¹ The expression ‘a tangled jungle of disorderly transactions’ is used by the United Provinces Banking Enquiry Committee Report (UPBECR) to describe the kaleidoscope of financial practices and monetary markets that made up ‘indigenous’ finance. The UPBECR attributes the expression to the earlier Lt Governor, Alfred Comyn Lyall.

² Bentham, J., Defence of Usury: Shewing the Impolicy of the Present Legal Restraints on Pecuniary Bargains in a Series of Letters to a Friend, Payne and Foss, London, 1787/1818.Google Scholar

³ Washbrook, D. A., ‘Law, state and Agrarian society in colonial India’, Modern Asian Studies, vol. 15, no. 3, 1981, pp. 649–721.CrossRefGoogle Scholar

⁴ Government reports concerned with these practices in independent India typically show declining market shares for non-banking and similar financial instruments and agents. However, these figures are hardly reliable as under-reporting can be expected to be rampant given the below-the-radar and partially criminalized nature of unregulated monetary transactions. As an example, data on ‘trade credit’ from the urban household indebtedness surveys of the National Sample Survey Organisation (NSSO) in 2002 for Uttar Pradesh would seem to be remarkably low for any observer of business practices in the bazaar areas of Banaras. The Radhakrishna Commission Report of 2007 stated that the significant expansion of institutional sources of credit to agriculturalists until 1991 was actually reversed afterwards, declining from 66 per cent in 1991 to 61 per cent in 2002, relying on the above-mentioned NSSO data (Government of India, Ministry of Finance, Banking Division, Report of the Expert Group on Agricultural Indebtedness, Government of India, New Delhi, 2007, p. 74.)

⁵ Cf., amongst others, Haynes, D. E., Small Town Capitalism in Western India: Artisans, Merchants, and the Making of the Informal Economy, 1870–1960, Cambridge University Press, Cambridge, 2012CrossRefGoogle Scholar; Harriss-White, B., Local Capitalism and the Foodgrains Economy in Northern Tamil Nadu, 1973–2010, MIDS Working Paper Series, Chennai, 2010.Google Scholar

⁶ Cf., amongst others, Bear, L., ‘Capitalist divination: popularist speculators and technologies of imagination on the Hooghly River’, Comparative Studies of South Asia, Africa and the Middle East, vol. 35, no. 3, 2015, pp. 408–23CrossRefGoogle Scholar; Levien, M., ‘The land question: special economic zones and the political economy of dispossession in India’, Journal of Peasant Studies, vol. 39, no. 3-4, 2012, pp. 933–69.CrossRefGoogle Scholar

⁷ Sanyal, K., Rethinking Capitalist Development: Primitive Accumulation, Governmentality and Post-Colonial Capitalism, Routledge, New Delhi, 2007.Google Scholar

⁸ P. Chatterjee, ‘Democracy and economic transformation in India’, Economic and Political Weekly, 19 April, 2008, pp. 53–62.

⁹ Birla, R., ‘Speculation illicit and complicit: contract, uncertainty, and governmentality’, Comparative Studies of South Asia, Africa and the Middle East, vol. 35, no. 3, 2015, pp. 392–407.CrossRefGoogle Scholar

¹⁰ See, for example, Ray, R. K., ‘Asian capital in the age of European domination: the rise of the bazaar, 1800–1914’, Modern Asian Studies, vol. 29, no. 3, 1995, pp. 449–554CrossRefGoogle Scholar; Gell, A., ‘The market wheel: symbolic aspects of an Indian tribal market’, Man (New Series), vol. 17, no. 3, September 1982, pp. 470–91.Google Scholar

¹¹ Kaur, R., ‘Bodies of partition: of widows, residue, and other historical waste’, in Histories of Victimhood, Jensen, S. and Ronsbo, H. (eds), University of Pennsylvania Press, Philadelphia, 2014, pp. 44–63.Google Scholar

¹² Chatterjee, ‘Democracy and economic transformation’, p. 55.

¹³ Appadurai, A., ‘Afterword: the dreamworld of capitalism’, Comparative Studies of South Asia, Africa and the Middle East, vol. 35, no. 3, 2015, pp. 481–5, 483.CrossRefGoogle Scholar

¹⁴ Birla, R., Stages of Capital: Law, Culture, and Market Governance in Late Colonial India, Duke University Press, Durham, 2009Google Scholar; Birla, ‘Speculation illicit and complicit’.

