Reborn In 17th century India with Black Technology

Dakshin Bharatiya Empire, Vijayanagar State, Capital City: Hampi.

|| 1655 Vedic Calendar, Five months and Three weeks after the New Year ||

Three weeks had passed since Vijay received the news of the completion of the coin-pressing machine. During these three weeks, he was extremely busy, as there were numerous matters to arrange and decisions to be made before the establishment of the bank.

The first thing he did was to modify the coin-pressing machine that had been recently developed by BIT Bhubaneswar and BIT Jagdalpur. What Vijay did was, with the help of the engineers from Raya Machinery, he had the power source altered from the hydraulic-powered water wheel to the wind-powered windmill.

After that, he implemented a lot of anti-counterfeiting mechanisms in the machine, as the machine is mainly used for coin pressing.

For anti-counterfeiting, Vijay had decided that the newly produced coins would have edge lettering, a unique metal composition, micro-engraving, milled edges, unique patterns, authentication marks, and several other anti-tampering methods to avoid counterfeiting of the coins.

After these modifications, Vijay had 20 such machines, which were built at the fastest speed, installed in Ramakkalmedu. He had also stationed a platoon of troops to safeguard the area. Currently, various construction projects are underway, with the majority of them being the construction of printing workshops.

Vijay previously intended these workshops to print textbooks for the empire, but now he had to change plans and modify them to print the new paper currency for the empire. He went on to oversee the installation of a lot of counterfeiting mechanisms in these machines as well.

After modifying these machines, the preparation for the printing of the new currency was essentially completed. The only thing remaining is the establishment of the National Bank.

For that exact purpose, the Minister of Finance, Jagannath Mohan, met him and produced a large stack of documents summarizing the banking structure and plans for its establishment, along with changes in currency rates and other pertinent details within the empire.

Vijay opened the document and began to read. He found himself unsurprised by any of the data mentioned, as he had already reviewed various iterations of the same document over the past two weeks. This particular document he held in his hands now represented the final and polished version.

Reading through the document, Vijay concluded that the positioning, structure, and authority of the bank were according to his vision. The National Bank will not directly deal with both civilian and government agencies or organizations. Instead, it will act as a regulatory body responsible for regulating all the other banks to be established in the empire.

For this reason, for the last half a year, the government has been hoarding gold under the order of His Majesty.

Vijay knew that it would be next to impossible to convince the people of the empire to trust these paper and steel currencies instead of using the gold coin, which they could see right in front of their eyes. Hence, he took another approach to make this transition. n/ô/vel/b//jn dot c//om

With the government hoarding the gold in the empire, the price of gold increased rapidly, causing the cost of daily necessities to become high. The value of the gold coin became several times more than it was a few months ago, and the Golden Varaha Coin was soon in short supply. Vijay did this so that he could smoothly transition from the gold currency to paper and steel currency.

If the government and the royal family support this transition by paying wages with this currency and selling all the goods and services while accepting this currency, there might be a chance for the plan to work. In order for this transaction to work, Vijay had made a lot of preparations.

"How much gold does the empire treasury have that can be used to print the currency?" Vijay asked.

"Your Majesty, our GDP last year was twenty-three million fifty-five thousand five hundred and seventy gold Varaha, equivalent to 79 tonnes of gold. It has only been 5 months since the year ended, but the revenue generated from various businesses in the empire has increased exponentially, so we have quite a lot of liquidity in the Empire Treasury.

According to my calculations, without impeding the operations of the government, we can comfortably use 40 tonnes of gold," Jagannath Mohan replied.

"40 tonnes is a little less, but it should do. Along with the 40 tonnes of gold in the Treasury, include the 10 tonnes of gold that I will provide to the empire as a loan at an annual interest of 5%," Vijay added with a calm face.

Jagannath Mohan was taken aback by this generous offer. His Majesty had not indicated any intention to purchase a share or stake in the National Bank that was about to be established, a move well within His Majesty’s authority. However, instead of seeking ownership, His Majesty had opted to provide the funds as a loan, leaving Jagannath filled with admiration.

Considering the prevailing economic climate, where GDP growth had consistently exceeded 10% in recent years, the 5% interest on the loan seemed almost inconsequential. Repaying such a debt would be a straightforward matter.

