|Genesis and Growth of the Calcutta Stock Exchange
From a get together under a "Neem Tree" way back in the 1830s, the Calcutta Stock broking fraternity has come a long way. Though the once famous shelter for Calcutta Stock brokers no longer exists, the roots laid in the last century have dug themselves deep into the city and the region. The North-Eastern region, today plays a crucial role in the countrys capital market, while the Calcutta Stock Exchange has emerged as the second largest bourse in the country. The investors from the Eastern Zone are also at the forefront today.
The origin of stock broking in India goes back to a time, when shares, debentures and bonds representing titles to property were first issued on the condition of transfer from one person to another. The earliest record of dealings in securities in India is the East India Companys loan securities.
By 1830 there was a perceptible increase in the volume of business in Calcutta and we find in the Englishman of 1836, the then widely circulated newspaper from Calcutta quotations of 4%, 5% and 6% loans of the East India company as well as shares of the Bank of Bengal being quoted at a considerable high premium over the par value of Rs. 100/-. Three years later, in 1839, quotations were also found in newspapers published from Calcutta, of shares of the Union Bank, the Agra Bank and certain other commercial undertakings like Bengal Bonded Warehouse Docking Company and Steam Tug Company.
The advent of the Companies Act 1850 and subsequent introduction of the principle of limited liability, made investments in stocks and shares popular.
Though Stock Broking was practiced in Calcutta as early as 1836, the members of the broking profession had neither any code of conduct for their guidance, nor any permanent place for congregation. The centre of their activity was near a neem tree, where at present, stands the offices of the Chartered Bank (now known as Standard Chartered) on Netaji Subhas Road, Calcutta. In 1905, Chartered Bank began to construct their own building, which led brokers to shift the arena of their operation, to the neighbourhood of the recent Allahabad Bank.
The brokers had no shelter and business was carried on in the open place. The inconvenience of such trading, prompted brokers to organise themselves and in May 1908, an association was formed under the name and style of the Calcutta Stock Exchange Association at 2, China Bazar Street.
On June 7, 1923 the Association was registered as a limited liability concern, with an authorized capital of Rs. 3 lakhs divided into 300 shares of Rs. 1,000/- each. The shares were subdivided into 4 shares of Rs. 250/- each in 1959. The Golden Jubilee of the Association was celebrated in 1938. The Diamond Jubilee in 1968 and The Platinum Jubilee in 1983.
The building at 7, Lyons Range, Calcutta which was constructed in 1928 and has been the office of the Stock Exchange for the last 70 years, has become absolutely insufficient for accommodating the enormous increase, not only in the number of members of the Exchange but also the phenomenal growth in the volume of business being handled by the members of the Exchange. The authorities of the Stock Exchange have already initiated measures for obtaining larger premises, so that the hardship faced by members due to acute shortage of space is mitigated. The Stock Exchange has already obtained possession of land at the eastern Metropolitan Bye-Pass, Calcutta for construction of a modern stock exchange complex which will house apart from members offices, the office of capital market intermediaries like clearing house, financial institutions, banks, registrars, etc.
At the time of incorporation in 1908, the Stock Exchange had 150 members. Today the total membership has risen to more than 900, which contains several corporate and institutional members. The number of companies listed on the Exchange is more than 3,500. The Annual turnover of the Exchange in 1997-98 was to the tune of Rs, 1,78,779 crores. The Calcutta Stock Exchange has been granted permanent recognition by the Central Government with effect from April 14, 1980 under the relevant provisions of the Securities Contracts (Regulation) Act, 1956, with a view to render useful service to investors.
"Every great and commanding movement in the annals of the world is the triumph of some enthusiasm" - Ralph Waldo Emerson
"Not enjoyment, and not sorrow, Is our destined end or way: But to act, that each to-morrow Brings us farther than today" - From A Psalm of Life, by Henry Wadsworth Longfellow
The year 1997 had been a momentous one in the history of this illustrious institution as on 26th February, 1997 the Calcutta Stock Exchange ushered in a new era by replacing the old manual trading system with completely computerized on-line trading & reporting system known as C-STAR (CSE Screen Based Trading And Reporting). The on-line electronic screen based trading system was inaugurated by Shri Jyoti Basu, Honble Chief Minister of West Bengal on 26th February, 1997. The computerized trading started initially with 101 "B" Group scrips. Subsequently with effect from 7.3.1997 remaining "B" Group and all "Permitted Group" scrips (approx. 3,500) were transferred on to the C-STAR systems. The Exchange finally shifted the entire "A" Group scrips on the computerized system with effect from April 4, 1997.