How many banks migrated from West Pakistan to India?

Yesterday, I had blogged about Pakistan bound banks during Partition. In the post, I pointed to two broad types of banks.

  • One which was Pakistan bound (East and West)
  • Two those who migrated from India to Pakistan and vice-versa.

We had shown most banks were in the first category. Only Habib Bank had migrated from Bombay, India to Karachi, Pakistan.

What about the banks which migrated from West Pakistan to India? (We keep our discussion to West Pakistan here as not much happened in East Pakistan.)

Again, RBI Statistical tables (1947) provide several answers and raise questions.

There were a total of 17 banks which migrated from West Pakistan to India. Around 14 were from Lahore, 2 from Rawalpindi and one from Sialkot.

Lahore 14
Rawalpindi 2
Sialkot 1
Grand Total 17

When we see classes of banks, then 7 A1 banks had migrated from Lahore.

No of Banks
Lahore Total  14
A1 7
A2 2
B 3
C 2
Rawalpindi Total  2
A1 1
A2 1
Sialkot
B 1
Grand Total 17

Where did these banks migrate to? All over Punjab and Delhi. There was no one place.

Amritsar Delhi Hoshiarpur Jullunder Ludhiana Panipat Grand Total
Lahore 3 2 2 2 4 1 14
Rawalpindi 2 2
Sialkot
Grand Total 4 2 2 2 6 1 17

It is also interesting to note that most of these 17 migrations happened before Partition date of 14/15 August 1947. Most of the migrations were in month of June-1947 (why should this be?). Even in month of June-1947, 7 of the 8 migrations were from Lahore.

Month of Migration  No of banks
May-47 1
Jun-47 8
Jul-47 2
Aug-47 2
1947 (dates not there) 4
17

We have financial data of only 6 of these banks in 1947. Barring New Bank of India, deposits declined in all the other 5 banks. This is again unlike the experience of other A1 banks based in Pakistan where deposits rose in 1947 compared to 1946.

Class Name Deposits Branches Branches in Pakistan
A1 Narang Bank of India 1945 8197 6
1946 7187 6
1947 5621 4
A1 National Bank of Lahore 1945 32776 19
1946 52196 35
1947 51844 36 22
A1 New Bank of India 1945 54426 27
1946 71425 39
1947 78156 26 1
A1 Oriental Bank of Commerce 1945 7204 8
1946 12951 30
1947 6829 25 9
A1 Prabhat Bank 1945 7259 11
1946 6972 18
1947 5579 16 6
A1 Punjab National Bank 1945 515246 196
1946 620230 279
1947 596400 275 79

 

From the 8 A1 banks, 3 went on to become one of the 20 largest banks in India. They were amidst the 20 nationalised banks in India:

  • Punjab National Bank found in Lahore in 1894 (migrated to Delhi), Formed by eminent Swadesis led by Lala Harkishen Lal.
  • New Bank of India found in Lahore in 1936 (migrated to Amritsar and then later to Delhi; merged with PNB in 1992). This bank was established by Prof Mulki Raj Kohli, an economics professor turned banker. In this way, its history is similar to Bank of Maharashtra  which was formed by an economist Prof VG Kale in Pune in 1935!
  • Oriental Bank of Commerce found in Lahore in 1943 (migrated to Ludhiana and then to Amritsar and finally to Delhi). Formed by Rai Bahadur Sohan Lal.

The other 14 banks were merged/liquidated.

It is interesting to note that not one bank migrated from Karachi. Infact, based on our research yesterday, we realised there were no major banks in Karachi barring Habib Bank which too moved from Bombay. Lahore was the major banking centre in West Punjab (which was included in Pakistan) financing agriculture and industry. Karachi though became the major port of the area,the banking was perhaps in hands of local indigenous bankers. Also, Western Coast from trade and banking was mainly done via Bombay and that could have been one of the reasons for non-development of Karachi as financial centre. This could be another reason for Jinnah to ask Habib Bank to migrate to Karachi instead of Lahore which till then was a major banking centre.

It will be fascinating to document evolution of Karachi as a financial centre..

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