on Sunday. According to police, the sion, they added. key accused among the three Recently, one of the tax- was attached to the CPC’s data payers refused to pay the division and had demanded money and shared the audio and collected money through recording of his conversation his friends from some major with the accused with Income taxpayers with whom he had Tax officials who held an contact over phone for pro- internal enquiry and then cessing their I-T refund claims approached the police. at the earliest. The Electronics City police He would allegedly charge have registered a case of them four per cent of the cheating and criminal breach refund money as his commis- of trust against them. 4 ECONOMY & FINANCE MUMBAI | MONDAY, 9 MARCH 2020 1 >

N YES BANK CRISIS N The man who said ‘yes’ to a chosen few Weak compliance and poor governance led to rialised. Kapoor’s aggressive lending shares, comparing them to diamonds MONEY GONE BAD practices didn’t help in building con- he would pass on to future genera- failure as it lent to those who couldn’t repay Gross NPAs (in %) fidence in the bank. tions. Ultimately, he was out of the Advances had grown in double- bank as both the head and signifi- SACHIN P MAMPATTA bank stints, including one at ANZ digits for the longest time. It only cant shareholder. Mumbai, 8 March Grindlays’ Investment Bank, and his began to show signs of slowing down There were other issues, too, in US education had raised questions in 2019. The last quarter for which YES Bank’s journey. This included a hen Rana Kapoor, bespec- as to why he would let go of a com- the data is available shows that dispute with the late co-founder tacled and casually attired, fortable post at a foreign bank for advances shrunk 6.1 per cent year on Ashok Kapur’s wife Madhu Kapur Warrived for Enforcement something new. He answered in two year as the bank grew increasingly over board representation, which Directorate (ED) questioning at the words: “entrepreneurial joy”. tight-fisted. turned bitter. The Bombay High agency’s Ballard Estate office in This joy had him working at his Quarterly net profit had been Court had ultimately ruled in her Mumbai on Saturday, he seemed a office as torrential rain swept falling since a year before, with loss- favour. There were rumours of a far cry from the hard-driving execu- Mumbai in July 2005. He cleared his es in every quarter from September truce between the two promoter tive that made YES Bank one of desk of pending papers ahead of a 2018. The gross non-performing families but the stock price didn’t India’s largest banking players since board meeting. Ultimately, the board assets ratio, or bad loans as a per- show any traction. This was even as it began operations in 2003. meeting itself was postponed as two YES Bank co-founder Rana Kapoor after being arrested by the Enforcement centage of total loans given out, rose the RBI was also reportedly unhap- Kapoor had worked with Rabo key board members couldn’t join Directorate. Experts said Kapoor’s aggressive lending practices didn’t help from 1.6 per cent then to 7.4 per cent py with the way that divergences India Finance at the time, and was amid the chaos in the city, which hap- in building confidence in the bank PHOTO:KAMLESH PEDNEKAR Source: Capitaline, Business Standard in September 2019. were handled at the bank, and slated to only be a co-promoter direc- pened around the time the company Depositors, interestingly, may declined to let Rana Kapoor contin- tor; not head the bank. The bank had was listed. The lender had grown at break- meted to ~4,132 crore on the BSE n’t have enough capital to cover these have acted presciently — total ue as its head. appointed Korn Ferry, an executive The listing itself could scarcely neck speed in the intervening years, after news of the government’s deci- advances either. The ED arrested deposits of the bank shrank for the Early advertisements for the insti- search firm, to find its first chief. have gone better. The first trade for helped perhaps by Rana Kapoor’s sion to supersede the bank’s board Kapoor on Sunday morning, alleg- first time in September 2019. The tution showed a banker saying “yes” Discussions within the promoter the stock was for fifty shares at a price reputation as a banker, willing to and impose a moratorium. ing that the Kapoor family has taken bank has delayed announcing its to an entrepreneur looking for funds. group finally resulted in the decision of ~65. This was a 44 per cent gain aggressively write checks. He report- Depositors began lining up to with- kickbacks from companies that the December 2019 quarter numbers, Business Standard had also asked that Rana Kapoor should become over the issue price. Subsequent gains edly had successfully got his money draw cash. They had been told bank lent money to. which doesn’t portend well. Rana Kapoor before operations managing director and chief execu- saw it enter the National Stock back from some promoters even that they can’t take out more than The recent quarters had been a Kapoor’s shares were sold after began, why his venture was called tive officer. Ashok Kapur, the other Exchange’s Nifty 50 index, a bench- when other banks struggled, but it ~50,000 until the bank’s issues desperate attempt to get additional lender-invoked pledges got triggered. YES Bank. “It’s positive and has a reli- co-founder, was to be chairman. mark comprised some of India’ did not always work. Ultimately, it are resolved. funding by the new CEO, Ravneet He was reduced to holding only 900 able and trustworthy feel to it,” he Kapoor put in his papers at Rabo, largest and well-known companies, proved too much with the Reserve Analysts have pointed out that the Gill, who came from Deutsche Bank shares worth ~60,000, according to a had said. which began its own search for a new and then in the 30-stock BSE Sensex. Bank (RBI) reportedly growing bank had lent out too much money to after Kapoor was sacked by the RBI. November 2019 news report. He had, Investors and the depositors chief executive. His beginnings at The bank was worth over ~80,000 unhappy with the bank’s practices. industrialists who didn’t seem to be Names of multiple investors had in a September 2018 social media lining up outside outlets may now Bank of America and other foreign crore as recently as September 2017. Its market capitalisation plum- in a position to give it back. And it did- done the rounds, but nothing mate- post, said he would never sell his feel otherwise. YES Bank clients’ SBI Cards Retail investors bought shares applications hang in balance as institutions exited en masse DEV CHATTERJEE Regulators, bankers in a in the account till the time the allotment Mumbai, 8 March is finalised. huddle to resolve issue According to the people in the know, As YES Bank’s financial met- the second option is that allotment process rics started showing signs of SAMIE MODAK takes place normally but YES Bank clients, stress over the past year, large Mumbai, 8 March who get an allotment, are asked to pay institutional shareholders and through alternative banks. the promoter of the bank sold The fate of applications worth nearly Market players say it is unlikely that their shares. But it was the ~1,500 crore in the SBI Cards and Payment the RBI would approve of the first method retail shareholders who were Services’ initial public offering (IPO) hangs and the second method also could pace left holding the can with over in the balance as many corporate and indi- operational difficulties. 50 per cent stake in the bank, vidual investors have bid in the share sale “The second option looks more viable. statistics collated by Business WHO HOLDS WHAT through YES Bank, which is placed under However, bankers will have to ensure that Standard shows. moratorium by the Reserve Bank (RBI). the IPO process doesn’t get prolonged. While promoter Rana YES Bank 9.6 13.7 2.2 17.5 15.5 23.6 While investors have adequate funds in One tweak could be that the shares are Kapoor’s shares were sold share 3.3 2.5 34.2 holding (%) 25.2 4.1 their YES Bank accounts, the moratorium kept in a separate account till the time either by him or because 23.0 21.5 21.0 4.6 53.2 would mean their funds will not be able to these investors pay, so that the listing lenders exited plegded shares, Promoters 17.0 5.3 move from their account to that of the process doesn’t get delayed. However, here the other promoter family —  19.3 issuer company. The country’s second- the risk is if the shares list at a discount, the Gogias — remained Foreign AT STAKE  43.0 40.1 37.0 41.2 34.9 6.0 largest credit card company’s ~10,300- these investors may not pay,” said a person invested. In November, Institutions 14.2 crore IPO closed on Thursday, hours About ~1,500 crore of applications worth privy to the discussions. Kapoor sold his residual shares Non-promoter 28.1 before the RBI imposed the curbs. ~2 trillion are said to have come through The legal implications of these two worth ~142 crore and was hold- corporate holding 18.2 YES Bank 20.0 19.9 19.8 19.8 19.9 Sources say investment bankers han- options are being vetted, says an invest- ing only 900 shares. This was Public & others 13.1 8.4 dling the SBI Cards IPO have raised this ment banker. Shares of SBI Cards are like- within weeks of Kapoor tweet- No. of applications Bids amt (~ cr) Q2 ‘18 Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ‘19 Q3 ‘19 Q4 ‘19 issue with the Securities and Exchange QIB 289 104,992 ly to list on March 16. The allotment could ing that the bank shares are Board of India (Sebi). be finalised on Wednesday and the pay- like diamonds and he will nev- Compiled by BS Research Bureau Source: Capitaline “In light of what has happened, we HNI 12,260 62,597 ment process is expected to complete by er sell his diamonds. His have asked the regulator whether appli- Retail 3,082,306 8,032 Thursday and a day later, shares would shares stake in the bank fell “There was a continuous ing firms downgrading the global bank JP Morgan cations backed by YES Bank accounts Employee 57,872 598 reflect in individual demat accounts. Sebi after institutions invoked the flow of wrong news from bank’s instruments. “Retail pegged YES Bank shares at ~1 should be considered for allotment,” said has brought down the time gap between pledge on his stake. unnamed sources that mar- investors should have been a share. “We believe forced an investment banker. Officials repre- Shareholder 582,328 24,976 closing of an IPO and listing of the secu- While the foreign institu- quee investors are lining up to more careful considering that bailout investors will likely senting SBI Cards, investment banks Total 3,735,055 201,195 rities to just six working days. tions reduced their stake from buy YES Bank shares. This the promoter himself was exit- want the bank to be acquired handling the IPO, Sebi, and RBI are like- QIB: Qualified institutional buyer, HNI: High-net-worth Sources say nearly ~1,500 crore worth 43 per cent in June 2018 to kept retail investors interested ing,” he said. at near zero value to account ly to meet on Monday to find a solution individual Source: Investment bankers of applications are impacted by the crisis 18.24 per cent, public share- in the stock,” said an analyst For the retail investors, the for risks associated with to the problem. at YES Bank. Also, 6,000 retail investors holding went up from 9.58 per with a foreign brokerage. news is not so good as State the stress book and likely loss Sources say two options are on the called ASBA process before the morato- have used PhonePe UPI for payments. cent to 53.24 per cent. The local Shriram Subramanian, Bank of India-led bailout is of deposits. We remain table. The first includes seeking RBI’s rium was announced. The digital payment application had suf- institutions also reduced stake founder and CEO of proxy aimed at the depositors and underweight and cut our tar- approval to allow usual fund transfer ASBA or Applications Supported by fered an outage as its banking partner is from 25 per cent in June 2018 to advisory firm Ingovern, said not towards the equity get price to ~1 as we believe as the application amount for the IPO Blocked Amount is the facility YES Bank. However, PhonePe is said to 14.21 per cent by December several red flags were ignored investors. Soon after the RBI net worth is largely impaired,” has already been set aside under the so- under which the money remains blocked have restored its services. quarter last year (see chart). by the retail investors with rat- announced the moratorium, it said.

Axis Trustee 1: STRUGGLING WITH BAD LOANS 2: LOAN GROWTH REMAINS TEPID seeks clarity STATSGURU Net NPAs Mar ‘15 Dec ‘19 (%) Rise in advances Dec ‘18 Dec ‘19 (%) 3.3 -5.3 on AT-1 Oriental Bank of Commerce 6.0 Oriental Bank of Commerce 11.2 6.2 1.5 bondholders Mapping United Bank of India 8.6 United Bank of India 6.8 4.1 0.2 SUBRATA PANDA Punjab National Bank 7.2 Punjab National Bank -1.0 Mumbai, 8 March 3.1 -8.7 mergers Corporation Bank Corporation Bank Axis Trustee Services, the 5.3 0.8 debenture trustees for YES 2.7 1.0 Bank’s additional tier-1 (AT-1) THE ANNOUNCEMENT of swap ratios Union Bank of India 7.0 Union Bank of India 5.8 bond, has written to the for the combination of 10 public 2.9 13.6 Reserve Bank (RBI) seeking sector banks (PSBs) into four has Andhra Bank Andhra Bank clarity on the fate of the AT-1 put the spotlight on such 6.4 4.2 bondholders. It also asked for unions, and how they have fared 2.7 11.8 appropriate treatment for before. Analysts would be keenly Canara Bank 5.1 Canara Bank 5.0 watching as to how the entities them in the larger interest of 1.9 -4.8 debt capital markets and deal with the integration in a challenging Syndicate Bank 5.9 Syndicate Bank 7.1 future bankfundraising. business environment. 4.0 -2.0 RBI’s draft reconstruction Each of the 10 banks participating in the process Allahabad Bank Allahabad Bank scheme for YES Bank sug- has more bad loans than it did five years ago (chart 1), 5.1 7.2 gested a permanent write- though much of it is to do with better disclosures. The 2.5 15.5 down of these bonds out- slowing economy has reduced credit offtake (chart 2). Indian Bank 3.5 Indian Bank 8.9 standing as of March 5. Bad loan ratios are expected to largely worsen for the Source: Capitaline, Business Standard Research Bureau ILLUSTRATION: BINAY SINHA Source: Capitaline, Business Standard Research Bureau According to the draft, the anchor banks, though net non-performing assets write-down is “in conformity show a decline for some (chart 3). This also holds true with the extant regulations for capital adequacy. The anchor banks will see their 3: ANCHOR BANKS FACE SOME WORRY 4: CAPITAL ADEQUACY REMAINS KEY 5: BAD LOANS RATIOS WORSENED 6: CAPITAL ADEQUACY issued by the RBI based on the capital cushion decline in at least two instances, Merged entity by name of anchor bank Capital to risk-weighted assets ratio IN PREVIOUS MERGERS TOO WAS ALSO AFFECTED Basel framework”. show analyst estimates (chart 4). Net NPA ratio Before merger After merger (%) Pre-merger Post-merger (in %) Net NPA ratio Capital to risk-weighted assets ratio “We submit that such However, this is not unique to the latest exercise. Before merger After merger (%) Pre-merger Post-merger (%) 14.7 15.0 write-down of the AT-1 bonds, Previous attempts of bringing together PSBs may 7.2 7.0 14.014.0 14.1 13.9 14.0 6.9 13.42 if given effect to, will be an have helped the weaker ones, but tended to weigh 6.5 5.19 13.11 arbitrary and discriminatory on the anchor banks. The State Bank of India saw its 12.2 12.85 decision. While the Basel-III net non-performing assets go up after its 2017 merger 5.1 5.3 framework does legally per- with its associate banks and the Bharatiya Mahila 3.71 3.65 11.77 3.33 mit write-off of the AT-1 bonds Bank. This was also true for Bank of Baroda’s 2019 3.9 or conversion of such instru- merger with Dena Bank and Vijaya Bank (chart 5). 3.5 ments into equity, such pow- The capital adequacy ratio also declined in both er ought not to be exercised instances (chart 6). in a manner in which prefer- The latest set of mergers is likely to take time to ence is given to the common iron out the kinks, suggest analysts. The Reserve equity holders at the cost of Bank of India in December 2019 noted that private retail as well as other investors sector banks accounted for 69 per cent of who have directly or through incremental loans in 2018-19. They also had a similar Punjab Union Canara Indian Punjab Union Canara Indian State Bank Bank of State Bank Bank of mutual fund schemes and share in deposits. It remains to be seen if bigger PSBs National Bank Bank Bank National Bank Bank Bank of India Baroda of India Baroda regulated financial institu- would be able to protect market share. Bank of India Bank of India Note: SBI numbers are as of March 31, 2017, and April 1, 2017. Bank of Baroda numbers are as of March 31, 2019, and April 1, 2019 Source: Company presentations tions subscribed to the SACHIN P MAMPATTA Note: As of December 2019 Source: Motilal Oswal Financial Services Note: As of December 2019 Source: Motilal Oswal Financial Services bonds,” Axis Trustee said. StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines Compiled by BS Research Bureau 6 CORONAVIRUS OUTBREAK MUMBAI | MONDAY, 9 MARCH 2020 1 > Laudable move Airports start stringent screening by Pharmexcil Mumbai was forced to turn back one All thanks to several OVER 3,500 DEATHS hour into the flight because of a Kuwaiti Customs for examination and doctors on standby, government order suspending flights to subsequent exports before the 105,836 number of cases, India for one week. date of notification will not be the queues of fliers including 3,595 deaths, across While the cancellation of flights has held up. Pharmexcil gave rele- eased the workload of doctors, they vant information of the transi- are manageable 95 countries and territories face other challenges in that the screen- tional arrangements to its ing regulations and rules for disease members and said for execu- BS REPORTERS 5 newcases in Kerala; 49 control are frequently revised, as are tion of other orders, exporters Mumbai/Delhi/Bengaluru/Kolkata, 8 March total number of cases deaths in Iran the self-declaration forms being given have to apply (form ANF-2N) to passengers. for licence with the DGFT. reaches 39 in India in 24 hrs he queues and tedium of airport "We were given a form by the cabin However, exporters say they travel just got longer, thanks to a crew on the flight. But when we landed, EXIM MATTERS are unable to upload applica- new hygiene protocol at health officials asked us to fill in anoth- tions on the website. Also, the T deaths in Italy in F1 Bahrain T N C RAJAGOPALAN airports. Check-in staff observe depart- 133 Grand Prix er form. It was a bit annoying. Luckily basis on which the applications ing passengers for sniffles, runny noses, 24 hrs. Milan, Venice, to take there were few passengers and the Last week, the Centre restricted will be considered is not clear. and coughs. Coaches taking passen- and much of the place screening got over in five minutes," said the export of several active Clear DGFT guidelines will gers to and from aircraft are washed country’s north under without Sigrid Eliasen who arrived from pharmaceutical ingredients help. Pharmexcil said some of down daily with alcohol-based clean- Passengers undergo a thermal screening test in the wake of novel coronavirus lockdown spectators Denmark in Mumbai on Friday. (API) and formulations made the orders for institutional sup- ing agents. Infrared thermometers scare, at Dimapur airport in Nagaland on Sunday PHOTO: PTI A Delhi International Airport Limit- from those ingredients. plies mandate supply of all greet all international passengers arriv- ed spokesperson said new guidelines In a laudable move, the items committed in their con- ing at Indian airports. ever, the queues had shortened and Friday said Mumbai airport needed to cater to the current demand, we have are being discussed with stake holders. Pharmaceuticals Export Prom- tracts. Non-supply of even one The screening of passengers from the waiting time for most passengers provide hand sanitisers and wipes to asked the state government for more "We are already following govern- otion Council (Pharmexcil) item would lead to cancellation China had begun on January 17 and had reduced to 5-15 minutes as addi- foreign nationals who are finger print- paramedic staff and it is under consid- ment guidelines for medical screening came up with clarifications for of entire order for all other prod- was later expanded tional doctors and paramedics were ed on arrival. eration. We are getting all help from of all passengers arriving on interna- its members and representa- ucts and result in blacklisting to cover another 13 deputed for checks. But on the same "Earlier, we had 42 doctors and the state government”, said Kaushik tional flights, in line with the airport tions to the government high- of firms by procurement agen- affected countries day, the process was tightened further paramedics in three shifts and now the Bhattacharjee, director at NSCB inter- health organisation’s requirements. lighting some difficulties. Two cies and imposition of penal- but with the detec- when the government ordered sepa- number has been increased to 136. national airport, Kolkata. The new guidelines are being discussed weeks ago, the finance minister ties. Also, the formulations tion of 39 cases, the rate passages at customs and immi- Additional staff is being made avail- He said the number of passengers with all the stakeholders and a trial run met several business leaders to manufactured for exports in government has gration and separate baggage belts for able during the night which sees a lot of had fallen, from around 5,000 interna- will be taken up very soon," he said. get their inputs regarding the accordance with the require- CORONAVIRUS escalated the preven- passengers arriving from 12 ‘vulnera- international arrivals. We have 25 tional passengers every day to 3,800. The spokesperson said it was too ear- disruptions caused by the out- ments of specific countries can- OUTBREAK tive measures at all ble’ countries. The airports have yet to infrared thermometers which is more Although Mumbai airport has seen ly to assess the impact on passenger traf- break of coronavirus in many not be diverted or utilised in the airports. Orders for implement this directive. than sufficient," said an official at the number of foreigners arriving fall by fic. “Our domestic traffic in February parts of the world. The phar- domestic market. universal screening "It took 10-12 minutes to complete Mumbai airport. 50 per cent in the last few days owing to 2020 has grown in double digits vis-a-vis maceutical manufacturers said Even the APIs manufac- were issued on Thursday and munici- the health screening. It was not At Delhi airport, two thermal scan- travel bans and flight cancellations, it last February while international traffic that, besides other problems, tured with USP/BP specification pal and state doctors were hastily crowded but the airport authorities ners and 33 temperature-measuring still had to screen over 12,700 passen- has had a negligible impact, primarily on almost 70 per cent of the API cannot be utilised for manufac- summoned to help with the task. should provide separate counters for devices are being used. At Bengaluru gers on Friday. routes to and from China," he said. required for making formula- ture of domestic formulations, Passengers arriving at Mumbai and senior citizens," said Saleel airport, medical students have been Bans are flying so thick and fast that tions are imported from China. which require compliance with Delhi airports had to wait in a queue Mohidekar who arrived from the US roped in to help. airlines are struggling to keep up with (Aneesh Phadnis, Arindam Majumder, Disruptions of those supplies Indian Pharmacopeia as per the for up to 40 minutes for the pre-immi- in Mumbai on Friday. “Although the medical staff of 44 the rules. On Saturday, a Jazeera Avishek Rakshit, and Samreen Ahmad will quickly be felt in the avail- requirements of national regu- gration health check. By Friday, how- A US citizen who also arrived on doctors and paramedics is enough to Airways aircraft from Kuwait to contributed to this report) ability of drugs in the country. latory authority. Hence, restric- So, the latest move to curb tion on exports of these manu- exports of some APIs and for- factured drugs would lead to mulations to meet the essen- wastage of drugs manufactured tial needs of our people was not and objective of imposing the Over 140,000 fliers under surveillance: Kejriwal unexpected. The transitional restriction (to improve their arrangements prescribed at availability in the domestic mar- PRESS TRUST OF INDIA avirus patients. came in contact with 168 in the ports for the purpose. Para 1.05 of the Foreign Trade ket) will also not be met. So, New Delhi, 8 March He appealed to the people in I WANT TO TELL THIS TO last 14 days while the third per- All those passengers who Policy read with Para 2.17 and Pharmexcil has requested the Delhi that if anybody from their EVERYONE THAT THE DELHI son came in contact with 64 undergo thermal screenings at 9.12 of Handbook of Procedures government to examine the fea- The Delhi government has neighbourhood had returned GOVERNMENT IS WORRIED people, he said. the airport once they go home, allow export of goods at the sibility of exempting the ‘drugs ordered DTC and cluster bus- from foreign countries in the ABOUT IT (VIRUS) BUT WE ARE “All those who came in con- especially those from Delhi, are ports/airports/inland contain- manufactured for export pur- es, metro and hospitals to be past 14 days, they should inform FULLY PREPARED TO TACKLE IT. tact with them are being isolat- being kept under watch for 14 er depots awaiting shipment, pose only’ from the restrictions. disinfected on a regular basis as the government. THERE IS NO NEED TO PANIC ed and their samples are being days to check for symptoms. where shipping bills have been In FY19, India exported a precautionary measure to deal The chief minister, who chai- collected and checked for symp- “1,40,603 passengers have filed and bills of lading or air- nearly $20 billion pharmaceu- with the novel coronavirus, red a state task force on Sunday, AND WE NEED EVERYONE'S toms,” he added. been screened at the airports so way bills issued before notifi- ticals, about 55 per cent of them Chief Minister Arvind Kejriwal said the government was fully COOPERATION Healthy people need not far and have been put on sur- cation of the restrictions. to developed countries and 18 said on Sunday. prepared to deal with the novel ARVIND KEJRIWAL, wear mask and there is no need veillance,” he said. Exporters with irrevocable per cent to African countries. Addressing a press confer- coronavirus, adding that people Chief Minister of Delhi to stock up masks at your homes Kejriwal also appealed to commercial letter of credit for Most are heavily dependent on ence, Kejriwal said that three do not need to panic. either, he said. He also urged employers to give paid leave to export of goods can get them India and China for medicines. cases of coronavirus have been “An order has been issued to far. One case is still under under and we need everyone's coop- people to wash their hands fre- those quarantined so that their registered with the regional Unless the spread of virus is reported in Delhi so far and one disinfect DTC, cluster buses, investigation. I want to tell this eration,” he said. quently with soap and water. livelihood is not affected. offices of the Director General quickly contained, its adverse case is still under investigation. Delhi Metro and hospitals every to everyone that the Delhi gov- After examining the three All passengers at the airport The chief minister said that of Foreign Trade (DGFT) with- impact can be very severe. The chief minister said that day,” he said. ernment is worried about it but cases, it was learnt that the first are being screened. Forty doc- now 25 hospitals have the in 15 days of the notification of 168 isolation beds have been set “Three cases of coronavirus we are fully prepared to tackle it. infected person came in con- tors of Delhi Government hos- facilities where one can submit restriction and export. Also, email : up at 25 hospitals for coron- have been reported in Delhi so There is no need to panic tact with 105 people, second pitals are deployed at the air- the samples. consignments handed over to [email protected] 8 ISSUES AND INSIGHTS MUMBAI | MONDAY, 9 MARCH 2020 >

