Along the Indian ocean, much of the trade was done by corporatized merchant guilds. Such organizations created under contract, are called Samaya in inscriptions. One of the largest Guilds, called “The Five Hundred”, was established in Aihole, Karnataka and soon become a multinational corporation. Another guild, called Manigramam, was from Tamil country and is mentioned in Nandi Varman’s inscriptions in Thailand.

Code of Conduct

A code of conduct called “Banju-Dharma” governed such organizations. Membership was based on economic interest and often cut across caste divisions – for instance, The Five Hundred was founded by Karnataka Brahmins but would later be dominated by Tamil Chettiars. Moreover, the supply chains depended on contracts between different guilds. Thus, the weavers guild would contract with the merchant’s guilds to supply a certain amount of cloth for export.

While these corporations had links to the ruling dynasties, they were capable of making independent arrangements for themselves. Thus, we find that business carried on irrespective of changing rulers, wars and geopolitical balance. Some of the larger guilds had companies of mercenaries that protected their interests from pirates, rivals & even avaricious rulers. In this way, the Manigramam guild survived several centuries till around AD 1300.

Role of Temples as Banks

The network of temples played an important role in financing this economic model. Unlike their Sumerian and Egyptian contemporaries, Vedic Hindus had referred simple fire altars to grand religious structures. This changed in later times as temples become the center of social and cultural life. The early medieval period saw a sharp increase in temple building.

The temples were key to the financing of trade, industry & infrastructure building. It is very common that medieval temples very wealthy but the common impression is that this wealth was mostly due to royal grants. In reality, the network of large and small temples had a close relationship with a merchant and artisan communities as well as the village/town councils; this is quite clear from an examination of various donations and contracts. Moreover, the reason that the temples accumulated so much wealth is that they acted as bankers & financiers.

For instance, a study of temple records by Kanakalatha Mukund shows that temple lending was mostly directed to corporatized bodies like guilds and village councils rather than individual merchants. The temple lends money to village/town councils for infrastructure investments and to merchant and artisan guilds for business. Interest rates usually ranged from 12.5 to 15 percent per annum. An eleventh-century inscription clearly shows that there was an active credit market.

Thus, the Chola period, Indian Ocean trade was no longer about individual merchants and small money lenders but was a sophisticated network of multinational guilds financed by large temple banks. Like globalized businesses of today, they too had to navigate between local political rivalries and those of major geopolitical powers.

(The article is based on the book “The ocean of churn” by Sanjeev Sanyal.)