Early Indian Banknotes: Presidency & Private Issues

Started by Chatterjee_Soubhik, June 06, 2020, 01:23:59 AM

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Chatterjee_Soubhik

June 06, 2020, 01:23:59 AM
Hi,

The Indian Banking system was completely based on coins, with the rupee on a silver standard. With the advent of the British trading company, and the later British Crown rule (Raj), the Indian banking system was introduced gradually to the concept of banknotes, and bills. In this thread, I'll discuss the early Indian banknote issues- the Presidency banknote issues by the 3 Presidency banks and the Private bank issues in the said time period.

I've compiled the information in this thread and referred to the sources listed under the references section. Please feel free to comment on the issue, and rectify/inform me if you spot any misinformation.

regards,
Soubhik.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#1
June 06, 2020, 01:28:45 AM
The following are the list of early banks that issued banknotes & paper money in India:

CALCUTTA PRESIDENCY:
1. BANK OF CALCUTTA / BANK OF BENGAL, Calcutta (Sicca Rupee System) // PRESIDENCY BANK
2. BANK OF HINDOSTAN, Calcutta (Sicca Rupee System)
3. COMMERCIAL BANK, Calcutta (Sicca Rupee System)
4. CALCUTTA BANK, Calcutta (Sicca Rupee System)
5. UNION BANK, Calcutta (Company Rupee System)

BOMBAY PRESIDENCY:
1. BANK OF BOMBAY, Bombay (Rupee System) // PRESIDENCY BANK
2. BANK OF WESTERN INDIA / ORIENTAL BANK CORPORATION, Bombay (Rupee System)
3. COMMERCIAL BANK OF INDIA / EXCHANGE BANK, Bombay (Rupee System)

MADRAS PRESIDENCY:
1. BANK OF MADRAS, Madras (Rupee System) // PRESIDENCY BANK
2. ASIATIC BANK (Star Pagoda / Arcot Rupee System)
3. MADRAS GOVERNMENT BANK, Madras (Star Pagoda / Rupee System)

Given that most of them were privately owned and lacked the royal charter/ parliamentary act empowering them to issue banknotes & paper money, their cannot be said to be legal tender, for their region of circulation. However, in the absence of any central bank, they continued issuing paper money. The Paper Currency Act of 1861, conferred upon Government of India the monopoly of Note Issue bringing to an end note issues of Private and Semi-Government Presidency Banks.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#2
June 06, 2020, 01:30:43 AM
Introduction to the Presidency banks

The Presidency Banks were established by the British East India Company as Commercial banks for the presidency administration. However, in the absence of a central bank, the Presidency banks acted as quasi-central banks, as did their successors, until the Reserve Bank of India was established in 1935. They engaged in commercial activities in the presidency administration regions, & printed banknotes for circulation in the region among other such activities. The Bank of Calcutta, The Bank of Bombay and the Bank of Madras were established by the British East India Company administration.


1. Bank of Calcutta / Bank of Bengal (2-June-1806 to 27-January-1921)

Formed mainly to fund General Wellesley's wars against Tipu Sultan and the Marathas, it was the one of the first banks of India and was renamed as the Bank of Bengal on 2-January-1809. The bank opened branches at Rangoon in 1861, Patna in 1862, Mirzapur in 1862, and Benares in 1862. When it became known that the bank intended to open a branch at Dacca, negotiations began that resulted in Bank of Bengal in 1862 amalgamating Dacca Bank (est. 1846). Dacca Bank did not issue banknotes (till it merged with the Bank of Bengal), while the Bank of Bengal issued banknotes for circulation in the Calcutta Presidency Region.


2. Bank of Bombay (15-April-1840 to 27-January-1921)

The Bank of Bombay was the second of the three presidency banks of the Raj period. It was established, pursuant to a charter of the British East India Company, on 15-April-1840. Given the absence of any central banking institution, the bank indulged in activities performed by a central bank. The bank also printed banknotes for circulation in the Bombay Presidency Region.


