USD 100 Billion pa Havala
Went on for 75 years
One Bank owned this market
What deficit ?? This was 100% profit
Till 2014, Indians used havala to park their money abroad. One bank owned this market. As per media reports, those who did this included a former Law Minister, a former Finance Minister and former Home Minister. If this was the clientele of the bank, there was nothing to worry about. The bank had every ruling party politician, every judge and everyone who mattered in their pocket. Also their extended families and their associates.
And then in 2007, a book appeared in the fiction category.
It was a complete unbiased true account of how the bank in India worked. This was just before the banking crisis of 2008. The book became a best seller. And the bank was doomed.
The bank was all powerful. It had enough dope on everyone. There was an en masse resignation of directors at their joint ventures. I read the book and resigned from the Board of one of their joint ventures.
I had no clue what they were all about. My co-director, a whole time Director of Citibank was also a Director of State Bank of India. His wife was the head of Tax of Deloitte. It was a racket. Everyone was a landlord, parent or business associate or a “priority banking client”. The head of the retail bank panicked and decided to become a whistleblower. Servesh swaroop, my neighbour in bbay died mysteriously.
The bank went out of control. In the 2008 financial meltdown, it got bailed out (of course, who else deserved more). Then there was a scam in the bank with Rs 400 crore disappearing from client accounts. How can you teach morals to your staff when you are running an illegal operation yourself. The CEO came forward to assuage panicking clients. And then the RBI suspended him for not being fit and proper.
It didn’t end there.
They got a chawri bazaar company called Avco Finance – and closed down their main NBFC called Corp Finance India Ltd. But they had thousands of post dated cheques taken from borrowers. So through a complicated set of legal approvals and “fixed” court orders – avco finance of chawri bazaar delhi became Ccorp Finance India Ltd of BKC, mumbai. No one knew. Business as usual. PDCs cleared. Court files disappeared. It helps to own the bank.
Then one day someone figured out that suddenly his lender had a new PAN Card and a new CIN number. In the tax scrutiny, a smart ITO figured out something was amiss. The PAN Cards in India have their fifth character as the starting alphabet of the assessee’s name. How did the PAN Card of a company starting with “C” have a pan card showing “A”.
People were running helter skelter. Offices were closed.
The bank was sold.
Money collected. Thank you Axis.
Governance. Board. FCPA. SEC ??
Some are too big to fail or kill.
The next book is due shortly.
Tighten your seat belt.
What was Trumps confidential meeting on Aug 5 with Fraser all about ? Can Americans afford tariffs