Amol Agrawal on the Bankers who Built Modern India
Ideas of India
South Canara Banks and Systemic Risk
- Two types of systemic risks existed: global trade/banking and agriculture-related.
- Canara Bank's customers, primarily small-scale and landless farmers, were not involved in global trade, focusing on local agriculture.
- The South Canara region, unlike other areas in India, had consistent rainfall and avoided droughts and weather shocks, mitigating agricultural risks.
- The bank's strategy further reduced risk by lending small amounts to many people, diversifying its loan portfolio.
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