ATMs in Ancient India
The title of this article may sound strange and very striking, but we will systematically deliberate on the issue of the title. Let me take you back to the 15th century where, in the Gujarat State of India, lived a great and renowned devotee of Lord, popularly known as Narsimh Mehta (sometimes referred as Narsi Mehta). If you have heard this song:
વૈષ્ણવ જન તો તેને કહિએ,
જે પીડ પરાઈ જાણે રે (Vaishnav Jan To Tene Kahiye, Je Perr Prayi Jane Re),
then you are right on spot–this song was written by this great devotee!
At those times, how people respected him, we do not know; but presently, the people of Gujarat and of the whole India who know a bit of history, respect him with great admiration and reverence for his devotion to Lord. Indian history is full of such devotees, taking birth from time to time and on different soils of India. Narsimh Mehta was certainly a loved one of the Lord and lived his life singing and doing work as if he is doing it solely for God. It is while reading his story that I came across a term and an incident that propelled me to write this article. It is known that this system of financial transaction, about which we would talk now, was prevalent in olden times also. I had heard the term earlier also; but I read it again in his book, and that is why I mentioned his name. I never paid attention to that term from that angle, but this time, the incident was more striking and so I made up my mind to write something on it!
The concept of ATMs is certainly new and we need to know about it a little:
ATMs are standardized cards offered by Banks to draw money from a machine set-up by the bank or from the machines of other banks with whom the issuing bank has made some collaboration. For drawing money from other banks’ machines, sometimes, it is chargeable; however, drawing from the issuing bank’s machine is always free, though there is a limit to maximum amount of money that can be drawn in a single day.
- ATM can be taken to any other place where the machine is available and money can be withdrawn.
- There is a particular code—password—for each card (known to the holder of the card), without which money cannot be withdrawn.
Okay, so now we return to our discussion where we say that ATMs were used in India in the historical times. It is clear that there were no such machines and all other banking processes, and we do not strip the new technology of its glare!
At those times, commerce was in hands of certain class of people and they use to lend money to the people whenever needed, against some items, just like the modern banks who do it for mortgages. And these people also kept the money in their custody if somebody wanted to deposit it for safe retrieval later, which is the primary function of today’s banks. However, we are not clear whether those persons offered interest for keeping money in their custody, but they did charge it when they lent it!
Now we come to the exact point: there was an object named as “Hundi”, in Sanskrit and Hindi, which was used by such people. It was not of paper, as in those days the use of paper was almost negligible; however, it might be made of wood or some metal. The issuing person (acting as the issuing bank who gives you an ATM card) used to write the “Hundi” against certain fixed amount of money in the name of another person in another place, who would take that “Hundi” and give the bearer the money pledged on that “Hundi”. The other person on other place, it is clear, would have connections or collaborations with the person who is issuing the “Hundi”. The bearer of the “Hundi” had to present the “Hundi” and could take the money.
But why I related this system to ATMs only and not with modern banking that is otherwise operating worldwide, because of some reasons that are discussed below:
“Hundi” was a specific object, which could be used to get money by producing it before the person to whom it is addressed, at a far-off place. It eliminated the need of taking cash while in journey or traveling, which is the primary function of ATMs.
There is no other service offered by banks of modern times, whereby a person can deposit money and take an object sort of thing and could get his or her money back in far off place by producing that object—it directly resembles to the ATMs.
At those times, traveling was done mostly on foot or on bullock carts, and moreover, there was a lot of forest area, which caused fear in the travelers for taking money with them due to the danger of being robbed. So they preferred to convert it in a card or object—Hundi. However, “Hundi” can also be robbed and there was no password for a particular “Hundi”, but at those times robbers use to rob while traveling and not in the city, mostly! And a robber would not take the hardships to get an object and move to the city, where he would have to get the cash from a person! –They never had such liberal times!
Though all the options were not there with “Hundi”, as are there with today’s ATMs: some of them are—
- It could be operated in one far-off place for which it had been addressed.
- The money could be gotten from the person only who had been addressed and not from any other person with whom he has any collaboration in that far-off place.
- Working during night was not available.
- If you misplace or lose it, the other person, who gets it or finds it, could cash the money by producing it before the addressed person. –There were no passwords or usernames!
- And lastly, it was for SINGLE use only and could not be used again for drawing more money.
However, apart from all these abovementioned differences and shortcomings, it still was one of the safest and simplest options, which apparently matched the today’s ATMs, and somehow fulfilled the needs of those times! Times goes on and the technologies change—the life moves and drives!