range units provide enhanced spatial will be safer than the vast percentage of resolution and accuracy to navigate human drivers. An AI system will not CHINESE WHISPERS The only way forward tight gaps in city traffic and cover jump traffic lights, or indulge in other potential blind spots on hilly terrain. risky behaviour and most accidents are Regardless of regulations, all modern vehicles will in poor weather conditions, and at night. The combined inputs from all these caused driver idiocy. If every car on the No-star constituency A car must also detect other moving units overlap. Machine-learning algo- road is driverless and they all talk to each become more and more autonomous objects at near and far range, identify rithms tested first on simulators in the other, accident rates will drop sharply. It’s been a month that Delhi handed a these, judge relative speeds, and adjust lab and then on public roads allow the But driverless cars do make errors humbling defeat to the Bharatiya Janata Mountain View, California, for its its own speed and direction accordingly. Waymo Driver to navigate the complex- — there have been fatal accidents Party (BJP) but introspection in the party is employees, as well as a fully public serv- Companies in this area tend to end ities of city driving and highway driving. involving driverless vehicles and there still on. There are some party functionaries ice in Arizona. Arizona has shut down up designing their own equipment, and In city driving, the short-range data are the associated issues of liability. If who are not willing to buy the argument Uber’s offering of driverless cabs follow- fabricating most of it because off-the- is crucial. On the highway, long-range there’s an accident involving a driver- that controversial statements by some ing a fatal accident but Waymo con- shelf components don’t meet their vision is also vital. The peripheral vision less vehicle, who is responsible? leaders or alleged attempts at polarisation tinues to operate. requirements. LIDAR — Light Detection reduces blind spots caused by parked Insurers would really like answers to cost the BJP dear. At a meeting last week, Waymo also has an agreement with and Ranging Radar is one of those key cars, or large vehicles in proximity. For that question. attended by 55 of the 62 who lost in the Jaguar Land Rover to convert 20,000 components. LIDAR provides both long- example, the peripheral cameras can There’s the other question — the so- recent polls, one such candidate electric I-Pace Jaguars into self-drives range vision as well as short-range look past a truck in front of the car, called trolley problem, which might complained that his constituency with a and it demonstrated its fifth generation detection, which helps with avoiding allowing the Waymo Driver to decide if make some owners queasy: Let’s say sizeable Muslim population could have self-driving equipment, the Waymo other moving vehicles. Along with cam- it’s safe to overtake. the car has the option of driving off a done with a gathering addressed by UP TECH ENABLED Driver, on these vehicles. eras and radar, LIDAR provides the cov- Waymo claims its own LIDARs can mountain road, or hitting a minivan Chief Minister Adityanath, which he Creating an autonomous vehicle or erage that autonomous cars require to view objects both close up, and more full of children: How would the vehicle couldn’t secure despite his best efforts. He DEVANGSHU DATTA converting one, are expensive tasks in navigate public roads. than 300 meters away. The best off-the- be programmed to act? Would it opt to reasoned that since Adityanath had come terms of R&D. Autonomous vehicles Waymo’s new system, the Waymo shelf LIDARs only have ranges of 250 kill the occupant in preference to kill- to address a gathering in a nearby he Alphabet subsidiary, have needs unique to them at the Driver, has a LIDAR unit plus cameras metres or so. In addition, this Waymo ing the children? constituency, his own could have been Waymo, completed its first moment. They need massive quantities mounted on the roof to provide 360 system is robust enough to handle poor Regardless of regulations, all modern embedded in the schedule. He also rued external round of funding on of data about their surroundings to act degree long-distance coverage. It also weather, rain, snow, hailstorms, bad vehicles will become more and more the absence of Union Minister Anurag T Wednesday, March 3, raising as their “eyes and ears”. They also need has four perimeter LIDAR plus radar roads, etc. autonomous. Less elaborate systems Thakur in his constituency. Thakur was $2.25 billion. The company will use these hardware and AI-driven software to pro- units mounted at the four corners to There’s a long way to go however, will be adapted for use in “non-autono- scheduled to visit his area the same day he investments to scale up research into its cess that data in real-time, and issue provide short-range vision, and periph- before most jurisdictions will allow ful- mous” vehicles but those will also had to address a rally in far-off Narela and systems for driverless, autonomous cars. driving instructions. eral vision. It has a mindboggling total ly-autonomous cars to operate, espe- increase the vehicle’s autonomy quo- ended up not making it to the candidate’s Waymo claims that vehicles it has A car has to read stop signs, direc- of 29 cameras as well. cially in crowded urban environments. tient. Also as economies of scale take constituency. If that was not all, an actor integrated have done more than 32 mil- tional signage, identify lane changing The long-range unit on the roof can However, long-haul driverless trucks are hold, these new cameras and LIDARs who was marked as a star campaigner in lion kilometres on public roads. It oper- zones, and speed limit notices from a identify pedestrians and stop signs from already operating in the EU and the US. sensors, will undoubtedly find use in his area was in another country on the ates a robot-taxi hailing service in reasonable distance. It must do this even more than 500 meters away. The short- It may be argued that driverless cars other industries. allotted day. Apart from campaign mismanagement, he also alleged "favouritism” in “star” allotment. Corona hit on tourism

The impact of the coronavirus outbreak YES Bank rescue: India’s TARP moment? on tourism is likely to be felt well into 2021. The peak tourist season is coming to Why did the Reserve Bank have to take the moratorium route to sew the deal? Why now? and none of its employees will lose their an end and the industry is facing huge jobs. The current investors in YES Bank losses because of a sudden slump. emergencies, a depositor can withdraw The RBI gave it a new CEO and left it will also see value, if they are willing to Several tour groups from China, South more but there is no window for those to the market to find a solution to the stay put. The only loser in the deal are Korea, Japan, and Thailand have who plan their investments in March to problem. That was the first choice. those that invested in the bank’s cancelled trips to Aurangabad, home to save on income tax and/or need to pay Indeed, many prospective investors additional tier-I or AT-1 bonds, of the famed Ajanta and Ellora Caves, which advance tax in the middle of the month. walked in, did a recee but walked out as ~10,800 crore — mostly mutual funds. they had scheduled months before, Another senior banking consultant either they were not convinced about the Such bonds are quasi-debt instruments according to various reports. March is the said YES Bank should have been auc- quality of assets or were gripped by the and carry higher risks. Media reports end of the tourist season, with several tioned to the highest bidder. That’s the fear of the unknown — how many say that the bond holders will move travellers, primarily from Buddhist best way to revive it and discover its accounts would turn bad in the future. court against the RBI plan of writing nations, thronging these caves every worth. Over the past one year, whenever a new them down permanently. year. Travellers from Europe have also There was merit in these arguments. large bad asset surfaced in the banking While the write-down will unnerve steered clear of the two World Heritage BANKERS’ TRUST But by Friday evening, when the RBI system, YES Bank has been exposed to it. bond holders and Indian banks will find sites and there is not even a single put up the draft reconstruction scheme There have been investors willing to it difficult to raise money through this booking so far even for the next season, TAMAL BANDYOPADHYAY for the bank, I am sure both agreed that take a bet on the bank but the Securities route in the future, RBI’s plan is in sync Aurangabad Tourism Development this is the best possible way to revive and Exchange Board of India’s (Sebi's) with the Basel III guidelines on such Foundation has said. YES Bank, given the circumstances. takeover norm and pricing formula instruments. The agreements between arly Friday morning, a senior The last time a new private bank was came in the way. These investors were the investors and the bank for such banker woke me up with his put under moratorium was in July 2004 bargaining for a lower price and higher bonds, I understand, do not have any Mamata’s ire outbursts on the phone: “Is —Global Trust Bank Ltd. Within 72 stake, not in conformity with the norms formula and provision for converting E this the way to save a bank? We hours, it was merged with public sector of the market regulator. In April 2009, the AT-1 bonds into equity or a tempo- Malda district in West Bengal has been are killing it and creating a big trust def- Oriental Bank of Commerce. This time, the Mahindra group could rescue the the difference is treated as profit and rary write-down to be followed up Chief Minister Mamata Banerjee’s bugbear. icit in the financial system.” India’s largest lender, the State Bank of scam-hit Satyam Computer Services Ltd one needs to pay tax on that but this is by write-up later. Even if such a provi- In the last Lok Sabha polls, the Trinamool He was referring to the moratorium India (SBI), is the white night. But it is after Sebi waived the norms. Under the not applicable to shares bought from a sion had been there, still the bond drew a blank there while the Bharatiya imposed on YES Bank Ltd by India’s not merging YES Bank with itself; it will current takeover code, the market reg- rights issue. holders might not have got anything as Janata Party and the Congress won a seat banking regulator the previous day, cap- put in up to 49 per cent equity, revive it, ulator does not have any discretion to A rights issue becomes successful Section 45 of the Banking Regulation each. In the 2016 Assembly elections also, ping withdrawal of money by its depos- and could continue to hold at least 26 do that. when at least 90 per cent of it is sub- Act, under which YES Bank is being her party failed to open its account there itors at ~50,000 each. The Reserve Bank per cent stake for the next three years. The only way it could be waived is scribed. SBI will probably underwrite reconstructed, gives RBI freedom to despite its great showing elsewhere in the of India (RBI) also superseded its board The RBI has not allowed any com- through the moratorium route, exercis- the issue and other investors (including overrule all such provisions. state. Little wonder, during a recent visit to and appointed an administrator, a year mercial bank to fail in the past three dec- ing RBI’s powers under Section 45 of the those that wanted to buy YES Bank To start with, SBI should keep a good the area, the chief ministers gave local after it ousted the bank’s promoter — ades. It has always played the role of a Banking Regulation Act. That’s how SBI shares at a cheaper price but could not amount of deposit with YES Bank to leaders a piece of her mind. Addressing the CEO Rana Kapoor and appointed matchmaker but this is the best deal it can acquire a 49 per cent and at ~10 per because of the Sebi norms) may pick up instil confidence in others and the RBI party’s booth-level workers’ conference at Ravneet Gill as the new boss. has stitched. Why am I saying so? Before share. shares. Depending on the response, SBI can open a liquidity window, if needed. Choto Sujapur, Banerjee pulled up district Freezing of all activities of a bank of that, why did the RBI have to step in? At this price the RBI would bring in can bring down its stake immediately This could be an Indian version of the leaders one by one. First she reprimanded YES Bank’s size in March, the last month And why now? ~2,450 crore. That will not be enough to after the rights issue. Troubled Asset Relief Program (TARP) former MLA Sabitri Mitra and Gourchanda of a financial year, creates enormous The deal has been in the works for bring YES Bank back on track. What All this is expected to happen fast. of the US, financed not by the govern- Mandal for fighting among themselves. inconvenience for all. It has been big months. All of us know that YES Bank next? SBI’s presence will create confi- Even though the moratorium is for one ment but by a government-owned She then turned to Babla Sarkar and time into cash management of com- needs capital, desperately. But what is dence and excite the investor commu- month, one can expect that it will be entity. If all goes well, the SBI will make accused him of never venturing beyond panies. How will they manage? Many not in the public domain is the flight of nity to take a fresh look at YES Bank. I business as usual for YES Bank by the money from its investment. the municipal areas of Englishbazar and medium and small enterprises will not deposits. Even the best of banks fail assume a rights issue will follow — the second half of March. Old Malda. She slighted him by calling him be able to pay their suppliers and those when depositors rush to withdraw pricing of which is not governed by the Since it is not a merger, there will not The writer, a consulting editor with Business a “municipal” leader. She rebuked a microfinance borrowers that have bank- money en masse. YES Bank’s deposit Sebi norms. Besides, when an investor be any value erosion for SBI stake- Standard, is an author and senior adviser to fourth one for neglecting his party duties, ing relationship with YES Bank will be portfolio has been eroding fast over the buys a share at a rate cheaper than the holders. No depositor will lose money, Jana Small Finance Bank Ltd. and so on. stuck. Indeed, for medical and other past few months. market price, under the income tax law, no branch of YES Bank will be closed Twitter: TamalBandyo

