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Chartered Mercantile Bank of India london china

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In the early 1860s, the prosperity of India and China had attracted London investors to India. Several banks were promoted in Bombay. The Chartered Mercantile Bank of India, London & Chia (refer to Chartered Mercantile Bank) together with the rest of the banks took advantage of the prosperity to raise more capital.

In 1866, a financial crisis occurs in India, and some major local wars broke out. The bank's London management called upon oversea agents to remit home all surplus funds not required to meet their liabilities without delay. The demand for paper money in Bombay in August 1866 was at its lowest. The Chartered Mercantile Bank business in Bombay was almost at a standstill. The solvency of the surviving exchange banks was questioned. The shares of the Chartered Mercantile Bank in London fell sharply. At the end of 1866, out of the 24 exchange banks, the Chartered Mercantile Bank was one of the seven banks that survived. However, a hard time continued. In the following forty years, the outbreak of some major events dragged both Britain and India into numerous wars, caused the silver crisis, and affected the bank's commercial activities. In 1900, the Chartered Mercantile Bank was compelled to surrender its Charter.

In Hong Kong, the Chartered Mercantile Bank later called The Mercantile Bank of India Ltd., became part of the Hong Kong Bank Group in 1959. During the late 1850s and the early 1960s, the Chartered Mercantile Bank of Hong Kong branch issued their banknotes for the Colony.

The first design used for its notes showed a Britannia seated on an island surrounded by a symbol of power and trade.

This design was replaced in 1866 by the new design, showing the British Royal Arms as a visual reference to the bank's Royal Charter.

In 1861, the Singapore branch of the Chartered Mercantile Bank began to issue their banknotes. During the financial panic in 1865, the Chartered Mercantile Bank's solvency was questioned. When the bank opened its door on 8 May 1865, the Chinese rushed in to exchange their banknotes for silver dollars. However, the bank survived the chaos. Towards the end of 1867, the situation improved and merchants started to gain confidence in the bank. Transactions over the bank's counter improved. Unfortunately, when the largest local opium firm failed, the Chartered Mercantile Bank suffered the most, compared to other banks, due to the bank's poor management and negligence on the overflow of transaction.

Things worked out differently in the Penang Branch that was opened in 1860. In 1866, nearly the whole of the banking business in Penang went to the Chartered Mercantile Bank. However, the local merchants were very unpleased with the terms offered by the banks. Soon they started to press for a new bank to open & to prevent the monopoly of the Chartered Mercantile Bank. In 1875, Chartered Bank of India, Australia, and China opened their Penang branch, and within a short period, it reached a position of equal status to that of the Chartered Mercantile Bank.

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Comments

Hong Kong, the Chartered Mercantile Bank later called The Mercantile Bank of India Ltd.

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2 years ago

What nice topic it is! You can represent about the Singapore. I also know about the Singapore from your article. Thank you so much for sharing.

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2 years ago

The bank's London management called upon oversea agents to remit home all surplus funds not required to meet their liabilities without delay.

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2 years ago