Archive for June 7th, 2016

How Keynes advocated central policies to advocate population control…

June 7, 2016

Phillip Magness points to this interesting aspect of Keynes thinking. He gave a lecture tracking history of laissez faire and said there are three areas where laissez faire needs to be done away  and we need a central control  – banking, need for population control and savings/investment:



Remaining 5 State Banks to merge with SBI and with it merges their interesting histories..

June 7, 2016

This bit of news has been doing rounds for a while. The govt is looking to merge the 5 state banks with the parent SBI. There were 7 of such state banks and two of them i.e. State Bank of Saurashtra and State Bank of Indore already got merged in 2008 and 2010.

Indian banking is such a goldmine for historic banking research. We have a bit of everything here. But there is hardly any concern for these matters.

Take this case of State Banks which were floated by the Maharajas of the respective states.  There is a lot of interest in trying to document the linkages between kings and banks particularly in Europe. But it is difficult as we are talking about a very old period where documents etc were difficult to find and figure.

And here we have about seven of these banks coming up in the beginning of 20th century. Most of them formed as a central bank cum commericial bank to foster banking practices in the region. The question to ask is why as late as 20th century> These kingdoms have been there for a long time , how were things financed before these banks?  Most likely the reasons are going to be that these kingdoms were financed by so called indigenous bankers who lost their powers due to emergence of joint stock banking.  The scale of indigenous banking was also too small to foster any kind of development in the spirit of Gereschenkron.

This experiment of a maharaja setting up a bank  started from Bank of Baroda in 1908. Thankfully we know something about this history via the brilliant book by Prof Dwijendra Triapthi. Then there is the Baroda Banking Inquiry Committee report (1930) which also discusses about the bank. Basically the idea was same. The State wanted to develop its industries and the indigenous banks were not well equipped (funded) to manage this. So, a bank was floated on the likes of Bombay based joint stock banks. It moved away from Maharaja shadow and moved onto become a private bank. So it is not part of State Bank system.

Then came State Bank of Mysore in 1913 and other six banks. This blog dug out some info about these seven banks:


Status of Indian economic and business history..

June 7, 2016

An interesting and depressing interview of Prof Tirthankar Roy. Much is already known though but one would hope he says things are getting better.

He reviews a lot of trends in Indian economic and business history:


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