What’s in a name? Ask banks.

#1 Dec 24th, 2017, 13:56
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I recently came across an article which said Lucknow Bank of Montreal celebrates its 200th anniversary. For a moment I thought there was a bank in Lucknow by the name which may have started there and then moved elsewhere. Digging a bit deeper, I discovered that the reference was to Bank of Montreal branch in Lucknow—Lucknow, Ontario, that is. (The Canadian town's name, it seems, was inspired by the 1857 mutiny.)

William Shakespeare famously wrote in Romeo and Juliet, “What's in a name? That which we call a rose by any other name would smell as sweet.” Not really. Names do matter and we need to look at history of bank names to understand their importance.

The historian Charles Kindleberger in a 1974 paper made the following observation: “The affinity of finance and locations is underlined by the fact that so many banks have places rather than functions (Merchants, Farmers, etc.) in their names. (Private banks, where confidence is all-important, are named for people).”

Take Bank of Montreal, for instance—the name emphasizes the place of origin, an aspect of the bank that the founders perhaps wanted to stress. And in some private banks like, say, JPMorgan or Rothschild, the names of their promoters signalled in a way the quality of the bank.

The history of banking in India suggests how the names of banks have not just changed over the decades, but also responded to socio-political forces in the country. Let us try and unravel this history.

India had an established banking culture long before the British bought their own style of commercial banking here. Indigenous banks and moneylenders dotted the country. The banks, like the private banks in Kindleberger's classification, were named after people—the Seths, the Chettiars, the Rastogis and so on. These bankers served several kingdoms and relied heavily on their reputational capital.

The first bank established by the British in India was Bank of Hindostan in 1770 in Calcutta (though later research suggests they formed banks even earlier). The name makes it clear that the bank was of Hindostan, or India; location-based naming was a convention followed by many early British banks (the Bank of England, for instance). As the British conquered one princely kingdoms after another, this convention spread across the country.

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