Demonetisation: Was it Modi’s masterstroke by Ajay Banga’s Mastercard?

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While commenting on RBI’s decision to ban exchange of scrapped notes after 30 December, Amartya Sen on 10 January said, “I don’t think this is RBI’s decision. This must be Prime Minister’s …I don’t think RBI decides anything at this time.”

The Nobel laureate’s comments came just few days after it was revealed that the RBI had not advised the central government to announce demonetisation. But, the decision to go for note ban was the Centre’s Narendra Modi government’s idea.

So the questions is; if it is not the RBI that decided the demonetisation, then who sold the idea to our honourable Prime Minister?

Various theories have been discussed at length behind the rationale and the timing of the note ban announcement. But no one could hit the nail on the head.

No one could suspect if the real architect of Modi’s demonetisation announcement were mega corporates (Master card, Visa and American Express) of America that controls the cashless ecosystem not just in India but throughout the globe.

War On Black Money or Promote Cashless Business?

Not once in his address to the nation on 8 November 2016, did the prime minister refer to the idea of leaving cash behind and going cashless as the objective of demonetisation. The narrative of demonetisation quickly changed from ‘War on Black-Money’ to ‘War on Cash’.

There’s very little doubt that the business model of mega corporates of cashless world has now become the cherished national goal of India. All thanks to our prime minister and his close relationships with the bosses of these companies.

It is important to note that ‘War on Cash’ has never been the stated objective of India as a nation or even mentioned on the election manifesto of any of the mainstream political parties including the BJP or Congress.

Financial catastrophe as huge as this was never witnessed by humanity ever before. Millions of Indians lined up for days for next 70 days to withdraw or deposit their legal money. According to a modest count, nearly 160 million Indians queued every day across 400,000 ATM machines and bank branches.

160 million standing in queue is akin to half of USA population (320 million) or the total population of Canada, Australia, UK and Italy standing in queues daily. 160 million people waited in queue daily for over 60 days and yet there was no widespread riot or unrest. This showed the support Prime Minister Modi received from people in his demonetisation drive.

It is also a fact that tens of thousands of people lost their jobs due to sudden economic slowdown, while hundreds died standing in queues outside banks and ATMs. The ordeal is far from over and overall impact on GDP is yet to be officially recorded. Worst hit sectors are retail, real estate, automobile and informal industry.

It’s, therefore, imperative that we ask as to whose war Prime Minister Modi is fighting even at such high cost of Indian people?
Demonetisation announcement on 8 November

Is it a mere coincidence that Modi’s announcement coincided with the three-day international summit of Cashless World at Brussels on starting on 7 November. At the Cashless World summit, a special symposium was organised to discuss emerging economies or the developing countries as laboratory to test cashless world. It may be pure coincidence that while delegates in Brussels were discussing modalities of withdrawal of cash from emerging economies, Modi had in fact already taken a significant step in that direction by withdrawing 86% of cash from Indian economy. One could wonder if the script for the Cashless World’s dream project was written in India or our prime minister had outsourced it to Brussels.

Speculation is rife in the economic and political circles that no fiscal expert was consulted. It appears that the RBI faltered in carrying out its constitutional duty to manage nation’s fiscal stability and credibility.

Government has been widely criticised for poor execution of demonetisation mainly on following grounds:
a. New Currency of Rs 2,000 and Rs 500 were not of the size that ATMs could handle. This led to delay in replenishing the immediate cash.
b. No stock of new currency was printed beforehand.
c. Rs 2,000, when made available was not easily marketable, as smaller denomination of Rs 1,000 was missing and INR 500 was printed much later.
d. Government ran short of paper, ink and printing machines leading to fears that the cash replenishment could take at least a year and a half.
e. Banks ran short of cash and government imposed withdrawal limits with no declared date of removing such limits on withdrawal.

Prime Minister Modi has been criticised for a host of reasons including ideological leanings, biases in favour couple of chosen corporate houses, but even his bitterest enemy could never accuse him of being inefficient and poor in management. Modi is known to be meticulous in planning and execution. One only needs to remember his five star events hosted abroad including the mega show at Madison Square in New York and London’s Wembley Arena.

So, the poor execution of cash replenishment is more likely by design rather than due to inefficiency and mismanagement.

WAR ON CASH

It appears that demonetisation was never intended to be focussed on black money. If it was so, Modi and his team would have been ready with cash to replenish, size of currency to fit into ATM trays and enough paper and paper-ink to print the whole lot in time to meet the requirements. One could trust Modi with that kind of efficiency. He is indeed the most successful mega event manager that world has seen for a long time. Could he allow it to be messed up so spectacularly unless it was designed to be that way? It was indeed a war on cash economy but allegedly taken at the behest of certain individual(s), whose proximity to Modi is well known.

