What are the significant differences between the Nakarattar bankingsystem and the modern Western banking system, according to the author?
Answers
Under colonial rule, the Nattukottai Chettiar or Nakarattar caste organized themselves into a complex, segmentary network of interdependent family merchant-banking firms. Each firm traded individually in commodities trading, money lending, domestic and overseas banking operations, or industrial investment. But beyond this - making possible every other commercial venture in which it engaged - each family firm operated as a commercial bank: taking money on deposit and drafting hundis and other financial instruments for use in the transfer of loanable capital to branch offices and to other banks. As a result, every Nakarattar firm was tied together with all of the others to form a unified banking system, playing a major role in the credit markets of South Asia and the Indian Ocean rim.