CHAPTER VI

 

BANKING, TRADE AND  COMMERCE

(i)

Banking and Finance

(a)

History of Indigenous Banking

(b)

General Credit Facilities

©

Insurance and Small Savings

(d)

Currency and Coinage

(ii)

Trade and Commerce

(a)

Course of Trade

(b)

Trade Centres

©

Co-operation in Trade

(d)

State Trading

(e)

Merchants’ and Consumers’ Associations and Organs for the Dissemination of Trade News

(f)

Weights and Measures

(g)

Storage and Warehousing

 

(A)  Banking and Finance

 

(a) History of Indigenous Banking

 

            Banking in various forms has been practiced in India since time immemorial. In ancient literature, there are quite a number of references to the very efficient system of banking in India. This system financed trade and commerce in an age when the West had not even evolved the monetary system. This system continues working to the present day in spite of the opening of a large number of joint-stock banks on modern lines. Since very early times, the people have been accustomed to the use of credit instruments, e.g. hundis. Money lending has also been going on from time immemorial. The Amritsar District, more particularly the Amritsar city, has always enjoyed special significance. Soon after its foundation, Amritsar became famous not only as the holiest seat of the Sikh religion but also as a great entrepot os trade and commerce in the whole of the north-west region. Through the efforts of the Sikh Gurus and because of the patronage of the Lahore Durbar, the city became the biggest clearing-house for the vast variety of products from the remote Himalayan fastnesses of Yarkand, Samarkand, Leh, Lahul and Spiti and from centers as far away as Afghanistan and Persia. Amritsar reached its heyday in religious and political ascendancy during the days of the valiant Sikh ruler, Maharaja Ranjit Singh. It continues to be a leading center in trade and commerce and also maintains its supremacy in textiles. In the field of religion, too, Amritsar occupies a unique position, because the holiest Sikh religious seats, viz. the Akal Takht and the Golden Temple, which draw a perennial stream of its votaries and admirers from far and near, are located here. These religious seats are the most important historical factors which have promoted finance, trade and commerce and also money-lending in the district.

            During the early period, money-lending was very simple, because it was the sahukar( indigenous money-lender) who was almost the sole source of finance. His clients were persons who were intimately acquainted with him. Money-lending involved very little of writing and functioned smoothly because of the personal contacts between the lenders and the borrowers. It is well known that in the early years of his kingship, Maharaja Ranjit Singh (as the head of the Sukarchakia Misl) had carried on his major financial transactions with Rama Nand1, a famous banker of Amritsar, because he could not set up a State treasury or appoint a treasurer of his own. The arrangement was discontinued when he organized his Accounts Office at Lahore in 1811 or thereabout. Till them, the traditional type of banking facilities were provided by the local financiers2 to  the promising prince, who soon became the ruler of the whole of the Punjab. In the beginning, the money-lenders fulfilled the emergent needs of the borrowers and were respected for their wealth as well as for their position, but gradually some defects crept into the system. The instinct of greed turned the money-lenders into Shylocks. The practice of usury came into vogue and exorbitant rates of interest came to be charged. The money lenders also resorted to the malpractice of fictitious entries. Apart from higher rates of interest, the borrower was under personal obligation to the money lender till he was able to clear his debt. There were numerous instances where the interest multiplied many times the principal, and the borrower, being unable to pay the debt, had to part with his belongings, including land. Before the advent of the British, this problem of rural indebtedness was not very acute. The cases were handled by the village panchayats. The panchayats watched the interests of both the borrower and the money-lender, and never allowed the money-lender to resort to extreme measures like the attachment of land and property. They also prevailed upon the money-lender to be considerate towards the borrower. Being a shopkeeper as well as a money lender, the sahukar generally preferred to get the produce, on which, without much effort, he could reap a double profit, one from the producer to whom he lent the money and the other from the consumer to whom he sold the produce.  This continued to be the case during the first twenty years of the British rule. After 1870,  circumstances changed. Land became a first rate investment which was always rising in value. As soon as he realized this thing, the money lender began to use it as an outlet for his rapidly accumulating capital, and, finding the investment more and more profitable, sought with increasing ingenuity to get the cultivator into his clutches and oust him from his land. He imposed such hard terms in his mortgages that a mortgage nearly always ended in sale. Land was, thus, becoming the property of the sahukar or money lender.

