┌──────┬────────┬──────────────────–┬────────────┬──────────–┐ │ │ No. of │ Capital, Reserve, │ Deposits. │ Cash │ │ │ Banks. │ and Rest. │ │ Balances. │ ├──────┼────────┼──────────────────–┼────────────┼──────────–┤ │ 1890 │ 5 │ £340,000 │ £1,810,000 │ £370,000 │ │ 1895 │ 9 │ 630,000 │ 3,780,000 │ 640,000 │ │ 1900 │ 9 │ 850,000 │ 5,380,000 │ 790,000 │ │ 1905 │ 9 │ 1,080,000 │ 7,990,000 │ 1,160,000 │ │ 1906 │ 10 │ 1,270,000 │ 7,700,000 │ 1,000,000 │ │ 1907 │ 11 │ 1,950,000 │ 9,340,000 │ 1,300,000 │ │ 1908 │ 14 │ 2,060,000 │ 10,840,000 │ 1,630,000 │ │ 1909 │ 15 │ 2,360,000 │ 13,660,000 │ 1,860,000 │ │ 1910 │ 16 │ 2,510,000 │ 17,110,000 │ 1,870,000 │ └──────┴────────┴──────────────────–┴────────────┴──────────–┘ 22. These figures reveal, in my opinion, an exceedingly serious state of affairs. If they could be brought up to date, they would probably appear even worse. As late as 1900 these Banks were comparatively insignificant. Since that time they have succeeded in attracting so large a volume of deposits as to make them an important part of the banking system of the country. Only six of them date back long enough to remember any real financial crisis in India (for the depression of 1907–8 was not accompanied by the symptoms of financial crisis). Growing up in smooth times, they have thought more of attracting deposits than of retaining cash reserves; and in 1910 we find sixteen Banks with deposits of £17,000,000 and cash reserves of not quite 11 per cent.[118] Even of these reserves the greater part is probably held by the older and more established of the Banks belonging to this class. In the case of the smaller Banks, dealing, as they are, with clients to whom banking is a new thing and in a country where hoarding is still dominant, the cash balances seem, from the available indications, to be hopelessly inadequate; and it is hard to doubt that in the next bad times they will go down like ninepins. If such a catastrophe occurs, the damage inflicted on India will be far greater than the direct loss falling on the depositors. The growth of banking habits in India is, of course, of the utmost importance to the country’s economic development. A startling series of failures will do much to retard it.