ANCIENT BANKING CORPORATIONS.
A BANK-The Oxford Dictionary definition.
A Financial Establishment that uses money deposited by customers for investment, pays it out when required, makes loans at Interest and exchanges currency. It mortgages valuables etc.
The Theory in Arthasastra the Book available to our kings as mentioned in Mahavansa . The reading of few regulation in vogue in India in ancient period may help the reader to better understand the situation about the management of finances in Sri Lanka. I am not suggesting that we copied blindly.
As Shown below one of the earliest delegation recorded in our ancient text, was that to King Asoka Court during the period of King Devanamapiyatissa. The Delegation headed by his chief Amati Aritha had a Ganaka[ One who was versed in Accounting] named Tissa, he was given the rank of Setthi [ The Head of Banker Guilds] while at Patilpatra in Maghada Janapadaya. Mahavansa Chapter para 20-26
The fact that Rev Mahinda and Sangamitta were grandchildren of the Setti [ A head of Banker Guild ] and many of the same clan accompanied Sangamitta to Sri lanka may be an important addition to banking traditions prevailing prior to their coming.
A FEW RULES OR REGULATION LAID DOWN IN ARTHASASTRA
The ancient Rules regarding banking activities in the Arthsastra in Chapters 3. Sections 11 and 12. A few interesting regulations regarding Upanidhi [deposits], Aadhi[ Pledges] Aadhana [mortgages], Yachithakam [ Borrowing] etc give an idea of how the ancient financial transaction were based upon. These include the obligations of debtorS and Creditors, Sureties, limitation of period of recovery.
The rules applied to Rina[ debt] the interest rates which was for
Normal Transaction was 1 ¼ % per month[ 15 % Annam in ancient India]
a. was 5 % per month for normal
b. Risky travel 10% through Forests and 20% by Sea per month[ Compare to Opening Letters of Credit on exports etc].
c. Grain lent shall be replaced the amount lent plus 50 % at harvest. The value of grain shall be treated as money loan and interest will be paid according if crop fails etc.
d. Commodity stocks Interest of money lent on stocks of commodities shall be paid yearly at 50 %
Rules for benefit of both Debtor and creditor.
If a cow is pledged the milk can be used by the creditor and no interest shall be charged on the money lent and the debtor shall never lose the right to redeem it. If no benefit an interest shall be charged.
HISTORY OF BANKERS OF INTEREST FROM MAHAWANSA
The ” Viashya settis’, who were the third class in the four-tiered class system of India in Pre-Buddhist Vedic society and post Buddhist society of India the order being Kshtriyas (rulers and warriors), Brahmanas (priestly class) Vaishya-settis (merchants and bankers) and Sridra (labouring class). The Vaishya settis, who came here to Sri Lanka on the invitation of Arahant Mahinda, were the mercantile bourgeoise of India, bankers and Chiefs of guilds to which the artisans and farmers were grouped and they were economically the most powerful. After their arrival in Sri Lanka in order to introduce the people to the banking system founded a series of banks called, Niyama[ Nigama] Tana ( see Dr S Paranavitanes interpretation of this word below] meaning places for depositing Money, Cereals, Pulses and Gold on which a fixed annual or monthly interest rate was assured and also they organised large marketplaces like the present day economic centres, called Padi where producers brought their products and retailers bought them in large stocks. Rohan L Jayatillake Newpaper Article.
But market centres there needed to be a ready source of credit.The Hopitigama pillar [ FAMOUSBbADULLA INSCRIPTION]inscription gives the royal directives as regards the conduct and the manner of sales at these market centres; Hopitigama was in Mahiyangana. This term Padi is still present in villages names such as Padiyapelalla, Padiyatalawa, Padiyagampola etc.
NEED FOR BANKS.
Duties on Buddhist Kings
The Duties of a Monarch propounded by the Buddha stated that the root of all Social Evil was Poverty and Unemployment. A King who merely collected taxes had the duty to supply Seed and Food for those who lived by Agriculture and Animal Husbandry. Those who lived by Trade should be provided with the necessary capital. The Government Servant were properly paid or compensated so that they don’t squeeze the people. New wealth had to be generated, the Citizens was free from Robbers and Cheats, could bring up Children in comfort and happiness, free from Want and Fear. The best way to spend surplus accumulation, whether from the Treasury or from Private donations would be in Public Works such as Tanks, Hospitals, and Monasteries that provided Education, Health care, Banks etc along the Trade Routes maintained by the King.”
Dr S Paranavitanes interpretation of Niyama-thane from Epigraphia Zelanica Vol III – Page 181 – Off the Tonigala Inscription.
Davaramandalaka or market town is mentioned in Chapter X of the Mahawansa. before the reign of King Pandukabaya [377-307 BC], where Serving lady smuggled out the baby prince Pakabaya from the palace. This is near the Cetiya Mountain or Mihintale. But there is no evience of any money or Grain deposited there.
NIYAMA-TANA-DEPOSITS OF GRAINS AND BEANS AND INTEREST ACCRUED
The Tonigala inscription of the time of King Siri Megha Vanna of 4th century AD, says in the third regal year of the king 365 AD, Deva a son of a minister deposited in the Niyama Thana two deyalak of paddy and ten amunas, Undu six amunas, Mung ten amunas and directed that with no decrease of the initial deposit the interest accruing on the deposits be directed to the Devagiri Vihara for the conduct of the annual Ariyavamsa sutra preaching festival. (Epigraph a Zeylaiica Vol 111 No: I7 pp 172 ff.) a full translation is attached, the rates of Interest agrees with that suggested by Arthasastra.
