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Partners, Servants, or Entrepreneurs? Banians in the Nineteenth-Century Bengal Economy

Published online by Cambridge University Press:  03 February 2021


Banians acted as intermediaries for European merchants in Bengal. They were highly influential in the eighteenth century but their importance waned thereafter. This article reexamines their role in the nineteenth century and argues that their importance persisted but evolved in response to changes in the Bengal economy and issues of contracting and governance. It shows that the banians remained a nexus between the local and global economies, facilitating a bidirectional transfer of knowledge. They enabled the development of innovative Indian business forms and contributed to the emergence of a diverse ecology of organizational forms and ownership in Bengal at the end of the nineteenth century.

Research Article
Copyright © The President and Fellows of Harvard College 2021

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I would like to thank the anonymous referees and editor Walter Friedman for comments that significantly improved the paper. Similarly, I am grateful to comments from Tirthankar Roy, John Turner, Chris Colvin, members of the Queen's University Centre for Economic History, and participants at the Business History Conference, Annual Meeting 2017, all of which positively shaped the paper.


1 It is important to distinguish between the baniya caste and banian as a profession. Jogendra Nath Bhattacharya notes that the caste occupied a range of mercantile functions around India, but being a member of the caste was not a prerequisite to enter the banian profession. Bhattacharya, Hindu Castes and Sects: An Exposition of the Origin of the Hindu Caste System and the Bearing of the Sect Towards Each Other and Towards Other Religious Systems (Calcutta, 1896), 158.

2 Cox, Howard, Biao, Huang, and Metcalfe, Stuart, “Compradors, Firm Architecture and the ‘Reinvention’ of British Trading Companies: John Swire & Sons’ Operations in Early Twentieth Century China,” Business History 45, no. 2 (2003): 1534CrossRefGoogle Scholar.

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11 Goswami, “Sahibs, Babus, and Banias,” 302.

12 Bengal Annual Register and Directory series, OIR 954.14 ST 1216 CH, British Library, London, (hereafter BL). First published in 1807, The Original Calcutta Annual Directory and Calendar was a series of registers detailing civil and military life in Calcutta. They included data on different types of firms operating in the region. Over time, the publisher and scope of the registers changed; from 1824 it was the Bengal Directory and Annual Register, compiled and printed by Samuel Smith and Co. In the 1860s, Thacker, Spink and Co. of London started to publish registers that extended geographic coverage, with lists delineated by region. This article focuses on the Bengal region lists. In the late 1880s it became Thackers Indian Directory, which ran until the 1960s. There is an obvious question of accuracy. It is probable that details of the European firms are reasonably accurate, as this was a close-knit commercial community, yet it is likely that the construction of the lists was determined by proximity to European interests. Indian businesses outside the European purview may not have been included, limiting understanding of the full scale of Indian commercial interests yet unlikely to affect details relating to the banians.

13 Palamadai Samu Lokanathan, Industrial Organization in India (London, 1935).

14 Neild-Basu, Susan, “The Dubashes of Madras,” Modern Asian Studies 18, no. 1 (1984): 131CrossRefGoogle Scholar; Subramanian, Lakshmi, “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 21, no. 3 (1987): 473510CrossRefGoogle Scholar.

15 Amalendu Guha also demonstrates the purposeful integration of Bombay Parsis into European firms to transfer knowledge of business practices. Guha, “The Comprador Role of Parsi Seths, 1750–1850,” Economic and Political Weekly 5, no. 48 (1970): 1933–36.

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17 Bolts, Considerations, 84.

18 Marshall, “Masters and Banians,” 192; Marshall, East Indian Fortunes, 45.

19 Philip Curtin, Cross-Cultural Trade in World History (New York, 1984), 175–76.

20 Marshall, “Masters and Banians,” 193, 203.

21 Misra, Business, Race, and Politics, 53.

22 Curtin, Cross-Cultural Trade, 175.

23 Webster, Richest East India Merchant.

24 Bengal Annual Registers 1813, 1818, 1824, 1834, BL.

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26 Ray, Indrajit, Bengal Industries and the British Industrial Revolution (New York, 2011), 223CrossRefGoogle Scholar.

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28 Tripathi, Amales, Trade and Finance in the Bengal Presidency, 1793–1833 (Calcutta, 1980)Google Scholar.

29 Report from the Parliamentary Select Committee on Manufactures, Commerce, and Shipping, P.P 1833, (690), 129.

30 Marshall, “Masters and Banians,” 207; Misra, Business, Race, and Politics, 54.

31 Webster, Richest East India Merchant, 56.

32 Singh, S. B., European Agency Houses in Bengal, 1783–1833 (Calcutta, 1966)Google Scholar.

33 Webster, Anthony, “An Early Global Business in a Colonial Context: The Strategies, Management and Failure of John Palmer and Co of Calcutta,” Enterprise & Society 6, no. 1 (2005): 122Google Scholar.