 

1The locality known as Bagh Rama Nand is believed to have been the estate of Rama Nand Saraf who had come to occupy a prominent position among local banders at Amritsar.

 

2As a result of the territorial expansion since 1799, Ranjit Singh’s dominion suffered a huge deficit and its revenue amounting to nearly Rs.30,00,000 per annum, had been mortgaged to Rama Nand, the rich banker of Amritsar, who alos kept Maharaja Ranjit Singh’s accounts of revenue receipts and expenditure.

 

            The various abuses in money-lending attracted the attention of the Government, which came out with came out with the requisite legislation to  safeguard the interests of the borrowers, i.e. the agriculturist. The Government realized the gravity of the problem of rural indebtedness and felt that unless some antidote was given, the evil might altogether alienate the rights of the tillers to the soil and pass on the land to the money lenders. This evil led to the passage of the Punjab Alienation of Land Act, 1900(XIII of 1900). Since then, the money lender has been content with the produce,  and a new class of agriculturist money-lender has come to the fore. The bulk of the usufructuary mortgage debt passed into their hands and they have rapidly increased their credit operations.

 

            The passage of the Punjab Alienation of Land Act, 1900 (XIII of 1900), however, did not better the lot of the tillers. The sahukar, deprived by the Act of the security of the land, could only lend up the limit of what could be repaid from the produce. But the agriculturist money lender, to whom the Act did not apply, could afford to lend up to the value of the land. He was at liberty to offer attractive terms to the tillers. He was more merciless than the rural money lender (sahukar) and was always on the look out for the misfortunes of the borrowers. The Act, thus, aggravated the difficulties of the borrowers instead of alleviating them.

 

            The passage of the Punjab Regulation of Accounts Act, 1930, the Punjab Relief of Indebtedness Act, 1934,  the Punjab Debtors’ Protection Act, 1936, and the Punjab Registration of Money lenders Act, 1938, adversely affected the village money lnders. This  created a scare in the minds of the moneylenders who restricted their credit operations. Consequently, a need was felt to create some agency  for providing finance  to the agriculturists. The Royal Commission on Agriculture recommended the development of co-operative  Societies Act was passed in 1904. Under this Act, the first Co-operative Thrift and Credit Society in the district was registered on 1st April, 1908, in the village of Pakharpura (Tahsil Amritsar) and the second society was registered in the village of Ramdewali (Tahsil Amritsar) on 3rd April, 1908. These credit societies were registered with unlimited liability and were successful in meeting the needs of the people of   rural areas. Gradually, the membership of the co-operative societies increased. The co-operative experience revealed that the societies must have some central institution for the facility of finance. Accordingly, the Co-operative Societies Act, 1912,  was passed, and it widened the scope and permitted the registration of secondary societies. Thus, there came into existence the Chetanpur Co-operative Bank Union, which was registered on April  5, 1919, for providing finance for its member societies. It was followed by other Co-operative Bank Unions formed at Tarn Taran, Mud Khokar and Vachhoa in the district. These small banking unions were subsequently amalgamated into the Central Co-operative Bank, which caters to the needs of co-operative societies of various types in the district.

 

            The passage of the various enactments by the Government also affected the agriculturist money-lender. He, therefore, explored other channels to invest his surplus funds, and , finally,  he was effectively checked when the Punjab Alienation of Land Act, 1900(XIII of 1900),  was repealed with the enforcement of the Constitution of the Republic of India on January 26, 1950.

