Viceroy: Lord Wavell

The Age Of Stars

Two wars, a central bank, and the sterling balances.

Vol. LXXIThe edition of 1945 · War and Depression16 records

Viceroy: Lord Wavell
Secretaries of State: Leo Amery · Lord Pethick-Lawrence
Finance Members: Sir Abraham Jeremy Raisman · Sir Archibald Rowlands
RBI Governor: C. D. Deshmukh

Sterling balances

£1,254m

+76.9% on 1944

failed

Indian banks (all) fail

207 banks, Rs 533 lakh paid-up capital, 1946–50

Number of bank failures and paid-up capital of failed banks: 1945, 27 banks, Rs 5 lakh; 1946, 27, Rs 9 lakh; 1947, 37, Rs 87 lakh; 1948, 45, Rs 179 lakh; 1949, 53, Rs 117 lakh; 1950, 45, Rs 140 lakh; 1951, 62, Rs 62 lakh. For 1946–50 together, 207 banks failed with total paid-up capital of Rs 533 lakh, against 365 banks and Rs 68 lakh in the war years.

VerifiedOfficial record. Source: RBI, History of the Reserve Bank of India, Vol. I, p. 730

Remittances and London accounts

Other₹562 croreIndia's merchandise export surplus, 1939-40 to 1944-45
Other2,023 USD mnUS Lend-Lease exports to "China and India" (reported jointly, not separately) to 31 March 1945
Other39,000 USD mnTotal US Lend-Lease aid to all United Nations, March 1941 to 31 March 1945 (19th Report on Lend-Lease, May…
Other₹76 croreIndia's reciprocal aid (reverse Lend-Lease) to US forces in India, 1944-45
Other20 INR crore per yearThe total amount spent by all the rulers on themselves and their families before integration is put by Menon…
Sterling balances₹1,363 croreRBI sterling holdings at end-March 1945, Vakil's continuation of the RBI table; OCR digits
Sterling balances£1,254mIndia's sterling balances at end-1945
War contribution₹357 croreSterling payments by HMG, 1944–45, from Vakil's continuation table; OCR digits

And 1 more in the Supplement.

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Banking

5 items

Reserve Bank of India · 1 August 1945

Reserve Bank of India: Establishment of a full-fledged Department of Research and Statistics and a Department of Banking Operations

two new departments

VerifiedOfficial record. Source: RBIH1

Government of the United Kingdom · 6 December 1945

Government of the United Kingdom: The Anglo-American Financial Agreement ("the Financial Agreement" in later British documents) is signed; it…

The Anglo-American Financial Agreement ("the Financial Agreement" in later British documents) is signed; it provides for the US loan to Britain and contains the sterling-balance conditions that later constrain India. Section 10 requires free convertibility of all sterling balances released after 15 July 1947

VerifiedOfficial record. Source: FRUS48v05p2d48

industrial and rural credit

Industrial finance and rural credit planning

The RBI played an active role in post-war proposals for special institutions for financing industry and for rural credit, including concessional credit to the co-operative sector

VerifiedOfficial record. Source: RBIH1

the rulers

Political Department privy-purse formula, agreed with a Sub-committee of the Chamber of Princes

The first precedent for the privy purse: a percentage of the average revenue of the previous five years, 25% up to Rs 5 lakh; 20% for Rs 5–10 lakh; 15% for Rs 10–25 lakh; 10% for Rs 25 lakh–1 crore; 7% for the second crore; 5% for the third; 3% for the fourth; and an overall maximum of Rs 25 lakh above Rs 4 crore. Menon, who rejected it as "on too generous a scale", records this as the product of consultation between the Political Department and a Chamber of Princes sub-committee, the clearest documented instance of collective princely financial bargaining

VerifiedOfficial record. Source: MENON1956, ch. "The Orissa and Chattisgarh States"

Reserve Bank of India · 1 January 1945

Reserve Bank of India: Wave of Indian bank failures after the war, not quantified by me

The published series is BMS1954 Section 2, Table 22 ("Bank failures, number and capital, All-India and by State, annual"); the search index also shows a table headed "Year (January–December) / Number of Banks Failed / Paid-up Capital of Failed Banks", which a sibling file records as unobtainable. Not found.

UnconfirmedOfficial record. Source: BMS1954` (series identified; values not extracted)

The Ledger: what was borrowed in 1945

Full ledger →

Creditor	Instrument	Amount	US$ m	Status	Grade
India (RBI / Government of India) as creditor; debtor HM Treasury / Bank of England	Sterling balances, peak (1945-12-31)	1,311 GBP	5,283	Peak. Pre-slice, context row.	reported

Rows are listed as recorded. Some describe the same loan from different sources and must not be added together.

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