Oversea-Chinese Bank is formed

The general boom after World War I, especially the success of the rubber plantation industry in Malaya, heralded the formation of the Oversea-Chinese Bank (OCB) in 1919, with a paid-up capital of $5.25 million.^[1] With two rubber magnates – Lim Nee Soon and Tan Ean Kim – behind its founding, the fortunes of the bank were largely intertwined with that of the rubber industry. Lim Boon Keng, the founder of two other Hokkien banks, the Ho Hong Bank and the Chinese Commercial Bank, was also influential in starting the OCB. He persuaded wealthy Hokkien industrialist Oei Tiong Ham from Java to subscribe to OCB’s shares.^[2] Other backers of the bank were the wealthy Chinese of Rangoon (Burma).^[3]

Shortly after its establishment, the OCB opened a branch in Penang. It later extended its operations with branches in Rangoon, Kuala Lumpur, Malacca, Amoy and Djambi (Sumatra).^[4] A large part of the bank’s business comprised remittances from Southeast Asia to China as well as foreign exchange. In 1932, there was a public run on the Rangoon branch as a result of the unhappiness that had arisen among the local Chinese community leaders there over the bank’s remittance service between Rangoon and Amoy. Coupled with their dissatisfaction with the local branch manager, the Chinese leaders agitated for a boycott that led to the run. The matter was resolved only when the general manager in Singapore arrived in Rangoon to seek reconciliation with the Chinese leaders there. Although saved from the run, the OCB could not stay afloat amid difficulties caused by the Great Depression (1929–1933).^[5]

In 1932, the directors of the OCB entered into confidential negotiations with their counterparts at the Ho Hong Bank with the view of amalgamating the two banks. As the talks progressed, the Chinese Commercial Bank was invited to join the scheme. The talks led to the formation of the Oversea-Chinese Banking Corporation (OCBC), which was incorporated on 31 October 1932.^[6]

References
1. Tan, E.-L.  (1953, July). The Chinese banks incorporated in Singapore & the Federation of Malaya. Journal of the Malayan Branch of the Royal Asiatic Society, Vol. 26, No. 1 (161), 124.  Retrieved February 19, 2014, from JSTOR.
2. Huff, W. G. (1994) The economic growth of Singapore: Trade and development in the twentieth century (p. 234). Cambridge: Cambridge University Press. Call no.: RSING 338.959570094 HUF; Lee, K. H.  (2003). Establishing an enduring business: The Great Eastern-OCBC group. In H. Dahles & O. van den Mujizenberg (Eds.), Capital and knowledge in Asia: Changing power relations (p. 161). London:  RoutledgeCurzon.
3. Untitled.  (1919, October 28). The Straits Times, p. 6. Retrieved from NewspaperSG.
4. Lim, C. Y. (1967). Economic development of modern Malaya (p. 234).  Kuala Lumpur: Oxford University Press. Call no.: RSING 330.9595 Lim; Tan, 1953, p. 125.
5. Tan, 1953, p. 125.
6. Tan, 1953, p. 126. Chinese bank merger. (1932, December 30). The Singapore Free Press and Mercantile Advertiser (1884–1942), p. 15; Tribute to bank founders’ faith and foresight. (1972, October 31). The Straits Times, p. 4. Retrieved from NewspaperSG.