The name of the Guild that took deposits on interest is Kalahumanaka Niyamat-tana and was in the Northern part of the City.
Dr Paranavitanes translate this
NIYAMATANA-DEPOSITS OF MONEY ON INTEREST.
The Labuaetagala lnscription (Ibid No. 26 pp. 247) says a son of a Minister named Sirinaka deposited at the NiyamaTana, at the eastern sector of the city Deposited Hundred Kahavanu(Gold Coins) a the Ariyavamsa sutra festival at the Vihara. This inscription is not dated but accoprding to the script Dr paranavitane dates it to the 5 Cent AD or thereabout.The Name of the ancient banking institution where the grain was deposited was the Guild of Mahatabaka[ Mahatabaka Niyana-Tana] and it was situated in the Eastern Quarter of the City [of Anuradhapura?].
CENTRAL CULTURAL FUND EXCAVATION INVESTIGATIONS REVEAL EVIDENCE ON THESE ANCIENT BANKS.
The extracts from the Cultural Fund Journals may be of interest. These suggest that Dvaragamas mentioned in Mahavansa were Market town perhaps dabbling in financial activities such as deposits on interest etc.
The Sinhala text of Jetawana excavation is below
TWO ABBREVIATION USED BY ANCIENT BANKERS .
Two abbreviations found on the Inscription may be important to the history of banking, as any Badagarika[ Treasurers] , Ganaka[ Accountants], Lekaka[ Clerks ] may very well have used them. Dr Paranavitane explanation of these two symbols in EZ III is below.
WHAT WAS THE EARLIEST RECORDED BANKS OF BABYLON.
One of the leading cities of Mesopotamia was Babylon. Centuries before the Israelite’s entered the Promised Land, the Babylonians invented the economic system called “capitalism.” The Encyclopedia Britannica (1943 Ed., Vol. 3, “History of Banks,” p. 67) notes that the Babylonians had developed a banking system “as early as 2000 BC.” The same article notes that the banking system began as an invention of the sun-god temples, and it states: “the temples of Babylon…were also the banks.” This Britannica article cites a document from that period which mentions a person who had borrowed silver and that: “He will pay the sun-god’s interest. At the time of the harvest he will pay back the sum and the interest upon it.” Farmers were even then borrowing money from banks to plant their crops.
The same article states that “about 575 BC,” there was “…an institution that has been compared to the Rothschilds of 19th century Europe—the Igibi Bank of Babylon…the records of this bank show that it …loaned on crops, attaching them in advance…loaned on signatures and on objects deposited, and received deposits on which it paid interest.” We see in this account that modern banking practices had their origins with the sun-god temples of ancient Babylon in Mesopotamia. The description of Babylonian banking practices in the 6th century BC gives us an insight into Babylonian banking practices in previous centuries as well.
DR S PARANAVITANE ON EARLY CORPORATIONS THAT DEALT IN ANCIENT BANKING.
Dr Paranavitane in the Inscription of Ceylon Vol I gives few examples of early Trading Corporations which may have dealt in ancient banking activities as paragrap scanned from his book is shown below.
DEPOSITS OF GRAIN
If grains was deposited in financial Guild which were primitive banking systems prelavent in ancient Sri Lanka, they would have had used an abbration just like the one similar to that for the standard unit for Money deposied the Silver kahapana. There is an inscription where money and grain was deposited which explains the unit of measure of the ancient period. This inscription at Eppavala is expalained in detail by Dr S Patanaviatane will give an indication of these terms used on inscriptions . It also give an indication of the economic condition during the 10th Century AD.
There are many inscriptions having a sign symbol to indicate the unit of measure of capacity, which is the unit for Karisa as explained in above, Dr S Paranavitane whhile describing the inscription at not only suggest a unit for a karisa but perhaps a symbol used for the fr4action of Karisa, this is given below
BANKING ACTIVITIES LATE ANURADHAPURA PERIOD.
The next example give an indication of a financial Section at Mihintale but of the 10 th Cent AD , which gives an incite into the staffing , the duties and responsibilities, the system of accounting, maintenance of records their Security and perhaps of Auditing. This also gives the emoluments that each member was paid in both kind and money. This is well worth studying along with many other inscription about accounting in banking Institute of old. The accounting system is similar to those of King Mahsena inscrition of the 4 Cent AD.
The Dvaragamas mentioned in the Mahavansa was close the Cetiya Mountians or Mihintale. But amoung the many monasteries that is mentioned on inscriptions that excepted money on interests similar to the Nigamatana was one of Mahinda IV at Mihintale. It may not be a conicidence that Mahinda met Tissa at Mihintale which was a Dvaragama during the 3 Cent BC and was the trade route linking Anuradhapura. But 12 Cent later the Monastery at Mihitale had a financial Institutes where from money and grain was dispensed and accounted for. The important fact is that under the Monks of the Monastery was a Niyama[ Nigama] Jetu who was in charge of this sections . The explanation of Dr S Paranavitane is given below about the staff who kept accounts of this establishment.
What the tasks of these officials are described at the end of slab A end portion, the translation is shown below.
The payments made to Chief Administrator of the financial section , the accounting staff as on the above inscription is given below