The Bankers of Colonial India: The Nattukottai Chettiars
How a TV Show and Research Led to Awareness
I absolutely love stumbling upon new discoveries while researching, it’s my version of being in “the right place at the right time.” For me, it’s less about physically moving around and more about letting my eyes wander across the internet. I know I’ve struck gold when I find myself grinning from ear to ear; picture my face as Gollum’s when he finds his “precious.”
As much as I hate to admit it, though I’d never own up to this at any other time, I have to now; my spiel here on my Substack is me vomiting every thought I’ve had that led to a particular piece. So when I stumbled upon this particular tidbit, something I’d never even heard of before, my brain immediately jumped to this infamous show I happily devoured back in the day. Yep, I even rewatched it. The history? Totally messed up (and “messed up” is a massive understatement). But hey, it did its job, it was entertaining and introduced me to historical characters I barely knew, making me want to dig up the real stories behind them. Alright, enough beating around the bush, I’m talking about the wildly inaccurate yet oddly addictive show about Mary Queen of Scots: REIGN!
So, why am I talking about this show now? Let’s start connecting the dots. If you’ve watched Reign, you probably know most of its key characters. If you haven’t, good for you, you’ve clearly made better use of your time. The show featured plenty of memorable figures: Mary and Francis (obviously), the mad king, Mary’s ladies-in-waiting, Nostradamus, and, most notably, Catherine de Medici.
During my research, which led to this delightful detour and the topic of this article, I stumbled upon the Nattukottai Chettiars. And then, bam! a random connection popped into my head. Naturally, I thought of the Medici family, the legendary Italian bankers who once controlled Europe’s wealth. And, as my brain tends to take the scenic route, this comparison brought me back to Reign.
The Chettiars reminded me of the Medici, a parallel that felt oddly fitting. Both were influential merchant-banking dynasties that shaped their societies in profound ways. But a quick, admittedly superficial search revealed that they operated in vastly different political and historical contexts. What does that even mean? Well, clearly, we need to dig deeper. Let’s dive in!
So who were the Nattukottai Chettiars?
It’s fascinating how localised innovations and shifts in demand can send ripples across the global economy, even in an era before the full-fledged globalisation we recognise today. A prime example of this is the year 1869, when the opening of the Suez Canal dramatically transformed trade dynamics. By significantly reducing the travel time between Europe and Asia, the canal spurred international trade and, in turn, created new economic demands.
One such demand was for primary commodities. As European markets opened up, the need for agricultural and raw materials surged. In the Indo-China and Burma regions, this translated into a sharp rise in demand for rice, a staple export that was crucial to feeding the growing global workforce.
Simultaneously, in Ceylon (modern-day Sri Lanka), the agricultural economy adapted to meet these new opportunities. Initially, Ceylon’s plantation economy was centred around coffee cultivation, then to tea, coconut, and rubber production. In neighbouring Malaya, this shift further extended to tin and rubber plantations, both critical commodities for industrialising economies.
But the most significant and often overlooked demand wasn’t for commodities, it was for credit. As economies transitioned to plantation-based models, vast amounts of capital investment were needed for land acquisition, labour, and infrastructure development.
Naturally, with this growing demand, any astute entrepreneur would seize the opportunity, and seize it they did. The Chettiar mercantile community of Tamil Nadu moved swiftly and decisively, positioning itself to dominate across four key geographies. A significant portion of Chettiar capital flowed into Ceylon, Malaya, and Indo-China, but the lion’s share was concentrated in Burma.
Before diving into the Chettiars’ banking prowess, let’s trace their origins. The Nattukottai Chettiars, also known as the Nagarathar community, hail from Tamil Nadu's Chettinad region in southern India. They rose to prominence as merchant bankers in the 19th and early 20th centuries, building a reputation for their financial acumen and philanthropy. Tradition holds that the Chettiars migrated from Chola Nadu to Ilayanthankudi in Pandya Nadu, where the Pandya king entrusted them with a temple. Over time, they expanded to eight nearby villages, each granted its own temple by the king. These nine temples became the spiritual centres of distinct Chettiar clans, fostering a strong pangali (fraternal) bond.
Initially, these pangali ties kept the community tightly knit. However, as the Chettiars spread across regions and generations, these connections gradually weakened, with most now familiar only with pangalis in neighbouring villages or those with shared ancestry.
Between 1870 and 1930, a staggering volume of wealth poured back from Burma into the villages of Chettinad, creating an era of unprecedented prosperity for the community. This financial influx not only reinforced their economic dominance but also seemed unstoppable, with no signs of decline in sight.
