Indian Banks: The Story of Indian Bank

Indian Bank History

Indian Bank was started in the year 1907 and commenced banking operations on August 15, 1907.

In the aftermath of the crash of the Arbuthnot Bank, several things happened. Sir Arthur Lawley, Governor of Madras and himself a victim of the bankrupt company, launched a public fund to raise money to help the weaker sections who had lost everything in Arbuthnot’s. Amongst the scores of letters in The Hindu on the scandal, there was one from Dewan Bahadur R. Raghunatha Rao, a distinguished administrator and a prominent citizen, that suggested the starting of an Indian bank “now that European integrity and honesty (have come) under a cloud.” And the most constructive thing to come out of the scandal was when a young vakil, V. Krishnaswamy Iyer, later to become an eminent lawyer and High Court Judge but at the time just making his way up and acting on behalf of several Arbuthnot creditors, took his cue from the letter that appeared in The Hindu and set out with a will to promote an Indian bank. He got together eight other prominent citizens of Madras who also felt, in the words of the historian of the bank, R.K. Seshadri, “that a bank which depended on the savings of those in the South had to be incorporated locally and managed by the Indians who were locally known and respected”. Not one of the promoters was a Nagarathar though they were to provide a substantial part of the funding.

Indian Bank Founder V. Krishnaswamy Iyer
Indian Bank Founder V. Krishnaswamy Iyer
Dewan Bahadur S. Rm. M. Ramaswami Chettiar, director, Indian Bank
Dewan Bahadur S. Rm. M. Ramaswamy Chettiar, founder director, Indian Bank
Rajah Annamalai Chettiar, Director, Indian Bank
Rajah Annamalai Chettiar, Director, Indian Bank

With the cooperative bank’s focus on the cooperative movement, the capital of the Presidency, the chief city of the South, sorely lacked an Indian joint-stock bank. It was to remedy this that Krishnaswamy Iyer and his co-promoters sent out their first circular on November 2, 1906, inviting the public’s views on the possibility of starting “a Native Bank in Madras”.

The encouraging response they received prompted them to call a meeting at Krishnaswamy Iyer’s house. At this meeting it was decided to go ahead with plans to establish an Indian bank. What resulted was the Indian Bank Limited, which was registered on March 5, 1907 and opened its doors for business on August 15th.

From their very first circular it was clear that the promoters were relying on “the indigenous bankers” of South India, the Nattukottai Chettiars, for finance and the business acumen to found the bank and make a success of it. In the event, though there were only three Chettiars among the 22 who attended the historic meeting at the Mahajana Sabha Hall, the community rallied around its leaders and helped finance the bank and run it successfully till nationalisation changed bank administration.

The first directors of the bank were Lodd Govind Doss, Rm.M.St. Chidambaram Chettiar, Dewan Bahadur S.Rm.M. Ramaswamy Chettiar (uncle of Sir M.Ct. Muthiah Chettiar, and who the next year made way for his younger brother, Annamalai Chettiar, later the Rajah of Chettinad), T. Seetharama Chetty, Khan Bahadur Mohamed Abdul Azeez Badshah Saheb, who was the honorary Turkish Consul in Madras, Murledoss Ramdoss, V. Krishnaswamy Iyer, Dewan Bahadur M. Adinarayana Iyah and C. P. Ramaswamy Aiyar. Other directors who joined the Board later the same year were Dewan Bahadur Govindoss Chatoorbhoojadoss, Nalam Lakhsmi Kantaguru and P.M.A. Muthiah Chettiar.


Indian Bank Logo

Logo: In keeping with the times, the Indian Bank’s new logo consisting of three circling arrows arranged around a central point was approved in July 1978. The three arrows stood respectively for Savings, Investment and Surplus. Saving leads to investment, investment to income, and income in turn to surplus or saving, in a circular chain, signifying ever-increasing prosperity. Source

Indian Bank - Cheque
Notice how the branding has changed?

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