ABSTRACT
There is evidence that moneylending with the payment of interest existed in India over 2 000 years ago. By the second or third centuries AD, bank ing as a business had become established with the expansion of mere moneylending into the taking of deposits and pledges coupled with other commercial activities. By the time the British came to India in the seven teenth century, indigenous banking had been well established for cen turies.1 By then almost every village had its money changer, or shroff, who acted as banker and could make remittances. The indigenous bankers came to play an important role in financing trade by the use of credit instruments, as well as being involved with the collection of revenue and state banking. Throughout the centuries, moneychanging itself had remained an essential part of their business so as to cater for the disunited state of the subcontinent’s currency.
