Chapter 10C: 2014 was the beginning of the end of the money export industry. It also signalled the start of an era of digital transparency. Left without a heir, the rule of the Gandhi dynasty was coming to an end. Sahara was being decimated by SEBI. An attempt was now made to somehow increase the two parameters of interest – collection of money and export of money. Dubai real estate and US education beckoned. But that wasn’t large enough. The real opportunity was in India.
Just like shares are rigged on the stock market. So can real estate prices. And this was the opportunity. Real estate was also heading to the stock markets. The Citi model was being leveraged by other players. KKR and Blackstone started the game they knew best. A Citi affiliate called Trans Union had managed to acquire Cibil – and thus got the entire countries data. SBI had been bull dozed into sharing their entire account database through a company called Perfios.
But companies were breaking free as they realised that the Citi HDFC duo no longer called the shots. NPCI truly became independent. NSE had blocked the acquisition attempt. Inorganic growth of the bank had stopped.
There was no one left to plunder.
The war room had been closed.
And so eyes turned to HDFC Ltd.
HDFC Ltd borrowed money from HUDCO, banks, global markets and the public to lend to borrowers wanting to finance a house purchase. It was in the words of Victor Menezes “a junk business”. Unless it could be financed from free money – like current and savings accounts . Borrowing at 6% and lending at 8% just didn’t seem attractive enough.
HDFC Ltd had two insurance ventures – life insurance and general insurance. LIC had managed to use tax incentives to convert insurance into a deposit business. Essentially they managed to take and keep people’s money at a very low cost. People gave them the money because of the tax savings. Now this was juicy business. Lacs of crores could be collected just like LIC had done.
And in a capital starved economy – he who has the capital makes the decisions. All that was needed was to get an insider from the ecosystem into a position of power.
And thus came the idea of promoting Deepak Parekh as Finance Minister of India.