3. Bank of Madras (1-July-1843 to 27-January-1921)

The Bank of Madras was formed in 1843 as a joint stock company with a capital of Rupees 3 million by the amalgamation of Madras Government Bank (1806), Carnatic Bank (1788), the British Bank of Madras (1795), and the Asiatic Bank (1804). Bank of Madras had a branch network spread into all the major cities and trade centers of South India, including Bangalore, Coimbatore, Madurai, Mangalore, Calicut, Tellicherry, Cochin, Alleppy, Cocanada, Guntur, Masulipatnam, Ootacamund, Nagapatnam, and Tuticorin. It also had a branch in Colombo, British Ceylon, now called Sri Lanka. The Bank of Madras, in the absence of any central banking authority during that time, also conducted certain functions that are ordinarily a preserve of a central bank. It also issued banknotes for circulation in the Madras Presidency Region.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#3
June 06, 2020, 01:31:42 AM
The Imperial Bank of India

The Imperial Bank of India was formed on 27-January-1921, by the resulting merger of the 3 Presidency banks- the Bank of Bengal, the Bank of Bombay, & the Bank of Madras. As per it's Royal Charter, it acted as the central bank of the British raj in India, until the formation of the Reserve bank of India in 1935. It issued bank notes for the Government of India (British Raj) in the name of the British Crown. The Bank was 20% Government owned, while 80% og it was held privately.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#4
June 06, 2020, 01:34:30 AM
Private Banks


1. Bank of Hindostan, Calcutta (1770-1832)

It is considered as among the first modern banks in colonial India. The Bank of Hindostan (1770-1832) was set up by the agency house of Alexander and Company was particularly successful. It survived three panic runs on it. The Bank of Hindostan finally went under when its parent firm M/s Alexander and Co. failed in the commercial crisis of 1832. The private bank had issued banknotes during it's operations in Calcutta Presidency.


2. Commercial Bank, Calcutta (1819-1828)

The Bank was established in Calcutta Presidency region as a commercial bank in 1819. However, the bank failed in 1828 as a result of the crash of 1825, which had an effect on it's operations. The Bank used to print banknotes.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#5
June 06, 2020, 01:35:36 AM
Private Banks


3. Calcutta Bank, Calcutta (1824-1829)

The Bank was established in Calcutta Presidency region as a commercial bank in 1824. However, the bank failed in 1829 as a result of the crash of 1825, which had an effect on it's operations. The Bank used to print banknotes for circulation in the presidency region.


4. Union Bank, Calcutta (1829-1848)

The Bank was established in 1829, in Calcutta- the first by an Indian, Dwarakanath Tagore in partnership with British companies. The bank used to print banknotes for circulation in the Calcutta Presidency Region. However, it faced stiff competetion from other banks, majorly, the Presidency Bank, regarding the extent of circulation of it's banknotes. The bank failed in 1848.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#6
June 06, 2020, 01:36:48 AM
Private Banks


5. Bank of Western India / Oriental Bank Corporation, Bombay (1842-1884)

The bank was established in 1842 in Bombay, India, as the Bank of Western India. The bank moved its headquarters from Bombay to London in 1845, and opened branches in Colombo (1843), Calcutta (1844), Shanghai (1845), Canton (1845), Singapore (1846), and Hong Kong (1846). The Bank acquired the failing Bank of Ceylon in 1850, and obtained a royal charter for the merged institution under the name Oriental Bank Corporation in 1851. It was chartered in 1851 to allow competition with the East India Company's opium billing monopoly, which was unpopular in England at the time. From the 1870s, the bank's finances suffered greatly from bad loans to coffee plantations in Ceylon (now Sri Lanka), and to sugar plantations in Mauritius. On May 2, 1884 the bank suspended payment and it was subsequently liquidated in a Chancery proceeding. The Bank issued banknotes for circulation in it's areas of operation.


