Chapter 9C: words like havala, benami or dabba trading are just Indian words for American inventions. Unbridled capitalism in the U.S. aided by an all powerful business and Jewish lobby had shifted global control to USA. Minor irritants like Japan, USSR and Germany had been settled by two World Wars. It was now time to harvest.
40% of the world economy was the stranglehold of what is called BFSI. Lawyers were the instruments of oppression. And aiding them was a legal system that was practical, flexible and exceedingly corrupt. Leave aside things that involved members of the public as jury. Everything else was anti foreigner. Every successful IITian from Rajat Gupta to Vinod Gupta has struggled with discrimination and legal trouble.
In America, big companies made the law. The common man adhered to it. For the rich and famous, you had Epstein. For the rest, you worked like a robot and paid your bills. The bills exceeded earnings and so you kept working harder to keep paying your debts. It was and is a country without a business model. And the only business model is to import money and to import talent and to import expertise. For the U.S. to import money, someone had to export it. To fuel the consumer boom, someone had to manufacture.
Someone has to balance cash flow. When an economy is not viable but highly prosperous – you need continuous inflow of capital. That is how you pay salaries and support infrastructure. The exporters of money from India are individuals and companies. But not small companies.
The war room realised that msme was a waste of time and the governments problem. The msme entrepreneurs were way too smart and way too hardworking. So a strategy was made by Citi HDFC to take money from the govt banks like SBI and PNB – then lend it to MSME against government guarantee, and pocket half the interest without any risk.
And thus three entities were backed. HDB, Bajaj Finance and Tata Capital. This was a marketing job. You needed a salesman. Someone capable of managing Gujratis and Marwaris, who spoke art and looked innocent. Looks can be deceptive.
Pramit Jhaveri entered the war room in 2004. He was a Chartered Accountant. But not from Gurdaspur or Akola. But from Tier 2 Mumbai. With a MBA from USA. He became country head of Citibank and entered the war room.
HDB was formed in Gujarat. It was a subsidiary of HDFC Bank. Cut, copy, paste from CFIL. The govt specified that NBFCs owned by banks had to reduce bank ownership to 20% and go public. But these laws are for others.
Even today, Pramit Jhaveri is a Director of Bajaj Finance. And till he was booted out, was a trustee of Tata Trusts. His fancy apartment in Woodlands at the junction of Warden and Peddar Road overlooked Antilia a stones throw away. His ambition was clear.
RBI declared him unfit and improper. RBI fined Citibank for non compliance. But what is a Rs 3 crore fine.
Nothing matters. Shadow banks owe Rs 10 lac crores to govt institutions.