¹⁵ Harvey, D., ‘The “new” imperialism: accumulation by dispossession’, Socialist Register, vol. 40, 2004, pp. 63–87.Google Scholar

¹⁶ Patnaik, P., The Value of Money, Tulika, New Delhi, 2008.Google Scholar

¹⁷ Chakrabarty, D., Provincializing Europe: Postcolonial Thought and Historical Difference, Princeton University Press, Princeton, 2000.Google Scholar

¹⁸ See, among many others, Markovits, C., Merchants, Traders, Entrepreneurs: Indian Business in the Colonial Era, Permanent Black, Ranikhet, 2014Google Scholar; Bayly, C. A., Rulers, Townsmen, and Bazaars: North Indian Society in the Age of British Expansion, 1770–1870, Cambridge University Press, Cambridge, 1983Google Scholar.

¹⁹ Banaji, J., Theory as History: Essays on Modes of Production and Exploitation, Brill, Leiden, 2010.CrossRefGoogle Scholar

²⁰ Washbrook, ‘Law, state, and Agrarian society’.

²¹ Sinha, H., Early European Banking in India (with Some Reflections on Present Conditions), Macmillan and Co., London, 1927Google Scholar.

²² Ibid.

²³ Leonard, K., ‘Palmer and Company: an Indian banking firm in Hyderabad state’, Modern Asian Studies, vol. 47, no. 4, July 2013, pp. 1157–84.CrossRefGoogle Scholar

²⁴ Birla, Stages of Capital.

²⁵ Sinha's work is highly instructive with regard to the early history of limited liability in his depiction of the failure of the Bank of Bengal's attempt to introduce limited liability in its operations in the early nineteenth century (Sinha, Early European Banking, p. 15).

²⁶ Cohn, B. S., ‘The initial British impact on India: a case study of the Benares region’, Journal of Asian Studies, vol. 19, no. 4, August 1960, pp. 418–31CrossRefGoogle Scholar; Dalmia, V., The Nationalization of Hindu Traditions: Bharatendu Harischandra and Nineteenth-Century Banaras, Oxford University Press, Delhi, 1997Google Scholar; for other areas, see Subramanian, L., ‘Banias and the British: the role of indigenous credit in the process of imperial expansion in western India in the second half of the eighteenth century’, Modern Asian Studies, vol. 21, no. 3, 1987, pp. 473–510.CrossRefGoogle Scholar

²⁷ Bentham, Defence of Usury.

²⁸ Hardiman, D., ‘Usury, dearth and famine in western India’, Past and Present, vol. 152, August 1996, pp. 113–56CrossRefGoogle Scholar.

²⁹ Ibid., p. 126.

³⁰ Ibid., p. 125.

³¹ Bellot, H. H. L., The Legal Principles and Practice of Bargains with Money-Lenders in the United Kingdom of Great Britain and Ireland, British India, and the Colonies, 2nd enlarged edn, Stevens and Haynes Law Publishers, London, 1906, pp. 28–9.Google Scholar

³² W. Tudball, Hon'ble Justice, cited in letter no. 3750/47, dated Allahabad 13 December 1917 from B. H. Bourdillon, Esq., Registrar, High Court of Judicature, Allahabad to the Secretary of the U.P. Government. National Archives of India, Delhi, Home Department files Judl.–Mar.–342-345—PartB.

³³ Cirvante, V. R., The Indian Capital Market, Geoffrey Cumberledge Oxford University Press, London, 1956, p. 47.Google Scholar

³⁴ National Archives, Delhi. Notes A, May, 1918: Notes in the Home Department (in Proceedings, May, 1918, Nos. 39–56), in The Usurious Loans Bill. Office Memo from the Legislative Department, no. 314, dated 31 January 1918 (Home Dept., Judl.; Judl.–Mar.–342-345—Part B).

³⁵ National Archives, Delhi. Letter from C. H. Cordeux, Esq., Registrar, Court of Judicial Commission of Oudh. File no. 347/1917. No. 1995/VII-82, dated Lucknow, 4 December 1917, in The Usurious Loans Bill. Office Memo from the Legislative Department, no. 314, dated 31 January 1918 (Home Dept., Judl.; Judl.–Mar.–342-345—Part B).

