The Japanese Main Bank System: Its Relevance for Developing and Transforming Economies

By Masahiko Aoki; Hugh Patrick | Go to book overview

14 The Lead Bank Systems in India

V. V. Bhatt

In both Japan and India the financial system was used after World War II as an instrument for rapid economic development, particularly through the accelerated pace of industrialization. The financial systems in both countries—in Japan until 1970 and in India until 1985—were largely bank-oriented. New projects and enterprises with no track record to facilitate financing through a market-oriented system, which can function only on the basis of detailed information about the actual performance of entrepreneurs and enterprises, therefore had to rely on bank financing. Further, in the initial post-war years in India, saving rates were low and, because of considerable uncertainty, savers were unwilling to assume the risk attached to market instruments. The policy environment in Japan also was not favourable for the functioning of a capital market. One of the mechanisms for making adequate finance available to new entrepreneurs and enterprises was the main bank system in Japan and the lead bank systems in India.

The objective of this chapter is to give a brief account of the lead bank systems in India and review their performance. These systems are, in the nature of financial innovations, somewhat similar to the universal banking system in Germany during the late nineteenth century and the main bank system in Japan with regard to their objectives (see Bhatt, 1988).

The plan of this chapter is as follows. A synoptic overview of the financial system in India is presented in the first section. The Indian lead bank systems and their characteristics are presented in the second section, and the reasons for their relative ineffectiveness are indicated in the third section. The relevance of the innovations represented by the lead bank systems in India and the main bank system in Japan for other developing countries and transforming socialist economies, and the pre-conditions for their effectiveness as an instrument for rapid industrialization, are discussed in the concluding section.


Overview of the Financial System

The Indian financial system as it has evolved is comparable in many respects with the financial systems of the most advanced developing countries

-494-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited page

Bookmark this page
The Japanese Main Bank System: Its Relevance for Developing and Transforming Economies
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this book
  • Bookmarks
  • Highlights & Notes
  • Citations
/ 651

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.