 

BANKING, TRADE AND COMMERCE

 

(b)    General Credit Facilities

 

(i)  Indebtedness, Rural and Urban

 

            By indebtedness we mean the amount borrowed by the people from various sources for investment in various fields. Rural indebtedness is the amount borrowed by the agriculturists from various sources. These borrowings are to be used for the improvements in agriculture, for the purchase of improved agricultural implements, better seeds, fertilizer, etc. But the amount thus borrowed is not generally used for the purpose for which it is borrowed. The funds are used for other purposes because of the extravagant habits, orthodox customs and heavy expenditure on ceremonies by the farmers.

 

            The amount borrowed by the industrialists, traders and other business communities refers to the urban indebtedness. Contrary to the rural indebtedness, the amount borrowed is generally used properly in their respective establishments.

 

Rate of Interest.__  The Co-operative Societies advance loans at rates of interest ranging from 2 ½ percent to 8 ½  percent. The loans advanced under the State Ais ot Industries Act,  1935, carry interest from 2 ½  per cent to 6 ½  pre cent. The Joint Stock Banks advance loans against jewellery, ornaments, etc, at the interest rates of 6 to 12 per cent. The indigenous money lenders charge interest varying from9 to 36 per cent. The loans advanced by the unregistered money lenders carry much higher rate of interest, usually ranging from 60 to 100 per cent per annum. The scale of the rates of interest depends upon the nature of the loan and on the financial condition of the borrower. In some cases, the interest is recovered in kind and it is charged at harvest time. For instance a sahukar lends a quintal of wheat and he recovers one quintal and a half at the time of harvest in lieu of the loan.

 

            Usury has, however become out of fashion nowadays, because people have become  literate and adequate banking facilities are available to meet their demands. This system still exists in the remote corners of the district, where educational facilities are hardly available and the money lenders are making the best use of the backwardness of the people.

 

(ii)  Role of Private Money-lenders and Financiers

 

            Money-Lenders.__  The supremacy of the bania or village money-lender is still unchallenged in the field of rural finance. This is due to inadequate funds at the disposal of the Co-operative Department, and also due to the fact that the ruralpeople have not yet fully understood the meaning of co-operation. Moreover, they have not yet realized the benefit of thrift and saving. The whole co-operative structure is mainly based on credit, and thrift is there only in name. Nevertheless, co operation has succeeded in lessening, if not in rooting out , the fraudulent practices hitherto adopted by the bania or sahukar.

 

            There are several methods of advancing loans, such as loans on personal surety, against produce, land, ornaments, property, etc. The main business of the rural money lender is to lend money to the needy and he is responsible for the largest amount of the banking credit available in the rural areas of the district. Generally, the money lender has his grocery shop in the village and he advances loans to the people for consumption and at the time of harvest he takes the crops into his possession to clear his debt and disposes it of according to his own will. He does not charge a fixed rate of interest on all such loans. The rate of interest varies from person to person. He lends either on the security of ornaments or on the promise of payment at the next harvest. Generally , he advances sums which are 60 to 70  percent of the face value of the property pledged against the loan advanced. The rate of interest is generally higher on a loan advanced on personal surety than that on a loan advanced against property. As the Punjab Regulation of Accounts Act, 1930, necessitates the maintenance of accounts, most of the transactions in the villages are made there orally or against ornaments. In times of famine, scarcity, at the birth of a son or at the marriage of a daughter, the rural money-lender is the refuge of the indigent cultivator. In fact, he is truly the custodian of the honour of the peasants and caters to their needs. The Punjabi proverb “Guru bina gat nahin, shah bina pat nahin” holds good in case of the money-lender.

 

            The local money-lender played an important role inproviding industrial rural finance. The passage of the Punjab Regulation of Accounts Act, 1930, affected the private money lending business adversely. Some of the professional money-lenders gave up their trade and took to other professions. However, the hereditary money-lenders still continue their business, because they find it more profitable. Money lending is regulated under the Punjab Money lenders Act, 1938,  which requires the money lenders to maintain regular accounts in the books prescribed under the Act. Besides, the money lenders are required to get themselves registered with the collector and get a licence under the provisions of the Punjab Registration of Money lenders Act, 1938.  The number of registered money-lenders in the district in 1968 was 200. Besides, there are a number of unregistered money lenders.