Padma Shri Ajay Banga: Coordinator of investors in Vibrant Gujarat 

In 2013, Ajay Banga, the celebrated CEO of Master Card Inc of Indian origin announced that he had declared a ‘War on Cash’. He preaches to world leaders and countries across the globe to go cashless for following reasons:
a. Cash is hard to track.
b. Cash is used for drugs, weapon trade and terror funding.
c. Cash has the danger of creating fake currency or counterfeit notes.
d. Cash is safe.
e. Cash helps tax evasion.
f. Cash is expensive to print, carry and distribute. It takes up almost 1.5% of GDP to manage cash logistics.

The justification of demonetisation by Modi and his media spin doctors is verbatim rhetoric of Mastercard business model. It could not be coincidence.

Son of a retired army officer, Ajay Banga was born in Pune and he graduated from the IIM Ahmedabad. He is currently the CEO of Master Card Inc. He has been the longest serving Chairman of US India Business Council (USIBC), which has been the nodal agency for all Vibrant Gujarat Summit. Importance of USIBC can be gauged by the following press release in Vibrant Gujarat 2015 summit:

“USIBC will bring the biggest delegation of US companies, three times the size of the one which came last year. The number that we have been talking about as a potential investment target in India is $41 billion, which has been identified by an informal sampling of our companies in the next 3-4 years, if the economic reforms that have been aspired to by the Prime Minister and by the government are fulfilled…….”
Banga has been the most vocal voice of Indian diaspora community that funded the most expensive campaign of 2014 Election through a never-ending stream of online cashless NRI donation for Modi. He has been the most vibrant emissary of Modi Magic in USA.


In Sept 2014, Modi’s first visit to USA as Prime Minister of India, Banga was rightly honoured by being allotted the most important seat on the much-advertised breakfast with CEOs. He can be seen seated right in front of Prime Minister. Banga and the USIBC also reciprocated by hosting the rock star welcome for Modi in the mega event at the Madison Square Garden, New York.


For Banga’s ‘selfless service’ to the nation, India honoured him on 26 January 2016 with Padma Shri. This is an honour that even some of the most illustrious industrialists of India with life time service to the nation haven’t received. It appears that his core competence area and vision of cashless world was soon to be put in the service of nation and if that be so, Padma Shri rightly belonged to him.

demonetisation masterstroke mastercard

 

On the 9 November 2016, while the entire nation was shell-shocked at the withdrawal of 86% of its currency, no prize for guessing that Banga’s company Mastercard had become the first big name to call Modi’s announcement a masterstroke.


On 15 December 2016, CISCO Co bagged the government contract called GIFT to develop Smart City in Gujarat under Make In India logo. How ironic that Indian companies like Wipro, HCL and TCS which supply smart solution internationally at competitive prices failed to get a contract to develop Indian smart cities. All India needed was an American company CISCO to propel the ‘Make In India’ initiative.

Players of cashless world

At this stage, it is important to map the biggest players of cashless economy. Visa, Mastercard and American Express are virtually the owners of cashless world. Together, they control spending volume of over nine trillion dollars which is four times the GDP of India. In 2013, these companies had almost $55 billion revenue for being the fintech interface for bankers, merchants and customers.

Every cash transaction across the globe results in loss to these companies. ‘War On Cash’ is their business model. They invest and propagate the cashless economy globally. It is their business to influence global fiscal policies and steer them towards a world without cash.

The ownership summary of these companies as available with NASDAQ is also very interesting. The controlling shareholders in all three cashless leaders are same financial conglomerates. The pattern as displayed below will establish common ownership of cashless world:

Mastercard Ownership Summary


Visa Ownership Summary


American Express Corporation

Through a maze of five or six holding companies, American Mega Financial Corporation control the Cashless world. Brands and banks could change but ownership and benefits of cashless transaction goes to same set of owners. They control over 9-10 trillion dollars of monetary transaction as on date while cashless economy is not even 10% of total world transaction. Imagine the power of this cartel and control on humanity if cashless economy was to increase to 50% of total transaction. Has India been chosen as the laboratory to realise cashless dream globally by these American big conglomerates?

Some valid questions emerge from the above narrative and sequence of events:
1. Who were the fiscal experts advising our prime minister on creating a cashless economy so abruptly? Was it outsourced to his ‘friend’ Banga and other friends in the US?
2. Whose design was it to starve the nation for cash? Was it Mastercard design to further its business in cashless world?
5. Mastercard started its cashless preparation in Jun 2017 for India. Sensing big money in cashless India, the company had invested $400 million in 2014-15 and increased its investment budget to $800 million on 27 June 2016. Did RBI know about demonetisation before Mastercard or it’s the other way around?
6. How much is the revenue that would accrue to Master Card, Visa and American Express whose ownership is almost common considering India was to go fully cashless?

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