BANKING TRADE AND COMMERCE

JOINT STOCK BANKS

Joint-Stock Bank: By the beginning of the 19th century some indigenous firms were carrying on banking business in Akola district. Some of them used to cash bills and make advances to merchants. Some of them also received deposits and made payments and carried out exchange, remittance and other banking operations for the Government. The only bank operating in the district was the Central Bank of India. It was established in the year 1945. Later on the branches of the State Bank of India were established at tahsil places.

State Bank of India.—Till the establishment of the Reserve Bank of India in 1935, the imperial Bank of India was acting as the Central Bank or the Government's Bank in Akola district. On 1st July 1955 the State Bank of India was constituted by a special Act and all the undertakings of the Imperial Bank of India were taken over by it. This policy was adopted mainly with a view to extending banking facilities on a large scale to the people in the rural and urban areas. The State Bank, however, also acts as agent to the Reserve Bank of India and conducts Government transactions. In addition it provides remittance facilities to scheduled banks, co-operative banks and co-operative societies. The role of the State Bank of India in respect of providing agricultural and rural credit facilities in the district at present consists in (a) financing agriculturists by way of advances to them against pledge of gold ornaments, (b) making advances against warehouse receipts, and (c) making advances to co-operative and marketing societies by way of repledge of their stock with the bank.

The rates of interest charged on advances differ according to the purpose for which the advances are made. Generally loans without security are not favoured, and if made, are for small sums and for short duration only. The interest rates in such cases range from 8 per cent to 9 per cent per annum. Such advances, however, are payable on demand and allowed for short duration only. Loans to industries are also given, the rate of interest varying between 7 and 8 per cent per annum. For cloth merchants and hardware dealers the rate of interest is between 7½ per cent and 8 per cent. Advances to industries are given priority over those to merchants dealing in seasonal crops like cotton, foodgrains etc. Next preference is given to traders and last to the personal account holders.

The State Bank of India is the most important bank because, besides its usual banking activities, it acts as an agent of the Reserve Bank of India, conducts Government business and affords remittance facilities to the public. It also affords special facilities, such as, (1) medium terra finance. (2) special credit transfer system, (3) safe custody of articles, (4) financial assistance to small-scale industries, (5) travellers' cheques and so on. They are briefly described below:—

Medium term finance.—It is given to industrial concerns for expanding their existing units and for establishing new units.

The advances made by the bank against suitable and adequate security, including the security of immovable property are to be repaid within seven years.

Financial assistance to small scale Industries.—Under this scheme advances are made to meet practically all the requirements of the small scale industries. Normally rate of interest charged is less than 6½ per cent.

Special Credit Transfer System.—This scheme enables a personal deposit holder (current and savings) to transfer money paid in cash up to Rs. 1,000 a day from any branch of the bank to his account.

Safe custody.—Safe custody is provided for documents and other articles of value such as wills, title deeds, insurance policies, jewellery and other personal effects at moderate charges.

Travellers' Cheques. -The bank issues its own rupee travellers' cheques in denominations of Rs. 50 and Rs. 100 which are encashable at any of its offices in India. They provide a convenient form of earning cash without any risk of loss or theft while travelling.

Whereas the Stale Bank of India acts as the Government's Bank, the other joint-stock banks in the district are engaged in activities mainly of a commercial nature. Their main object consists in carrying on banking business including borrowing, raising and lending or advancing money against different types of securities, accounts, policies, bonds, hundis, bills etc., granting and issuing letters of credit and circular notes, dealing in stocks, funds, bonds, debentures, investments, etc., receiving money and valuables on deposit or for safe custody or otherwise collecting and transmitting money and securities, managing of property and transacting all kinds of agency business. In short, the main business of the banks is to attract deposits-current, fixed and savings and to make available to their clientele the requisite finance.

The following table gives the list of banks in Akola district, their date of establishment and the place of location.

TABLE No. 21

List of Banks in Akola District

There has been a considerable progress in the availability of banking facilities in Akola district during the period from 1962 to 1966. The following statement gives the number of banking offices, and banking facilities per lakh of population and average population served by each banking office during 1962 to 1966.

It will be seen that the number of banking offices per lakh of population in 1966 increased by more than one and a half times over their corresponding number in 1962.The population served by each banking office decreased by 60% in 1966 as compared to the corresponding figure in 1962. This means that banking facilities have been expanding year alter year there by catering to smaller units of population than in the preceding years.

The nationalisation of 14 eminent banks in 1969 by the Government of India was a very important landmark in the development of banking in this district as elsewhere in the country. Of the 14 nationalised banks, the Punjab National Bank, the Central Bank of India, the Bank of Baroda, the Bank of Maharashtra and the Allahabad Bank had their branches in the district in 1969. These banks provide easier and better credit facilities to small industries, self employed artisans and agriculture than they used to provide prior to nationalisation.

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