BANKING TRADE AND COMMERCE

JOINT STOCK BANKS

Joint-stock banks: The growth of modern banking was slow and retarded in Ahmadnagar district till about the forties of this century. Modern banking found an humble beginning in the district with the establishment of the branches of the Bank of Maharashtra at Ahmadnagar, Sangamner and Kopargaon on 31st July 1935. After two years, i.e., in 1937, the branches of the New Citizen Bank of India were established at Ahmadnagar, Kopargaon and Sangamner. This was followed by the establishment of a branch of the Dena Bank at Ahmadnagar in 1938, and another branch of the Bharat Industrial Bank at Shrirampur in 1939. There is only one non-scheduled bank at Shrirampur in the district. The real expansion of banking business took place from 1957 when the branches of the State Bank of India were established at Sangamner, Kopargaon, Ahmadnagar and Shrirampur.

The State Bank of India transacts Government business such as making payments on its behalf and other routine matters like exchange and remittance facilities. The bank also works as an agent of the Government in its function of extending credit facilities for industrial development. The other business which the bank is authorised to transact includes the following:-

(1) advancing and lending money;

(2) selling or realisation of cash in respect of promissory notes, debentures, stock receipts, bank annuities, shares, etc.

(3) advancing and lending money to court of wards;

(4) transacting cash agency business on commission basis and entering into general contracts or suretyship contracts with specific security or without security;

(5) dealing in bills of exchange and other negotiable instruments;

(6) administration of any estates entrusted to it;

(7) borrowing money for the purpose of the bank's business and standing security for such loans by pledging assets or otherwise.

The rates of interest on deposits are now largely standardised as per stipulations of the Reserve Bank of India. The rates of interest on advances depend on security and the period of the loan. The rate of interest generally varies from six and a half per cent to nine per cent. In the absence of industrial development on a large scale the banking business has not expanded much in this district. It is mostly restricted to the agricultural sector though the banks extend financial assistance to small-scale and cottage industries at concessional rates of interest. The advances that are generally made are medium term and are repayable within a period of seven years against suitable and adequate security including that of immovable property.

At the end of 1962 there were 41 banking offices including cooperative banks in the district. This number rose to 46 on 31st March 1963, to 53 at the end of March 1964, and further to 73 at the end of the year 1966. Most of this increase in number of banking offices was on account of the increase in the number of branches of co-operative banks.

The nationalisation of banks since July 1969 was an important land-mark in the economy of this district as that of other districts in India. Since nationalisation of 14 banks, there has been a slow but steady progress in the branch banking in rural and urban areas of the district.

In pursuance of the economic policy underlying nationalisation, the banks have adopted progressive measures for expansion of credit facilities for development of agriculture. The agrarian sector which was formerly deprived of banking credit in the past was hereby immensely benefited by expansion of credit. Accordingly, systematic efforts are being made for making credit available for digging and construction of wells for irrigation. The lead bank survey report for the district prepared by the Central Bank of India, estimated the financial need of the district for increasing agricultural production at Rs. 100 crores. Of this financial need, the Ahmadnagar District Central Co-operative Bank has advanced credit to the tune of Rs. 20 crores, the nationalised Banks Rs. 20 crores and the Land Development Bank Rs. 3 crores. This leaves a credit gap of Rs. 57 crores. The Report has also estimated the deposit potential in the district to the tune of Rs. 50 crores with the fast development of agriculture. It has also been estimated that the deposit potential may be doubled within a period of about 5-10 years.

Following is the list [Source.-Statistical Tables Relating to Banks in India, 1972, published by Reserve Bank of India.] of banking offices of scheduled and commercial as well as co-operative banks as existed in the district in 1972:-

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