INSIGHT LETTERS

run small enterprises and have risen Mohan Committee Report of 2002 must Roadblocks to growth Hasty decision from scratch must be consulted to pre- be salvaged from railway godowns and vent such mistakes. action must be taken to corporatise While roping in the State Bank of Bhartendu Sood via email Indian Railways. A railways regulatory Is the new Data Protection Bill biting the hands that feed us? India (SBI) was a laudable and timely servers. This raises several concerns. data needs to be secured and protected? move to help the fund-starved bank, A ‘no’ bank What is personal and what is sensitive is If there is justified cause for contest, pro- putting a restriction on withdrawal subject to interpretation. This matters curing a court order will offer access to has done enormous harm to the econ- News of the proposed takeover of YES because critical data can be shared with data — like in any criminal case. omy, market sentiments and lastly, Bank by the State Bank of India (SBI) a foreign entity only with explicit con- Most products and services rely on the YES Bank itself. does not surprise many in the kno- sent and other requirements. One man’s internet and cloud computing. The One thing which can't be denied is whow of the functioning of this private “critical” is another man’s “sensitive”. mobile economy contributes significantly the investor confidence in YES Bank — sector bank. What indeed surprises me Who decides? to India's GDP. Digital India could offer reflected from the huge deposits the is that the Reserve Bank of India (RBI) Additionally, storing massive amounts $1.3 trillion in business opportunities for bank has and the 67 per cent equity that took this long to react to the bleeding of data in physical servers locally is the future. Light-touch industry-friendly it put in the hands of retail investors. It financial report of the said bank. In the extremely expensive. It will drive up costs regulations are the key to realising these is here that the restriction on withdra- past, there were reports of feud within and make it harder to do business in India dreams. wal will hit the bank badly. Account the Kapoor family in their “power T V RAMACHANDRAN — without proof of being effective in pro- Unfortunately, the rules around con- holders have become wary and belated struggle”. Flouting RBI norms and reck- body set up in the same lines in other tecting data. Running data servers is a sent might be too cumbersome for small- assurances that their money is safe will less sticky loans advanced without due sectors of the economy where private sec- ndia became the world’s fifth- very high-cost initiative. It requires land, and medium-sized businesses. User con- not make them continue. I believe the diligence resulted in piling of non-per- tor is making valuable contributions. largest economy last year. This incredible amounts of uninterrupted sent contracts and agreements are stan- bank will lose 75 per cent of deposits forming assets. Things could have been The railways spend around 67 per achievement was only possible power, advanced security measures, and dard practice. The new rules place all the moment restriction is withdrawn. “nipped in the bud” by the RBI if it cent of its income on salaries and pen- I through strategic economy-boost- more. Indian infrastructure is not cur- decisions around consent in the hands of Not to forget it has harmed private drew lessons from the bitter past epi- sions with the latter consuming ing regulatory policies and lowered con- rently equipped to handle this. the DPA and not organisations. Excessive banks badly. Agreed YES Bank was sodes of banks 'covering up' their sol- around 30 per cent. Since no provi- trol on foreign trade and investments The Supreme Court granted Indians reliance on consent to drive any data pro- financially in bad health but still in vency! In India, we wake up only on sions have been made by the railways (World Population Review). Unfortu- privacy as a fundamental right in the cessing can create consent fatigue. Apart better health than Allahabad Bank, or whistleblowing and end up with a late since its inception toward meeting the nately, the rules proposed by the new landmark Puttaswamy verdict of 2018. from lawyers, there are very few who read say, UCO Bank. Why are such restric- realisation. End of the day, genuine pension liabilities and with 1.5 million Personal Data Protection (PDP) Bill seem This means Indians should enjoy data each word of their smartphone or app tions not enforced there? customers are left high and dry. pensioners to fend for, there is little to contradict this growth mindset. Will protection — from all entities. The data user agreements. Also, how will this affect Why is the restriction on withdra- Ashok Jayaram Bengaluru left for improvement in facilities and this hit Indian businesses and their protection Bill has a curious exemption. third-party contracts? Detailed and spe- wal bad? Take the case of a current modernisation. Probably, the solution employees the most? The central government can grant access cific consent gathering in all transactions account holder. He deposits remit- Speed up reforms lies in sequestering the pension pay- India’s economic liberalisation began to select government agencies and over- will slow down and hinder business tances on day-to-day bases and with- ments from the railways balance sheet in the 1990s and accelerated over the past ride protections at any time. They will growth — except for compliance lawyers. draws when payments are to be made. This refers to the edit “Fast trains at slow which can provide much needed cap- few decades. Indian businesses such as also appoint the overseeing authority, the The PDP Bill also created a separate It is stupid to think that he could allow speed” (March7). Having partially priva- ital for railways’ regeneration. Tata and Infosys are powerful entities Data Protection Authority (DPA). How is category of organisations called “social remittances to be put in an account for tised most of the transport sector, there Ganga Narayan Rath Hyderabad globally. As a result, India’s massive $185 our information being protected if media intermediaries”. It is practically a month and then wait for the benevo- is no reason to babysit Indian Railways billion IT industry employs 4 million anyone from any government agency can impossible to segregate purely “social lence of the Reserve Bank of India (IR) in the face of increased passenger Letters can be mailed, faxed or e-mailed to: (direct) and 10 million (indirect). On the seize data in local servers, at any media” organisations. Are news websites (RBI) governor to withdraw on April 4. traffic and continued slippage in share The Editor, Business Standard startup front, in 2019 alone, over $10 bil- moment? So, if we are not protecting data, social media intermediaries? After all, I think that the RBI should allow with- of cargo movement by the IR. The pro- Nehru House, 4 Bahadur Shah Zafar Marg lion in investments poured into India why traverse this maze of regulatory they collect user comments. This move drawals of the amount which goes to posal to privatise 50 stations and intro- New Delhi 110 002 (Bain). Industry-friendly regulations, low- hoops and hurdles? is also redundant since intermediaries the account after 6 PM on March 5 and duce 150 trains is too little to make any Fax: (011) 23720201 · E-mail: [email protected] cost cloud computing, and our large pool Also, how will the PDP Bill affect (communication channels) are already other withdrawals should be relaxed dent in railways’ fortunes, given the sheer All letters must have a postal address and of young talent are critical drivers for Indian fintech industry? Indian fintech covered under the IT Act, 2000, and within a week. size of the railway network. The Rakesh telephone number global investment. India now boasts of 25 raised $7.4 billion in investments in the Intermediaries Guidelines, 2011. How market sentiments have been Indian-born Unicorns (billion-dollar last decade and is a valuable contributor In the end, what problem are we solv- hit can be gauged from the fact that startups) servicing the global economy. to the Indian and global economy. The ing? Placing more roadblocks to growth the moment the news regarding SBI’s None of these accomplishments PDB Bill’s restrictions on cross-border can hamper our economy and drive participation was known , the share HAMBONE would have happened without the gov- data flows could severely slow this indus- global investors away. Industry-friendly price of YES Bank appreciated by 28 ernment’s help. India’s growth trajectory try down. In this digital world, cross-bor- policies are the foundation that permits per cent to touch ~38 and when the has been steady but it may now become der data flows are integral to growing the Indian enterprise to thrive and secure restriction on withdrawals was shaky. While the PDP Bill’s intent is excel- economy. Data flows across borders Indian job opportunities for the future. known, it depreciated by 400 per cent lent, several stipulations may adversely raised global GDP by 3.5 per cent ($2.8 tril- (Research inputs by Chandana Bala) to touch ~5. affect our economy and the job market. lion) in 2014 and could reach $11 trillion What we need? Instead of big econ- For starters, take the mandate for by 2025 (McKinsey). Protectionist policies The author is president of Broadband India omists or bureaucrats, we need small data localisation. It requires “sensitive” like data localisation will obstruct our Forum and founder & CEO of Advisory@TVR businessmen in the decision-making and “critical” data to be stored on Indian growth (Bauer, 2013). Why not specify that Views are personal panel. We don’t need the likes of Ratan Tata or Mukesh Ambani. Those who OPINION 9 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIV Number 146 ILLUSTRATION: AJAY MOHANTY seem to repeatedly do bad things? Why do individ- MUMBAI | MONDAY, 9 MARCH 2020 uals in policy institutions seem to repeatedly make mistakes? In both cases, what is going on is responses to flawed incentives. The bad incentives that have given us an important financial crisis in India from End of a long rope 2011-12 onwards are alive and well, and without the required financial reforms, the crisis will fester. There’s need for an insolvency framework for financial sector How do we improve banking regulation? The RBI requires clarity of purpose: To deliver consumer he Reserve Bank of India (RBI) finally stepped in last week and price index (CPI) inflation of 4 per cent, and to deliver decided to use the powers granted it under Section 45 of the Banking safe and sound banks. The RBI should be divested Regulation Act to deal with the YES Bank crisis. It has, for a month, of peripheral work, and get going on the path to superseded the board of the bank and imposed several other restric- capability on these two functions. While the RBI T board correctly has a majority of independent direc- tions on its operations. Customers will not be able to withdraw more than ~50,000 and it cannot take on any new liabilities. There are two questions tors, there is a need to put the board in control of the organisation design, to hold the management that should be asked in any such case and particularly in this case. The first accountable, and to control the legislative function. is: Was there a delay in acknowledging the seriousness of the problem? And, The legislative, executive, and judicial functions second, what comes next? require good governance procedures that are encod- It certainly appears that the erstwhile promoter-manager of YES Bank, ed into the law. As with all other financial agencies, Rana Kapoor, was granted a very long rope by the authorities and that action It’s the incentives, the RBI needs the Comptroller and Auditor General should have been taken to deal with the financial institution and its management (CAG) audit and appeals at the Securities Appellate long since. The charges against Mr Kapoor, who has been arrested, are serious, Tribunal (SAT). Sound formal processes for report- even though not proved as yet. The Enforcement Directorate has accused him ing, RTI, and budgeting are required. How do we improve resolution? India began and his family of setting up shell companies that were used for receiving kickbacks stupid on the Insolvency and Bankruptcy Code (IBC) jour- from corporate entities that took loans from YES Bank. The RBI has put into ney in 2016. There are, however, two groups of place an administrator, a former chief financial officer of State Bank of India The most important post-mortem required after the YES Bank financial firms where the IBC process is likely to (SBI), who has sought to reassure bank customers that their deposits are safe. fare poorly: The firms which have made strong Yet reviving YES Bank at the time of a general slowdown in economic crisis is about flawed incentives of bankers and officials promises to unsophisticated households (banks activity and optimism is a tough ask. The first step will be to put in a strong and insurance companies) and systemically management that can work in the meantime to push forward the government’s onservatives have argued that the existing pol- with previous experiences with bespoke resolution important firms (e.g. HDFC). For these two groups plan for revival. The bank, India’s fourth-largest in the private sector, is to be icy machinery of Indian finance is broadly fine. in UTI (2001) and Global Trust Bank (2004). of firms, what is required is a specialised “resolu- taken over by a consortium led by SBI, in what is essentially a bailout. The C The difficulties of YES Bank are a reminder How might this event change the prior of economic tion corporation” which will look beyond the inter- that there are significant difficulties in the policy appa- agents? Private persons might trust the disclosures ests of lenders in order to find a tidy burial for the new management will have to properly audit the books and return operations, ratus. It is important to not slip into personalising the and credit-worthiness of private banks less, and trust failed financial firm. especially withdrawals, to normal at the earliest. Investigations into wrong- failure. The personnel in the government and the electronic payment systems less. If mistrust clusters These key ideas were worked out in the Indian doing by the previous ownership and management are of course ongoing, Reserve Bank of India (RBI) have tried to battle with around a group of stressed private firms, it could research community from the 1990s onwards, in the and should continue. the difficulties with intelligence and determination. morph into contagion through reduced access for expert committee process from 2007 to 2010, and But the priority now must be to restore confidence and to ensure there is The failure lay in institutional these firms to credit and then translated into a draft law by the Financial no contagion. The problem is that banks like YES Bank should ideally be capacity, in the impersonal work- deposits. The incentive impli- Sector Legislative Reforms Commission (FSLRC), allowed to unwind in an orderly manner. No market system works properly if ing of incentives and informa- cations of these changes might led by Justice B N Srikrishna, over 2011-15 a bailout organised by the government is the only cost to a company that has tion. The solutions lie in such prove to be more important for (http://bit.ly/2wHdfzv). This process of policy anal- institutional reform. the economy, in the long run, ysis saw important flaws in Indian financial eco- taken bad decisions. But the issue is that there is no resolution framework in Market-based credit risk mea- than the immediate disruption. nomic policy, and designed the corresponding insti- place for a financial institution that has to go bankrupt. A previous attempt in sures show that YES Bank was In the mainstream dis- tutional reforms. The puzzle before policymakers this government’s earlier term lapsed following concern that depositors’ money in a difficult zone from 2011 to course, the collapse of a firm is that of assembling teams that will carry through would be used to “bail in” failing banks. Of course, there is always the risk of 2014, and then from 2018 is seen as the failures of indi- legislation, where sensible compromises are made contagion in the financial sector and so it is understandable if the state has onwards. And yet, in the data of viduals, both in the firm and through the standing committee process but the been forced to bail out YES Bank with some cost to the nationalised banks. March 2019, it reported a nice in policy institutions. We essential ideas are protected, and then of assembling Yet that cannot be the only option. There must be an institutional structure capital adequacy ratio (CAR) of SNAKES & LADDERS should be sceptical about the teams that will build new financial agencies and and legal framework that can support the exit of a large deposit-taking financial 16.5 per cent, a value that was theory that the event is reform existing ones. firm in such a way that depositors are protected, assets are not destroyed, and clearly wrong. There was failure AJAY SHAH caused by some bad human A subset of the Indian policy community has in both, the legislative function beings. A more abstract view argued that the key flaw in Indian finance is the incentives for promoters are clearly maintained. The regulator and the gov- of banking regulation (i.e. the design of regulations) is more insightful, which sees the individuals as large size of public sector banks. While I am no friend ernment were slow to react to the problems of YES Bank. It should not be slow and the executive function of regulation (i.e. the imple- merely playing out the role for them in a vast dra- of public sector ownership, it is important to be con- in responding to the deeper failures that the YES Bank bailout has revealed. mentation of regulations, also termed “supervision”). ma, where each person is responding to incentives. cerned about the consequences of low state capacity Since the role of private financial institutions is likely to increase over time, The endgame may have been precipitated by an The human actions that added up to the failure in financial regulation. Economists have long argued financial sector regulators, including the RBI, need to be more proactive. exit of deposits. The incipient stages of a bank run of YES Bank were responses to incentives. We that the one thing more troublesome than a public are extremely unpleasant; policymakers get a flurry bemoan the willingness of people in India to go sector bank is a poorly regulated private bank. The of difficult days with little time to think and carefully through a red light but persons of Indian origin do best sequence that can be envisioned for the next design. But there was no need for the authorities to pretty well at respecting traffic lights, when driving 25 years involves learning how to do banking regu- Justice delayed wait till this endgame. There was ample time in in other countries. Human beings are roughly the lation, then opening up to entry by private banks, which the resolution could have been planned. same everywhere, the key thing that matters is the and finally privatising public sector banks. For the Supreme Court intervention often takes too long While we recognise that India lacks the “resolution incentives that we are placed under. The most impor- years with low state capacity in regulation, a small corporation” that would do a tidy resolution for tant post-mortem required after YES Bank is not the banking system is in our best interests. peaking at the International Judicial Conference recently, Prime some financial firms, the bespoke resolution of YES investigation and fault-finding of individuals: We Minister Narendra Modi underlined the importance of the rule of law Bank and Infrastructure Leasing and Financial should worry about the flawed incentives at work. The writer is a professor at National Institute of Public and highlighted the role of speedy justice in that context. The prime Services (IL&FS) looks more messy when compared Why do individuals in private financial firms Finance and Policy, New Delhi Sminister is quite right to say that the verdicts of the Supreme Court in particular, even if controversial, are regarded with respect by the other wings of the state and the public at large. The link between the speedy disposition of high-profile matters and the regard for the rule of law is also an important point. It is unfortunate, therefore, that in the recent past, the highest court The next water decade has not been as swift to address some matters of grave constitutional and would dare to say that I do not believe that there building rural water assets. This is where the real challenge remains — ensur- political importance that are in its purview. will be water wars, or that cities will run out of In the decade of the 2010s, the crisis of urban ing the sustainability of the water-supply systems. In one of the most vexed political issues of the day, namely the right to I water, or that we will not have any water to drink. drought hit homes. But again, policy evolved as it Today, the problem is that the natural-resource water carry out protests against the Citizenship Amendment Act at places like I say this, knowing fully well that we have a dire and learnt that augmenting water supply was only one asset created is not durable — the pond gets filled; Shaheen Bagh in Delhi, the Supreme Court has now adjourned the hearing on crippling crisis of water shortage in the country and part of the challenge — cities were increasingly the tank is encroached upon; and the watershed, so it is getting worse. dependent on long-distance sources; pumping and critical for the drainage to be secured, is destroyed. the issue to as far away as March 23. This is unfortunate. The context of the I say this because water is a resource that can be piping this water meant losses in distribution as well The problem lies in the fact that land and water recent violence in Delhi, which arose partly from anger at the protests, makes replenished — it snows and rains each year. More as the costs of electricity, and these, in turn, made bureaucracies are fractured — somebody owns the the postponement even more unfortunate. The court has not been idle; it has importantly, other than in the case of agriculture, we the available water expensive and more inequitable. pond, another agency the drain, and yet another the appointed two well-regarded personalities as interlocutors with the protestors don’t consume water. We use and discharge. More importantly water supply was linked to pollu- catchment. Water security requires this to change. on its behalf. But nevertheless a speedier resolution would have perhaps Therefore, it can be treated and then re-used and tion — the more the water supplied, the more is This means giving much greater control over the water helped calm the tensions that erupted in Delhi recently. Another vital consti- recycled. So, this is one future we can change. wastewater generation. The CSE’s report Excreta structures to the local community — deepening tutional and political issue that has been hanging fire, in this case for years, is But this means getting the policy and practice of Matters detailed how this unaffordable paradigm of democracy and devolution of powers — is then the the question of electoral bonds. Such matters should not be delayed for so water management right. The water-sewage management answer to water management. good news is water literacy has needed to be changed. Then we need to do all we can to minimise our use long that they become moot. grown. Till the late 1980s, water A few years later, our of water, and become much more efficient with every Questions have also been widely asked about the delay in addressing management was largely con- research revealed that the bulk drop. This means doing everything from investing in issues arising from the effective abrogation of Article 370 of the Constitution fined to the issue of irrigation of the urban residents are not water-efficient irrigation, appliances, and changing and the associated security clampdown on the erstwhile state of Jammu and projects — building dams and even connected to the under- diets so that the crops we eat are water-prudent. Kashmir. Constitutional matters of such gravity should ideally have been canals to store and supply water ground sewerage network, So, this is the opportunity — the decade to put all addressed with the greatest of urgency. It is precisely for such issues that the over long distances. But then which is capital- and resource- we have learnt into practice and to turn around the Supreme Court exists, after all. The court did finally pass judgment on the came the big droughts of the intensive. Instead, they depend water-story of India. It is possible. We just have to broad issue of internet shutdowns, imposing some restrictions on the procedure late 1980s and it became clear on on-site sewage “disposal” make it our single-biggest obsession. Water, remem- by which the executive can issue such shutdowns. Yet the specific question of that it was not enough to plan systems, where household toi- ber, is about livelihood. It is about food and nutrition. for augmenting water only lets are connected to septic It is about economic growth. restrictions on Kashmir has been allowed to slide for too long. There is also DOWN TO EARTH through large projects. This was tanks or just holding tanks or This decade is then our make or break — it is also the very basic question of habeas corpus rights. For centuries, in countries also when the Centre for SUNITA NARAIN even to open drains in the vicin- because it is in this decade that we will see the revenge with the rule of law, one of the central duties of the judiciary has been to rule Science and Environment ity. In all this, new solutions of nature as impacts of climate change grow. We need on the legality of detention. But even in high-profile cases, such as that of the (CSE) published its report Dying Wisdom, which doc- emerged — if affordable water supply was critical, to scale up our work to invest in water systems and to detention of Farooq Abdullah, who is a former chief minister, a former Union umented technologies for rainwater harvesting in then cities needed to cut the length of their distribu- make them durable, not just to withstand another minister, and a member of Parliament, the Supreme Court did not act as ecological diverse regions of India. Our slogan for that tion pipelines, which meant increased focus on local rain but another deluge. We need to speed up our quickly as it could — the notice was issued after six days, a gap that in effect period was, rain is decentralised, so is the demand water systems like ponds, tanks, and rainwater har- work, because climate change will make sure that we allowed the government the time to charge Mr Abdullah under the Public for water. So, capture rain when and where it falls. vesting. Then, if cities needed to ensure affordable have more rain, but in fewer rainy days. This means There was a paradigm shift in policy. In the sanitation for all and affordable treatment of wastew- doing much more to capture the rain, when and where Safety Act and rendered the judicial intervention moot. droughts of the late 1990s, state governments ater, then on-site systems could be re-engineered so it falls. It is about a new worship — this is a god that It cannot be disputed that the court must take the time it needs to come launched massive programmes to capture rainwater that waste was collected from each household, trans- we cannot fail. to the correct judgment in any matter, particularly those of national importance. by building ponds, digging tanks, and building check- ported, and treated. However, if the judgment comes too late to be relevant, then the court risks its dams on streams. By the mid-2000s, these efforts So, this is where we are in our understanding of The writer is at the Centre for Science and Environment own relevance in the process. coalesced into the Mahatma Gandhi Rural water management. We know what to do, the question [email protected] Employment Guarantee Act — investing labour in is why we are not getting our act together. Twitter: @sunitanar

