Reborn In 17th century India with Black Technology - Chapter 1122

Chapter 1122: Financial Overhaul (2)

Vijay thought about it and nodded, ” It will, but it will be a semi-government organisation, with it having independent financial and accounting, with private players also participating in its management. ”

“And that brings us to the next point of the discussion, we will introduce derivatives, or as I like to call them, futures, betting on the price of a commodity in order to protect the interests of traders. ”

“The BCCE will be listed on the stock exchange, and futures trading will be permitted, allowing participants to speculate on whether a commodity within the BCCE will rise or fall. This mechanism enables businesses to hedge against price fluctuations; for instance, a baker could lock in wheat costs for six months if necessary. By opening up futures trading, the daily flow of capital through the market could increase by several billions, injecting liquidity and stability into the empire’s trade system.”

“And the third point is to introduce retail-friendly treasury bills. ”

“These will be short-term loans that the citizens lend to the government. The citizen pays 500 varaha today, and in half a year, the government gives back 520 varaha, with the interest being tax-free, making it more attractive for the people than keeping cash at home and in low-interest bank accounts. ”

Dharmendra, the director of the Reserve Bank, suddenly asked, ” But your majesty, we do not lack funds. ”

“That’s where you’re wrong, ” Vijay looked at Dharmendra and shook his head, ” These funds are not because we are desperate for it, but because we have to make the people spend their money, and also in order to leverage more money to earn a higher amount of money. ”

Vijay knew that Dharmendra was still confused, but he continued on, since further clarification was in the things he had planned that were yet to be explained.

” So ultimately the goal of phase one is to make varaha into the indisputable and easily convertible currency where real commodities can be exchanged. ”

Vijay lifted up two fingers

“Then we go on to phase two, which I call making the middle class the economic engine. ”

“Dharmendra, you have to push the policy for this. ”

Dharmendra was confused but still nodded.

“Until now loans were provided to the people, but it was always more accessible to the businesses and entrepreneurs than the common man, so from now on financial institutions will offer loans for homes, cars, personal loans for weddings, emergencies, people borrowing small amounts of money, and any other thing where people will pay it back with interest after some time. ”

“This will encourage the middle class to spend more and leverage additional funds to acquire what they desire, while simultaneously earning more to repay their debts, effectively turning them into the driving engine of the economy. To enrich this model of targeted financial services for the middle class throughout the empire, insurance will also be diversified, allowing companies to offer coverage for crop failures, medical emergencies, factory fires, shipwrecks, car accidents, tractor damages, and many other contingencies.”

“You have to form a comprehensive regulatory body for each of the loan procedures and insurance procedures, so that brings me to the next point: you have to create strict regulatory agencies. ”

“These agencies will be responsible for inspecting banks and insurance firms for fraud and other things, which will also be responsible for setting minimum capital requirements for lenders, enforcing transparent pricing on insurance, and punishing companies that scam citizens. ”

“The agencies will be backed by the Reserve Bank, but their management will once again be done by the public, where people are replaced every five years, where they are paid a base salary throughout their work, but get a bonus only when they bust fraudulent activities and companies going under the rules and regulations set by the agency. ”

Dharmendra nodded after noting down the instructions, and he also got a clue as to why his majesty was telling him to borrow from the people; presumably, it is to lend it back to the people again so that more value is created with the same money.

“And coming to the third phase, it will be to make varaha an international trading currency. ”

“Most of the neighbouring countries and the countries in the eastern hemisphere have already agreed to our request to purchase our goods using only varaha, but that is not enough; we have to do more. Any two countries trading with each other should be in varaha, so we will start with ASEAN. ”

“The countries in ASEAN may have formed an association under our insistence, but there is a lot of distrust between them, for example the Toungoo Kingdom does not trust Siam and Lan Xang, the Ayutthaya Kingdom practically has conflicts with all its neighboring countries, making trade although possible but full of friction, the Chenla Kingdom has conflict with both Ayutthaya and Lan Xang, so on and so forth. ”

“We can take advantage of these differences. Our banks can become the neutral party for their trade. We can offer to facilitate their trade: when Toungoo sells rice to Ayutthaya, Bharatiya Bank guarantees the payment; when Chenla buys spices from Lan Xang, our bank ensures the payment and the delivery.

