'Temples Were Banks And Venture Capitalists...': Sanjeev Sanyal On How Ancient India Ruled Global Trade

Economist, historian and Prime Minister’s Economic Advisory Council (PM-EAC) member Sanjeev Sanyal has highlighted the role of temples as important financial institutions in ancient India, supporting large-scale trade and maritime activity during the Chola Empire.

Speaking at Nationalist Collective hosted by Republic Media Network, he explained that India’s trade dominance a thousand years ago was built on both maritime capabilities and a strong banking system operated through temples.

“In case you have ever wondered why Hindu temples in the medieval period had so much gold, it was not because kings handed over their wealth to them,” Sanyal said. “The reason temples had so much money was because they functioned as banks and venture capitalists.”

Merchant Guilds and Global Trade

According to him, merchant and artisan guilds such as “Manigramam” and “The 500” (named for their 500 shareholders) operated in a way similar to modern multinational companies.

These guilds had operations across the Indian Ocean and maintained their own navies to protect trade routes. “These were not small bodies. They had a global footprint and were backed by capital from temple-based financial systems,” he said.

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Sanyal described how these guilds, financed by temple treasuries, were central to trade between three major economic hubs of the time—the Fatimid Empire in Egypt, the Chola Empire in southern India, and China’s Song dynasty.

“India at that time was about a third of the world economy, but this was not just because of the domestic economy—it was because we dominated world trade,” he noted.

The 1025 Chola Naval Expedition

He pointed to the events of 1025, when Chola king Rajendra Chola launched a naval expedition against the Srivijaya Empire in Southeast Asia. The Srivijayas had taken control of both the Malacca and Sunda straits and had increased tariffs on passing ships, affecting Chola trade.

Sanyal said it was likely that much of the naval force used in the campaign came from the merchant guilds. The expedition was successful in defeating the Srivijayas and reopening the trade routes. “There is no difference between economic power and military power. They are joined at the hip,” he said.

Sanyal also discussed the decline of this system in the early 13th century. Invasions from Central Asia disrupted the three major economic hubs, with India’s coastal temples — many linked to port activities — being looted.

“People tend to think of these attacks only in cultural or religious terms, but it was also an economic disaster,” he said. “When these temples were destroyed, the financial base of our maritime power was destroyed.”

Impact and Lessons from History 

He emphasised that the loss of these temple-based financial systems weakened India’s ability to protect its trade interests. The merchant guilds they supported collapsed, leaving space for other powers to dominate regional trade in the centuries that followed.

Sanyal concluded that the historical link between financial and military strength remains relevant. “Our ancestors knew that to protect economic power, you sometimes have to be willing to back it with hard power,” he said. He also explained the shifts in world power since World War II, the rise and fall of global superpowers, and the implications for India's role on the world stage.