³⁶ National Archives, Delhi. Letter of H. M. R. Hopkins, no. 556/XIX-1/17-18, dated Meerut 8 December 1917, in The Usurious Loans Bill. Office Memo from the Legislative Department, no. 314, dated 31 January 1918 (Home Dept., Judl.; Judl.–Mar.–342-345—Part B).

³⁷ Sahukar, a trader cum moneylender.

³⁸ Ibid.

³⁹ National Archives, Delhi. No. 3750/47, dated Allahabad, 13 December 1917. Letter from B. H. Bourdillon, Esq., Registrar, High Court of Judicature at Allahabad, in The Usurious Loans Bill. Office Memo from the Legislative Department, no. 314, dated 31 January 1918 (Home Dept., Judl.; Judl.–Mar.–342-345—Part B).

⁴⁰ Ibid.

⁴¹ ‘Move to control money lending: Punjab Bill’, Times of India, 23 June 1938.

⁴² U.P. Regulation of Money-Lending Act, 1976.

⁴³ National Archives, Delhi. Resolution in the Legislative Assembly by Seth Govind Das recommending that immediate and effective measures be adopted for putting a stop to the entry of transborder moneylenders into India (1938). F. 20/38-Judl. National Archives, Delhi. Proposed question in the Legislative Assembly by Bhai Parma Nand, regarding convictions of Muslims and non-Muslims got by the police in the various provinces in cases of dacoities and murders of moneylenders . . . during the past financial year (1934). F. 11/XIII/34-Police.

⁴⁴ National Archives, Delhi. Office order regarding the indebtedness to the Pathan moneylenders. F. 288/35-Public.

⁴⁵ See, for example, National Archives, Delhi. Proposal to appoint a Commission of Enquiry . . . to enquire into the conduct of Mr. S. S. Bajpai, ICS, U.P., in the matter of his indebtedness. F.212/38/Ests.

⁴⁶ Cf. Reserve Bank of India, History of the Reserve Bank of India (1935–51), Reserve Bank of India (prepared by S. L. N. Sinha), Bombay, 1970, pp. 213–18.

⁴⁷ Cirvante, The Indian Capital Market, p. 38.

⁴⁸ Reserve Bank of India, Report of the Study Group on Non-Banking Companies, Reserve Bank of India, Bombay, 1975, p. 113.

⁴⁹ Interviews with Shri Radha Raman Prasad, co-founder of the State Bank of Banaras and one of the last living members of the old banking families of Banaras who conducted ‘indigenous’ banking before the decline of this banking segment in Banaras; interviews with Shri Navneet Raman.

⁵⁰ Government of Uttar Pradesh, Uttar Pradesh District Gazetteers, Varanasi (Supplementary), Government of Uttar Pradesh, Lucknow, 1988, p. 38.

⁵¹ Government of India, Banking Commission, Report on Indigenous Bankers, Banking Commission (Government of India), Bombay, 1971, p. 92.

⁵² Ibid., p. 95.

⁵³ Ibid., p. 98.

⁵⁴ M. B. V. Martin, ‘An economic history of Hundi, 1858–1978’, unpublished PhD thesis submitted to the London School of Economics and Political Science, 2012.

⁵⁵ Government of India, Banking Commission, Report on Indigenous Bankers, p. 87.

⁵⁶ Ibid., p. 88.

⁵⁷ UPBECR IV, p. 100.

⁵⁸ Cf. Gregory, C. A., ‘Village money lending, the World Bank and landlessness in central India’, Journal of Contemporary Asia, vol. 18, no. 1, 1988, pp. 47–58.CrossRefGoogle Scholar

⁵⁹ Roughly: usurer.

⁶⁰ The predominance of the sawai rate, as depicted in the UPBECR, indicates changes in interest rates over the last decade. The Benares district gazetteer of 1909 argues that interest rates had been stable throughout most of the nineteenth century, with the derhi rate (50 per cent compound interest per season) being equally prominent, at least for loans in grain. (Government of India, Benares: A Gazetteer, Being Vol. XXVI of the District Gazetteers of the United Provinces of Agra and Oudh, Superintendent, Government Press, United Provinces, Allahabad, 1909, pp. 52–3.)

⁶¹ Instalment.

⁶² For Banaras, the UPBECR reports the following: ‘Four new types of loan are reported from Benares: in two cases the principal is repayable in monthly instalments of one rupee, in the other two it is repayable in daily instalments of one anna. The amounts are respectively Rs. 16 repayable in 20 monthly or 330 daily instalments; and Rs. 20 repayable in 25 monthly or 395 daily instalments’ (UPBECR I, p. 64).

