So far as the Indian deposits are concerned, these returns are very valuable. But the aggregate of deposits outside India is as nearly as possible useless. For Exchange Banks of both groups—the Banks primarily Indian and the agencies of huge European institutions doing business in many parts of the world—are lumped together, so that the total includes the whole of the French deposits of the Comptoir National d’Escompte and of the deposits, in whatever country, of the other Banks with Indian agencies enumerated on p. 206. The figures are, therefore, hardly relevant to questions peculiarly Indian; and I will content myself with quoting, from the table given in the official statistics, the total deposits of Exchange Banks made in India, and the cash balances held in India against them.
Exchange Banks
| Deposits in India. | Cash Balances in India. | |
| 1890 | £5,000,000 | £2,300,000 |
| 1895 | 6,900,000 | 1,800,000 |
| 1900 | 7,000,000 | 1,600,000 |
| 1901 | 7,900,000 | 2,200,000 |
| 1902 | 9,100,000 | 2,300,000 |
| 1903 | 10,800,000 | 2,100,000 |
| 1904 | 10,900,000 | 3,300,000 |
| 1905 | 11,400,000 | 2,500,000 |
| 1906 | 12,100,000 | 3,400,000 |
| 1907 | 12,800,000 | 3,700,000 |
| 1908 | 13,000,000 | 2,500,000 |
| 1909 | 13,500,000 | 2,800,000 |
| 1910 | 16,200,000 | 2,900,000 |
17. Two facts emerge from this table with great plainness—the rapid rate at which in recent years Exchange Banks have been able to increase the funds raised by deposit in India herself, and the slow rate at which they have thought fit to increase their Indian balances.[107] The position has evidently changed a good deal in quite recent times. It is tantalising to think that two years must elapse before we can know how the Banks stood in these respects last December (1912). The Statistics of British India do not lend their aid to ruder hands than those of the historian.
In the event of an internal financial crisis in India the Exchange Banks are probably depending on the anticipation that they will be able to remit funds from London by telegraphic transfer. In this case they rely on not being hard pressed in India and in London at the same time. An Indian reserve, such as they appear to keep, of from 18 to 20 per cent would be respectable, for example, in England. But in such a country as India, where banking is ill–established and hoarding more than a memory, the proportion held in reserve seems somewhat lower than perhaps it ought to be. Possibly Exchange Banks have already been in smooth waters longer than is for their good. There are famous dates in the history of Indian banking which should serve as a memento mori.
18. When we turn to the assets and liabilities of the Exchange Banks in England we find reason for supposing a much stronger position; for the bulk of the bills of exchange held are probably domiciled in London and may be regarded, therefore, as liquid London assets.[108] The following table sets out the figures relating to deposits, leaving out the Hong Kong and Shanghai Banking Corporation, because, although its Indian business is important, this can only be a small proportion of its total business. I include all the other Banks given in my first group (see p. 207) although the non–Indian business of the Chartered and National Banks cannot be accurately allowed for.
Fixed and Current Deposits (in £1,000,000)
| Bank. | 1900. | 1905. | 1906. | 1907. | 1908. | 1909. | 1910. | 1911. | 1912. | |||||||||
| National | 6 | 9 | 9 | ¾ | 10 | ¼ | 10 | ½ | 11 | ¾ | 12 | ¾ | 13 | ¼ | 18 | |||
| National | 6 | 9 | 9 | ¾ | 10 | ¼ | 10 | ½ | 11 | ¾ | 12 | ¾ | 13 | 14 | ||||
| Mercantile | 1 | ½ | 2 | ¾ | 3 | ¾ | 3 | ½ | 3 | ½ | 4 | ½ | 5 | ¼ | 5 | ½ | 5 | ½ |
| Delhi and London | 1 | ¼ | 1 | ¼ | 1 | ¼ | 1 | ½ | 1 | ¼ | 1 | ¼ | 1 | ½ | 1 | ½ | 1 | ½ |
| Eastern | ... | ... | ... | ... | ... | ... | 1 | ¼ | 1 | ¾ | 2 | |||||||
| Total | 18 | 24 | ¼ | 28 | 27 | ½ | 27 | ½ | 31 | ¼ | 36 | ¼ | 38 | 41 | ||||
The total cash in hand and at bankers held by these five Banks at the end of 1912 was about £m7¾ I estimate that in 1910 these Banks may have held outside India about £m23 in deposits and about £m5 cash in hand and at bankers.
As to the proportion of these deposits which were held for long periods there is no accurate information. The Chartered and Eastern Banks are alone in distinguishing in their balance sheets between fixed deposits and current accounts. In 1912 the Chartered Bank held £m10½ on current account, etc., and £m7½ on fixed deposit; the Eastern Bank £m½ on current account and £m1½ on fixed deposit.[109] More than half of the deposits of the Banks as a whole are probably held on current account or at short notice. If we are to make a guess, the Banks may have held in 1910 about £13,000,000 on current account outside India; but by no means all of this (in the case of the Chartered and National Banks especially) would be held in London. The question of the amount of the London assets of the Banks does not lend itself to statistical summary. But I do not think that there is the least reason for supposing that the position is not a strong one.