"Your Majesty, the royal family currently holds 90% of the equity of the Raya Royal Bank, while the remaining 10% is divided among the Shetty family, the Kalyan family, the Bhonsle family, and other noble title-holding families of the empire."
Vijay recalled that during the establishment of the Raya Royal Bank, he had wanted to make the equity of the bank a privilege for the nobility, so he had distributed shares to the nobles of the empire. But it seemed that with the benefits provided by the second version of Nobility reform, the advantages of the Raya Royal Bank were not too important.
"Ganesh, contact Uncle Shetty, Mr. Pawan Kalyan, and the other shareholders of the Raya Royal Bank, and buy back the shares at a 50% premium. Also, don't forget to mention to Mr. Kalyan and Uncle Shetty that I will support them in opening the bank with the sale of these shares."
Ganesh immediately noted down the orders and quickly left the conference room.
Vijay directly went back to the discussion
"Dharmendra, I will support these two consortiums to arrange for the money. With these two banks providing the required deposits—20 tonnes for one bank—you would suddenly have 40 tonnes of gold in the bank treasury."
"If you print all of this into currency, what would the total currency of the Bharatiya Empire be?"
Dharmendra quickly took out an abacus, which he always kept in his pocket, and immediately started calculating. A few seconds later, he replied, "It would be two billion nine hundred forty-one million one hundred seventy-six thousand four hundred seventy-one Varaha (2,941,176,471), Your Majesty."
Vijay nodded in satisfaction, but then he grew annoyed. He was immediately satisfied with an acceptable situation, but he wanted to be bolder. "Dharmendra, increase the exchange ratio between gold and Varaha to 150 Varaha for one golden Varaha coin (3.4 grams of gold)."
Dharmendra was immediately startled and panicked. "Your Majesty, please rethink about it! Although we are still in military economy mode, in reality, we have already transitioned to a capitalist economy.
Now, suddenly pushing inflation to such an extent will cause dissatisfaction among a lot of people." Dharmendra was really scared; he wanted to do something exciting, but, swear to God, he really did not want to do something this exciting.
However, to his dismay, Vijay cut him off. "Don't worry about it. I have my own considerations. Also, you don't have to increase the exchange rates so quickly; you have a year to do it right. I will give you until June of 1659—exactly twelve months from now—to get the ratio right."
Dharmendra's words were stuck in his throat; his mouth was wide open as he wanted to say something but couldn't. What else could he say since his majesty had already made the decision? "I will follow your orders, Your Majesty." Although he was worried, he still had to follow the orders of his majesty.
Not only because it was his duty, but his majesty had also made and brought many miracles to the empire. So, if he was not obedient, someone would be ready to take his place in a split second.
Vijay knew that the man opposite him was still not satisfied or convinced by his plan, but he did not intend to explain. In truth, his plan to increase inflation was not without thought; he had actually considered a lot before making this decision. It's just that the decision he made came a little faster than he had intended.
Vijay knew that with the coming of the industrial revolution, the productivity of the nation would increase manifold, which would inevitably decrease the cost of production for many products. This was his problem: if the cost of products decreased drastically, the current coinage would be too valuable for the common people of the Bharatiya Empire.
For instance, one Bharatiya coin is now worth $3 when accounting for inflation.
To be honest, this isn't a problem of people being too poor to afford anything; it is a problem of the currency being too high in value for the people to buy any product of lower value.
How can any Bharatiya citizen, after the industrial revolution, buy a common soap, a toothbrush, or even a utensil that costs less than a dollar for three freaking dollars? Even though the current Bharatiya Empire could be considered a rich society, calculating it by per capita income, at least in the South, the value of the currency is still too high.
Hence, Vijay wants to use inflation to quickly devalue the currency by the time he is ready to push off the industrial revolution.
"Dharmendra, taking the exchange rates of 150 to 1, how much Varaha currency would be circulating in the market by 1659?"