34 Calcutta Magazine and Monthly Register, vol. 29–32, 4 Apr. 1832, 200–1.

35 Chakrabarti, Ranjan, “The Brown Ships in the Indian Ocean: The American Merchants and the Bengali Banians, 1790–1880,” in Business History of India, ed. Palit, Chittabrata and Bhattachorya, Preanjal Kumar (Delhi, 2006)Google Scholar.

36 Tripathi, Trade and Finance; Amiya Bagchi, The Evolution of the State Bank of India, Part 1, 1806–1860 (Delhi, 1987).

37 Michael Aldous, “Avoiding ‘Negligence and Profusion’: Anglo-Indian Trading Firms, 1813–1870” (PhD diss., London School of Economics, 2015), chap. 3.

38 Report from the Parliamentary Select Committee, 130.

39 Bengal Annual Registers, 1831, 1858, BL.

40 On growth in the cotton industry, see Tripathi, Dwijendra, The Oxford History of Indian Business (Delhi, 2004), 100–6Google Scholar; on the tea boom of the 1860s, see Griffiths, Percival, The History of the Indian Tea Industry (London, 1967)Google Scholar.

41 Bengal Annual Registers, 1831, 1855, 1863, BL. Radhe Shyam Rungta identified this trend and linked it to the passage of a Companies Act in 1850 and the Joint-Stock Companies Act in 1857, which lowered costs of incorporation and enshrined the principal of limited liability. Rungta, The Rise of the Business Corporation in India, 1851–1900 (Cambridge, U.K., 1970).

42 Chapman, Stanley, Merchant Enterprise in Britain: From the Industrial Revolution to World War I (Cambridge, U.K., 2004), chap. 4Google Scholar; Jones, Geoffrey, Merchants to Multinationals: British Trading Companies in the Nineteenth and Twentieth Centuries (New York, 2000), chap. 2Google Scholar.

43 Misra calculated that by 1915 managing agents controlled 75 percent of industrial capital in India. Misra, Business, Race, and Politics, 5.

44 Dey, Kumud Lal, The Law Family of Calcutta (Calcutta, 1932)Google Scholar.

45 Chakrabarty, Dipesh and Dasgupta, Ranajit, “Functions of the Nineteenth-Century Banian: A Document,” Economic and Political Weekly 9, no. 35 (1974): 7375Google Scholar.

46 Memorandum of agreement between Gillanders, Arbuthnot and Co and Gobind Chund Doss, Kallydoss Seal, and Doyalchund Doss, 1866, 2695, Glynne-Gladstone Archive, Gladstone's Library (hereafter GG).

47 “Merchants, Banians and Brokers in Calcutta,” Bombay Times and Journal of Commerce, 18 June 1859.

48 Owens, Raymond and Nandy, Ashis, The New Vaisyas: Entrepreneurial Opportunity and Response in an Indian City (Durham, 1978), 16Google Scholar.

49 Bhattacharya, Hindu Castes and Sects, 141–48, 158–61, 126–36, 26–35.

50 Owens and Nandy, New Vaisyas, 81.

51 Bengal Annual Register, 1873, BL.

52 Bhattacharya, Hindu Castes and Sects, 143.

53 Gillanders, Arbuthnot and Co., was among the larger of the agency houses that became managing agents in the second half of the nineteenth century. There was, however, a degree of commonality in the structure and organization of these firms, indicating a reasonable degree of representativeness in these sources.

54 The History of Gillanders, 1910, 95, 2749; A typescript for a booklet of the history of the firm, 1930, 2750 both in GG.

55 The diary of Mohendro Nath Mookerjee, 1900, 2744, GG.

56 Mohendro Nath Mookerjee diary. Mookerjee is a brahmin name, again indicating shared caste origins with the banian profession. It is quite possible the diary was written to flatter the European partners, possibly in the hope of an improved pension, but it does give some insight into the nature of the writers’ work and their relationship with the European partners at the firm.

57 Mohendro Nath Mookerjee diary, 4, GG.

58 Mohendro Nath Mookerjee diary, 46, GG.

59 Kadernauth Chaudry to Mackinlay, Dec. 1854, 2708, GG. The writer asked for a loan to cover extensive losses he had incurred on a tobacco trade, promising repayment from his salary.

60 Owens and Nandy, New Vaisyas, 81.

61 Mukherjee, “Foreign and Inland Trade,” 359.

62 Misra, Business, Race, and Politics, 54.

63 Mukherjee, “Foreign and Inland Trade,” 361; Bengal Annual Register, 1893, BL. Anglo-Indian commodity networks were also notable; for example, Cartwright H. D. and Co., a British-owned jute agent, acted for J. Dass and Co., R. D. Banerjee and Co., and R. C. Mookerjee and Co., Indian-owned up-country jute dealers.

