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In subcontinent banking system invent through informal banking practices. In which people
knows about the loans and usury. In those days people deposited their money with a person
who belong to a good family of good conduct and follow with rules.
Hundies:
The hundi system invent firstly in subcontinent. In many of the transforming funds of
their customers from one place to another place was held through hundi system. Then also
loans system invents in which people give their immovable properties and get loan in the
basis of their properties and securities. Much of the interest earn through farmers against the
mortgage of the standing crops.
Banking during Muslim rule in India
Basically India has much of the area cover by agriculture sector. So in which giving the
interest free loans and grants in cash on one hand and allowing paying land revenue. Many
loans give to the farmers in the production of crops. During Industrial development in sub
continent many small factories working in this region. And the permission of king state loans
given to the factories for increase the production. For this action much of the export of India
spread to foreign countries like china, East Indies and other pacific islands. In the 12 th century
some bankers as MULTANI and SHROFFS who were acting as the agent of government to
collect the revenue. On this time Muhammed Tughlag introduced the token currency, metal
currency and note currency. And on the regime of Akber central banking system also
introduce in India.
Emergence of public banks in India
When the English traders came in India. They introduced their own agency houses like
Alexander and Co and Fergusson and Co. Both these firms combined banking with other
businesses. First public bank in India start with the amount of 50 lacks in 1809. And this bank
allows charging max 12% interest per annum to their customers.
Joint stock bank
When the small banks failed in India British introduced the joint stock bank in 1860.
The 1 joint stock bank Punjab national bank was registered in 1895.
st
Exchange bank
These banks help in the foreign trade to the British. For this reason they introduced these
types of bank much of the foreign exchange currency and trade of India were easy through
exchange banks.