history but, he argues, of more general questions. The first is whether Piketty is a centre-left parties, which, as he notes, relevance. First are “ternary” societies reliable guide to such a large territory. His increasingly represent highly educated Capitalism reconsidered divided into functional classes — clergy, book combines history, sociology, voters. And his clear implication is that nobility and everyone else. Second are political analysis and economic data for social democracy can be revived by But for the book-buying public, the ideological and political.” “ownership” societies, in which it’s not dozens of societies. Is he really enough of refocusing on populist economic policies, big revelation of Capital was simply the But where does ideology come from? A who you are that matters but what you a polymath to pull that off? and winning back the working class. fact of soaring inequality. This perceived Piketty argues that history is full of have legal title to. Then come the social I was struck, for example, by his Piketty could be right but most revelation made it a book that people “ruptures” that create “switch points,” democracies that emerged in the 20th extensive discussion of the evolution of political scientists would disagree. In the who wanted to be well informed felt they when the actions of a few people can century, which granted considerable slavery and serfdom, which made no US, at least, during the Obama years the had to have. cause a lasting power and mention of the classic work of Evsey Affordable Care Act extended health BOOK REVIEW To have, but maybe not to read. An change in a CAPITAL AND IDEOLOGY privilege to Domar of MIT, who argued that the more insurance to many disadvantaged analysis of Kindle highlights suggested society’s Author: Thomas workers, ranging or less simultaneous rise of serfdom in voters, while tax rates on top incomes PAUL KRUGMAN that the typical reader got through only trajectory. Piketty from union Russia and slavery in the New World were went up substantially. Yet the white around 26 of its 700 pages. Still, Piketty To make that Publisher: The representation to driven by the opening of new land, which working class went heavily for Trump, even years ago the French economist was undaunted. case, Piketty Belknap Press of government- made labour scarce and would have led to and stayed Republican in 2018. Maybe SThomas Piketty released Capital in His new book, Capital and Ideology, provides what provided social rising wages in the absence of coercion. the political science consensus is wrong. the Twenty-First Century, a magnum weighs in at more than 1,000 pages. There amounts to a Harvard University benefits. Finally, The second question is whether the What I can say with confidence, though, opus on income inequality. Economists is nothing necessarily wrong with writing history of the Press there’s the current accumulation of cases actually is that until the final 300 pages Capital already knew and admired Piketty’s a large book to propound important ideas. world viewed Translated by: Arthur era of strengthens Piketty’s core analysis. It and Ideology doesn’t do much to make scholarly work, and many — myself To be fair, the book does advance at through the lens Goldhammer “hypercapitalism,” wasn’t clear to me that it does. the case for Piketty’s views on modern included — offered the book high praise. least the outline of a grand theory of of inequality. The which is sort of an For Piketty, rising inequality is at political economy. Remarkably, the book also became a huge inequality, which might be described as book’s archetypal Price: $39.95 ownership society root a political phenomenon. The The bottom line: I really wanted to like international best seller. Marx on his head. In Marxian dogma, a case study is Pages: 1,093 on steroids. social-democratic framework that Capital and Ideology, but have to In retrospect, however, what society’s class structure is determined by French society Using a made Western societies relatively equal acknowledge that it’s something of a professionals saw in Capital wasn’t the underlying, impersonal forces, technol - over the past two and a half centuries. But combination of extrapolation and for a couple of generations after World letdown. There are interesting ideas and same thing the broader audience saw. ogy and the modes of production that Piketty ranges very far afield, telling us guesswork to produce quantitative War II, he argues, was dismantled, not analyses scattered through the book, but Economists already knew about rising technology dictates. Piketty, however, about everything from the composition of estimates for eras that predate modern out of necessity, but because of the rise they get lost in the sheer volume of income inequality. What excited them sees inequality as a social phenomenon, modern Swedish corporate boards to the data collection is a Piketty trademark, and of a “neo-proprietarian” ideology. This dubiously related material. In the end, I’m was Piketty’s novel hypothesis about the driven by human institutions. Institutio - role of Brahmins in the pre-colonial it’s a technique he applies extensively is a view shared by many, though not all, not even sure what the book’s message is. growing importance of disparities in nal change, in turn, reflects the ideology Hindu kingdom of Pudukkottai. here, I’d say to very good effect. But for economists. That can’t be a good thing. wealth, especially inherited wealth, as that dominates society: “Inequality is He describes four broad inequality me, at least, the vast amount of ground it But why did policy take a hard-right opposed to earnings. neither economic nor technological; it is regimes, obviously inspired by French covers raises a couple of awkward turn? Piketty places much of the blame on ©2020 The New York Times News Service 10 ECONOMY & PUBLIC AFFAIRS MUMBAI | MONDAY, 9 MARCH 2020 1 > PSB MERGER Perpetual licences for fund Gains may not accrue managers by PFRDA soon Considers raising fund management charges a bit INDIVJAL DHASMANA PENSION FUND basis point. New Delhi, 8 March “Currently, fund manage- soon for investors MANAGERS ment charges are pittance. It is The Pension Fund Regulatory FOR GOVT SECTOR just 1 basis point, which means Experts say concern over growth, credit cost, and asset quality would restrict and Development Authority for every ~100 you give, only one (PFRDA) will issue request for | LIC Pension Fund L paisa is charged. We feel that valuation improvement despite sharp correction in share prices proposals (RFPs) in the next two | SBI Pension Funds there is a scope to increase it a months and select fund man- SUPRATIM BANDYOPADHYAY, | UTI Retirement Solution little bit to professionalise pen- chairman, PFRDA SHREEPAD S AUTE agers for perpetuity against the FOR PRIVATE SECTOR sion funds,” Bandyopadhyay Mumbai, 8 March current practice of issuing these Currently, fund said. It has yet not decided the licences for five years. management charges | HDFC Pension Management exact fund management ased on their closing Supratim Bandyopadhyay, are pittance. It is | ICICI Prudential Pension Fund charges. “We will find the ideal stock prices on newly appointed chairman of just 1 basis point. We Management charge,” he said. On whether Thursday, when the PFRDA, said the authority feel that there is a scope | Kotak Mahindra Pension Fund PFRDA will decide to issue share-swap ratios expected that the existing seven to increase it a little | LIC Pension Fund licenses on tap later, he said,"Let B bit to professionalise involving the combination of fund managers and some others | SBI Pension Funds us see what is the response we pension funds” 10 public-sector banks (PSBs) would apply for these RFPs. | UTI Retirement Solutions get on our RFPs." into four were announced, the Licences for perpetuity Currently, there are seven exercise looks beneficial only means these would not be re-look whether to increase it or the RFPs.” As to why PFRDA is pension fund managers — for the shareholders of Punjab revoked unless a fund manager not. Bandyopadhyay clarified not going for on-tap licences, he HDFC Pension Management, National Bank (PNB), Oriental itself wants to exit or it violates that the licences were given for said the authority also decides ICICI Prudential Pension Fund Bank of Commerce, and some terms. The fund man- perpetuity but these would not fund management charges in Management, Kotak Syndicate Bank. agers will only need to pay fee be issued on tap. “On tap means the RFP process. “We cannot do Mahindra Pension Fund, While the mergers are for renewing licences. you give some eligibility condi- that if we issue on-tap licences,” LIC Pension Fund, SBI Pension expected to improve the per- Earlier, PFRDA had put a cap tions and anyone filling those he said. The regulator is also Funds, UTI Retirement formance of the PSBs over the on the number of fund man- conditions can apply and get planning to increase this charge Solutions, and Aditya Birla Sun long term, concern over agers at 10. It is now having a the licences without we issuing moderately from the existing 1 Life Pension Management. growth, market share gains, and credit cost could keep a According to ICRA, the GOING CHEAP level corporate debt, is vul- lid on their valuations in the market share of private banks Price-to-book value ratio (x) nerable to default over the near to medium term. has improved to around next three years. Andhra Bank 0.00 Mona Khetan, analyst at 35 per as of September last This could keep the credit Allahabad Bank 0.14 Reliance Securities, says: “Past year from 28 per cent as of cost for the corporate banking Crypto trade getting back on track PSB mergers show that both March 2014. Indian Bank 0.17 segment, not just PSBs, under asset quality and growth are Also, though PSBs have Union Bank of India 0.24 pressure. RAJESH BHAYANI high despite new investors’ finalise proposals of banks CEO Nischal Shetty. affected in the four-six quar- two-thirds market share, close Canara Bank 0.26 Though some corporate Mumbai, 8 March registration was noticed. that have shown interest in “Doors to massive crypto ters after the merger, making to 50 per cent is held by the Syndicate Bank 0.27 loan accounts are expected to Unocoin, a opening their adoption in India has now the incumbents unattractive country’s largest bank, State United Bank of India 0.33 be resolved, Shrivastawa says With the Supreme Court setting crypto account. The opened. It proves that we can despite sharp correction in Bank of India, which has a Oriental Bank of Commerce 0.35 recovery could get longer. aside the Reserve Bank’s circu- exchange from exchange was now innovate, and the entire valuation multiples.” very large business base. Punjab National Bank 0.43 However, the likely gains lar banning banks from deal- the south, has recently country can participate in the In the current tepid envi- Lalitabh Shrivastawa, Corporation Bank 0.55 over the long term are some- ing with cryptocurrency, sever- resumed offer- acquired by blockchain revolution. With ronment, too, where credit deputy vice-president at Trailing 12 months price-to-book value; data as of thing still keeping experts al exchanges have started ing services. Binance, more than 1 billion popula- March 6, 2020; compiled by BS Research Bureau growth is expected to remain Sharekhan, says market- Source: Bloomberg hopeful about PSBs. opening accounts to bring back The exchange’s which is the tion, the Indian market is a moderate, pressure on mar- share gains would be difficult G Chokkalingam, founder trading on exchanges like they chief executive world’s largest sleeping giant,” Nischal said. ket-share gains for PSBs would for PSBs as private players and managing director, were doing before April 2018. officer (CEO), crypto He sees hundreds of new be more severe, even as their have been aggressively focus- vated for some more time. Equinomics Research However, investors have Sathvik exchange. crypto start-ups in India, mil- near-term capital position ing on growth. Additionally, the impact Advisory, says: “The merger been advised caution in trad- Vishwanath, Investors have “We have lions of dollars of venture cap- looks fair. On asset quality, the merg- of the ongoing economic could improve the medium- ing till the government the said: “We been advised the best mobile italists’ investment in this sec- Analysts at Antique Stock er process will lead to slowdown and coronavirus to long-term business poten- clears its stand on the issue. already have caution in trading app in India tor and more job openings. Broking expect private banks, increase in gross non-per- on asset quality is still not tial of PSBs. Most PSBs, which The Centre had in February processed hun- till the government with highest Naveen Surya, chairman mainly the top five lenders, to forming assets (NPAs) of the clear, but is more likely to be trade at a discount to adjusted 2019 introduced a Bill propos- dreds of the clears its stand rating. We will emeritus, Payment Council gain more market share. anchor banks — PNB, Union negative. book values now, are likely to ing a ban on cryptocurrency. requests for on the issue. It had continue to of India and current Factors such as technolo- Bank, Canara Bank, India Ratings says the see a significant premium to Bitcoin, the largest and deposit and earlier introduced a offer attractive Chairman of Fintech gy advancement, faster and Indian Bank — by up credit profiles of companies their adjusted book values in the first cryptocurrency, is withdrawal of Bill proposing a ban features for Convergence Council, is bull- branch expansion, and a suf- to 580 basis points, based are likely to remain under the medium term.” commanding premium of 1.5- Indian rupee Indian users so ish after the SC judgment. He, ficient capital base of the pri- on the October-December pressure as the economy For now, investors 2 per cent of its cost on one of and more cus- that they can however, cautioned investors vate sector as well as foreign 2019 numbers. grapples with a synchronised with less risk appetite are rec- the exchange’s apps which tomers are easily be against dealing with cryp- banks have led to PSBs losing This, in turn, would keep and prolonged economic ommended “wait” till has started permitting trad- signing up now.” involved in Bitcoin and other tocurrency till the Centre market share to the former in credit cost (provisioning as a slowdown and so ~10.52 tril- clarity on growth and asset ing against payment. Even Another exchange, crypto. We are at testing came up with its plan to deal the past few years. percentage of loan book) ele- lion, or 16 per cent of system quality emerges. buy-sell spread was seen very WazirX, is expected to stage,” said the exchange’s with it.

Banks well > FROM PAGE 1 capitalised, run by the PFRDA comes under the NPS Rana Kapoor in ED custody, Shadow over AT-1... LOSING SHEEN Total Trust. Their interests are guarded by the no reason to Fixed income experts say these bonds have in CY18 NPS’ board of trustees. While the money to been an important avenue of raising funds Amount raised via AT- 12,066 build up the pension funds of the workers worry: CEA for banks, especially for those unable to tap 1 bonds (~ crore) in CY19 are invested by the companies that bid for faces ~4K-cr kickback probe the equity markets due to beaten down Number of tranches the rights, the board of trustees takes care of equity value. “Most public sector banks IndusInd Bank 1 the assets and funds in the interest of the already can’t access equity capital markets. 1,489 (10.5) subscribers. The government feels that a Such a move will make it difficult for them sole NPS has stalled the development of to access debt markets as well. This is a ret- Bank of 2 the sector. Hence, the Trust deed will be rograde step,” a debt fund manager said. SBI Baroda modified to allow for multiple trusts, which “For the first time, AT-1 bonds are being 8,169 3,397 (8.8) can be set up by any pension company. So written off ahead of equity. Equity share- (8.9) 3 a foreign pension fund like, say Calpers, holders will still own 51 per cent of the Total: 13,055 could run a pension fund in India and set up restructured bank, but AT-1 bondholders a pension trust for the purpose. Figures in bracket are average yield (%) will suffer full loss. This could put brakes on Source: Bloomberg The existing NPS will become a self-reg- fundraising in the AT-1 market,” the fund ulatory organisation to ensure that best PRESS TRUST OF INDIA manager said. Under Basel III Capital practices are followed by all the pension Mumbai, 8 March Regulations, outlined by the RBI in its mas- bonds in 2019. Among other banks that trusts. It will report to the regulator, the ter circular, an AT-1 bond is superior to equi- accessed the AT-1 bond market last year renamed PRDA. Allaying concern over the ty. Meanwhile, information memorandums were IndusInd Bank (raised ~1,489 crore) banking sector’s health in of such bonds highlight the risk of write- and Bank of Baroda (raised ~3,397 crore). the wake of the YES Bank down or conversion to equity if a bank’s Other banks that raised capital through AT- Ujjwala may get... fiasco, Chief Economic financial health is in trouble. 1 bonds include Punjab National Bank, Adviser Krishnamurthy Rana Kapoor being after being arrested by the Rana Kapoor’s wife Bindu Kapoor at ED’s office According to sources, banks are recon- Canara Bank, Union Bank of India, Andhra The source said mobile vans would be intro- Subramanian on Sunday Enforcement Directorate PHOTO: PTI in Mumbai on Sunday PHOTO: KAMLESH PEDNEKAR sidering fundraising plans through AT-1 Bank, ICICI Bank, and HDFC Bank, among duced, giving priority to safety aspects, too. said Indian banks were well bonds. On Saturday, IndusInd Bank decid- others. Some NBFCs have also used AT-1 The government had faced flak over capitalised and there was no The agency is in possession of some crucial crore and rest for general corporate purpose. ed not to consider issuing bonds for bonds for capital requirements. lower Ujjwala refills, as the average number reason to worry. documents that show Kapoor bought two prop- This loan was against the five properties valued fundraising. The bank said Monday’s board of refills by normal customer comes to He further said that it was erties in the UK, and their valuation of which is at ~40 crore as collaterals. This happened when meeting, which was to consider issuances of around 7. The Ujjwala scheme, under which a wrong method to assess a underway. The probe agency also seized 44 DHFL had already defaulted on a ~3,700-crore AT-1 bonds and/or tier-2 bonds, was being Foreign pension... free cooking gas connections are given to lender’s health based on the paintings from Kapoor’s residence. loan given by YES Bank. DHFL, however, put on the back-burner. poor families, was instrumental in increas- ratio of deposit to market Roshini, Kapoor’s daughter, was stopped by arrived at the valuations of these properties at Fixed income experts say regulatory Reforms in India’s pension sector has been ing LPG coverage to 97.4 per cent house- capitalisation (m-cap ). immigration authorities from taking a Mumbai- ~735 crore on the basis of future development intervention on AT-1 bonds can further patchy, with several grey areas persisting in holds from 55 per cent. According to the “What I want to emphat- London flight as a look-out-circular had been potential, according to the instruction of widen risk premium on such bonds, espe- the market. For instance, the largest pen- ministry of petroleum and natural gas, of ically state is that the m-cap issued against Kapoor family members by the Wadhawan. The valuations were done assum- cially for smaller banks. sion fund operator in the country, the 275.9 million LPG consumers in India, 80.3 ratio is a totally incorrect ED. The ED started its probe last Friday based on ing these land parcels would be converted from “Going forward, appetite for such an Employee Pension System (EPS) under the million consumers come under the Ujjwala metric for assessing the safe- a first information report (FIR) filed by the Central agricultural use to residential. However, there instrument in the market shall be muted or Employees' Provident Fund Organisation, scheme. “Behavioural change, further ty of the banks. No banking Bureau of Investigation (CBI). The CBI in the FIR has been no change in status as of now. be available only at higher spread for risk- is run by the labour ministry and is outside strengthening the supply chain, and a shift sector expert or banking reg- alleged Kapoor entered into a criminal conspir- According to the ED, the assessed value would free names,” said a person heading the insti- the scope of the PFRDA. All private sector towards cleaner energy are some of our key ulator uses this measure,” acy with DHFL promoters Kapil Wadhawan and have only been ~485 crore even after conversion tutional fixed income business of a non- employees earning below a certain thresh- priorities. We are looking for innovative Subramanian said. others for extending financial assistance to DHFL of land use. Therefore, the claimed value of banking financial company (NBFC). old have to mandatorily subscribe to the ways to increase refills and sustain adop- Experts or regulators use by YES Bank in lieu of substantial undue benefits these properties is highly inflated. Further, financial advisors say AT-1 EPS, though the government established a tion,” Petroleum Minister Dharmendra the capital to risk weighted to himself and his family members through the The ED also highlighted another loan of bonds were also sold to retail investors, cit- bridge between the two pension systems Pradhan said last week, stating “the mission assets ratio, and not the companies held by them. ~750 crore, which was disbursed in 2018 by ing the 250-300 basis point higher yield in 2015. The most important reform will be is not yet complete”. After the BJP govern- deposit/m-cap ratio as a The CBI FIR also names DoIT Urban YES Bank to Belief Realtors (an RKW Group than bank fixed deposits, without disclosing the establishment of more than one pen- ment took charge for a consecutive time measure to gauge resilience Ventures, a company allegedly held by Kapoor’s Company) for redevelopment of Bandra the inherent risks of write-down or losses. sion trust instead of the sole National last year, PMUY beneficiaries were given of banks, he added. family members. Reclamation project. Of the said amount, ~118 So far, AT-1 bond market has been Pension System Trust. The NPS Trust was options of 14.2-kg and 5-kg cylinders. Now, “What banking sector The ED remand copy cited the CBI report crore was taken by YES Bank as processing fees tapped by both large and small-sized banks. established by the PFRDA in 2008 with the existing PMUY beneficiaries are being giv- experts and regulators use and has explained the transaction between and balance ~632 crore was transferred to RKW According to data from Bloomberg, State execution of the NPS Trust Deed. Any work- en the option to go for two 5-kg cylinders is what is called the CRAR. It DHFL and Kapoor and his business enterprise and from there, immediately to KYTA Advisors Bank of India raised ~8,169 crore from AT-1 er who subscribes to the pension system instead of a 14.2-kg connection. is important to keep this in in detail. According to the remand copy, DHFL through three group companies of Dheeraj mind that the international had sanctioned a loan of ~600 crore to DoIT in Realty. The advisor company transferred the norms for CRAR is 8 per cent 2018 for repayment of an earlier loan of ~300 full amount to DHFL immediately. and Indian banks on an COVID may delay roll-out of Vivad se Vishwas scheme average have a CRAR of 14.3 > There are more than 400,000 such cases eli- Global, said: “It is not an easy decision to pushing the envelope too far, he added. per cent. BS SUDOKU # 2993 gible to avail of the scheme, and they take in a lot of cases, especially when it “That has made the scheme lose its “So, 8 per cent is the Very easy: involve at least ~9.3 trillion. involves multinationals, and hence it would lustre. An extension of payment dates by mandated minimum norm  As things stand now, tax has to be paid take time. The frequently asked questions three months without any additional and our banks on the average Solution SOLUTION TO #2992 by March 31. Otherwise, the scheme is open have been released recently and we are all charge of interest seems to be just and have 14.3 per cent (CRAR). tomorrow till June 30 this year, but an additional 10 racing against time to get this done.” would motivate many more taxpayers to Now 14.3 per cent versus 8 per cent of tax dues will need to be paid in An extension, he said, would be opt for the scheme.” per cent almost translates HOW TO the case of payments made after March 31. welcome, considering that coronavirus was The designated authority (DA) will into 80 per cent greater cap- PLAY The earlier dispute resolution scheme of affecting Indian offices as well as determine the amount payable within 15 ital than the international Fill in the grid 2016 provided a seven-month window till global/Asian headquarters of several multi- days of receiving the declaration and grant norms,” he said. so that every December 31, but an additional one-month nationals. Rajat Mohan, partner, AMRG a certificate of amount to be paid. The He further said that the row, every extension was given. Similarly, the Sabka Associates, said the taxpayers had been giv- declarant will have to deposit the money Reserve Bank of India column and Vishwas Legacy Dispute Resolution en a short window to discuss, deliberate, within 15 days of the determination of the (RBI) mandates the Indian every 3x3 box Scheme, for service tax and excise duty, and decide the fate of tax disputes in various tax liability. The clarification gives little time banks to keep CRAR at contains the also saw a month’s extension till January 31, forums and were related to ultra-technical to assessees to square up by March 31 9 per cent. digits 1 to 9 2020. Amit Maheshwari, partner, AKM issues. The deadline to pay by March 31 is because the Bill is yet to be enacted.

