Madras has many firsts in financial institutions – Times of India

Chennai: For a city that’s less than two decades short of 400 years old, Madras or Chennai has had a long history of industry and commerce. Established on August 22, 1639, its lineage in financial services dates to the Pallava era when temples like Thiyagarajaswamy temple in Thiruvottiyur would accept endowments and invest them through the Chettiyar community for interest.
In ‘Madras: A Historical Fin City’, a web-talk organised by the Madras Chamber of Commerce & Industry (MCCI) in commemoration of Madras Day, city historian and businessman V Sriram talked about how some of Indian industry’s first financial concepts took root in erstwhile Madras. “The first joint stock company, the first modern commodities exchange, the first modern bank, first bank for Indians and first cooperative bank were all ideas that came from Madras,” he said.
Part of the city’s financial roots go back to when dubashes’ (interpreters) worked with the Dutch and Portuguese and later with the English. “The dubashes were not only interpreters but also offered financial services like raising money, arbitrage and taking forward positions on the cloth trade,” said Sriram. The most important were people like Pachiyappa Mudaliar who worked with the East India Company and Ananda Ranga Pillai who worked with Dupleix, Governor of French Pondicherry.
The dubashes formed a joint stock company for cloth trade as early as the 1670s — the earliest instance of a corporate body in India. Later, the first modern commodities exchange and the first modern bank (Bank of Madras) came up. The city also birthed India’s first cooperative bank in 1906 – the Madras Urban Cooperative Bank.
One of 19th century’s biggest scams was also in the city when the Nawab of Arcot’s appetite for loans fuelled a lending bubble. “Everybody formed agency houses which collected money and loaned to the Nawab from 1780s to early 1800,” said Sriram. That roster included some of the city’s most iconic businessmen – Thomas Parry of Parry & Co and John Binny of Binny & Co. “British parliamentarian Edmund Burke also wanted to invest but was rebuffed after which he turned whistleblower and burst the bubble,” said Sriram. “The enquiry commission rendered many people insolvent and the Nawab lost his kingdom.”
Given its financial lineage, the MCCI has taken up the initiative to make Chennai the next financial hub and a core team is working on a fin-tech policy for the TN government, said Srivats Ram, vice-president.