12. This summary leads us, therefore, to the important conclusion that the business of financing Indian trade, so far as it is carried out by Banks with their seat in London,[103] is in the hands of a very small number of Banks. They stand, broadly speaking, in an exceedingly strong financial position supported by large reserve funds. In this matter India is now enjoying the fruit of past disasters and of conditions in which the struggle for existence was too keen to allow any but the fittest to survive. If the present spell of prosperity lasts too long, she will no doubt lose it. 13. I shall not attempt any complete account of the activities of a typical Exchange Bank. Much of their business is very like that of any other Bank. But it will be worth while to describe in rather more detail the most characteristic part of their transactions and the part which is most relevant to the topics of this book. 14. In addition to its capital and the reserves accumulated from profits, an Exchange Bank obtains its funds by receiving deposits either for fixed periods or on current account. These deposits are received both in India and in London; but it is a principal object of Exchange Banks to obtain as much as they can in London, and they seek to attract such deposits by offering better terms than an English Bank will allow. On fixed deposits, received for a year or more, 4 or 3½ per cent will be paid; for shorter periods a more variable rate; and on current accounts 2 per cent will be allowed on the minimum monthly balance or on the amount by which the balance exceeds a certain fixed minimum. Apart from the cash, money at call, and investments, which every Bank must hold, a certain part of these funds are employed in making loans either in India or elsewhere. But a large part is employed in the purchase (or discount) of bills of exchange. Some of these bills will be negotiated in London and drawn on India, but the bulk of them will be negotiated in India and drawn on London. A busy Exchange Bank discounts far more of these trade bills in India than it can afford to hold until maturity. But as they are drawn on London houses there is no difficulty in rediscounting them in London. As the majority of the bills are bought by the Banks _in India_, while cash is received for them, either at maturity or through rediscount, _in London_, the Banks are constantly in the position of finding themselves in funds in London and of wishing to have funds (for the purchase of more bills) in India. They proceed, therefore, to even up their accounts as between London and India by buying, in London, Council Bills (or transfers) or sovereigns (from the Bank of England or from the agents of Egyptian or Australian Banks) for delivery in India, or, perhaps, silver (though their dealings in silver bullion are probably much less important than formerly)[104] for remittance to India. The question of what determines