Nath Bank Explained

The Nath Bank (Bengali: নাথ ব্যাংক) 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 asevere 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]

Notes and References

1. Book: Khan . Nurul Islam . 1977 . Bangladesh District Gazetteers: Noakhali . Dacca . Bangladesh Government Press . 177 . At the time of Partition in 1947 there were two scheduled banks with head offices at Noakhali. These were the Nath Bank, Ltd. and ... The Nath Bank Ltd. had three branches in the district. The bank was descheduled on October 28, 1950 and later on amalgamated with the Comilla Union Bank Ltd. to form the United Bank of India Ltd.
2. Book: Mallick. Indrajit. Marjit. Sugata. Sugata Marjit. Financial Intermediation in a Less Developed Economy: The History of the United Bank of India. 2008. SAGE Publications India. 9788132100225. 48.
3. Ghosh . Arun . 9 July 1988 . Banking and Decentralisation . Economic and Political Weekly . 23 . 89 . 1407 . 4378725.
4. Book: Shrivastava . Mohan Prasad . Anupama . Shrivastava . Mohan Prasad . Pandey . Pradeep Kumar . Vidyarthi . V.P. . Vision 2020: Merger and Acquisition of Indian Banking . Banking Reforms And Globalisation . 2007 . APH Publishing . 8131301591 . 5 . 22 July 2012 .