By the 1930s, the Chettiar community faced challenges that would drastically alter their trajectory. The once-steady ship of their financial empire was rocked first by the Great Depression and then by Japan’s invasion of Southeast Asia during World War II. These crises culminated in the post-war nationalisation policies of the Burmese government, which stripped the Chettiars of their properties with little to no compensation, draining a significant portion of their wealth.
The fallout was severe. Many small and medium-sized Chettiar firms were forced to pledge or liquidate their assets to survive. However, the larger enterprises managed to weather the storm, albeit with reduced influence. From a community where nearly 90% were engaged in merchant banking and financial services, the number plummeted to just 15%. The decline marked the end of their high-risk entrepreneurial ventures, as many shifted to safer, more stable white-collar professions, signalling a departure from their once-bold risk-taking spirit
The Chettiars attribute much of their decline to their own strategic missteps. Unlike other prominent business communities in India, such as the Marwaris, Gujaratis, and Parsis, who thrived on the age-old economic principle of diversification, the Chettiars concentrated their wealth and operations in a single, highly specialised sector. These other communities transitioned smoothly from traditional trade into modern industries, building resilience through diversified investments.
Until the 1930s, the Chettiar economy appeared robust and thriving, benefiting from the plantation and trade boom across Southeast Asia. However, this prosperity masked a critical vulnerability: their reliance on credit financing in a region deeply tied to agricultural cycles and colonial policies. When the global economic landscape shifted, particularly during the Great Depression, the Chettiars’ lack of diversification exposed them to catastrophic losses.
The storm they hadn’t anticipated, plummeting commodity prices, political instability in Burma, and shifting colonial policies, uprooted much of their community’s business foundation. Unlike their diversified counterparts, the Chettiars lacked the economic adaptability to weather the crisis, underscoring the importance of spreading risk across industries and geographies in uncertain economic climates.
The legacy of the Chettiar community in shaping trade practices and banking systems remains nothing short of illustrious. Their moneylending activities played a pivotal role in transforming Southeast Asia’s subsistence economies into cash-crop-driven ones. By extending credit into rural areas, the Chettiars significantly expanded the money economy, integrating previously isolated regions into broader market systems.
In doing so, the Chettiars functioned as key intermediaries within the circulation sphere, akin to Southeast Asia’s "trading minorities", notably the Chinese and, to a lesser extent, other Indian communities, who facilitated commercial transactions. While traders focused on channelling cash crops to ports for export to industrialised countries or to supply plantations and mines, the Chettiars provided the financial infrastructure that enabled these transactions. They financed the cultivation, transportation, and expansion of agricultural production, ensuring the smooth functioning of supply chains that underpinned the growing regional and global trade networks. Their contribution to integrating rural economies into the industrial global market underscores their lasting influence on economic systems in the region.
I have just barely scratched the surface, but it would be safe to say that while both the Medici and the Chettiars were influential banking dynasties, their contexts and impacts diverged significantly. The Medici operated in the fragmented, politically volatile city-states of Renaissance Europe, using their banking empire to secure immense political power and cultural patronage, leaving an indelible mark on Western history. In contrast, the Chettiars flourished within colonial systems, aligning their financial strategies with British imperial policies while driving economic transformation in Southeast Asia.
Their differences highlight not only the unique challenges of their eras but also the varied ways financial systems adapt to shape and serve societies. The Medici capitalised on the rise of European capitalism and state-building, while the Chettiars were instrumental in transitioning subsistence economies to cash-crop production, underpinning Southeast Asia’s integration into global trade networks.
Though I couldn't draw a fruitful correlation between the two, this exploration introduced me to the remarkable legacy of the Chettiar community, a powerful Indian financial force that reshaped regional economies and left a lasting imprint on history.
References:
McDaniel, J. T. (2018). The Goddess of Old Money: The Chettiar Bankers of India and their Temples in Southeast Asia. Material Religion, 14(1), 115–126. https://doi.org/10.1080/17432200.2017.1418212
Evers, H. (n.d.). Chettiar moneylenders in Southeast Asia. Persée. https://www.persee.fr/doc/ehess_0079-4074_1988_ant_29_1_1281
Evers, H. (n.d.). Chettiar moneylenders in Southeast Asia. Persée. https://www.persee.fr/doc/ehess_0079-4074_1988_ant_29_1_1281
Fortune seekers. (n.d.). Google Books. https://books.google.co.in/books?hl=en&lr=&id=VPJaEQAAQBAJ&oi=fnd&pg=PT7&dq=Nattukottai+Chettiars&ots=F4R4KPg7Sf&sig=O70EiIN_hQ6E0uDUdSiCPCetEWk&redir_esc=y#v=onepage&q=Nattukottai%20Chettiars&f=false