BANKING IN KERALA 25
and to offer some explanatory hypotheses about the nature and pattern of its growth. The early history is traced separately for Travancore and Cochin. As no ready information is available., the evolution is followed by piecing together fragmentary information from various sources including oral evidence from informed persons.
BEGINNINGS IN TRAVANCORE
The genesis of modern banking in the late nineteenth and early twentieth century in India may be said to be associated with the development of foreign trade and organized commercial and industrial sectors. Foreign banks were the first to be established, principally at port towns like Bombay, Calcutta and Madras. The dominance of foreign banks in the early days was due to the preponderant share of foreign capital in organized trade such as tea and jute, shipping and insurance. Not only in India, but even in countries like Japan, banking originated around port towns.® Despite flourishing foreign trade at a large number of ports,7 banks in Fravancore originated first in villages around Tiruvalla (such as Niranom, Thalavady, Ambala-puzha and Chcngannoor) though in later years the port towns had grown into prominence. In 1900 there were 17 foreign companies (mostly in insurance and plantations) with their headquarters at Alleppey and though the number rose to 50 by 1912, no foreign bank started operations there.
Modern commercial banks in Kerala miy be said to have emerged along with the capitalist form of business organization and production. Some of the traditional financial institutions like chit funds and kuri^ and to a lesser extent indigenous banks have tended to assume modern institutional forms like joint-stock firms in the normal process of social growth.9
By 1900, there were about 23 joint-stock companies registered in Travancore and 47 factories under the Factories Act (Table I). Besides these, there were a few companies, registered ouiside but working in the state. From the early years of this century till 1939, there was a concentration of firms, especially banking companies in the Tiruvalla taluk.! ° Taluk-wise distribution of the different types of joint-stock companies in Travancore for 1919-20 and 1924-25 (two years for which data are available). shows that concentration was the most in the Tiruvalla, Ambala-puzha, Quilon and Kottayam taluks. Though it is difficult to establish any close link between the growth of non-banking companies and banks, these taluks developed into banking centres and undoubtedly part of the demand for their services came from the non-banking companies. It is possible that even the resources for the growth of the banks came at least partly from the joint-stock companies.
The first joint-stock company floated in Travancore was the Punalur Paper Mills in 1889, ' followed by the Manorama Company'2