The Nath Bank was an Indian-owned bank founded by Kshetra Nath Dalal in 1926 in Noakhali, now in Bangladesh but then in undivided India. By 1947, when the Partition of India was imminent, the bank had its head office and three branches in Noakhali district,[1] and a branch in Comilla in Tipperah District. Noakhali and Tipperah districts became part of Pakistan, so the bank moved its head office to Kolkata. At that time, Indian banks were facing a severe crisis. In 1949, the Nath Bank had to be bailed out by the Reserve Bank of India.[2] That failed to resolve the crisis and the bank was finally liquidated in 1950.[2] The economist Arun Ghosh attributes its collapse to its over-aggressive expansion of branch banking.[3] The failure of the bank created a panic among depositors.[4]
References
- Bangladesh District Gazetteers: Noakhali Bangladesh Government Press, 1977^
- Indrajit Mallick, Sugata Marjit. Financial Intermediation in a Less Developed Economy: The History of the United Bank of India SAGE Publications India, 2008^
- Arun Ghosh. Banking and Decentralisation Economic and Political Weekly, 9 July 1988^