'FILE NO: 14/14 name; BANK FOR MUSCAT (IMPERIAL BANK OF IRAN & THE PERSIAN GULF)' [‎127r] (253/434)

doubt If the old hundi adatom will oontlnue* 7ho hundl
ay atom Is run on a baa la of trust oxlatln^ for nany years
between fan 11 lea in Muscat and farAillea In India and with
the exodus of Hindus from Pakistan It la thought unlikely
that the Hundl system will continue ao regards trading
with Karachi, and all export trade from i run cat to Karachi
ana import trade from Karachi to Muscat would be pasaod
through a Bank, If one existed in Muscat*
GEingUL*
The Government of India "iroaamry attached to the Agency An office of the East India Company and, later, of the British Raj, headed by an agent.
la to close down on ZXat March, 1948* No arran ;or-Lonts
exist at present for merchants to obtain payment after that
date for their exports to India and merchants are therefore
anxious that a Bank should be opened In Muscat before 31st
March# I do not think auitib le arrangements could \ e made
in such a short time If the Bank decided to open a Branch
but, if It Is decided to open, I am of the opinion that we
should open before the date season c^niencoa in mid-July# if
the merchants knew that the Bank wre to open before the
date season they would feel much happior, as they fear that
If no Bank opens, the Impossibility of getting their funds
back from India my result in the export of dates being
confined to the very wealthy merchants only. Major Stewart,
the political Agent A mid-ranking political representative (equivalent to a Consul) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Agency. , has repeatedly urged the sultan to
arrange for a Bank In Muscat and it was a disappointment
when the imperial Baidc of Iran decided not to open# I was
infer? od by merchants that the Ir^perial Bank representative
made only a hurried visit to Muscat and only called on two
of the wealthiest merchants who, as I have indicated else
where, were not anxious to see a Bank established. Docidir^
that Muscat was a good place to get out of, he acted
accordingly, because of this and because ox' Major Stewart f a
rep/eated requests to the sultan for a Bank, it seems
possible that the sultan might grant us a monopoly on very
favourable terra. If, however, we express our willingness
to open a Branch but delay doing so, ho my grant a monopoly
to the highest bidder an other Banks are believed to be
interested in opening in MiJacat* I surest, therefore, that,
if it is decided to open, a senior representative should be
sent forthwith to discuss the matter with the Sultan who is
expected to return to Muscat on or about 12th J^arch for a stay
of about two months only. Any delay in negotiating may result
in other Banks being considered and will certainly result in
losing the goodwill of the merchants, sane of whose businesses
are now at a standstill because of present control regulations*
v*hen I first visited Mr. Janal-, the sultan»a Secretary, it
was obv&ous to me that he was afraid of expressing any opinions
which might be mistaken for those of the sultan, r>o I did not
endeavour to ascertain on what terms the Bank would be allowed
to open. l/hen Major r.tewart told me, however, that he liad
explained to the Sultan many times that no Bank would open in
Muscat unless they thought it would be a paying proposition
and that the sultan must therefore make it attractive for a
Bank to open, I decided I would leave the Secretary in doubt
as to what I really thought and so told hin that although I
considered a Bank in Muscat was absolutely necessary for the
maintenance of trade with the outside world, I did not consider
it a good business proposition but tAwt the decision would rest
with the .lank»s Directors. Me expressed the hap*