 

(iii) Government and Semi-Government Credit Agencies

 

            Besides the local money lender, loans are also obtained from Government institutional credit agencies, such as the Punjab Financial Corporation, Khadi and Village Industries Commission, Joint-Stock Banks, and Co-operative Societies. The Punjab Financial Corporation and the Khadi and Village Industries Commission cater to the financial needs of large-scale  and medium scale, and Khadi  and village industries, respectively.

 

            The Government also advances loans to the agriculturists for the purchase of seeds, cattle, tractors, agricultural implements, etc. Loans are also advanced under the State Aid to Industries Act,1935. Loans advanced by Government as taccavi loans and those under the State Aid to Industries Act, 1935, are detailed in the chapters IV and V’ ‘Agriculture and Irrigation’ and industries respectively. The Co-operative Societies advance loans against promissory notes, whereas banks do so against gold, shares and securities agricultural commodities and other easily marketable goods.

 

            Amritsar is a big center of trade and commerce. Among the urban areas of the district, it occupies a unique position. In the beginning, the mode of the joint-stock banks was unknown, and the main instrument of payment was the darshani hundi. This system was somewhat similar to the cheque system prevailing nowadays. The hundi was purchased by the traders at par, above par or below par, and this was a negotiable instrument. The major firm doing this business was Messrs Narain Dass Chella Ram, having its indigenous bank branches in the Punjab, the North-West Frontier Province and Sind. Besides the darshani hundi, there used to be mudti hundi for fixed days, i.e.thirty, sixty, ninety and one hundred and eighty days respectively. The interest was calculated and deducted beforehand and it was always drown on self. Another instrument of credit was the stamp-paper which was a form of deposit.

 

            The system of mudti hundi was very delicate and sensitive. If the hundi was not honoured, the purchaser party was declared bankrupt on the spot. In the rural areas, certain defects crept in this system, because the traders did not observe the rules and regulations properly. As a result, this system gradually became unpopular and paved the way for the joint stock banks.

 

(iv)  Joint Stock Banks

 

            Banking was known and pratised in India at a time when the rest of the world had yet to evolve a medium of exchange in the form of money. However, the organized joint stock banking institutions on Western lines began to develop in the country about the middle of the nineteenth century. In India, these banks have passed through varying fortunes. In the first decade of the twentieth century, there was a mushroom growth and consequently there were bank failures on a very large scale. The weeding out of the inefficient and uneconomic units and the merger of the weaker ones into the stronger ones helped to strengthen the banking structure.

 

            The first joint stock banks established at Amritsar were the Punjab National Band and the People’s bank of India. The later withered away very shortly. The Punjab National Bank (floated in 1894)  established its branches in 1901 and other banks followed suit. The collapse of so many banks during the last few months of 1913 was extremely bad for trade and entailed serious consequences to the depositors. It had, however, some good results. Many of the banks which collapsed had failed to observe even the most elementary principles of  banking and had merely attracted deposits by offering impossibly high rates of interest. The sounder banks reaped the benefit from very largely increased deposits.

 

            Now the banking structure in the country is quite solid. Neither the depression of the thirties nor the World War II (1939-45), nor even the cataclysmic partition of the country in 1947 gave any serious set-back to the joint stock banking in India, although it has not remained unscathed altogether.

 

            The development of banking in India, during and after the World War II presents an impressive picture, but it has not been free from certain undesirable features. Some of these defects were removed through suitable amendments of the Indian Companies Act, but there still remained an urgent need for comprehensive legislation to safeguard the interests of the depositors. This was done through the Banking Companies Act 1949, and  through subsequent amendments.

