Banque de Madagascar et des Comores

Banque de Madagascar was a French colonial banking institution established in 1925 to issue currency and provide credit in Madagascar. From 1946, after the Comoro Islands became a separate French territory, it operated under the name Banque de Madagascar et des Comores. Although legally a specialized issuance bank rather than a fully independent central bank, it performed many central-banking functions for the colonial economy, including banknote issuance, management of the local monetary system, and the provision of credit through a network of branches. The institution emerged from a long-running debate over how Madagascar should be supplied with a currency adapted to local economic conditions. France had taken direct control of Madagascar in 1897, and the island’s monetary circulation initially relied largely on French coins. During the First World War, French banknotes replaced some coin circulation, but colonial officials and commercial interests argued that Madagascar required a locally administered issuance system. The Comptoir national d'escompte de Paris had promoted such a bank as early as 1895. French policymakers considered both direct state issuance and a privately operated model similar to the Banque de l'Indochine and Banque de l'Afrique Occidentale before settling on a hybrid structure. Legislation adopted on 22 December 1925 created the Banque de Madagascar. In practice, operations were entrusted to Banque de Paris et des Pays-Bas under agreements concluded with the French Finance Ministry and the colonial government. The initial capital combined public, banking, commercial, and popular participation: the government of French Madagascar held 20 percent, Banque de Paris et des Pays-Bas 15 percent, Comptoir national d'escompte de Paris 10 percent, Malagasy colonial economic interests 35 percent, and inhabitants of Madagascar 20 percent through a public subscription completed in March 1926. The French state retained substantial influence, including the power to appoint the chairman and three other directors. The bank issued notes denominated in Malagasy francs, initially pegged at par with the French franc. French coins continued to circulate at first, while locally designated Malagasy franc coins appeared later. Between May and December 1926, the institution opened branches in Tananarive, Tamatave, Diégo-Suarez, Majunga, Nossi-Bé, Fianarantsoa, and Mananjary, followed by branches in Tuléar, Manakara, and Fort-Dauphin. Its Paris head office moved from 134 Boulevard Haussmann to 88 rue de Courcelles in 1929, and the bank also maintained a Marseille office. The bank’s monetary role expanded and changed after the creation of the Madagascar-Comoros CFA franc in 1945. In 1946, its name was changed to Banque de Madagascar et des Comores, and a Comoros branch opened in 1953. The institution remained closely tied to French monetary policy, while its banknotes were adapted to reflect the inclusion of the Comoros; coins continued to carry only the Madagascar designation. French public ownership increased during the postwar period, with the French government taking majority control in 1950. Decolonization progressively removed the bank’s issuance functions. After Madagascar became independent on 26 June 1960, the Institut d'Émission Malgache was created to issue currency for Madagascar. Madagascar left the CFA zone on 1 July 1973, and the issuance institute later became the Central Bank of Madagascar. In the Comoros, the bank lost its issuance monopoly in 1963; a separate Comorian issuance institute was established in 1974 and became the Central Bank of the Comoros in 1981. In 1977, Banque de Madagascar et des Comores merged with Banque immobilière de Crédit-Soficam to form Compagnie générale de banque Soficam. The historical bank therefore ceased to exist as an independent institution, leaving a legacy primarily in the monetary and banking history of Madagascar and the Comoros.

The Banque de Madagascar was created within the institutional framework of French colonial rule. After France converted Madagascar from a protectorate into a colony in 1897, monetary circulation remained heavily dependent on French currency. Commercial banks, including Comptoir national d'escompte de Paris, argued that the island needed a local issuance institution capable of adapting currency and credit to the colonial economy. The First World War increased reliance on French banknotes, strengthening the case for a specialized local bank. French lawmakers debated whether the state should issue currency directly or whether a private bank should receive an issuance privilege. The eventual solution, enacted on 22 December 1925, created the Banque de Madagascar under a mixed ownership and governance model. Banque de Paris et des Pays-Bas operated the institution in practice, while the French state retained important appointment and oversight powers. The capital structure included the colonial government, French banks, Malagasy commercial interests, and inhabitants of Madagascar through a public subscription. The bank began issuing Malagasy franc notes, with the currency initially pegged to the French franc. It developed a substantial branch network during its first years, opening offices in Tananarive, Tamatave, Diégo-Suarez, Majunga, Nossi-Bé, Fianarantsoa, Mananjary, Tuléar, Manakara, and Fort-Dauphin. These locations connected the issuance institution with commercial centers and agricultural regions. Its Paris headquarters served as an administrative link to French financial authorities, and an office in Marseille supported connections with metropolitan trade. The institution’s role changed after the creation of the CFA franc system in 1945. When the Comoros became a separate French territory in 1946, the bank was renamed Banque de Madagascar et des Comores. It opened a Comoros branch in 1953 and issued notes reflecting the expanded territorial remit. The French government strengthened its ownership position in 1950, making the bank more directly aligned with official monetary policy. The end of colonial rule gradually dismantled the bank’s currency monopoly. Madagascar’s independence in 1960 led to the creation of the Institut d'Émission Malgache, which assumed responsibility for issuing currency in Madagascar. Madagascar subsequently left the CFA zone in 1973, and the institute became the Central Bank of Madagascar in 1974. In the Comoros, the bank’s issuance privilege had already been curtailed in 1963. A separate Comorian issuance institution appeared in 1974 and became the Central Bank of the Comoros in 1981. By 1977, the former colonial issuance bank no longer occupied its original monetary position. It merged with Banque immobilière de Crédit-Soficam to create Compagnie générale de banque Soficam. The Banque de Madagascar et des Comores is consequently a defunct historical institution whose importance lies in the development of colonial monetary administration, the transition from French currency arrangements to national central banks, and the early banking infrastructure of Madagascar and the Comoros.