"Yes, thank you for your generous contribution to the empire, Your Majesty. Your contribution to the well-being of the people will be remembered forever. The government will repay this loan within a few years without forgetting about the interest. Please rest assured," Jagannath Mohan assured.

Vijay nodded his head, unperturbed by the possibility of the 10 tonnes of gold not returning to the royal family. With the imminent opening of the bank, he harboured great confidence in a scenario akin to the industrial boom sweeping the empire. His optimism regarding the growth of the empire’s economy was palpable.

Even in the event that, despite all the advantages provided, the government could not repay his loan, he wouldn’t mind acquiring a share of the National Bank.

As for the source of the gold, it had been mined from various open-pit mines—a venture Vijay had been involved in for three to four years. Among the top three mining enterprises in the empire, the Raya Mining Company ranked first, followed by his uncle Shetty’s company in second place, and his brother-in-law’s company in third.

Vijay had forged deals with these two families to exclusively purchase the gold they mined, all for the purpose of supporting the establishment of the National Bank.

"Now, with the funds I’ll be providing, it will total to 50 tonnes of gold. Additionally, let’s impose a condition for the establishment of private banks in the empire: the initial deposit requirement should be set at 10 tonnes of gold, And this deposit will be handed over to the National Bank which will be newly established," Vijay proposed.

Jagannath Mohan was shocked by this number, as he was certain that almost no one had the capacity to bring forth such a large amount of money, especially in the form of gold, that too in order to open a bank.

Although Mohan knew that the bank could potentially be very profitable, given the operating structure and profit model outlined by His Majesty, he hesitated due to the untested nature of the model. He was uncertain whether to persuade His Majesty to lower the requirement.

Vijay, observing the hesitation on Jagannath Mohan’s face, understood the reason behind it. He reassured, "Don’t worry. This deposit requirement serves to prevent financial fraud within the empire, offering the people some insurance in case the bank faces bankruptcy. Additionally, there’s no need to doubt the profitability of the bank.

If managed intelligently, a bank functions much like a money printing machine. Though this truth may not be apparent to everyone now, once the Royal Devaraya Bank is established and successfully operational for a few months, it will become clear to all."

Jagannath Mohan was surprised again as he did not know His Majesty wanted to establish a bank. Then doesn’t that mean His Majesty would deposit this amount?

"Your Majesty, does that mean?"

"Yes, the royal family will establish a bank, and I will personally contribute a deposit of 10 more tonnes worth of gold to the empire’s Treasury. This will bring the total gold available for currency printing up to 60 tonnes. This should suffice for at least 5 years. Within that time frame, we will explore and exploit more gold mines," Vijay explained.

"In the meantime, I need you to maintain the value of the currency in a stable manner. I want one Gold Varaha, the old currency, to be worth ten Varaha, the new currency, in terms of stability for at least five years. Can you achieve this?" Vijay inquired.

"Yes, Your Majesty, I am confident in this endeavour. With the introduction of these currencies, the money supply in the empire will increase tenfold, resulting in a significant reduction in commodity prices, And an increase in transaction and tax collection. While this may pose a short-term challenge for merchants, it will ultimately enhance their market Competitiveness," Jagannath Mohan assured.

"Yes, that may be true," Vijay agreed.

The primary use of 3.4 grams of gold for a Varaha coin has been a bottleneck of the Empire’s commerce for a long time. The only reason it was not so noticeable was that the market of the empire had been small in the past. However since Vijay had implemented economic reforms, the market size has been rising steadily, and the value of the gold Varaha coin has been increasing significantly.

Although a strong currency is good for a nation, it is not so good for trade because, with a limited quantity of currency, it will end up becoming a bottleneck for the size of the market. So now, with the value of the currency dropping so much, the amount of money circulating in the empire will increase, bolstering the financial health of the empire.

This can be maintained until there are sufficient gold reserves.

As for this drawback, Vijay is not worried because, within five years, he is confident that he could establish a Navy that can travel at least in Asian waters. So, with his knowledge from the past, finding gold mines is not too hard. Also, the gold deposit in the Empire is sufficient to maintain the gold standards for at least a century.

But Vijay anticipated that the rate at which gold is mined from these mines is slower than the rate at which the economy size increases. Hence, Vijay had to constantly find new gold mines. But still, the current amount of gold will do for now.

P.S. Sorry, I couldn’t fit it all into one chapter; I had to split it. However, this volume will end with this arc.