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..