 

            The number of banking offices at various places in the district, as on March 31, 1968, was as under:

 

 

Number of banking offices

 

 

Total

Located in the

Rural area

Located in the urban area

State Bank of  India

4

-

4

State Bank of  Patiala

1

-

1

Punjab National Bank

9

1

8

Other Commercial Banks 

26

1

25

Co-operative Banks

12

8

4

Total   

52

10

42

 

(Statistical Abstract of Punjab 1969, p. 556)

 

 

BANKING ,  TRADE  AND  COMMERCE

           

            The different leading joint-stock banks, including foreign banks, which have their branches in the district , are as under:

 

  1. State Bank of  India

 

  1. State Bank of  Patiala

 

  1. Punjab National Bank

 

  1. Central Bank of  India

 

  1. Allahabad Bank

 

  1. United Commercial Bank

 

  1. The National and Grindlays Bank Ltd.

 

  1. Union Bank of  India

 

  1. Bank of  India

 

  1. Bank of Baroda

 

  1. Dena Bank

 

  1. Indian Overseas Bank

 

  1. The Sahukara Bank Ltd.

 

  1. The Chartered Bank Ltd.

 

  1. The Central Co-operative Bank Ltd.

 

  1. The New Bank of  India Ltd.

 

  1. The Punjab and Sind Bank Ltd.

 

  1. The Gadodia Bank Ltd.

 

  1. The National Bank of Lahore Ltd.

 

  1. The Hindustan Commercial Bank Ltd.

 

  1. The Amritsar Co-operative Bank Ltd.

 

  1. The Tarn Taran Central Co-operative Bank Ltd.

 

 

The  total deposits and bank credit in the district, as on June 30,1970, amounted to 4453 lakhs of rupees respectively.

 

(v)  Co- operative Credit

 

      The co-operative movement in the district was started after the enactment of the

 Co-operative Societies Act, 1904, and the subsequent Act of 1912.  The first two co-operative Societies in the district were organized and registered in 1908 in the villages of Pakharpura and Ramdewali, Tahsil Amritsar. The movement gained momentum with the passage of the Acts of 1954 and 1961. Consequently, a number of co-operative societies came into being at various places in the district. On June 30, 1968, there were 2086  Co-operative Societies in the district. Of these, 1343 were co-operative  Credit Societies (1163 agricultural and 180 non agricultural). Besides, a Central Co-operative Bank also functions at Amritsar, with branches at Rayya, Patti and Tarn Taran.

 

            Co-operative Credit Societies.__  Ordinarily, the money-lender provided loans and other essential commodities to the borrowers on credit. For the recovery of his dues, he preferred to buy the produce himself at concessional rates. The explaitation of the peasants by the money-lender worked like a doubled-edged blade, a high rate of interest on the loans advanced to the poor agriculturists and the low proce given for their produce. The Punjab Registration of Money-Lenders Act, 1938, curtailed to some extent the powers of the money-lenders. But the organization of the co-operative societies aims at eliminating the money-lender as a class.

 

            There were 1343 cp-operative credit (agricultural and non-agricultural) societies in the district in 1967-68. The functions of these societies are to mobilize savings of the members and to advance loans at reasonable rates of interest for productive purposes.

 

            The details regarding the membership and the working of the agricultural and non-agricultural co-operative credit societies, functioning in the district during 1963-64 to  1967-68,  are given in Appendices I and II on pages 254-255.

 

(c)    Insurance and Small Savings

 

Insurance.__  Before the establishment of the Life Insurance Corporation in 1956,

the following companies, covering life and other risks, were functioning at Amritsar :-

 

1.                 The Oriental Government Security Insurance Company Ltd.

 

2.                 The Bombay Mutual Life Insuracne Company Ltd.

 

3.                 The New India Insurance Company Ltd.

 

4.                 The Bharat Insurance Company Ltd.

 

5.                 The Laxmi Insurance Company Ltd.

 

6.                 The Sunlight of India Insurance Company Ltd.

 

7.                 The Hindustan Co-operative Insurance Company Ltd.

 

8.                 The Jupiter Insurance Company Ltd.

 

9.                 The Hindustan Insurance Company Ltd.

 

10.              The Empire of India Insurance Company Ltd.

 

11.              The Bombay Life Insurance Company Ltd.

 

12.              The Industrial and Prudential Insurance Company Ltd.

 

