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Pioneering Small Savings


Pradosh Nath

FINANCIAL INTERMEDIATION IN A LESS DEVELOPED ECONOMY: THE HISTORY OF THE UNITED BANK OF INDIA
By Indrajit Mallick and Sugata Marjit
Sage, Delhi, 2008, pp. 274, Rs. 795.00

VOLUME XXXIV NUMBER 3 March 2010

This is a book that ends without an index. Even with the aid of new technology (software), preparing an index remains the most tedious job, particularly because the job has to be taken up only after the painstaking finalization of the print-ready copy. Nevertheless, an index of a book is as important as the title of the book. It is unfortunate that the publisher and authors have decided to ignore this fact for the book which deals with an important and not much explored aspect of the Indian economy. Besides the seminal works of Tripathi and Bagchi, there are quite a few essays and articles on the banking industry of Bengal and by Bengalese. Before turning the pages of the book, I wanted to check if some of those writings were used in the book. And it was then that the absence of the index was felt. This, however, does not take away the merit of the book that narrates the century-old history of a financial institution closely associated with the economic lives of Eastern India, particularly the rural economy. This is the history of a bank that pioneered the banking business of small savings. Another important merit of the book is its theoretical backdrop that has been used to understand and develop the historical narrative. The authors have chosen a chronological order for the chapters and expressed their apprehension that readers might be critical of that. They have chosen the events of changes in external business conditions and policy environments to trace the locus of the history of the Bank. As a result important theoretical issues have actually become footnotes, leaving the main text for more journalistic narration of the history of the United Bank of India, which was formed in 1950 through the amalgamation of four banks, namely, Comilla Banking Corporation Ltd. (incorporated in 1914), Bengal Central Bank Ltd.(incorporated in 1918), Comilla Union Bank Ltd.(incorporated in 1922), and Hoogly Bank Ltd.(incorporated in 1932). Some of these issues are related to development banking particularly in the context of a less developed economy characterized by an underdeveloped financial market. Can that market be activated by institutions of financial intermediation? Japan and Korea achieved a remarkable success through strict government control. Compared to that the Indian experience was much below expectations. The question of socio-economic conditions enabling the emergence of ‘financial entrepreneur-ship’ has been raised but not focused enough to arrive at any ...


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