Which of the following are correct?
A. Nakarattars are basically based on nuclear family firms
B. The Nakarattars loaned and deposited money with one another in caste defined social relationship
C. Individual Nakarattars organised their lives around participation in and management of various communal institution.
D. Nakarattars are class based banking system
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → B, C only
A. Nakarattars are basically based on nuclear family firms Incorrect. As in most ‘traditional’ merchant communities, Nakarattar banks were basically joint family firms, so that the structure of the business firm was the same as that of the family.
B. The Nakarattars loaned and deposited money with one another in caste defined social relationship Correct. The Nakarattars loaned and deposited money with one another in caste-defined social relationships based on business territory, residence, descent, marriage and common cult membership.
C. Individual Nakarattars organised their lives around participation in and management of various communal institution. Correct. Individual Nakarattars organised their lives around participation in and management of communal institutions that accumulated and distributed reserves of capital; it was the reputation of the caste as a whole, not a government bank, that assured public confidence.
D. Nakarattars are class based banking system Incorrect. The Nakarattar banking system was a caste-based banking system, not a class-based one. Trust and credit moved within the caste and its kinship networks.
Note: The paragraph describing Nakarattar banks as joint family firms, in the chapter ‘Markets as a Social Institution’, was there in the pre-rationalised NCERT, which NTA followed in 2023. It has been deleted from the NCERT book (2025-26), though the chapter and its box on the Nakarattars are still there.
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.” NCERT (Pre-rationalised): “…The Nattukottai Chettiars (or Nakarattars) of Tamil Nadu, provide an interesting illustration of how these indigenous trading networks were organised and worked. A study of this community during the colonial period shows how its banking and trade activities were deeply embedded in the social organisation of the community. The structures of caste, kinship, and family were oriented towards commercial activity, and business activity was carried out within these social structures. As in most ‘traditional’ merchant communities, Nakarattar banks were basically joint family firms, so that the structure of the business firm was the same as that of the family. Similarly, trading and banking activities were organised through caste and kinship relationships. For instance, their extensive caste-based social networks allowed Chettiar merchants to expand their activities into Southeast Asia and Ceylon.…” |