MUMBAI | MONDA Y, 9 MARCH 2020 PERSONAL FINANCE 11 VALUE OF ~1 LAKH SENSEX GOLD SILVER FD (SBI) PPF INVESTED IN VARIOUS ASSET 1-YEAR 1,02,567 1,37,831 1,23,964 1,06,800 1,08,000 CLASSES 1-YEAR 1,02,567* 1,26,482 1,16,775 1,04,760 1,08,000 POST-TAX RETURNS *Note: Cumulative equity gains up to ~1,00,000 in a financial year are tax-free. 5-YEAR 1,27,599 1,66,743 1,26,953 1,48,641 1,51,757 All post-tax returns are calculated for an individual in the 30 per cent tax bracket, 5-YEAR 1,27,599* 1,60,069 1,24,258 1,32,408 1,51,757 without considering the indexation bene- POST-TAX RETURNS fit As on March 06, 2020, in ~; compiled by BS Research Bureau > . Take charge of your financial life While recounting their own journeys, three achievers from the financial services industry advise women on how to achieve security in money matters ‘Contribute and ensure ‘Make equities part ‘Start investing to earn fair remuneration’ of your portfolio’ financial independence’ SHINJINI KUMAR, evant to your teams, your clients, and RADHIKA GUPTA, but investing is something a lot of MRIN AGARWAL, money, that is treated as par for the Country Business Manager, Global your organisation. Raise your hand for CEO, Edelweiss Mutual Fund them shy away from. I recently met Financial educator, Director, Finsafe, course. But when a woman does, it Consumer Bank, Citibank India opportunities. Feel empowered to ask employees of a large tech company. A and Co-founder Womantra becomes an issue. There are also for what you consider fair and equitable. On choosing to work in financial lot of women said they would not like many women who are just not inter- On her journey in the financial sector: All good organisations value contrib- services: I studied engineering and to get involved as they don't come On what attracted her to financial ested in saving and investing so long I did not make a conscious choice to ution and pay for performance. In India, finance at Wharton, which is one of the from a Finance background. But just as planning: I did an MBA with spe- as they have money to spend. become a banker. In fact, I studied gender-based wage disparity is less egre- best finance schools in the world. I you don't need to be a Michelin- cialisation in Finance. My first job English Literature and Journalism. I was gious in the formal sector because a grew to love this industry over time. I starred chef to cook in your house, the was with a wealth management firm. On the attitude of the younger a small-town girl who wanted to live in a large number of jobs are in the govern- spent four years on Wall Street, where I same way you don't need to be a I love working with numbers. generation: Unfortunately, matters city. When I qualified to join the Reserve ment or public sector. But it exists by saw the highs of 2006-07, followed by Warren Buffett to manage your own are worse there. My company runs a Bank of India, more than anything else I way of subconscious bias. It is more the lows of 2008. At the age of 24, I money. On challenges women face in programme on money management was excited about moving to Bangalore. obvious in the semi-formal or informal founded Forefront Capital in India, planning their finances: Women for women. Typically, it is women of It has been a huge learning opportunity economy. which was perhaps India’s first regis- On positive changes she has are conditioned to think money man- above 30-35, who have children, who since. I have been lucky to tered Category III fund. We sold observed: Younger women are grad- agement lies in the male domain. are interested. The younger lot is on a find great opportunities On how to bounce back after a break: Forefront to Edelweiss. I then joined ually becoming more knowledgeable, Lack of knowledge big consumption spree. If you ask and mentors over the Sit back and soak in the phenomenal joy Edelweiss to keep running the and more aspirational. They work and fear of the them about their financial goals, it is years—from central of being a mother. Do not let anything same business. In 2016, hard and want more from their unknown also to travel, have a destination wedding, bank to consulting to a tarnish that happiness. But you surely Edelweiss Mutual Fund money. They ask a lot of stop women and own a Louis Vuitton bag or digital bank, and to a want to come back post-maternity acquired the business of JP Finance-related questions, from invest- Jimmy Choo shoe. multinational con- and find the right balance between Morgan Mutual Fund and which is a positive sign. ing. They get sumer bank now. being a mother and a working pro- I was tasked with looking petrified at the On advice to younger women: fessional. The time to think about after the merger. I became On investing for long-term thought of los- Financial literacy is not taught at On how working this is pre-maternity. Invest in your CEO of Edelweiss Mutual goals: Start saving and ing money. If a schools and colleges. In India, money women can get relationships at work and at Fund at 33. investing early. Don't out- man invests in is a taboo subject that parents don't their due: For any home. Build stakeholders or source this job to the men stocks and loses discuss with their children, especially woman entering promoters that will look On women in your life. Be goal- girls. This needs to change. the work place, out for you and support being good oriented. So long as Once you have started earning, that my short advice you when you return. At savers, not you are on track to is just economic independence. is: “Don’t give home, set the clear investors: achieve your goal, Women need to make financial up.” My long expectation that you will Unfortunately, you are doing independence an important advice is to go back to work. Do this there is truth well. Be aspira- goal in their lives. Spend a stay focused beforehand as you will in this stereo- tional and lim ited amount, and save and on making a not be able to do it once type. Saving make equities invest the balance. Begin early. contribution you are with the baby comes natural- a part of your and being rel- and trying to come back. ly to women, portfolio. As told to Sanjay Kumar Singh Take medium-term DON’T BREAK FIXED DEPOSIT, BORROW AGAINST IT Loan rate is 100-200 BINDISHA SARANG nBanks usually lend up to 90 banks as an overdraft facility. nIf you fail to service the per cent of the value of your loan, the bank can foreclose nIn case of an emergency, nThe rate on such loans is 1 bet on commodities FD. The limit varies from one your FD to recover its money. basis points higher instead of breaking a fixed and 2 percentage points bank to another. As manufacturing in China recovers, so will than the FD rate deposit (FD), you can get a above the FD rate. The tenure nThis loan is not available on loan against it. nLoan against FD is given by is up to five years. five-year tax saving FD. the demand for raw materials LOAN AGAINST FIXED DEPOSIT faces a dilemma. India’s inflation is well above the upper limit of the Name of Bank FD interest rate range (%) Interest Minimum loan Maximum loan target band of 2-6 per cent. That’s Highest Lowest rate (%) amount (~) amount* mainly due to food inflation. But Lakshmi Vilas Bank 7.80 4.50 FD rate + 1 No limit Up to 90% food inflation usually doesn’t Deutsche Bank 7.75 3.75 FD rate + 2 25,000 Up to 95% reduce in summer. A rate cut would be contraindicated, given inflation. Bandhan Bank 6.75 3.50 FD rate + No limit Up to 90% But weak growth makes it 1.50 - 2.00 tempting. Axis Bank 6.50 3.50 FD rate + 2 25,000 Up to 85% If the RBI maintains the current MARKET INSIGHT policy rate (it’s very unlikely to Federal Bank 6.50 3.50 FD rate + 2 No limit Up to 90% DEVANGSHU DATTA raise), the rupee may become more HDFC Bank 6.40 3.50 FD rate + 2 25,000 Up to 90% uncompetitive globally, since hard Punjab National Bank 6.05 4.50 FD rate + 1 Online: There is global panic at the thought currency rates look to be trending 25,000** Up to 95% of a COVID-19 pandemic. That has down. On the other hand, the rupee provoked extreme action from the has taken a beating in the past ten State Bank of India 6.00 4.50 FD rate + 1 Online: US Federal Reserve, which made days and the RBI may want to shore 25,000** Up to 90% an out-of-turn 50-basis-point rate up the currency. Citi Bank 5.00 3.00 FD rate + cut for the first time after October From a foreign portfolio inves- Up to 2.50 1 lakh Up to 90% 2008. The Fed Fund policy rate pair tor (FPI) perspective, India’s growth *Figures are percentage of FD amount. **In branch: No limit. Rates as on March 4, 2019 is down to a band of 1-1.25 per cent. is low, equity valuations are high, Source: Paisabazaar.com The Fed cut is likely to lead to and the currency is bearish. There copycat actions by other central has been heavy FPI selling in banks, including the People’s Bank March, with over ~12,000 crore of China. Since US inflation is run- (equity and debt combined) ning at 2.5 per cent, this is a deeply divested by March 4. That money negative real interest rate for is flowing back into safe hard cur- Vintage cars are for the passionate America. Japan and the European rency assets, and into more sus- Union have nominally negative tainable equity valuations in other Maintenance gets rates already, and lower inflation. markets. FPI selling is one reason PRICES OF GOLDEN OLDIESS Like everywhere else, sentiment why the rupee has dropped. difficult as parts become Car Model Market in India too has been hit by coro- If FPI selling continues, there price navirus and the US rate cut. Weak will be further pressure on the harder to find with each (~ lakh) Q3 GDP data (October-December rupee. This brings us back to a 2019) has been discounted. This theme we have mentioned several passing year Austin Twelve 1928 11 was the seventh successive quarter times before. Diversifying overseas NAMRATA KOHLI 2 Door 1660 cc when growth stayed into hard currency Vauxhall J 1939 45 down, although Q3 was While the bounce assets seems to make The MG TC 1946 remains Shriji Arvind Ford Super 1946 25 marginally better than back may not last sense for domestic Singh Mewar of Udaipur’s favoured Model Deluxe Q2. The data for Q1 and for long, there investors. The cur- mode of transport within the City Palace. Q2 (April-September could be a 10-15 rency gains alone It is a four-cylinder car he began driving Morris 8 series 1948 45 2019) were revised up, per cent surge in would be worthwhile. in the 1970s. “It is a compact, powerful 800 cc while the data for Q1 the prices of Plus, if there is a con- car that I used to drive in the days when I 1 Hillman Minx 1950 29 and Q2 2018-19 (April- industrial metals tinuing flight to safety, used to play cricket and polo regularly. Series V 4 Door September 2018) was from the current there would be major Being an open two-seater, it is a delight revised down. levels capital gains in US to drive under the open skies,” he says. Chevrolet 1958 14.5 Biscayne Hard Top This is very unusual bonds. This was the first in the line of sports cars 2 since Q1, Q2 data is usually revised If you are looking for a tempo- introduced by MG in the 1940s. For Austin Cambridge 1964 4.9 only after full-year data comes in rary, or medium-term trade, there Shriji, his vintage and classic car Willys Motor because that’s when unlisted firms is likely to be a big rebound in collection is another facet of the living 1972 3.51 and individuals file results and global commodities once China heritage of Mewar. “These are not just Willys M38 taxes. The net result of revisions starts functioning at close to its full automobiles, they are an integral part of Source: Droom Car seems to be meeting a GDP growth capacity again. It stands to reason our history,” he says. All the vehicles that “target” of 5 per cent for 2019-20. that as the manufacturing hub of belonged to the Maharanas of Mewar Rayalacorp Chennai and his 1957 February’s high-speed data is hard the world recovers, so will demand have been painstakingly restored. Some Studebaker won first prize at the rally. He to compare year-on-year because for the raw materials it consumes. are over seventy years old but are still in 3 says restoring a car is so difficult that of the extra working day. But con- Such a bounce may, or may not, running condition. only those with passion should sumption still seems down, since last. But there could be a 10-15 per 1. Classic Volkswagen cars at a rally. 2. A post-war American beauty in maroon. undertake it. Adds Titus: “A full-body off auto sales are weak. cent surge in industrial metals like A heritage well preserved 3. A vintage showstopper in yellow restoration could cost ~25-75 lakh.” The global economy has been copper, iron ore and zinc prices While royalty is the primary custodian of When evaluating participants in a disrupted by anti-epidemic meas- from current levels if Chinese vintage cars, industrialist families and obtained a specific blanket exemption Madan Mohan, managing trustee, 21 Gun rally, the judges look for perfection in all ures. Trade has been impacted and growth picks up. There could be a the Parsi community are equally passion- from the principal bench of the National Salute Heritage and Cultural Trust. He aspects – engine, undercarriage, supply chains broken. China seems firming up of energy prices as well. ate about them. Says Neville Tata, the 21- Green Tribunal by an order dated informs there is a classification of old cars bodywork, etc. Says Pratap: “They even to be over the worst but other Most analysts see the industrials year-old son of Jimmy Tata and great December 18, 2017, allowing these based on the year they belong to: Veteran look at old pictures to see how it has been nations, including Italy, South and energy commodities space as great grandson of Jamshedji Tata: "Cars automobiles to be used on the roads of cars (1886-1908), Edwardian (1909-1919), done up.” Pavit Libra, whose Ford Korea, Japan and the US are now overall bearish for 2020. But the fall have been a passion since I was a child. the National Capital Region for specific Vintage (1920-1949), Classic (1950-1965) Mustang was among the first runners- impacted. in the first two months has been so My current car was modelled off a set of purposes. This permission has since and Modern (1966-1975). Mohan recently up, says judges look at everything for The optimists are betting on the steep that there is ample room for hot wheels I got interested in at the age been expanded to many usages.” These organised the ninth edition of the 21 Gun originality: “Not all the cars made in the disease limiting itself in summer if a bear market rally. of three. It was a cultural icon of its time— cars will soon have a new registration Salute International Vintage Car Rally & same year have parts from that year.” the virus doesn’t survive high tem- Steel has seen unusual price a pioneer in terms of technology.” number. "All vintage four- and two- Concours d’Elegance at Karma Lakelands Outsiders aren't privy to information peratures. Even if that turns out to swings. Global demand is down. wheelers made at least 50 years ago will Golf Course, NH-8 Gurugram. “Pink, on who is selling as they happen be true, and there’s no guarantee, But Indian steel manufacturers Separate registration be registered with a specially allotted mint green, red, shades of blue — I don’t privately. Mumbai, Kolkata, Chennai there may be at least another have hiked prices due to lack of According to Diljeet Titus, managing alphabet series applicable all over India, think we can imagine getting such head- and Delhi are key hubs. These cars are quarter of sub-par economic Chinese supply. When China partner, Titus & Company , Advocates, VA, or vintage automobile," says Titus. turning colours today,” says Aashna valued on the basis of marque (make and activity. comes back into the market, Indian and founder, The Titus Museum, “At the Khurana, creative director at Karma model), body style, rarity, coachbuilder, The Reserve Bank of India (RBI) steel prices could slide. Heritage Motoring Club of India, of Vintage rallies Lakelands. provenance, and restoration quality. which I am the general secretary, I had A regular organiser of such shows is Ranjit Pratap, managing director, Valuation also depends on upkeep. 12 THE SMART INVESTOR MUMBAI | MONDAY, 9 MARCH 2020 BSE 200: TOP 5 GAINERS OF LAST WEEK QUICK TAKE: YES BANK EXPOSURE HURTS MAX FINANCIAL “THERE IS DISAPPOINTMENT WITH INDIA AND INCREASING BSE price in ~ Feb 28, ’20 Mar 07, ‘20 % chg The stock of Max Financial Services, the parent of Max Life, CAUTION AMONG INVESTORS SINCE THE LAST ELECTION. THE Godrej Consumer Products 560.8 638.8 13.9 plunged 14% on Friday following YES Bank’s bailout news. RECENT POLITICAL MOVES AND LAWS HAVE DISTRACTED THE 3M India 20,626.8 22,638.5 9.8 Besides investment exposure, Max Life also gets 10% of its GOVERNMENT FROM ECONOMIC REFORMS” Pidilite Industries 1,515.1 1,654.3 9.2 insurance business through YES Bank’s distribution Dr Reddy's Laboratories 2,925.8 3,169.8 8.3 channel. This could impact Max Life’s persistency ratio by JOHN LAU, 300-400 basis point in the 13th month basket, say analysts Head of Asian Equities, SEI Cipla 401.5 434.0 8.1 >

