Question

The Nakarattars banking system is based on:-

• A. Class based banking system
• B. Caste based banking system
• C. Western banking system
• D. Free-Trade system

Hint:

In Indian economic history, many traditional business communities (like the Nakarattars, Marwaris, etc.) leveraged their specific caste and community networks as social capital to build extensive commercial empires.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The question is about the organizational basis of the indigenous banking and trade system of the Nakarattars (also known as Nattukottai Chettiars), a prominent mercantile community from Tamil Nadu.
Step 2: Detailed Explanation:
The Nakarattars were renowned traders and financiers who operated across South and Southeast Asia during the 19th and early 20th centuries.
Their entire business model was built upon their extensive and tightly-knit social structure. Trust, credit, and information flow were managed through caste and kinship networks.
Business partnerships were formed within the caste, apprentices were recruited from within the community, and financial instruments (like hundis) were honored based on the collective reputation of the caste. This social solidarity was the foundation of their success, making it a classic example of a caste-based banking system.
Step 3: Final Answer:
The Nakarattars' banking and trade system was fundamentally based on their caste networks.