Viceroy: Lord Wavell

The Age Of Stars

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

Vol. LXXIIThe edition of 1946 · War and Depression20 records

Viceroy: Lord Wavell
Secretary of State: Lord Pethick-Lawrence
Finance Members: Sir Archibald Rowlands · Finance Member, Viceroy's Executive Council
RBI Governor: C. D. Deshmukh

Banking · run · 1 November 1946

One Bengali scheduled bank, affected by withdrawals, asked the RBI for accommodation against shares without…

deposits down Rs 44 lakh; advances up Rs 1 crore; 63 per cent of advances against shares

One Bengali scheduled bank, affected by withdrawals, asked the RBI for accommodation against shares without disclosing that its deposits had fallen by Rs 44 lakh between May and November 1946; the fall was masked because demand loans from other banks offset it, while the bank increased advances by Rs 1 crore. Despite a May 1946 RBI circular warning against credit for speculation in shares, advances against shares were 63 per cent of its total advances in December 1946, at margins of only 25 to 30 per cent. The RBI refused the request, partly because advances against shares were prohibited by s.19 of the RBI Act.

VerifiedOfficial record. Source: RBI, History of the Reserve Bank of India, Vol. I, pp. 730–731

Remittances and London accounts

Other₹426.4 croreIndia's excess of exports over imports during the war, total as printed in Vakil's table, conflicts with…
Sterling balances₹1,724 croreRBI sterling holdings at end-March 1946, Vakil's table; consistent with Kaushal's Rs 1,724.70 crores
Sterling balances₹1,725 croreIndia's accumulated credit balance in sterling, stated in rupees as at May 1946
Sterling balances£1,293mIndia's accumulated credit balance in sterling, converted by me at £1 = Rs 13.333, derived
Sterling balances£3,480mPeak of total UK sterling liabilities to all holders, end-1946 ("a peak of £3,480 million at the end of 1946")
Sterling balances£35mIncrease in the RBI's sterling holdings between 1 February and 29 March 1946, per Dalton in the Commons: "by…
Sterling balances₹1,733 croreIndia's accumulated sterling balances "to the extent of nearly Rs. 1,733 crores" by March 1946, "besides the…
Sterling balances₹426 croreSame, as a pre-war debt comparison: the pre-war sterling debt of India repatriated out of the war balances

And 8 more in the Supplement.

Use ← and → to turn the page.

Banking

3 items

Interim banking legislation · regulation · 1 January 1946

Interim banking legislation: Interim measures brought into force

VerifiedOfficial record. Source: RBIH1 ch. 16

all Indian banking companies

Interim banking legislation

Interim measures brought into force from 1946 and amended with retrospective effect from 20 September 1947, later placed on a permanent basis in the Banking Companies Act. The RBI's own assessment is that they "helped achieve an improved standard in the working of banks and also restrained the overgrowth of banks"; bank failures fell from 119 in 1939 to 27 in 1945, against 51–88 a year in 1935–38.

VerifiedOfficial record. Source: RBI, History of the Reserve Bank of India, Vol. I, ch. 15 and ch. 22

Banking companies

Banking Companies Bill, 1946

Listed in RBIH1's table of contents; interim legislation of 1946 brought into force recommendations of the relevant committee

UnconfirmedOfficial record. Source: RBIH1 ch. 16 (contents)

Turn to another year

1875 to 2017