A Russian Bank in the Khanate of Khiva of NovoUrgench Branch of the Russo-Asiatic Commercial Bank

Abstract

Cotton farming, being one of the leading branches of economic activity of Turkestan of the beginning of the 20th century, attracted the attention of big investors of the Russian Empire. This article examines functioning of the Novo-Urgench branch of the Russo-Asian commercial bank (RACB) on the basis of the material from Russian State Historical Archive (RGIA): successful and unsuccessful operations, organizational structure, interaction with clients, and its influence on the regional market. The unique character of this branch of one of the largest Russian banks lay in that fact that it was the only lending and financial institution that expanded its operations throughout the entire oasis of Khiva, including territories that were under control of the Khan of Khiva. Both local political and economic elites and entrepreneurs from Central Russia were clients and partners of the Novo-Urgench branch of the bank. Wide-spread liaisons allowed the institution to promptly conquer and maintain, even under conditions of a crisis, its niche on the market of financial services in Central Asia. On the threshold of the World War I, the bank attempted to monopolize cotton farming, working with big clients and even stimulating development of the processing industry. Novo-Urgench branch of the Russo-Asian bank provided help to the local merchantry trying to increase export of raw cotton and to enter both Russia-wide and international markets. For the objective reasons of shortage of liquid assets, underdeveloped infrastructure of the region, swings in stock-exchange and problems with human resources, the Novo-Urgench branch of the Russo-Asiatic bank could not capture and control the Khivan market. During the war years, the Central Asian periphery was under the influence of the problems characteristic of not only the banking sector, but Russian economy as a whole.