mark in the December quarter. Worse, as Siddharth Purohit of STREET SMC Capital says: “There could be SIGNS Low on confidence and growth, more moderation in growth as banks would be more risk-averse now. Also, retail loans-led growth could not go on forever.” The SBI Cards IPO math While lower growth is still The ~10,300-crore IPO of SBI Cards and private banks in for tough days acceptable, the same along with Payment Services’ managed to attract bids asset quality pressures (whether worth ~2 trillion despite the selloff in the from corporate or retail loans), secondary market. The credit card issuer NOT FALL-PROOF which saw gross non-performing has set the issue price at ~755. For high Majority of private bank assets (NPA) ratios of all banks net-worth individuals (HNIs), the stocks are down 10-33% Price Change (%) (barring ICICI Bank and Axis acquisition cost works out ~870 after (~) 1-day YTD Bank) touch a fresh four-year factoring in the interest cost. On listing, the YTD, indicating weaning YES Bank 16.2 -56.0 -65.5 high, isn’t going down well with shares will have to gain at least 15 per cent RBL Bank 259.1 -14.1 -24.9 the Street. over the issue price for HNIs to make conviction in the sector Varma expects pressures money. Grey market premiums have Ujjivan SFB 44.4 -11.0 -17.6 likely from the telecom sector dropped to 10 per cent after last week’s HAMSINI KARTHIK IDBI Bank 27.2 -9.2 -26.6 and non-banking financial com- market fall. Meanwhile, the IPO has seen New Delhi, 8 March panies (because of real estate and nearly 3.1 million retail applications. On IndusInd Bank 1,014.3 -5.6 -32.9 small business loan-related the basis of number of applications, the rivate bank stocks are CSB Bank 161.5 -5.2 -25.5 stress) to keep the banking sec- issued is subscribed 1.37 times. In other probably an example of Bandhan Bank 403.9 -4.6 -20.5 tor’s asset quality on tenter- words, 100 out of 137 retail applicants will how quickly strong hooks. “We see considerable get allotment. ICICI Bank 486.3 -3.7 -9.7 P narrative and conviction headwinds on the systemic asset SAMIE MODAK can change in a short span. IDFC First Bank 36.3 -3.6 -19.6 quality. Banking sector gross ETF overhang for YES Bank Irrespective of the size, stocks, Axis Bank 657.9 -2.9 -12.7 NPAs are likely to rise, as delev- such as RBL Bank, IndusInd Bank, eraging under the growth slow- Shares of YES Bank may continue to face Axis Bank, HDFC Bank, and ICICI HDFC Bank 1,134.9 -1.5 -10.8 down gets trickier,” she warns. selling pressure from exchange-traded Bank, were easily among the most Select top private banks’ data as on March 6, 2020; YTD: Year-to-date Besides, the fast-spreading funds (ETFs). The stock will be part of the bought until some time ago. Source: Exchange Compiled by BS Research Bureau impact of COVID-19 globally and Nifty index until March 27 following which However, with the exception of AU rated fund manager says that liabilities. lately contained at 5.5 -5.8 per downgrades over the past three in India has forced analysts to it will be replaced by Shree Cement. The Small Finance Bank (AU SFB), when India’s fourth-largest private Sonal Verma, chief econ- cent (the overall cost of funds at quarters, not many analysts saw sharply cut the GDP target for the rejig will add to the selling pressure on these stocks have seen a 10-33 per bank fails, it will prompt investors omist, Nomura, cautions: “YES 6.2–6.5 per cent) in the December private banks slowing their run- June quarter. Nomura slashed its the stock, say analysts. YES Bank will cent price erosion year-to-date, as to relook at their portfolios. “Most Bank’s failure may prompt a shift quarter, private banks are likely rate until a few months ago. While expectations from 4.5 per cent to continue to remain part of the Bank Nifty compared to an 8.9 per cent fall in of us (fund managers) are heavy in deposits from smaller private to see some pressure on retaining Axis Bank and ICICI Bank some- 4 per cent. and some mid-cap indices. According to the BSE Sensex during this period. on private banks accumulated sector banks to the perceived this money. “It is likely that to what kept up with their past For investors, these clearly data from Value Research, ETFs and index Perhaps for the first time in over four years and wherever pos- safety of public sector banks.” retain retail customers, some growth trajectory of 15 — 18 per signal to tone down expecta- funds with the Bank Nifty as underlying nearly a decade, private banks are sible we will book profit,” he said. This, she says, in turn, will con- banks marginally increase cent, especially on the retail side, tions. Even if top-quality stocks, have investments in the private lender. being challenged on the very pil- Analysts at Kotak Institutional strain the ability of private sector deposit rates,” said an analyst. All others such as IndusInd Bank and such as HDFC Bank, Axis Bank “Selling from passive funds will weigh on lars of their strength — growth and Equities warn that with three banks in growing their loan book, this will only compound the HDFC Bank missed their historic and ICICI Bank have undergone the share prices even if there are any investor confidence. With YES back-to-back financial institution an aspect that turned trouble- existing problem of growth. run-rate of 25 per cent-plus (espe- valuation correction, waiting out possible reliefs from the government or Bank’s failure, a section of inves- failures (IL&FS, PMC Bank and some two quarters ago. Con si - Considering that banks are cially on the retail front) by a rea- the March quarter may be pru- Reserve Bank of India (RBI),” said a tors feels it is time they took some YES Bank), it will be a lot more dered as a cheap source of funds, reckoned as a play on India’s GDP sonable margin. Even RBL Bank dent before taking fresh posi- dealer. money off these stocks. A top- challenging for players to raise with the blended cost of deposits growth, which has seen severe was way off its 35–40 per cent tions in these names. JASH KRIPLANI Crude comfort for airline stocks Domestic aviation stocks SpiceJet and mandate and acknowledged the slow- InterGlobe Aviation have hit an air down, it will continuously intervene pocket. Last week, both stocks hit their ‘We expect the markets to remain polarised’ to bring the economy back on track. lowest level in one-year. The shares of In this background, investors should SpiceJet have dropped 60 per cent from The outbreak of coronavirus opens up an unanticipated and unmeasured downside risk, feels NISCHAL MAHESHWARI, chief executive officer ing providing the bulk of the returns. reduce cash gradually and look for its 52-week high, while InterGlobe has for institutional equities & advisory at Centrum Broking. In the short to medium term, a defensive portfolio strategy is recommended, he Since we do not expect a broad-based value investing. However, the out- come off by 37 per cent. Following this tells Puneet Wadhwa. Edited excerpts: recovery in the FY21 as structural bot- break of coronavirus opens up an drop, some investors are of the view that tlenecks are likely to impede the path unanticipated and unmeasured both the stocks are good buying How are the markets likely to play out support the government’s Given the gradual pick-up in of normalised growth recovery, we downside risk. In the short to medium opportunities given the sharp drop in over the next three-six months? growth objectives, have pro- growth on account of meas- expect the markets — that are being term, since the coronavirus scare global oil prices. Brent crude prices have The outbreak of coronavirus has vided a significant boost to ures adopted by the govern- driven by only a few stocks — to remain will hamper growth world over, dived below $50 a barrel. “While the occurred at a time when the global and the Indian capital markets. ment and the RBI, we had esti- polarised. Overall earnings are likely to a defensive portfolio strategy is aviation sector has been hit by the domestic economies are facing a The Indian economy may mated 22-23 per cent growth see limited traction. recommended. coronavirus, the fall in oil prices is a silver slowdown. The fear of supply-chain dis- enjoy the position of being NISCHAL in Nifty earnings for FY21. lining. SpiceJet and InterGlobe are largely ruptions, likely to occur because of the less vulnerable to such MAHESHWARI However, the outbreak of coro- How do you see the consumption- domestic market focused. We think oil industrial clampdown in certain shocks as India’s integration CEO, Institutional navirus in China has raised related theme play out in the back- prices will be a significant tailwind if Chinese provinces, has obstructed the into global value chains is equities & advisory trepidations regarding disrup- drop of sub-par economic growth? coronavirus worries subside,” said a fund nascent signs of global economic sta- minimal, compared to its Centrum Broking tions in global industrial pro- The FMCG sector should start seeing manager. bilisation displayed through the cease- Asian peers. However, if the duction and trade channels, traction as it holds the key potential of SUNDAR SETHURAMAN fire in the trade war between the US situation is not contained, India may thereby putting global growth at risk. acting as a contrarian play. Auto stocks and China, coupled with a few green be affected, too. Optimistically, for If the epidemic is not contained in the have corrected significantly and we do shoots in India. 2020, we expect foreign institutional near term, chances are that growth not see elongation of coronavirus bey- In the absence of any meaningful investor (FII) inflows to continue gath- could further trend lower. ond spring. Expect things to normalise EVENTS THIS WEEK domestic triggers, the markets are most ering momentum as the better macro- With the relative lower participate in the summer. Investors can look likely to track virus-related develop- economic stability makes investments rate in global value chains, India may at the auto space — passenger ments across the globe. In this back- in India relatively attractive. stay less vulnerable than other east vehicles and two-wheelers Date Particulars drop, they are likely to remain range- Asian economies, but the spillover of a — but should refrain from 9-Mar Ex-dividend: Jubilant Life bound in the near term. The RBI can What’s your view on the banking global slowdown is certain to have an investing in commercial Sciences, Jubilant FoodWorks do a pre-emptive rate cut of around 25 sector given the recent developments? impact. Investors are more likely to play vehicles. 10-Mar India - Manpower survey basis point (bps) in the April policy, or Given the challenges faced by corpo- defensive and sectors, such as informa- China - PPI & CPI figures even earlier. Other measures to improve rates and non-banking financial com- tion technology (IT) and fast-moving Your investment 11-Mar US - CPI & core CPI transmission through another round of panies (NBFCs) in the last 12-18 months, consumer goods (FMCG), are likely to strategy amid all UK - manufacturing & long-term repo operations (LTROs) can- banks with high corporate exposure surprise amid risk-off sentiment. these developments? industrial production figures not be ruled out. should be avoided. Investors should Though the worst UK - trade balance consider retail-focused banks. Will the polarisation that we see in the seems to be behind Ex-dividend: Endurance Will foreign investors allocate more to Domestic demand is likely to witness markets now get entrenched over the us, it is going to be a Technologies, Ramco Cements Indian equities? increased traction in the next few next one year? slow path towards 12-Mar India - CPI & IIP figures Given the ongoing global risk sen- quarters, given pockets of rural At this juncture, the market remains normalisation. Given India - imports, exports & timent, investors are flocking to safe- economic activity gathering momen- polarised with consumer durables, the current govern- trade balance figures haven asset classes and avoiding risky tum, along with recent announcements information technology (IT), and bank- ment has a political US - jobless claims emerging-market (EM) asset classes. on personal income tax cuts. This UK - RICS house price balance However, if one needs to choose among will drive credit growth in retail- GIVEN THE CHALLENGES FACED BY CORPORATES AND NON- Ex-dividend: Motherson Sumi EMs, India remains an attractive invest- focused banks. BANKING FINANCIAL COMPANIES IN THE LAST 12-18 MONTHS, Systems ment destination. Also, favourable pol- 13-Mar US - imports price index icy initiatives, coupled with persistent Your estimates for corporate BANKS WITH HIGH CORPORATE EXPOSURE SHOULD BE AVOIDED. INVESTORS SHOULD CONSIDER RETAIL-FOCUSED BANKS Ex-dividend: Pidilite Inds. efforts to garner more foreign capital to earnings growth in FY21? Source: exchange/websites/Bloomberg Compiled by BS Research Bureau

expect a quick relief rally up to 11,200-11,250. However, a COMMODITY PICKS Worst rout in nine years fall below 10,900 could Market cap-to-GDP now below trigger one more leg of cor- rection wave till 10,800- long-term average SOY MEAL likely to be extended 10,750,” says Shrikant Chouhan, senior vice-pres- ASHLEY COUTINHO discount to its long-period average SUNDAR SETHURAMAN STARTING PROBLEM ident, equity technical of 18.1 times, according to the Mumbai, 8 March The year 2020 is off to worst research, Kotak Securities. India’s market cap-to-GDP — a ratio brokerage. The Nifty’s price-to-book start in nine years On Friday, the Nifty used to determine how over, or ratio is at 2.5 times, below its The equity markets are off YTD Full dropped to 10,827 in intra- under-valued a market is — is now at historical average of 2.6 times. to the worst start to a year chg* (%) year (%) day trade and saw a sharp 70 per cent, based on FY20 GDP However, India’s valuation continues since 2011. On a year-to-date pullback from that level to estimates, and below its long-term to be at a premium to emerging 2011 -9.7 -24.6 basis, the benchmark Nifty close slightly below 11,000. average of 76 per cent, a report by market (EM) peers. The MSCI India’s Soymeal is trading at ~31,600 per tonne at the is down 9.7 per cent. Last 2012 12.9 27.7 Analysts at ICICI Direct Motilal Oswal Financial Services P/E trades at a premium of 62 per cent benchmark Indore markets. For the week time, it had dropped more 2013 -1.5 6.8 believe the markets could observed. to MSCI EM’s P/E, above its historical ahead, prices are expected to trade weak and during the period under 2014 1.5 31.4 form a base at current levels. This is the lowest in the last four average premium of 52 per cent. head towards ~31,300 and then ~31,000 per consideration was in 2011, 2015 7.9 -4.1 “The markets are entering a years. The ratio was the highest, at Over the last 12 months, MSCI tonne. Weak demand from feed makers amid when the European debt cri- truncated week and may wit- 95 per cent, in FY10. India has remained flat, while MSCI decline in placements due to the outbreak of 2016 -5.8 3.0 sis had dampened global ness some short closure if Valuations of Indian equities are EM has slid 1.5 per cent. The world’s coronavirus in India is expected to keep the investor sentiment. On 2017 9.5 28.7 the Nifty holds above 11,000. now below their long-period market cap in this period has risen undertone weak in near term. Friday, the 50-share index 2018 -2.7 3.2 However, till clouds over averages. The Nifty trades at a 12- 3.3 per cent to $2.5 trillion, while ended at 10,989. The index 2019 1.8 12.0 coronavirus remain, the month forward price to earnings India’s market cap remained flat at WHEAT is down 11 per cent from its 2020 -9.7 NA major short-covering trend multiple of 16.8 times, at a 7 per cent 2.5 per cent, its historical average. record high of 12,352 on Source: Exchanges; Compiled by BS is unlikely to pan out,” says January 17. The market is Research Bureau; Note: till March 6 for the brokerage. likely to slide further, say all the years; YTD: Year-to-date Experts say traders have GOING CHEAP technical analysts. built huge short positions in The market cap-to-GDP ratio has “The Nifty has formed a tom fishing as it is same like “The updates on the the market. As a result, posi- slipped below its long-term average bearish candle on the weekly ‘catching a falling knife’,” spread of coronavirus cases tive development often leads chart. Resistance is grad- says Siddhartha Khemka, would be the only biggest to short-covering, which Year M-cap/GDP (%) ually shifting lower. Now head-retail research, Motilal trigger for the next few trad- takes the indices higher. FY14 66 Wheat prices in the Indore market are trading 11,250-11,430 levels would be Oswal Financial Services. ing sessions. Also, the res- However, given the overarch- FY15 81 at ~1,970 per quintal. Prices are expected to an immediate hurdle (on the Market players said olution plan for YES Bank ing weak sentiment, the trade lower towards ~1,900 per quintal in a upside) for the index. domestic investors have could be an important recovery is short-lived. After FY16 69 couple of weeks following approaching Support is placed in the been hit by a double trigger on the domestic a bad start in 2011, the Nifty FY17 79 harvesting and ample stocks carried forward 11,800-11,650 zone. Until vol- whammy — the YES Bank front. The short-term trend ended the year with a 25 per FY18 83 from last year. atility cools off and price set- crisis and the rising number is weak, and 10,900 should cent decline. Investors will tles, and we don’t see a of coronavirus cases. Market act as an important support be hoping that 2020 may FY19 79 Prerana Desai, strong reversal signal in players said these two events for the market. Trading have begun on a weak note, FY20E 70 Research Head - Edelweiss Agri Services data, traders shall avoid bot- will dictate market direction. above the same, we can but ends well. and Credit MUMBAI | MONDAY, 9 MARCH 2020 BUSINESS LAW 13 . <