13.              The Ruby General Life Insurance Company Ltd.

 

14.              The Great India Insurance Company Ltd.

 

15.              The New Asiatic Insurance Company Ltd.

 

16.              The Metropolitan Insurance Company Ltd.

 

17.              The Asian Insurance Company Ltd.

 

18.              The Sterling Insurance Company Ltd.

 

19.              The Sunlife Insurance Company Ltd.

 

20.              The Indian Mercantile Insurance Company Ltd.

 

21.              The Calcutta Insurance Company Ltd.

 

22.              The Indian Globe Insurance Company Ltd.

 

 

The life insurance business in the district is, at present, carried on by the Life Insurance Corporation of India, whereas the general insurance business is done by The Oriental Fire and General  Insurance Company Ltd., The National security Insurance Company Ltd., The Calcutta Insurance Company Ltd, The Hindustan Co-operative Insurance Company Ltd. The Vulcan Insurance Company Ltd., The Jupiter Insurance Company Ltd., The British India Insurance Company,  The Universal Insurance Company , the Howrah Insurance Company , The New India Insurance Company,  The New Credit Insurance Company, The Anand Insurance Company, The National Insurance Company, The Great American Insurance Company, The Ruby Insurance Company, The Co-operative Insurance Company, The Hindustan General Insurance Society, The Concord of India Insurance Company, The Indian Trade and General Insurance Company, The Zenith Insurance Company, The Sterling General Insurance Company, The Indian Mercantile Insurance Company, The Pherex Insurance Company, and The Odeon Insurance Company, all functioning at Amritsar.

 

            The Life Insurance Corporation of India covers the life risk, whereas the general insurance of every kind, except that of life is carried on by the other companies. The Life Insurance Corporation opened its first branch office at Amritsar on September1, 1956. The jurisdiction of this branch extends to the thanas of the Amritsar city, Cantonment and Sadr, Kathunangal, Majitha and the Ajnala Tahsil. With the expansion of business in the district, two additional branches to cater to the insurance needs were established at Amritsar proper on June 15, 1959, and on July15, 1963. In order to intensify the drive for insurance in the rural areas, one branch at Tarn Taran was opened on March 21, 1960, with a network of Development Officers at various centers of the district. This branch office covers the Tarn Taran and Patti tahsils and thanas of Jandiala Guru and Beas. The Life Insurance Corporation on March 31, 1968 had 58 Development Officers at Amritsar ( Units I, II and III ) and 14 at the Tarn Taran Branch for securing business in the district. The number of agents in the district, as on March 31, 1968, was 1141.

 

            The Life Insurance Corporation also advances loans at the rates of 6 and 7 ½  per cent against policies and houses respectively.

 

The following statement shows the branch wise business secured by the Life Insurance Corporation of India in the district during the five years from 1963-64 to 1967-68:-         

 

  

 


 

Business secured by the Life Insurance Corporation of India in the Amritsar District, 1963-64 to 1967-68

 

 

Name of Branch

Year

1963-64

1964-65

1965-66

1966-67

1967-68

No. of Policies

Amount

(Rs.)

No. of Policies

Amount

(Rs.)

No. of Policies

Amount

(Rs.)

No. of Policies

Amount

(Rs.)

No. of Policies

Amount

(Rs.)

Amritsar-I

3659

20126000

2234

15718000

2179

13640000

2187

15803250

2154

17618750

Amritsar-II

3107

18668500

2011

13323000

1871

13193000

2034

16296750

2311

21828250

Amritsar-III

857

5733250

994

7768000

1369

9732500

1355

10727500

1314

1203530

Tarn Taran

1894

6818000

1567

6267000

1804

9066750

1844

10198000

1882

1180750

(Source: Divisional Manager, Life Insurance Co-operation of India, Divisional Office, Jullundur)

 

 