1. 1977Merger into Compagnie générale de banque Soficam

   The bank merged with Banque immobilière de Crédit-Soficam.

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2. 1973Madagascar leaves the CFA zone

   Madagascar left the CFA monetary area effective 1 July.

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3. 1960Madagascar creates a separate issuance institute

   After independence, the Institut d'Émission Malgache became responsible for issuing currency for Madagascar.

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4. 1953Comoros branch opened

   A branch office was established in the Comoros.

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5. 1946Name expanded to Banque de Madagascar et des Comores

   The bank was renamed after the Comoros became a separate French territory.

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6. 1945Madagascar-Comoros CFA franc introduced

   The CFA franc replaced the Malagasy franc as the relevant currency framework for Madagascar and the Comoros.

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7. 1928Shares listed on the Paris Bourse

   The bank’s shares were admitted to trading in Paris on 27 September.

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8. 1926Initial branch network opened

   Seven branches opened between May and December, beginning in Tananarive and extending to other Malagasy commercial centers.

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9. 1925Banque de Madagascar created

   French legislation of 22 December 1925 established the institution as a specialized issuance bank for Madagascar.

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A state-supervised colonial issuance bank combining central-bank-like monetary functions with commercial credit and branch banking.

• Malagasy franc banknotesCurrency issuance1926

  The bank issued notes denominated in Malagasy francs for circulation in the French colony. The currency was initially pegged at par to the French franc. French coins remained in circulation during the early years, while locally designated Malagasy franc coins were introduced later.

• Madagascar-Comoros CFA franc banknotesCurrency issuance1945

  Following the establishment of the Madagascar-Comoros CFA franc in 1945 and the bank’s renaming in 1946, the institution issued notes associated with the shared French monetary framework. Notes were revised to reflect the inclusion of the Comoros, although the coinage retained the Madagascar name.

• Commercial and colonial creditBanking services1925

  Alongside its issuance role, the bank provided credit to businesses and economic activities in colonial Madagascar and the Comoros. The available historical material does not identify specific modern-style loan products, but credit provision was one of the institution’s principal functions.

• Branch banking servicesBanking services1926

  A network of Malagasy and Comorian branches supported currency distribution, deposits, payments, and access to credit. The network expanded rapidly after establishment and linked the institution to major ports, administrative centers, and regional commercial towns.

• 1977Merge with Banque immobilière de Crédit-SoficamM&A

  The bank’s historic currency-issuance role had been displaced by national monetary institutions in Madagascar and the Comoros.

  What changed. Banque de Madagascar et des Comores merged with Banque immobilière de Crédit-Soficam to form Compagnie générale de banque Soficam.

  Aftermath. The merger ended the independent existence of Banque de Madagascar et des Comores.

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• 1946Extend the institutional remit to the ComorosStrategy

  The Comoro Islands became a separate French territory after the Second World War.

  What changed. The institution changed its name to Banque de Madagascar et des Comores and later opened a Comoros branch.

  Aftermath. The bank became the issuance and banking institution associated with both territories within the Madagascar-Comoros monetary framework.

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• 1925Adopt a mixed public-private issuance-bank modelStrategy

  France needed a local currency and credit institution for Madagascar but had not settled on direct state issuance or a private concession model.

  What changed. Legislation created the Banque de Madagascar with mixed ownership, while Banque de Paris et des Pays-Bas was assigned operational responsibility and the French state retained appointment powers.

  Aftermath. The arrangement established a closely supervised colonial issuance bank and influenced later revisions of issuance privileges elsewhere in the French colonial monetary system.

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• 1977Banque de Madagascar et des Comores merged into Compagnie générale de banque Soficam

  The bank merged with Banque immobilière de Crédit-Soficam, ending its existence as an independent institution.

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• 1960Bank loses currency-issuance role in Madagascar after independence

  Following Madagascar’s independence, the Institut d'Émission Malgache assumed currency issuance for the country.

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• 1950French government assumes majority ownership

  The French government took majority ownership of the institution during the postwar period.

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• 1946Institution renamed Banque de Madagascar et des Comores

  The bank adopted a new name after the Comoro Islands became a separate French territory.

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• 1928Banque de Madagascar shares admitted to Paris Bourse

  The bank’s shares were listed on the Paris Bourse, reflecting its mixed public, financial, commercial, and public-shareholder ownership structure.

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• 1925Banque de Madagascar established as colonial issuance bank

  French legislation created the Banque de Madagascar to issue local currency and provide credit in the colony.

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1. Banque de Madagascar