⁶³ Bayly, Rulers, Townsmen, and Bazaars.

⁶⁴ Interviews with Shri Radha Raman Prasad.

⁶⁵ Census of India 1961, District Census Handbook Uttar Pradesh, 53—Varanasi District, Lucknow, 1965.

⁶⁶ UPBECR I, p. 124.

⁶⁷ Ibid., pp. 118–20.

⁶⁸ Kumar, N., The Artisans of Banaras: Popular Culture and Identity, 1880–1986, Princeton University Press, Princeton, 1988.Google Scholar

⁶⁹ See, for example, ‘The industries of Benares’, Journal of the Royal Society of Arts, 5 March 1915, vol. 63, no. 3250, p. 344; Periodical Archives Online.

⁷⁰ See, for example, UPBECR I, pp. 38–41.

⁷¹ Bayly, Rulers, Townsmen, and Bazaars.

⁷² See, amongst others, Haynes, Small Town Capitalism; Sahai, N. P., Politics of Patronage and Protest: The State, Society, and Artisans in Early Modern Rajasthan, Oxford University Press, New Delhi, 2006CrossRefGoogle Scholar; Swarnalatha, P., The World of the Weaver in Northern Coromandel, c. 1750–c. 1850, Orient Longman, Hyderabad, 2005Google Scholar; Venkatesan, S., Craft Matters: Artisans, Development and the Indian Nation, Orient BlackSwan, Hyderabad, 2009Google Scholar.

⁷³ Kumar, Artisans of Banaras; Raman, V., The Warp and the Weft: Community and Gender Identity among Banaras Weavers, Routledge, New Delhi, 2010.Google Scholar

⁷⁴ Bismillah, Abdul, Jhini-jhini bini cadariyan, Rajkamal Prakashan, New Delhi, 1986.Google Scholar

⁷⁵ According to the lenders I spoke to, interest rates used to be lower, at around 20 per cent, in earlier times, typically referring to the first half of the 1990s, which often forms a threshold of clear recollection even among older lenders.

⁷⁶ Lenders at this level are in my experience typically male, though this may be related to ethnographic difficulties in meeting female moneylenders.

⁷⁷ Among infrequent debtors, I have come across a small number of examples in which the reliance on gossip actually reverses the organizational basis of this sub-regime of lending at the level of the neighbourhood: as gossip carries information on the need to borrow that is often considered shameful, some infrequent debtors have reported having made significant efforts to approach moneylenders in distant neighbourhoods in order to prevent their circumstances from becoming public knowledge. The depiction of the difficulties faced when contacting moneylenders beyond the neighbourhood boundaries, however, reinforces the general accuracy of the organizational principle. Local public knowledge of the shame of borrowing carried through gossip obviously increases the lender's chances of enforcing repayments, though it certainly does not help the lender in acquiring a positive public image.

⁷⁸ A number of moneylenders I have met or interviewed had links with political parties, or were engaged in politics themselves, at least outside the segment of high-end informal finance. There is no indication, however, that politics assumes a significant role in moneylending or vice versa. Rather, local politics constitutes an area of engagement for entrepreneurs who are also active as brokers or moneylenders.

⁷⁹ The code will often simply be constituted by the unique identification number of small-denomination rupee notes that are cut in half (with both sides remaining in possession of the code) in a way highly reminiscent of traditional hundi usages, depicted by, amongst others, Sinha, Early European Banking, p. 155.

⁸⁰ Van Schendel, W. and Abraham, I. (eds), Illicit Flows and Criminal Things: States, Borders, and the Other Side of Globalization, Indiana University Press, Bloomington, 2005.Google Scholar

⁸¹ The name has been changed.

⁸² Whether or not an unregistered ‘Money Circulation Scheme’ is legal depends on the amounts involved, and most bisi circles are actually legal. The term bisi originated from the Hindi word for 20, the traditional number of players in one circle.

⁸³ H. W. Wolff, Co-operative Banking: Its Principles and Practice (with a Chapter on Co-operative Mortgage-Credit), P.S. King and Son, London, 1902. Money-circulation schemes were never included in co-operative finance, though, in this way relegating them to the emerging monetary outside. I am highly thankful to Ritu Birla and Lakshmi Subramanian for their suggestions on the links between chit funds and the early co-operative movement.