            Small Savings.__  Small savings is a Central Government- sponsored scheme controlled by the Ministry of Finance ( Department of Eonomic Affairs ). The National Savings Commissioner for India, with his headquarters at Nagpur, is the Head of the Department of National Savings Organization. The Scheme has been primarily introduced for inculcating in the masses the habit of thrift and raising funds needed for the development of the country. The movement has become very popular,especially among the rural people, and has, thus, acquired a great significance. In the States of the Country, the National Savings Organization is headed by the Regional Director,National Savings, Government of India. The regional Office for the Punjab is located at Jullundur. The Regional Director, National Savings ( Government of India ) , Punjab, Jullundur, has, under him, three Assistant Regional Directors, National Savings, at Jullundur, Patiala and Amritsar. In each district, there is a District Organizer, National Savings Scheme. But, in some of the important districts, like Amritsar, there are two District Organizers.

 

            In order to have better co-ordination between the Central Organization and the State Governments, Directorates of Small Savings have been set up in various States. The Director, Small Savings, Punjab, Chandigarh, is at the head of the State Government  Small Savings Department. At the district level, the District Organizers are the co-ordinating agencies between the Central Organization and the district authorities. They provide necessary assistance to the district authorities in the promotion and growth of the movement.

 

            The number of accredited agents, who worked for small savings on commission basis in the district, as on March 31, 1968, was 105.

 

            The gross and net collections under the Small Savings Scheme in the district, during the period 1961-62 to 1967-68, are given below:-

 

Year

Gross investments (Rs.)

Net investments(Rs.)

1961-62

32225775

6947357

1962-63

32453503

1414574

1963-64

34097578

5970888

1964-65

36416546

4471999

1965-66

40948222

6655076

1966-67

41654378

8248688

1967-68

49722347

3676318

 

(Source  :   Deputy Commissioner, Amritsar)

 

 

 

BANKING, TRADE AND COMMERCE

 

(d)   Currency and Coinage

 

            During the Mughal period, the mercantile affairs of the kingdom were generally transacted in round mohars, rupees and dams. The copper coin called dam, paisa or fulus formed the fortieth part of the silver rupee. For the purpose of accounts, the dam was divided into twenty-five parts, each of which was called jital. Up to A.D.1616, the official rate of exchange was 40 dams for a rupee but,from A.D. 1627 onwards, the rupee was worth 30 dams or a little more or less.3

 

            The coins under the Sikh Government consisted of  the silver rupee and the gold bugti besides copper coins of smaller denominations. The gold bugti was equal to five rupees. During the Sikh period, mints existed at Amritsar and Lahore, besides those in the provinces of Multsn, Kashmir,Derajat and Peshawar. The gold coins were usually minted at Lahore.4

 

            Under the British and after the independence (1947) up to April 1, 1957, the coinage consisted of the silver rupee and eight-anna and four-anna pieces, the nickel two anna and one anna pieces, besides the copper pice and pies. A rupee consisted of 16 annas or 64 pice or 192 pies. An anna was equal t 4 pice or 12 pies, and a pice was equal to 3 pies.

 

            The decimal coinage was introduced into the country from April 1, 1957. The new system has made calculations and the keeping of accounts easy and simple. The Government issued pamphlets and distributed posters among the public to acquaint them with the new system. Besides, the conversion tables were displayed at all prominent places of money transactions. Being a prominent center of trade and commerce, the Amritsar District has been favourably affected by the reformed coinage system.

 

            The decimal coinage completely replaced the old prevalent coinage with dffect from April 1, 1964. In the beginning, the people, especially in the rural areas, felt some difficulty in transactions, as they were accustomed to counting under the old coinage system. But gradually, they started counting according to the new system, which became popular in the urban as well as in the rural areas. Naya  paisa, named so in the beginning, is now called paisa. With the withdrawal of the old coinage from circulation, the prefix ‘naya’ became redundant and was dropped from June 1, 1964.

 

3Sarkar, S.C.and Datta, K.K.,Modern Indian History,Vol .1 (Allahabad, 1942), pp. 298-99.

   4Chopra, Gulshan Lal, The Punjab as a  Sovereign State (1799-1839) ( Hoshiarpur, 1960) pp.152-55.

 

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