This was something I found by accident and I am proud to share it with you. I had not known that Karnataka had so many banks established and the reason for establishment can be attributed to Swadeshi movement which led to the agitated entrepreneurs to establish banks for the obvious need, i.e. money.
From Wikipedia :
“The state of Karnataka, particularly the region comprising the coastal districts of Dakshina Kannada and Udupi is called as the cradle of banking in India. This is because seven of the country’s leading banks, Canara Bank, Syndicate Bank, Corporation Bank, Vijaya Bank, Karnataka Bank, Vysya Bank and the State Bank of Mysore originated from this state. The first five in the above list of banks were established in the districts of Udupi and Dakshina Kannada. These districts have one among the best distribution of banks in India – a branch for every 500 persons. Between 1880 and 1935, 22 banks were established in coastal Karnataka, nine of them in the city of Mangalore.
The Indian Government’s notification of nationalisation of banks in the year 1969 and 1980, resulted in lot of these banks being nationalised with the Indian Government now owning some amount of control over these banks. As of today, State Bank of Mysore, Canara Bank, Vijaya Bank and Vysya Bank have their headquarters in Bangalore, Corporation Bank and Karnataka Bank are headquartered in Mangalore while Syndicate Bank is headquartered in Manipal.”
The reason for many banks to be in the coastal region is still confusing to me. I kept wondering why it has to be in the coastal region. If I was an entrepreneur and I wanted to start a business in the banking domain then I would ensure I get funds easily and I have earned trust with many people in that region. Other than this I am not able to think of any. One other reason I can think of is that because of the geographical location. Since this area is sandwiched between the Western Ghats and Arabian Sea, the place poses many difficulties to start the industries and hence banking was an easy option.
One of the main reasons could be that the easy availability of the scholars who could keep track of money easily. Generally entrepreneurs look for cheap and efficient labor so that they can make decent money. The geography and the brilliant people on the coastal region might be the two reasons for many banks to be set up.
Do you think of any reasons? If so please share it with me. I would be happy to know that.
Engineer's Finance 