Ideas of India Amol Agrawal on the Bankers who Built Modern India
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Aug 29, 2024 Amol Agrawal, an author and economics professor at Ahmedabad University, dives into the evolution of banking in India, shedding light on both colonial and post-colonial influences. He discusses the unique attributes of South Canara’s banking success, including fostering community trust and resilience during economic turmoil. The conversation also addresses the challenges of bank failures, the impact of nationalization, and the innovative pygmy deposit scheme aimed at enhancing financial inclusion for the underbanked.
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Long Arc Of Indian Private Banking
- Modern banking in India evolved through waves of localized banks, commodity booms, and regulatory changes rather than a single linear path.
- RBI's creation and the Bank Regulation Act centralized oversight and redefined what counted as a bank.
Loans Before Deposits
- Early Indian finance prioritized lending and currency issuance more than mobilizing small depositor balances.
- Nationalist goals and Swadeshi politics later shifted banks toward deposit mobilisation and retail banking.
Banks Sparked Local Industry
- South Canara banks proactively seeded local industry by offering targeted credit before large-scale industrialization occurred.
- That reverse sequence made the region both a banking and development outlier.