Viceroys: Lord Northbrook, Lord Lytton

The Age Of Stars

Silver rupee, Presidency Banks, and money drawn on India from London.

Vol. IIThe edition of 1876 · Crown Rule18 records

Viceroys: Lord Northbrook · Lord Lytton
Secretary of State: Lord Salisbury

Bank of Bengal rate

6.76%

+1.1 pts on 1875

Bank of Bombay rate

6.98%

−0.25 pts on 1875

Bank of Madras rate

6.38%

−0.62 pts on 1875

Council Bills

₹13.75 cr

+17.1% on 1875

Home Charges

£14.58m

+7.1% on 1875

Bank of Bengal · 1 January 1876

The Government of India sold its 2,200 shares to the Bank of Bengal's directors at a premium of 22.5 per cent

2,200 shares of Rs 1,000 at a 22.5 per cent premium

2,000 shares were cancelled and 400 (Rs 500) shares sold for the bank's benefit.

VerifiedOfficial record. Source: The Presidency Banks Act, 1876 (Act XI of 1876), text printed in The Unrepealed General Acts of the Governor General in Council from 1867 to 1876 (Calcutta, 1887), pp. 553-584 (archive.org)

Read the feature

Named for India, Registered in LondonThe exchange banks answered to the City; a Presidency Bank was majority Indian-owned. What the records say about who owned colonial India's banks.What India Paid London, Head by HeadCouncil Bills, Home Charges and opium as the official books of British India recorded them, set beside what Naoroji and Dutt said they meant.

Remittances and London accounts

Council Bills₹13.75 croreAmount of bills (and telegraphic transfers) drawn on India by the Secretary of State; sum received in England…
Home Charges£14,577,158Net disbursements in England (excluding discharge of debt and all capital transactions), the 'Home Charges'…
Opium revenue₹9.12 croreGross opium revenue, all India = Rs 91224600 (tens of rupees in source); net receipts = Rs 62808130 (tens)

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Banking

14 items

Presidency Banks (all three) · regulation · 1 May 1876

The Presidency Banks Act 1876 (Act XI of 1876) came into force, repealing the Bengal and Madras Acts and the…

Bengal capital reduced by Rs 20,00,000 (to Rs 2 crore); Madras capital reduced by Rs 6,25,000 (to Rs 50 lakh)

The Presidency Banks Act 1876 (Act XI of 1876) came into force, repealing the Bengal and Madras Acts and the Bombay Acts, reducing the Bank of Bengal's capital by Rs 20 lakh and the Bank of Madras's by Rs 6.25 lakh, and reconstituting the New Bank of Bombay, Limited as the Bank of Bombay.

Bank of Madras · 1 January 1876

The Government of India sold its 562.5 shares to the Bank of Madras's directors at a premium of 10 per cent…

562.5 shares of Rs 1,000 at a 10 per cent premium, plus 62.5 shares bought and cancelled

The Government of India sold its 562.5 shares to the Bank of Madras's directors at a premium of 10 per cent; the directors had earlier bought and cancelled a further 62.5 shares.

Presidency Banks (all three)

The Presidency Banks Act, 1876 (Act XI of 1876), s.10 and ss.13-16 (capital)

Bank of Bengal capital fixed at Rs 20,000,000 in shares of Rs 500 (divisible into half shares), increaseable to Rs 30,000,000; Bank of Madras Rs 5,000,000, increaseable to Rs 12,000,000; Bank of Bombay Rs 10,000,000, increaseable to Rs 20,000,000. Increase or reduction required a special resolution and the previous sanction of the Governor General in Council, with a one-third-in-number, one-half-of-capital quorum.

Presidency Banks (all three)

The Presidency Banks Act, 1876, ss.24-28 (directors)

Board of six directors in the first instance, thereafter not fewer than six and not more than nine, fixed by special resolution and elected by the general or special meeting; three a quorum; two directors to retire by rotation annually; a director must hold unencumbered stock or shares of the bank of at least Rs 10,000 nominal; a director of any other joint-stock bank in British India, or a salaried officer of Government not specially authorised by the Governor General in Council, is disqualified; no two partners of the same mercantile firm may serve together. No Government-appointed directors.

Presidency Banks (all three)

The Presidency Banks Act, 1876, s.36 (business the banks may transact)

Permitted business includes lending on Government of India and UK securities, on bonds and annuities charged on Indian revenues, on stock or shares of railway or other companies whose interest is guaranteed by the Secretary of State, on municipal and port-trust debentures, on bullion and goods, and on accepted bills; the drawing, discounting, buying and selling of bills of exchange and other negotiable securities 'payable in India, or in Ceylon'; the making and issuing of bank-post-bills and letters of credit payable in India or Ceylon, otherwise than to bearer on demand; the buying and selling of gold and silver; deposits and cash accounts; agency business; borrowing in India; and acting as banker to the Government under agreement with the Secretary of State.

