BOMBAY: War-time banking problems in India were examined by Dir Homi Mody addressing today [March 29] the Annual General meeting of the Central Bank of India. While Great Britain stood the strains and stresses of the fourth year of the war without questioning, India had problems of her own, said Sir Homi.

Apart from acute scarcity and distress in several parts of the country, inflation reared its head and created severe hardships amongst the fixed wage earners and the poorer sections of the population. The position was one of “omnipresent and cumulative shortages” and it compelled recognition of the urgent need for the provision of consumer goods as was the case in other countries such as Egypt and Iran where also inflation had made its appearance.

In India, owing to increasing economic activity and the continued purchases of goods by the Governments of the Allied nations, there was an abundance of funds…. In Great Britain, the deposits of clearing banks increased by about £1,500,000,000 since the outbreak of the war. A feature of particular note in India was the heavy increase in the volume of demand liabilities of scheduled banks which, since September 1939, went up by something like 275%...

Published in Dawn, March 31st, 2019