ILLUSTRATION: AJAY MOHANTY BRIEF CASE M J ANTONY GEETIKA SRIVASTAVA & SUDIPTO DEY

A weekly selection of key court orders n the aftermath of the apex court’s landmark judgment on REGULATORY Electricity tariff differs for institutions the use and regulation of cryp- SANDBOX IDEA The Kerala State Electricity Regulatory I tocurrencies, the fate of the draft Commission has the power to segregate Banning of Cryptocurrency & Last August, the RBI had come self-financing educational institutions Regulation of Official Digital out with an enabling framework (SFEIs) from government-run and Currency Bill, 2019, hangs fire. The for regulatory sandbox. Some government-aided private educational draft Bill, in stark contrast to the experts feel the regulator could institutions for the purpose of fixing tariff, court’s order, stipulates that the use explore putting in place a subjecting SFEIs to a higher category of of cryptocurrency is punishable with regulatory sandbox for fintech tariff. The tariff notification to that effect is legal, said the a fine or imprisonment of up to 10 companies using cryptocurrency Supreme Court in its judgment, Kerala State Electricity Board years. Both government and banking technologies. vs principal, Sir Syed Institute. A single-judge Bench of the sector regulator — the Reserve Bank high court had earlier upheld different tariffs, but a division of India — have to go back to the “Allowing fintech firms to test Bench set it aside, leading to the appeal. The division Bench drawing board once more to firm up fintech innovations relating to explained its stand thus: “When the supply is to an their views on the nascent cryptocur- cryptocurrency/assets will educational institution, irrespective of whether it is self- rency ecosystem. enable the RBI to develop an financing or aided by the governmental, the tariff cannot be “The judgment will free up evidence-based regulatory different, as education means to impart knowledge. entities to innovate in, and further response for cryptocurrencies in Education in ancient times was not connected with earning. develop, technologies based on block- India,” says Shehnaz Ahmed, Free education is what was in accord with dharma.” The chain or distributed ledger technol- Regulating senior resident fellow, Vidhi Supreme Court upheld the single-judge Bench judgment ogy,” says Arun Prabhu, partner, Cyril Regulating Centre for Legal Policy. and added the student profile of state-run and state-aided Amarchand Mangaldas. It becomes Regulatory sandboxes institutions is different from those of SFEIs. Students from all the more important in such a sce- provide an avenue for regulators comparatively modest background go to state-run or state- nario for the government and the reg- and innovators to test their funded institutions. Moreover, government-run institutions ulator to revisit and shape regulations cryptocurrency:cryptocurrency: innovations within a regulated are maintained by taxpayers. surrounding cryptocurrencies, and environment. It helps them

help foster growth of the evolving collect evidence on the benefits ecosystem. Maharashtra APTEL order quashed “Infrastructure and talent in the and risks of new financial The Supreme Court has set aside the order country provide an unprecedented innovations while monitoring of the Maharashtra Electricity Regulatory economic opportunity,” says Dinkar On an uncharted path and containing their risks. Commission and the Appellate Tribunal for Kalra, advocate-on-record, and Vidhi Centre for Legal Policy’s Electricity (APTEL), which had quashed five author of the book Crypto Experts want government and RBI to formulate light-touch norms in a report, Blueprint of a Fintech circulars issued before the formation of Currencies in India: Not Illegal, But Regulatory Sandbox Law, argues the commission. The circulars dealt with Not Quite Legal. to help foster growth of this evolving ecosystem for a standalone law that will the captive power plant policy of the state Experts say several scenarios could bring sandbox testing of fintech government. In this appeal, Maharashtra State Electricity now pan out. The Supreme Court’s solid evidence. “It is for the govern- Bill, 2018. The Bill had provisions to for virtual currency intermediaries, innovations under a common Distribution Co vs Union of India, the main issue was order has made it clear that virtual ment to establish that the risk of dam- allow the sale and purchase of cryp- supervised by an expert body with framework. The proposed whether the commission could have quashed circulars currencies do come under the man- age warrants measures, such as a tocurrencies at recognised and reg- capability in technology, economics framework would provide a issued by the distribution company before its formation. The date of the RBI. So, the central bank ban”, says Anirudh Rastogi, founder, ulated exchanges. The Committee and finance. The licensing require- formal mechanism for all commission was constituted under the Electricity Regulatory could seek a review of the judgment. Ikigai Law, which represented crypto initially was of the view that the ban- ments could include capital adequacy relevant financial sector Act of 1998 and the circulars were issued before that by the If the RBI does so, it may leave room exchanges in the case. ning option was difficult to imple- requirements, fit and proper criteria, regulators — in this case the RBI electricity board. Allowing the appeal, the Supreme Court for further deliberation. The RBI, with Another option for the govern- ment and, that could also drive some and disclosure requirements. and Sebi — to participate in declared that the circulars and policy decisions issued before the backing of the government, may ment is to reconsider its stance in light operators underground, encouraging Experts stress the need for light- sandbox testing. the establishment of the commission were illegally set stress on its authority to protect con- of the judgment. It could take into the use of such currencies for illegit- touch regulations for the evolving aside. Consequently, the court also quashed the order sumers from possible frauds. account several factors, such as the imate purposes. cryptocurrency ecosystem. “If the reg- Outlining the broad contours concerning a refund, which had imposed a heavy burden on The other scenario is where the Financial Action Task Force’s In case the government revisits the ulator wears the hat which works for of the proposed law, the report the distribution company. legislature may still think about going Guidance for a Risk-Based Approach Bill, it would be a wait-and-watch the currency and security interest suggests creating an inter- ahead with a blanket ban, but experts to Virtual Currencies, published in game for the industry. “Given the legal world, the regulations may easily end regulatory co-ordination say, the chances of that may be low. June 2015, which recommended that complexities, multiple authorities up practically as a ban,” says Srinivas committee, consisting of Arbitration clause must be registered The Supreme Court has noted that the countries proposing a ban on crypto- (including the RBI, Sebi, ministry of Katta, partner, Induslaw financial sector regulators. While An arbitration clause in a lease deed, RBI did not have enough material on currencies should consider if such a finance, etc) will need to weigh in,” Experts say what will also play on each regulator could continue which is not registered and insufficiently record to show that the ban, which it prohibition would drive the industry noted Sanjay Khan Nagra, partner, the minds of policymakers is the operating its own sandbox, the stamped, cannot be acted upon, the imposed, qualified the test of propor- underground, bypassing controls. Khaitan & Co. potential upside of taxing the crypto- proposed law should lay down Supreme Court ruled in its judgment in tionality. However, if the legislature The government could also revisit the Jaideep Reddy and Vaibhav currency trade. “Cryptocurrencies are minimum standards for fintech Dharmaratnakara Charities vs M/s were to pass a law in this regard, and Inter-Ministerial Committee’s initial Parikh, lawyers at Nishith Desai here to stay, and the sooner the sandbox testing in the country, it Bhaskara Raju. In this case, the trust gave if that law were to be challenged in report in 2018, along with a draft Bill Associates, who represented the peti- world’s legal systems adapt to it, the says. a 38-year lease to the latter in 1996 for the the court, it would have to pass this — the Crypto Token and Crypto Asset tioner in this case, suggest the govern- less painful the transition will be,” renovation of the Samadhi of the founder. However, there test by backing its arguments up with (Banning, Control and Regulation) ment consider a new licensing regime says Dinkar. was not much progress during the following years and allegations were made against each other. Ultimately, the lessee moved the Karnataka High Court for the appointment of an arbitrator under the Arbitration and Conciliation Act. TYAGI AND BEYOND The high court appointed a retired judge as arbitrator. The trust appealed to the Supreme Court arguing that the lease deed was not properly stamped and, therefore, invalid. The court held that the high court was in error and set aside the Sebi chairman’s unfinished agenda arbitration. SAMIE MODAK opposed this proposal, saying they SAT’s observation. However, the issue transferred to respective clients. Regulating MFs: Domestic mutual infringe on Sebi’s financial autonomy. has not entirely been settled. Experts Market players say the issue may con- funds (MFs) have grown in size with Pre-deposit for DRT appeal compulsory Amid bouts of volatility in the second- Last month, Sebi’s board approved say the jurisdictional dispute is posing tinue as concerned stakeholders are assets under management nearing The Supreme Court has reiterated that the ary market, largely because of con- the Budget estimates for 2020-21. The an immense challenge for Sebi. unlikely to go down without a fight. ~30-trillion mark and regulating them borrower who moves an appeal before the cerns over the coronavirus epidemic Budget estimates haven’t accounted Besides establishing its powers over has become more challenging. In the Debt Recovery Tribunal must pre-deposit and its negative impact on the econ- for the transfer of surplus funds as the auditors, Sebi has to work around Market development: Sebi has to past two years, Sebi had to deal with the amount claimed by the secured omy, the Securities and Exchange government is yet to notify the other regulators when it comes to reg- constantly strive to develop financial tricky situations when it came to debt creditors or determined by the tribunal. It Board of India (Sebi) faces several changes. Going ahead, this could ulatory overlap with the Indian markets. One area where the regulator exposure of MFs to corporates. Given is not only the borrower who is under this other challenges that may not get become a contentious issue for Sebi Bankruptcy Code or some RBI statues. has failed to achieve success is the the weakness in the economy, the reg- obligation but also the guarantors and addressed in the next six months and leave it with limited funds. To “Overlapping jurisdiction has been a development of the corporate bond ulator has to keep a close watch on mortgagors, the Supreme Court stated in the appeal case, under the extended tenure of its chair- make up for this, it might resort to hik- key challenge for Sebi. Fundamental market. Despite various initiatives, the potential corporate defaults. Union Bank of India vs Rajat Infrastructure. The judgment man Ajay Tyagi. Here are a few tricky ing the fees it levies on market players. jurisdiction issues were underscored domestic debt market is yet to take off. asserted that according to Section 18 of the Securitisation Act areas Tyagi, and his successor, will by issues like PW, IBC and bank Also, new instruments, such as REITs Quality of orders: The quality of (SARFAESI Act), 50 per cent of the disputed amount should be have to deal with: Jurisdictional dispute: One of Sebi’s default disclosures,” says Vidisha and InvITs, have lost their appeal some of Sebi’s recent orders has deposited before taking up the appeal. It could be reduced to key objectives is to protect investor Krishan, partner, MV Kini & Co. because of adverse tax changes. raised eyebrows of legal experts. Even 25 per cent by the tribunal after recording adequate reasons Sebi’s independence: Though the interest and market integrity. To The plan to make GIFT City an the SAT has openly criticised it, say- for doing so. In any case, the condition of pre-deposit could market regulator has gained teeth over achieve this objective, Sebi has often Defaulting brokers: Misuse of client international financial hub hasn’t ing Sebi had passed the order “with- not be waived. Earlier, the Bombay High Court had taken an the years, the government has come in crosshairs with other regu- funds by brokers has proved to be a taken off well. Sebi has to sit with out any application of mind”. Some opposite view and allowed the tribunal to hear the case deprived Sebi of some of its autonomy lators. A recent example of this is the major headache. While the regu- the government and oth- legal experts point out Sebi had without pre-deposit. It claimed it had discretionary power to by curbing its annual spends and tar- order passed by Sebi barring Price lator has tightened the frame- ers to address the issues. passed interim or ex-parte orders in do so. The Supreme Court denied this claim and emphasised geting its surplus funds. Last year’s Waterhouse (PW) for lapses in the work to prevent future misuse, During Tyagi’s important cases without understand- that statutory provisions could not be bypassed by claiming Budget proposed that Sebi constitute Satyam scandal. Responding to an past issues continue to crop up. three-year tenure, Sebi ing the nuance of the case, leading to discretionary powers, which the high court did not have in a reserve fund and transfer a fourth of appeal by PW, the Securities Appellate Also, some lenders have floated nearly two disruptions. Market players say this this case. The Supreme Court did not go into the allegation its annual surplus into it. It said the Tribunal (SAT) even held Sebi didn’t been up in arms after it dozen discussion pap- could be partly because of inadequate that the property worth ~160 crore was sold for ~65 crore with transfer to the reserve fund should be have the power to debar auditors. This ordered depository firms to ers. Though it finalised staff strength. Also, by Sebi chief’s the connivance of the bank’s employees. less than the annual expenditure of prompted the regulator to move the transfer the collateral pledged many regulations after own admission, its enforcement the preceding two years. Also, after Supreme Court, which stayed the by brokers with banks to be public consultation, sev- action needs more improvement. To meeting all expenditure, Sebi is eral areas still needed tackle this issue, Sebi is trying to Award against MMTC set aside required to transfer the remainder of attention, say make use of new technologies. The Delhi High Court last week set aside an the surplus amount to the BY AJAY TYAGI’S OWN ADMISSION, experts. Experts say it could increase the use arbitral award in a dispute between MMTC Consolidated Fund of India. Further, SEBI’S ENFORCEMENT ACTION NEEDS TO of recently acquired powers, such as and Anglo American Metallurgical Coal, the government has also proposed search and seizure, liquidation of saving the public sector unit from liability that Sebi take its approval for its IMPROVE. FOR THIS, SEBI IS TRYING TO assets, and use of call logs, to improve of approximately ~748 crore. The annual capital expenditure. Tyagi had MAKE USE OF NEW TECHNOLOGIES enforcement. judgment remarked that “in our view, such an award must rest on surer factual and legal footing than only to say that it has been rendered by an arbitral tribunal and is, therefore, sacrosanct. The award of damages, interest, and costs is a travesty of justice and the award suffers from perversity”. The majority in the Biz judgement rule and directors’ liability arbitral tribunal allowed the claim of Anglo American for damages on account of non-lifting of 453,034 MT of coking process of decision-making. interestedness. It aims to balance the need to The most important challenge that coal by MMTC from Australia. The third arbitrator had The board and directors have two fiduciary protect the interest shareholders (equity) and independent directors usually face is dismissed the claim. The private firm had argued that MMTC responsibilities — duty of care and duty of protect the statutory right of the board to run gathering sufficient information relevant for was consistently requesting for a reduction in the price of loyalty to the company. The duty of care the company without fear. Other two drivers deciding on a particular issue. It is the coal, thereby declining to lift coal at the contractually agreed requires the board and every director to make of the rule are: (i) Respect for the private responsibility of the independent director to price. MMTC said that because of the worldwide financial decisions in good faith and reasonably ordering of the corporate governance assess whether the agenda note provides crisis, prices of its products like pig iron had nose-dived in prudent manner. The duty of loyalty implies arrangements (as reflected in internal sufficient information. He/she should ask 2008 and it was asking for adjustment of price only with that the directors should be completely loyal to documents of the company), which usually for additional information if required. regard to the last consignment. The high court admitted that the company. They should avoid possible grant extensive authority to the board to He/she should also keep himself/herself its jurisdiction to go into facts was limited. But analysing the conflicts of interest, should not involve in self- manage the company; and (ii) recognition by informed of changes and likely changes in communication between the two parties, the judgment dealing by taking advantage of the corporate the courts that they are not the internal and external observed that “we are at an utter loss to understand as to information, and should keep the information business experts, making contexts between two board how the tribunal can read into commercial communication ACCOUNTANCY received as members of the board confidential. deference to board authority a Directors, including meetings. He/she cannot take between educated and worldly-wise men of commerce, ASISH K BHATTACHARYYA The board and directors develop necessity. independent the plea that the management words that do not exist in the communications. If such perceptions about the probable changes in the Directors, including directors, are equally did not keep him/her imaginary interpolations are allowed into the e-mails, then In a company, the board of directors (hereafter, internal and external contexts and form independent directors, are liable for omissions informed. Good corporate the inferences and conclusions derived therefrom must be board) has the statutory authority and judgement on the outcome of alternatives equally liable for omissions and and commissions of governance practice requires held to be perverse in law”. responsibility to manage and govern the before making a decision. Genuine errors in commissions of the company. the company. the management to keep company. The board is the trustee of the funds forming judgement is always a possibility. In However, they are protected if However, they are directors informed and to entrusted to the company by shareholders. the interest of the company, the board and they apply the highest fiduciary protected if they provide detailed information Follow MSME Act procedure; no writ The auditor is also a key actor in corporate directors must be allowed run the company standards. A director should act apply the highest in the agenda papers, but the A firm with a grievance should not rush to governance. Shareholders appoint the auditor without the fear that they will be held liable for in the same manner as a fiduciary standards onus of gathering information the high court when there is an efficacious to report whether financial statements are decisions that might be construed as reasonably prudent person in lies on the director. remedy under the Micro, Small and presenting the true and fair view of the inappropriate with the advantage of his/her position is expected to The rule has worked well Medium Enterprises Development Act. In financial position and performance of the hindsight. The ‘business judgement rule (the act. The duty of care requires the director to over the last hundred years, as courts the case, Fives Stein India Project vs State company. The auditor’s responsibility also rule)’ provides immunity to the board and collect information that is necessary for due recognise shareholders’ primacy and of MP, an award was passed by the MSME includes reporting fraud or suspected fraud, directors from liabilities that might arise if the diligence, act in good faith, and form a shareholder value creation as the primary Facilitation Council against the firm, which although he/she is not expected to dig out company and shareholders suffer loss rational judgement without the presence of a objective of a company. We have to wait and is engaged in manufacturing nuclear and thermal frauds. The Company (Auditor’s) Report Order because of genuine error in judgement. conflict of interest. In evaluating whether the watch how the rule will be interpreted by components. It had bought goods from Mahakaushal (CARO) requires the auditor to report on some The rule does not allow the courts to director has applied the fiduciary standard of courts when investors and regulators expect Refractories which was alleged to be sub-standard. The specific important issues which are of interest second guess business decisions taken by the ‘duty of care’, the court takes into account companies to act responsibly towards all- dispute was taken to the council, which gave an award to shareholders and regulators. In a way, the board unless it is established that the board competencies of the director based on his/her important stakeholder groups. against Fives Stein. It challenged the award in the high auditor reports to shareholders whether the blatantly violated the fiduciary standards – training and experience. For example, the court. The court rejected the writ petition, stating that MSME board applied fiduciary standards in decision- the duty of care and duty of loyalty or the level of due diligence expected from an The writer is director of the Institute of Management Developement Act had provided the procedure for appeal making. However, he/she does not comment decision-making process was tainted, say, accountant on an accounting issue is higher Technology Ghaziabad and it should be followed. on the quality of business decisions and the because of lack of independence or with than that of a non-accountant. Mail id: [email protected] 15 STRATEGY MUMBAI | MONDAY, 9 MARCH 2020 “IN INDIA, WE WOULD CONTINUE TO PUSH “FROM AN EXPANSION POINT OF VIEW, WE ARE “FOR US, INFLUENCERS AND CONTENT CREATORS ARE LIKE SMALLER PACKS, DRIVE INNOVATION AND PRETTY MUCH DONE (24 CITIES). THIS IS BECAUSE MICRO-ENTREPRENEURS WHOM WE CAN MENTOR. BRANDS ROLL OUT LOCAL DRINKS AND FLAVOURS IN GROCERY IS A HUGE MARKET. THE IDEA IS TO GO CAN CONNECT WITH THEM VIA THE PLATFORM. BRANDS CAN LINE WITH OUR GLOBAL STRATEGY” DEEP THAN SPREAD YOURSELF THIN” ALSO ADVERTISE ON INSTAGRAM AND GET LOYAL USERS” JAMES QUINCEY HARI MENON MANISH CHOPRA Global chief executive officer, Coca-Cola Co-founder & CEO, BigBasket Head of partnerships, Facebook India > .