6. Commercial Bank of India / Exchange Bank, Bombay (1845-1866)

The Commercial Bank of India, also known as Exchange Bank was a bank which was established in Bombay Presidency (now Mumbai), in 1845 of the British Raj period. The bank failed in the crash of 1866,[1] after successfully operating for 20 years. The bank issued banknotes for circulation in the Bombay Presidency Region.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#7
June 06, 2020, 01:37:45 AM
Private Banks


7. Asistic Bank, Madras (1804-1843)

The Asiatic Bank was founded as one of the constituent banks of the Bank of Madras, in 1804. Though not much is not known, it is believed to have issued banknotes denominated in the currency of star pagoda/arcot rupee, from the banknote collection of Rezwan Razak. The Bank is said to have seized independent operations in 1843, when it was completely amalgamated to form the Bank of Madras.


8. Madras Government Bank, Madras (1806-1843)

The Madras Government Bank is known to have been founded at 1806 by Lord Bentict, the Governor of Madras Presidency in 1806. The notes issued by the bank were mostly used as treasury bills, than proper banknotes. Thus it cannot be said to be a proper issuing bank. The notes printed had simple designs and were printed in black. In 1843, the bank was amalgamated with others to form the Bank of Madras.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#8
June 06, 2020, 01:44:08 AM Last Edit: June 06, 2020, 02:04:35 AM by Chatterjee_Soubhik
Clarification
I know that there are other private banking institutions from the same time period. In this thread, I've highlighted only those who are recorded to have issued banknotes/ bills of exchange/ promissory notes. Many financial institutions (for eg, the Carnatic bank) did not issue such forms of paper money bearing their names, and thus are not highlighted in this thread.


References:

01. Live History: India's First Currency Note (https://www.livehistoryindia.com/forgotten-treasures/2018/10/05/indias-first-currency-note)
02. Wiki: Indian Rupee (https://en.wikipedia.org/wiki/Indian_rupee)
03. Wiki: Banking in India (https://en.wikipedia.org/wiki/Banking_in_India)
04. Banknote Museum: India- early Banks (http://banknote.ws/COLLECTION/countries/ASI/IND/IND-PRV.htm)
05. The Revised Standard Reference Guide to Indian Paper Money (http://www.indianbanknotes.com/)
06. RBI: Museum (https://www.rbi.org.in/scripts/pm_papermoney.aspx)
07. Wiki: Bank of Calcutta (https://en.wikipedia.org/wiki/Bank_of_Calcutta)
08. Wiki: Bank of Bombay (https://en.wikipedia.org/wiki/Bank_of_Bombay)
09. Wiki: Bank of Madras (https://en.wikipedia.org/wiki/Bank_of_Madras)
10. Wiki: Imperial bank of India (https://en.wikipedia.org/wiki/Imperial_Bank_of_India)
11. RBI: Museum- Early issues (https://www.rbi.org.in/scripts/pm_earlyissues.aspx)
12. Reports from East India Company Affairs (Parliamentary reports) Vol-10, Part-2 (Dec-06-1931 to Aug-16-1932)
13. RBI: Museum- Advent of Modern banking in India (https://www.rbi.org.in/scripts/ms_banks.aspx)
14. Livemint: Paul,Aniek "The chequered history of Kolkata's banks" (22 August 2015)
15. Wiki: Oriental Bank Corporation (https://en.wikipedia.org/wiki/Oriental_Bank_Corporation)
16. A Comprehensive Guide of Early Indian Paper Money (1770-1861), Xilbris Publishers


Please feel free to inform me on aditional information regaring this topic, any kind of rectification, or if you think I've missed out on something important.

regards,
Soubhik.
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#9
June 06, 2020, 02:05:45 AM
Attached:
Reports from East India Company Affairs (Parliamentary reports) Vol-10, Part-2 (Dec-06-1931 to Aug-16-1932)
page 499-500
Numismatics is the window to the history of the human civilisation.

Chatterjee_Soubhik

#10
June 06, 2020, 02:06:59 AM
Attached:
A Comprehensive Guide of Early Indian Paper Money (1770-1861), Xilbris Publishers
Section 3.1
Numismatics is the window to the history of the human civilisation.

Figleaf

#11
June 06, 2020, 10:52:54 AM
 :like:
An unidentified coin is a piece of metal. An identified coin is a piece of history.
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