64 Kling, Partner in Empire, 244–45; Owens and Nandy, New Vaisyas, 60.

65 Misra, Business, Race, and Politics; Jones, Stephanie, Merchants of the Raj: British Managing Agency Houses in Calcutta Yesterday and Today (London, 1992)CrossRefGoogle Scholar.

66 Bengal Annual Register, 1893, BL. All names are either brahmin, banik, or kayastha, again emphasizing the shared caste origins.

67 Bengal Annual Register, 1893, BL.

68 Dey, Law Family.

69 Mukherjee, “Foreign and Inland Trade,” 361.

70 Bengal Annual Register, 1893, BL.

71 Bengal Annual Register, 1893, BL.

72 Goswami, “Sahibs, Babus, and Banias,” 302–3.

73 Bengal Annual Register, 1893, BL, lists a Gubbay DA and Co. and Juggernath Dass and Co. as bill, stock share, and bullion brokers.

74 Dey notes that the bank was founded by a number of prominent Indian businessmen, but the majority of shareholders were European. Dey, Law Family, 11–12.

75 Bengal Annual Register, 1893, BL, also continued to list 116 Indian bankers. Despite the growth in joint-stock and multinational banking, local credit systems remained an important component of the Bengal economy.

76 Mukherjee, “Foreign and Inland Trade,” 361. Bengal Annual Register, 1883, BL, shows that Ausootosh Dey and Nephews and Prankissen, Law and Co., both old, established banian firms, as well as S. C. Chander and Co., were members of the Bengal Chamber of Commerce.

77 Rungta, Rise of the Business Corporation, 250.

78 Mukherjee, “Foreign and Inland Trade,” 362.

79 Aldous, Michael, “Avoiding Negligence and Profusion: The Failure of the Joint-Stock Form in the Anglo-Indian Tea Trade, 1840–1870.Enterprise & Society 16, no. 3 (2015): 671CrossRefGoogle Scholar; Tirthankar Roy and Anand Swamy, Law and the Economy in Colonial India (Chicago, 2016), 134–36.

80 “Merchants, Banians and Brokers.”

81 Roy and Swamy, Law and the Economy, 141.

82 Roy, Tirthankar, Company of Kinsmen: Enterprise and Community in South Asian History, 1700–1940 (New Delhi, 2010), 89CrossRefGoogle Scholar.

83 Gijsbert Oonk also notes the prevalence of traders and intermediaries among Indians investing and managing industrial ventures in Bengal. Oonk, “The Emergence of Indigenous Industrialists in Calcutta, Bombay, and Ahmedabad, 1850–1947,” Business History Review 88, no. 1 (2014): 43–71.

84 Ray, “Asian Capital,” 553.

85 Tirthankar Roy identifies a similar pattern of adaptation, as opposed to decay and obsolescence. Roy, Artisans and Industrialization: Indian Weaving in the Twentieth Century (New Delhi, 1993).

86 Ray, “Asian Capital,” 553.

87 Goswami, “Sahibs, Babus, and Banias,” 290; Oonk, “Emergence of Indigenous Industrialists”; Goswami, Omkar, “Then Came the Marwaris: Some Aspects of the Changes in the Pattern of Industrial Growth in Eastern India,” Indian Economic and Social History Review 22, no. 3 (1985): 225–49CrossRefGoogle Scholar.

88 Lokanathan, Industrial Organization; Gupta, Bishnupriya, “Discrimination or Social Networks? Industrial Investment in Colonial India,” Journal of Economic History 74, no. 1 (2014): 141–68CrossRefGoogle Scholar; Bagchi, Amiya Kumar, Private Investment in India, 1900–1939 (Cambridge, U.K., 1972)CrossRefGoogle Scholar; Deepak Nayyar, ed., Industrial Growth and Stagnation: The Debate in India (Bombay, 1994).

89 Misra, Business, Race, and Politics, 53–55.

90 Roy, Tirthankar, “Transfer of Economic Power in Corporate Calcutta, 1950–1970,” Business History Review 91, no. 1 (2017): 329CrossRefGoogle Scholar.

91 Jones, Charles, International Business in the Nineteenth Century: The Rise and Fall of a Cosmopolitan Bourgeoisie (Brighton, 1987), 94Google Scholar.

92 Goswami, “Then Came the Marwaris”; Timberg, Thomas, The Marwaris: From Traders to Industrialists (Delhi, 1977)Google Scholar; Roy, “Transfer of Power.”

93 Ray, “Asian Capital,” 553.

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