FROM BANK NEGARA MALAYSIA records - The first 25 years:1959-1984 by Supriya Singh

For majority of the people in the country, banks stood for something stange and foreign. Banks in the 50s were a big town phenomenon. While Kuala Lumpur had 21 branch offices in 1959, Penang had 12 and Ipoh 6, the whole state of Perlis did not have a single banking office before Bank Negara was established. Trengganu had only one, Kelantan had two and Kedah had 3.

Many still kept their money in cash, hiding it under the mattress, or in the eaves of the house or burying it. Some kept it with the local shop keepers so that it would be safe and they can get it in time of need. When there was sufficient cash it was invested in gold, cattle or land.

For a small businessman, with no security, it was very difficult to get a loan. As one banker who was active in this period says, "The question that was asked in the 50s was, ‘What type of security do you have?’" Security meant land, a house, rubber estates. Some banks accepted trade bills, stocks and shares, others did not. If you did not have any of these, it was difficult getting a loan even if you were a person of high repute in your community and had a viable business proposition. It is this gap in the credit structure that the Chettiars, together with other money lenders and pawnbrokers filled.

They would lend to people who did not have access to banks. If you wanted to borrow from a Chettiar, you had to be introduced to him by another client or another Chettiar. If you had spare money you could also deposit it with a Chettiar. They had a reputation of being frugal, shrewd businessmen of integrity. You seldom heard of a Chettiar reneging on his debts.

To borrow from him you had to go to his office. It was much the same set up you can see today. There would be a row of Chettiars sitting on a raised platform. In front of each Chettiar would be a desk. The desk had no legs or had its legs sawn off. This is where he would keep his long ledger book with his accounts in Tamil. Next to him would be a safe to store his cash and documents. The customer sat on the same platform.

On the other side of the room would either be a similar raised platform or long tables with drawers, where most of them would store their belongings and sleep. Most often their families were in India. They would constantly remit money back to them and for business in India.