What was the trading practice of the Nakarattars community of Tamil Nadu in pre-colonial India?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → They practiced a caste-based banking system.
Option (1) They practiced a jajmani-based exchange system. — Incorrect. The jajmani system is a non-market exchange of services and produce between castes in a village. The Nakarattars were traders and bankers who dealt in money and credit, which is a market activity.
Option (3) They practiced a caste-based banking system. — Correct. The Nakarattars loaned and deposited money with one another in caste-defined relationships based on business territory, residence, descent, marriage and common cult membership. Public confidence in each Nakarattar rested on the reputation and shared reserve deposits of the caste as a whole, not on a government-controlled central bank. So their banking system was a caste-based banking system.
NCERT (2025-26): “Caste-based trade among the Nakarattars of Tamil Nadu The Nakarattars loaned and deposited money with one another in caste-defined social relationships based on business territory, residential location, descent, marriage, and common cult membership. Unlike in modern Western banking systems, it was the reputation, decisions, and reserve deposits shared among exchange spheres defined according to these principles, and not a government-controlled central bank, that … assured public confidence in individual Nakarattars as representatives of the caste as a whole. In other words, the Nakarattar banking system was a caste-based banking system. Individual Nakarattars organised their lives around participation in and management of various communal institutions adapted to the task of accumulating and distributing reserves of capital.” |