We essentially become the middleman, making trade between these countries much more seamless, and since they’ll start using our systems and our banks, they are bound to use our currency, which brings me to my second point: they naturally accumulate more varaha, making them dependent on our currency and becoming stakeholders in the varaha economy, where they have a strategic interest in varaha remaining stable and valuable.”

Vijay felt that doing this right now was the perfect opportunity, since internal trade between ASEAN relied on barter, there was no unified currency, and Bharath could seize the chance to become exactly that before they figured it out themselves.

“This policy should be directed by both the government and the Reserve Bank, so I’ll leave it to you. ”

The Prime Minister and Dharmendra both nodded, understanding what the emperor wanted.

“And since keeping money in a place without spending it is a waste, we can offer the other countries to borrow the money they have accumulated in the reserve at 3 to 5% interest, bringing back the billions of varaha, which we can use to develop our own infrastructure, military, and other development. ”

Everyone’s eyes lit up; they did not know that finance could be done like this as well.

What Vijay didn’t reveal was that even if the empire were unable to repay its debts to other countries, it could simply print more money, accepting higher inflation. In effect, the world would share the burden of the empire’s economy. Just thinking about the leverage the Bharatiya Empire was about to gain sent chills down his spine. Vijay remembered how, in his previous life, America had practically been scamming the world, but now, with the empire in a similar position, he realised the scale of the scam. At least the Bharatiya Empire’s currency was backed fifty percent by gold; the American dollar, in contrast, relied entirely on trust and fist.

“The 4th phase will be to build a stronger Reserve Bank. ”

“Since banking will get much more complicated with so many new policies coming out, better professional monetary management practices will be implemented to avoid financial crises. ”

“Also, a clearing and settlement system will be established. This will be a new organisation directly under the Reserve Bank, let us call it Unified Payments Interface, or UPI. This will be responsible for payments from within the country to other countries. All the banks in the empire and all the international banks could use this interface to send money to each other, with the UPI guaranteeing every transaction. This will make international trade more reliable and efficient, also currency conversion fees can be reduced, payment disputes can be minimised, strengthening the importance of our currency even more. ”

“By implementing everything till here, we get another power. ” There was a glint in his eye. ” We get to mandate trade of major commodities, like the ones in BCCE, be traded using varaha.”

“Imagine, steel being traded between two nations anywhere in the east using Varaha instead of their own currency or barter”

“This will make even companies hold varaha for commodity purchases, and it becomes a measuring stick for regional trade, which creates an unavoidable structural demand for our currency that persists regardless of political change in that country. ”

“In the 5th phase is to create what I call financial dominance and to have a global influence. ”

“We will establish sovereign wealth funds that foreign nationals can invest in. The same sovereign wealth fund can issue infrastructure bonds, similar to the treasury bonds we issue from the government to the people, but instead, these bonds could be bought by anyone, be it a Bharatiya national or a person from abroad, where the money will be used to build our roads, ports, railways, and other infrastructure for steady returns. ”

” Essentially, by providing bonds, commodities underwriting, and Bharatiya products that can only be bought using varaha, our currency is simply too good to ignore. ”

” By the end of the 5th phase, we have economically conquered all the countries we are allied with without firing a single shot, and we have achieved hegemony. ”

After Vijay ended his speech, claps immediately rang out, deafening claps. There was nothing but excitement; all the skepticism they had felt towards his majesty for wasting 2.9 billion varaha to rebuild the capital had completely disappeared.

They did not know how it would affect the empire after implementing all the policies his majesty mentioned, but one thing is for sure: the picture painted by the emperor is simply too beautiful for them not to look forward to.

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