ANCHITA GHOSH The two issues that have to be addressed by the industry now are low espite being a cinema-loving occupancy — around 40 per cent across country, screen penetration in the board — and the growing threat from India is among the lowest in OTT operators. The twin challenges can Dthe world, with an average of be tackled by bringing in cutting-edge six screens per million people (KPMG in technology and offering better experience India's media and entertainment report, Spreading overall, agree oper- 2019). Compare that to 46 screens per mil- ators. No wonder at lion people in China and 23 per million THE BIG least eight out of a in the US. PICTURE total of 20 IMAX the- Smells like opportunity for growth, atres in India were right? Throw in events, product launches NO. OF SCREENS opened in the last and kids' birthday parties and you have the net n three years, despite Multiplex the perfect recipe to make the most of n Single the Canadian enter- the opportunity. Newer technologies and wider tainment technol- Last year was probably the best for the ogy having its pres- multiplex industry for more ways than ence in the country

footprint have helped 6,765 one. The box office collections in finan- 6,641 for over two decades

multiplexes rewrite the script 2,955 cial year 2018-19, according to the recent 2,760 now. KPMG media and entertainment report, Just weeks back, grew by 14.7 per cent to stand at ~12,940 Carnival anno- crore domestically, while the collections unced that it would from the overseas markets rose by 16.1 2017-18 2018-19 convert all its projec- per cent. tion systems into What also helped was the growth in FOOTFALL laser — the first advertising revenues — which jumped to Total year-wise chain in India to do 10 per cent from the earlier 6 per cent in footfall for INOX, so. “We are using FY19. The duration of cinema advertising PVR & Cinepolis phosphorus laser, hasn't increased — it remains at 15-20 increased its effective ad rates by intro- — box office collections, food and bev- is phenomenal. We are on course to open the potential of the catchment area. The (in million) which is the first real minutes per show — but in-cinema adver- ducing a new category at the premium erages (F&B), and advertisements. These the largest number of screens in 2020. metros get the maximum number of laser projection sys- tising has become more innovation- end and pricing it at ~5.10 lakh per 10 sec- account for more than 90 per cent of Some developers are under stress, but a screens and the best technologies. PVR tem. From April 15, heavy. Inox, for instance, has used the onds. The most expensive ad spot on the the revenue, with box large number of single- says it goes by the rule of thumb of open- almost 150 of our walls of its multiplexes to display ads and channel was earlier priced at ~4 lakh per office collections contrib- screen operators have ing 100-odd screens every year, but that screens will be in the deployed other interactive tools over and 10 second. uting the lion's share. What has also shown interest to convert would mostly be in metro or tier-I cities. laser format. The

above on-screen communication. Plus What has also given this business an Analysts say the shift given this themselves to PVR,” he says. “However, every year we are adding 10-15 149 160 163 191 viewing experience advertisers are coming around to cutting impetus to the business is the new tax towards F&B was inevitable business an India's largest multiplex per cent of the screens in tier-II or III cities will be similar to that FY FY FY FY long-term deals with theatre owners — regime. The goods and services tax because dependence on impetus is the chain, PVR last year where there is regional content, also occu- ‘16 ‘17 ‘18 ‘19 in IMAX theatres,” they have access to a captive audience (implemented in mid-2017), has been a box office collections alone new tax regime. unveiled a 70,000 sq ft prop- pancy level is much higher,” says Dutta. Source: KPMG says Umrotkar. without a remote control to skip ads. If blessing, says Mohan Umrotkar, CEO, would be risky. It seems the The goods and erty in Delhi that can seat To cut a long story short, the latest Apart from every- the trend earlier was weekly or fortnightly Carnival Cinemas. "India remains a price- focus on non-box office, services tax 1,833 people and boasts of technology goes in the prime locations thing else, laser technology is more envi- deals, now advertisers are open to sewing sensitive market. But earlier, the movie non-F&B revenues will (implemented in the latest technologies. PVR where consumers are willing to pay extra ronment-friendly, says the company. up deals that run up to three months. industry had to pay a sin tax of 40 per grow going forward. mid-2017), has Superplex comprises one for better experience. For instance, two Carnival is also eyeing alternative plat- The reasons are not far to seek. In cent. The government has brought it So now is the time to been a blessing, IMAX screen, one 4DX months back Select Citywalk in Delhi and forms like those being developed terms of the sheer investments required, down to 12-18 per cent,” he adds. improve footprint and add say operators screen, two ultra-premium Phoenix Marketcity in Mumbai got IMAX by Dolby and Giant Screen of China. cinema advertising is cheaper. If it is India has over 9,000 screens currently, to the screen count, say auditoriums, seven main- screens with laser technology. The old “China’s Giant Screen has a similar format ~400-500 per show at a theatre, a 10-sec- of which around 2,950 are multiplex industry players. Real estate stream and a PVR IMAX projectors are being shifted to cities and feel like IMAX. They are also explor- ond ad spot on a leading Hindi general screens, with 195 more added in FY19. is in a slowdown and mall operators are Playhouse, a dedicated auditorium for like Pune or Hyderabad. Ticket prices ing the Indian market. We have the facility entertainment channel would run into Now look at the typical revenue mix finding new homes in smaller cities. PVR children with toys and accessories. become 2x or even 3x for IMAX screens to adopt that technology; we need lakhs. Take this one example. Last year, of an average multiplex. It would derive Cinemas CEO Gautam Dutta says, “The As far as last-mile penetration is con- so sustaining them in smaller cities to upgrade the sound system,” says Hindi entertainment channel Star Plus most of its revenues from three sources number of malls coming up across India cerned, the expansion math is based on becomes difficult. Umrotkar.

that its campaign is based on a sur- and gender stereotypes to create vey they carried out to understand vibrant energies at work.” QUIZ 655 Flocking together on the what stereotypes women battle Goyal said that the ads, while today. They found that women are crafting a neat story, lacked an Whose ad carries the line “Where there is food, there rarely groomed to take emotional connection. “Most of it 1 should be alcohol” and what is the context? over their father’s busi- is empty lip service or invented gender trail nesses, because they are causes,” he said. Why, for instance Connect a brand founded in the 1770s that was first known seen as incapable or, do so few brands talk about poor as India ______, (subsequently the India was removed), expected to get married. participation of women in the 2 Advertisers pushed the inclusion cart on Women’s The Sinking of the Titanic, Napoleon Bonaparte and what Their ad sought to dispel workforce or unequal workplaces? do you arrive at? Day, but has the occasion lost its marketing bite? the notion. According to an Accenture Uber used the results report, “Getting to Equal 2020: The from the 2011 census to Hidden Value of Culture Makers,” Name the person who said, “To be a successful investor you design its ad. The survey said that which covers several industries 3 don’t have to outperform the market, you only have to three out of five women refrain across 28 countries including match it”. from traveling beyond a kilometre India, organisations today are at an for work, giving up higher-paying inflection point. “Today’s work- Name this a billion-plus Euro company which created its offers in favour of a shorter com- force cares increasingly about 4 brand name in the early 1900s after gaining inspiration mute. Lucinda Barlow, senior direc- workplace culture and believes it from the famous Arc de Triomphe in Paris. It was listed on tor, Marketing APAC at Uber, said, is critical to helping them thrive in the German stock exchange. “Many Indian women are ruling the workplace (88 per cent of out career opportunities to stay women and 77 per cent of men in Name the businessman whose lively autobiography, closer to home, whether it's down India), and majority of leaders (91 5 Struggles and Triumphs, reveals the power of the man's From left: Flipkart raises the issue of a daughter inheriting her father’s business; Uber talks about letting girls to safety concerns or a lack of travel per cent in India) believe an inclu- entrepreneurial mind. travel long distances for work; Brooke Bond brings in a gender-inclusive message and SBI tells the story of options. With this campaign, we sive workplace culture is vital to athlete Dutee Chand’s struggle to be accepted as a woman want to move forward the conver- the success of their business,” the Name the person who first started as a painter of minia- sation within communities and report noted. tures and then went on to invent an award-winning de- T E NARASIMHAN family business and Uber’s sage forward. But in the clutter, the workplaces.” At the same time, there is a 6 vice to cut marble. He also built a submarine with #WithinHerReach, talks about message is getting diluted, espe- Ranjani Krishnaswamy, general perception gap: nearly all leaders torpedoes and tried selling them to warring parties, Na- Standard Chartered Bank ran an ad safety for women. In addition, cially since brands are all speaking manager, Marketing, Jewellery in India (94 per cent) believe with a woman executive sitting numerous brands have launched in the same voice and tone. Much Division, Titan Company said, their people feel included, yet poleon Bonaparte and Lord Nelson. across a glass table top with a ticker short films, memes, posters and tel- of it is not much more than toke- “Tanishq has an inclusive, gender just one third (36 per cent) of tape running at the bottom of the evision campaigns, extolling the nism, said Sandeep Goyal, brand neutral environment. This is employees agree. No brand, During World War I, the US War Industries Board asked screen. “We’ll have women in at strength, commitment and courage expert and founder of Mogae evidenced in the large number of except for a pledge by Standard 7 women to stop buying a particular item of regular personal least 30 per cent of our senior roles that women show in the course of Media. While brands cannot ignore women colleagues we have and an Chartered Bank to do better by use to free up metal. It helped free up some 28,000 tons of by 2020,” it said. Ecommerce major, their lives. the day, the challenge increasingly innate sense of equality which is its women leaders, puts its adver- metal, enough to build two battleships. What were they Flipkart, has a campaign called Women’s Day (March 8) saw is how do they drive meaningful all persuasive in the company cul- tising might behind the issue. stopped from buying? #RaiseHerToLead that pushes the brands across categories put their communication? ture. As in our advertising, so in Doing that may just get them idea of daughters inheriting the best gender-aware or ‘woke’ mes- A Flipkart spokesperson said our work lives, we are breaking bias heard over the clamour. Hello Darkness, is the ad line for which brand and for 8 what reason?

Which pioneering businessman said your creative output is aligned to 9 this “Work is the master key that insights and strategic rigour, opens the door to all opportunities”? ‘Brands must do more than posturing’ ensuring the smooth fusion of science and art. Incorporating this What does this logo represent? essence into tangible design That applies a more positive spin on cost reduction, repositioning the initiative as a more elements and carefully selected 10 nomenclature is critical to the responsible ethical story, Eyles tells Shubhomoy Sikdar COMPILED BY GAURAV SRI KRISHNA, www.facebook.com/gaurav.s.krishna design process, and invariably Can brand design enhance and are sticky for existing ones, new packaging. Repackaging and results in stunningly consumer- credibility among potential keeping them within the walls of redesigning are powerful tools centric creative, that most ANSWERS TO THE STRATEGIST QUIZ 654 consumers? Especially when there the franchise. Our client which when done right do have the importantly drives tangible are hundreds of brands and Sinebrychoff, a Finnish Brewery power to unleash the impact they commercial results. 1. Unilever was helping the US thousands of influencers online... and a market leader in the category, did in Britannia’s case — growing government develop the 2. During the 1973 Arpanet Design is a complex, yet critical for instance, engaged us recently to household penetration by 96 per Since communication is no longer Norrmalmstorg robbery component when it comes to rebrand its flagship beer Koff. Now cent as volumes more than a one-way street in the modern era, and hostage crisis in 5. The Misery Index coined building a brand. Your visual craft beer is a growing market doubled. are customer preferences of Stockholm, best known by the American becomes your silent identity, segment in Finland. Which is why brands (especially the ones with a working to promote your brand even though Koff beer in Finland is How do you ensure that creative certain legacy) taken into as the origin of the term Economist Arthur Okun Stockholm syndrome, through elements such as design, widely popular and known as the pursuits and business goals consideration while a redesign is 6. Sugar colours, symbols and country's “first” beer, the harmonise during a brand-design in the works? the criminal Jan Erik words, effectively brand needs to stay on revamp exercise? When iconic brands go for Olsson made a 7. Emilio Pucci put together to uniquely top of its marketing If the design of the brand is not redesigning to reposition policeman sing the differentiate you from efforts to counter the aligned with the message the brand themselves, the underlying Lonesome Cowboy and 8. Alia Bhatt endorses all your competitors. Going rising competition. We wants to deliver, the natural risk of objective is always grabbing a larger he in turn was humming these brands beyond aesthetic and developed a quirky course is that you will confuse the market share. The tightrope that Killing me Softly 9. Tinder helped Parle-G functional values, a great ANDREW EYLES creative design to designing processes, is actually set consumer on what they should many legacy brands walk to reach 3. Early Birding meet Chayos brand design will step up CEO & co-founder resonate with the by the company and not the expect and, as a result, fail to new customers while holding on to to reflect what the brand optimistic Finnish target designer. We designed the connect with them. The brand’s the hard-earned brand-love 10. Shelby’s Cobra car bluemarlin 4. The @ symbol was stands for — crisply audience. The end result repositioning keeping in mind the purpose, positioning and requires keeping customer brought into usage in manufactured by Carroll delivering the message while was an offbeat design that stood out brand’s message of “Exciting personality, all elements drive the preferences in mind while 1971 when Ray Hall Shelby who was an emotionally hooking in the clutter on the shelf to appeal Goodness” in place. With the vital designing of its visual identity. Any redesigning and also while Tomlinson, who worked American automotive the consumer. to consumers who value directives in place, the brand design exercise follows understanding what are the designer independence and quality. repositioning targeting a broader carefully constructed strategies incumbent elements of a brand for BBN Technologies, Is the customer touch point, and demographic with a proposition of after understanding the company, that you can move forward with One lucky winner will receive a cheque for ~2,000. Send your entries the corresponding clutter, also Closer home, tell us something “the fun in between” landed the management goals, product’s and what elements are best to let go to [email protected]. All entries must carry the postal address of kept in mind in creating design about your work for Britannia successfully with the consumer purpose and target audience. of. Straying too far from what has the contestant. Last date for receiving entries is March 10 till 8 pm. solutions? Treat whose sales purportedly base. The refreshed identity and Forensic immersion into the been familiar could be risky. Previous winners and employees of Business Standard and their fam- The “clutter” is the key challenge to rose 80 per cent since its variant innovation pushed brand consumer mindset, their However, not being brave in a ilies are not eligible to participate. The winner is chosen on the basis navigate on a crowded shelf, and repackaging and redesigning. awareness from 85 per cent pre- challenges, aspirations, market of fierce competition can be of the first correct entry received. great brand managers build design The defining of a company’s goals redesign to 98 per cent, with 80 per expectations — and their detrimental too. solutions to ensure their products or personality, which is cent of consumers stating they relationship with your business There was no correct entry to Quiz number 654 can stand to engage new customers foundational to all branding and bought the brand as a result of the objective — all these ensure that More on www.business-standard.com 16 MUMBAI | MONDAY, 9 MARCH 2020 1 > When PM ‘signed Bhendi Bazaar takes a leap into future

After many failed attempts over the floors which are opening a new world opment programmes till date. It is needs of diverse communities living open spaces and highly visible com- off’, and women past decade, Bhendi Bazaar, one of the of modern living for the families there. being fully funded by the Saifee and working in the area,” Saifee mercial areas. The state planned to most underdeveloped and busiest Around 610 of the over 3,200 families Burhani Upliftment Trust, established Burhani Upliftment Trust Secretary redevelop the area almost a decade business-cum-residential districts of and 128 of the over 1,250 businesses by the late Syedna Mohammed Abdeali Bhanpurawala said. ago but work was marred by slow pace. took over the city, is taking a big leap into the have moved in to the new buildings Burhanuddin. The redevelopment comprises 16.5 The project involves razing 250 future in what's said to be the nation's — all for free. These two towers have come up on acres of land with more than 250 mostly dilapidated medium-rise struc- ‘Inspired by my mother, who instilled largest cluster redevelopment project. The families, which were living in the plot where 13 dilapidated build- decrepit buildings, 3,200 families and tures and building 13 high-rise towers The 125-year-old neighbourhood 80-ft dilapidated homes, are moving ings stood and form part of the 13 tow- 1,250 shops, all of which will be incor- in their place. These towers will house the habit of feeding the homeless, I spanning 16.5 acres, not very far from into 350 sq ft modern apartments now. ers which will be developed at the site. porated into a state-of-the-art sustain- existing commercial and residential the iconic CST, is already home to two This is the country's largest and one “The new neighbourhood will meet able development model with wider tenants, who will be given ownership started Foodbank India’ newly-developed towers of 36 and 41- of the most ambitious cluster redevel- the present and future socioeconomic roads, modern infrastructure, ample of their new apartments. PTI

IAF women fighter pilots Avani Chaturvedi, Bhawanna Kanth and Mohana Singh receive ‘Nari Shakti Puraskar 2019’ from President Ram Nath Kovind as Union Minister Smriti Irani looks on, at Rashtrapati Bhavan on Sunday PHOTO: PTI

ARCHIS MOHAN morning. “India has outstand- New Delhi. 8 March ing women achievers in all parts of the nation. These women even women shared their have done great work in a wide life stories on the social range of sectors. Their struggles Smedia handles of Prime and aspirations motivate mil- Minister Narendra Modi on lions. Let us keep celebrating the Sunday to mark the achievements of such women International Women’s Day. and learning from them,” the PM Three of them also received the tweeted with hashtag “She Nari Shakti Puraskar from Inspires Us”. President Ram Nath Kovind at a The seven women who function held at Rashtrapati shared their “life journeys” Bhavan in the afternoon. included Kalavati Devi, a mason Last week, the PM had tweet- from Uttar Pradesh’s Kanpur, ed that he planned to give up his who has helped construct over social media handles on Twitter, 4,000 toilets; mushroom farmer Instagram, YouTube, and Bina Devi from Bihar’s Munger; Facebook to women achievers and Arifa Jan from Srinagar in on International Women’s Day. Kashmir, who works to preserve The seven women were cho- and popularize Kashmiri hand- sen from different regions, eco- icrafts. Kalavati, Bina, and Jan nomic and social strata of the also received the Nari Shakti country. Work done by them has awards. also helped create awareness Apart from the three, others about schemes of the Modi gov- who handled the PM’s social ernment, particularly Swachh media handles were Bharat Abhiyan and Jal Jeevan Maharashtra’s Vijaya Pawar, who Mission for water conservation. works to conserve handicrafts of The videos these seven women the state’s Banjara community, shared on social media were philanthropist and founder of viewed widely. Food Bank India Sneha “Greetings on International Mohandoss, bomb blast survivor Women’s Day! We salute the spir- Malavika Iyer, and Hyderabad it and accomplishments of our based water conservationist Nari Shakti. As I’d said a few days Kalpana Ramesh. ago, I’m signing off. Through the Before handing over his day, seven women achievers will Twitter handle to women, Modi share their life journeys and per- wished former Rajasthan chief haps interact with you through minister Vasundhara Raje on her my social media accounts,” birthday. First to use the PM’s Modi tweeted from his personal social media handles was @narendramodi handle in the Chennai’s Sneha Mohandoss.

MEET THE WOMEN... SNEHA MOHANDOSS, Tetiabamber block, for 5 years. founder Food She has been involved in Bank India, spreading digital literacy and Chennai was awarded for training 700 Mohandoss founded women on how to use mobile Food Bank India at the by Tata Trusts. time of the Chennai floods in ARIFA JAN, Srinagar, runs 2015 to fight hunger. “Inspired by handicraft business my mother, who instilled the Arifa, 33, is the founder habit of feeding the homeless, I of Numdha started this initiative called Foodbank India,” she said. The Handicrafts and NGO runs over 20 chapters and helped revive the initiated activities like mass- lost art of Numdha cooking, cooking marathons, handicraft. She has trained breastfeeding awareness drives. more than 100 women in Kashmir and employed 25 MALVIKA IYER, Kashmiri craft people and works with increased wages of her people with employees from ~175 to ~450. differently abled Iyerwas 13 when she lost VIJAYA PAWAR, both hands in a bomb blastin Maharashtra, conserves Bikaner, and also herlegs were Banjara handicraft severely injured. Iyersaid Pawarhas popularised education helped herovercome Gormati arts and the accident. She gave her10th handicraftof the class exam as a private candidate Banjara community of with the help of a writerand rural Maharashtra. From 2000 to scored 97%.“People with 2004, she worked on collecting disabilities should have equal and preserving the designs, and representation. The more we see registered an NGO in 2004. “Ithas them, the more we acceptthem helped generate employment. As as partof oursociety,” she said. many as 450 women are associated with us and another150 KALAVATI DEVI, Kanpur, run theirown businesses now,” campaigns against she said. open defecation A mason, 58-year- KALPANA RAMESH, old Kalavati has architect and water helped build over conservationist, 4,000 toilets in villages in Hyderabad and around Kanpur, and When she returned campaigned door-to-door to Hyderabad from about the ills of open US, the family and defecation. the neighbourhood had to rely on water supply BINA DEVI, 43, Munger, from tankers. Ramesh and her Bihar husband built a “sustainable Referred to as the home” about eight years ago ‘mushroom where the effort was to preserve mahila’ for every drop of rainwater. She popularising said the entire community mushroom cultivation in 105 adopted rainwater harvesting villages that has helped 1,500 and could survive the summer women, 43-year-old Bina was of 2016 without buying a single sarpanch of Dhauri Panchayat, water tanker.