Since Dharmendra had already decided to follow the orders of his majesty, he did not hesitate in answering. He quickly took out his abacus once again. It took him a little longer to calculate as he computed twice, then replied to his majesty, "That would be 4,411,764,706 Varaha, your majesty."
A smile suddenly crossed Vijay's face. With a quick calculation, the amount of Varaha in circulation would increase by 150%, which is a staggering increase of 2,647,058,824 Varaha. This means that once again, the economy of the Bharatiya Empire has expanded.
Additionally, with a rough calculation, he had brought down the cost of 1 Varaha from $3 to $1.50, 1.4 euros, or 1.2 pounds.
Although this was still a very heavy currency, it was acceptable for the current Bharatiya Empire, whose per capita income was also very high. The cities of the Bharatiya Empire, at least in the South, had no less capital generation and consumption compared to that of the main European cities.
Capital of Vijayanagar, Hampi
Ravi Shetty was immediately startled when he received a message from the emperor's office.
Ravi was initially hesitant about whether to sell the shares in the Raya Royal Bank, as it was a very profitable investment. However, when Ganesh from the emperor's office mentioned that his nephew would help him foot the bill for the establishment of the bank, he no longer hesitated and immediately agreed to sell the 4% of shares he held.
He and his collaborators had already managed to amass almost 16 tonnes of gold, but with the sale of 4% of the Raya Royal Bank, he immediately recovered two tonnes of gold. With the two additional tonnes of gold being invested by Vijay, the bank he had planned would be established without delay.
Ravi contacted all his partners in the establishment of the bank, as he alone could not come up with so much wealth. He had joined hands with many industrialists in the empire, including the textile king Bakshi, the medical king Bhupathi, the king of ships Gana Prabhu Berunda, the silk tycoons Joshi family, the coal tycoons Kombai family, and other prominent industrialists.
Pawan Kalyan received a similar offer to that of Ravi Shetty, but unlike Ravi, he didn't hesitate even a little. Knowing that the opportunity he had was rare, he immediately agreed and sold the 2% he held in the Raya Royal Bank in order to recover one tonne of gold.
Pawan Kalyan had formed a coalition with the remnants of nobility from the Vijayanagar Empire, as well as the members of the new nobility system.
For example, the prominent stakeholders in the bank he was about to establish, excluding the run-of-the-mill nobles who played a small role and accounted for around 5% of the total investment, included the Maratha Bhonsle family, the royal family of the Ahom state, and the Senapahti family.
The Senapahti family was currently the most prominent family, with a hierarchy similar to that of the Ahom and Bhonsle families, having produced two kings for the empire: Logananda Senapati and Ramayya Senapati. They had accumulated a lot of wealth. There was also considerable investment from the Gurkha family, especially from Mahalaxmi Gurkha, who is currently the wife of King Sarvesh Ranavikrama.
The three other kings of the empire have also invested a certain proportion of shares.
With the end of a series of operations between Vijay and the two different consortiums, two new banks had suddenly been registered with the Ministry of Trade, Commerce, and Industry, along with obtaining a legal license from the Reserve Bank of Bharat.
The bank of the Shetty Consortium was called Shetty and Cooperative Industrial Bank, as it focused on providing convenience for industrial enterprises, which were its main customers. Meanwhile, the consortium of the Kalyan family and the nobles was named Bharatiya Southern United Bank, which focused more on asset preservation and real estate investment.
This was what the new nobility of the Empire valued most; even though they couldn't pass on their noble titles to their descendants, they at least wished to pass on their wealth. The nature of the bank was one of the reasons why Vijay allowed so many nobles to form a group in the form of a bank; otherwise, he would have been cautious, as he did not want all the nobles of the empire to form a cabal.
Additionally, to be careful, both banks had a stake of the royal family, ranging from 10% in the Shetty and Cooperative Industrial Bank to 18% in the Bharatiya Southern United Bank. Both banks also had the veto rights of the Raya family in important decisions.