Presidency Banks (all three)

The Presidency Banks Act, 1876, s.36(m), (m2) (foreign exchange)

The banks could buy, for the purpose of meeting bills or letters of credit, 'bills of exchange payable out of India, at any usance not exceeding six months', and could draw bills and grant letters of credit payable out of India for remittances by principals. The popular statement that the presidency banks were forbidden foreign-exchange business is therefore too strong as regards the 1876 Act: a limited out-of-India bill business was expressly authorised, though not general dealing in exchange, which the Government had refused in 1861-63.

Presidency Banks (all three)

The Presidency Banks Act, 1876, s.37 (business the banks may not transact)

No loan or advance for a longer period than three months; no lending on the bank's own stock or shares; no lending on the mortgage of or other security over immovable property; no discounting or lending beyond a bye-law maximum to a single individual or firm; no discounting of paper lacking the responsibility of at least two unconnected persons or firms, except against the securities listed in s.36(a)(1)-(5); no paper with more than three months to run (four months for the Bank of Madras on Ceylon paper); overdrawing without security allowed up to Rs 2,000 only.

Presidency Banks (all three)

The Presidency Banks Act, 1876, ss.38-39 (Government business)

All sums payable by or to the Secretary of State for India in Council or the Governor General in Council at the General Treasuries of Fort William, Madras and Bombay were made payable at the offices of the respective banks, and presentment at the General Treasuries was replaced by presentment at the banks, until at least fourteen days after notice by the Governor General in Council that the bank would no longer act as banker to the Government. The bank was to be paid on terms settled with the Governor General in Council.

Presidency Banks (all three)

The Presidency Banks Act, 1876, ss.40-42 (offices and branches)

Offices fixed at Calcutta, Madras and the Island of Bombay. The banks might maintain existing branches and establish new branches or agencies within their own presidency at the directors' discretion; branches outside the presidency required 'the previous consent of the Governor General in Council, and subject to such restrictions as to the business to be transacted as he thinks fit in each case to impose (such consent and restrictions being notified in the Gazette of India)'. An agency in Bombay, Calcutta or Madras could not compete with its own principal bank.

Presidency Banks (all three)

The Presidency Banks Act, 1876, ss.43-46 (accounts, dividends, reserve fund)

Books balanced on 31 December and 30 June; a signed balance statement to be sent to a Secretary to the Government of India (and to the Local Government for Madras and Bombay); the Governor General in Council entitled at all times to require information and the production of any document, and to require publication of statements of assets and liabilities at such intervals and in such form as he thought fit. Dividends determined half-yearly; the directors may set aside a reserve fund out of profits and invest it in the s.36(a)(1)-(4) securities, and apply it to meet contingencies or equalise dividends.

Presidency Banks (all three)

The Presidency Banks Act, 1876, s.56 (voting scale)

Votes scaled by holding: 1 vote at Rs 2,000 of stock or shares, 6 votes at Rs 50,000, 8 votes at Rs 1,00,000, 10 votes at Rs 1,50,000, 12 votes (the maximum) at Rs 2,00,000.

Presidency Banks (all three)

The Presidency Banks Act, 1876, s.66

Nothing in 33 George III, sess. 2, cap. 52 was to render it unlawful for a servant of Government, or for a Judge of a High Court, to become a member of a corporation established under the Act.

Indian revenues

Loss by exchange on the Home Charges

From the depreciation of silver the rupee fell from 1s 10.9d (1874-75) to 1s 2.98d (1892-93), so a sterling Home Charge of ~£16m cost Indian revenues progressively more rupees. The Statistical Abstract records the 'loss by exchange' on the Secretary of State's bills against 10 Rs = £1: £2,163,713 (1877-78) rising to £9,946,200 (1892-93).

VerifiedOfficial record. Source: Statistical Abstract 21st number table 57; ; 39th number table 84; https://dsal.uchicago.edu/statistics/1894_excel/ (dsal.uchicago.edu)

Indian exchange and silver

Select Committee on the Depreciation of Silver (House of Lords)

Inquired into the fall in the gold price of silver; its report (pp. xix-xxxv, 1876) argued that the Secretary of State's Council Bills competed with bullion remittances and so checked the flow of silver to India. Ambedkar (1923) rejects that argument, and cites Marshall's contrary evidence (Q. 10,164-76).

ReportedOfficial record. Source: Select Committee on the Depreciation of Silver, Lords Paper 178 of 1876; cited in Ambedkar, The Problem of the Rupee (1923), ch. 4 (archive.org)

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