Old world forex brokerages continue to live in a time warp. Many may wither away if they don’t get their house in order.
Gautam Ashra, managing partner at Kanji Pitamber & Co, one of India’s oldest forex brokerages, turns wistful as he talks about his grandfather Kanji Pitamber who set up the firm in 1933. “He was fitness personified till the moment he left this world peacefully in 30 seconds flat aged 91,” says Ashra. And then stumps you with the words: “He ran from bank to bank in the Fort and Ballard Estate area (in Mumbai) as a young man taking orders for dollars and pounds. It made him fit for life.”
You ask Ashra what made his grandfather a ‘marathon’ man. “There were no hotlines back then. He took an order from Chartered Bank (today’s Standard Chartered Bank) and ran to State Bank of India (SBI); then on to Bank of Baroda, to Grindlays Bank. At times, he had to run real hard just in case a rival got ahead of him.” And to dispel any thought you might still entertain that he’s pulled a fast one on you, Ashra helpfully adds: “Bicycles were not very common those days.” Then guffaws: “But I will not live long like my grandfather. At the rate I am wining and dining bankers, I will also go soon.”
It’s easy to misunderstand Ashra — he does not ‘bribe’ bankers, but well, indulges them. For it’s a matter of life and death in the forex brokerage business. The number of firms has dwindled to about 15 from 40-odd just a few years ago; and from 125 in 1998. Of the forex market’s daily turnover of $40-odd billion (spot plus forwards) only about 7 per cent is put through them. And five of similar vintage — Kanji Pitamber, FR Ratnakar & Co, Vrijlal Thakar & Co, Govindram & Sons, and Mecklai & Mecklai — corner 75 per cent of the volumes.
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