Banking policy in Burma Essay Example | Topics and Well Written Essays - 1500 words

Banking policy in Burma - Essay Example The indigenous banks of Burma were not started, until after the county’s independence in 1948.The banks that started operations in Burma during the colonial times, targeted the export trade of rice. They centralized their operations around Rangoon, engaging mainly in Chettiar lending, except a few like Dawson’s bank, which exited Burma after the 1942 invasion by the Japanese (Econ 335 a). Remarkable in the philosophical and the ideological banking profile of colonial Burma, are the exchange banks, which initiated western banking services at Burma. These exchange banks trace their origins to the trading firms of Burma, which mediated the commercial dealings of Burma with the outside world – throughout the nineteenth century. These firms include the Wallace Brothers, which was a remarkable example of the transition from being merchants, towards assuming the role of merchant bankers. By the end of the 19th century, the traders and the merchants that had operated as banks across the British Empire, either converted or left business for international banks. Most of these banks were headquartered at London, including Lloyds Bank and the National Bank of India (Econ 335 a). Most of the banks did not engage in the service of the entire population, particularly the countryside, but focused on the financing of rice trade, among a few other commodities at Rangoon. The finances of these banks were mostly outsourced from outside Burma, particularly London; the banks, later diversified towards the collection of deposits from European professionals, managers, and Burmese and Indian traders. The banking sector of colonial Burma was characterized by trade finance and the sale of bills of exchange. The bill of exchange is among the finance tools that revolutionized international trade during the nineteenth century; the instrument allowed exporters to receive the value of their exports, immediately after the sale of the exports, and in the local currency. The service was offered by exchange banks, which marked a reduction in the risks borne by exporters and importers; it also increased their access to credit. The bills of exchange were a short-term credit instrument, ordinarily 60 days, and not longer than 90 days. Banking institutions like the British banks, concentrated in the provision of financial services, and funding to businesses, particularly European as well as the colonial administration and its agencies. For instance, the Imperial bank offered wholesale financing to Chettairs, thus was an import financier of the Burmese agricultural sector. Despite the dominance of British banks, non-British exchange banks like Citibank started their operations in Asia, during 1812. The bank started its operations at Rangoon in 1919. For example, some Chinese banks arrived into Burma, immediately after the completion of Burma Road, in 1938 targeting the upcoming opportunities (Econ 335 a). There was the rise of Burmese banks, including  "U Rai Gyaw Thoo and Dawson’s Bank†. Dawson’s Bank was started in 1905, with the role of assisting Burmese agricultural players, so that they could free their lands from Indian-money-tenders. The local banks sought closeness to the farmers, so that they would ensure that they would get cheap credit, and, so that the banks would ensure that they used the money for the specified purpose. U Rai Gyaw Thoo was among the first Burmese-operated and owned bank, which grew out of shipping, trading and money lending. There