BANKING TRADE AND COMMERCE

JOINT STOCK BANKS

By the beginning of the 19th century some indigenous firms were carrying on banking business in Bhandara 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 first modern bank operating in the district was the branch of the Punjab National Bank. It was established in 1951. Later on in the year 1955, two branches of the State Bank of India were established in the district at Tumsar and Gondia.

State Bank of India: Till the establishment of the Reserve Bank of India, the Imperial Bank of India was acting as the Central Bank or the Government's Bank in Bhandara 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 of—

(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 stocks with the Bank.

The rates of inrerest 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 durations 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. 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 commodities 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 conducts, as an agent of the Reserve Bank of India, Government business and affords remittance and exchange facilities to the local banks and the public. It also affords special facilities, such as—

(1) medium term finance,

(2) special credit transfer system,

(3) safe custody of articles,

(4) financial assistance to small-scale industries,

(5) traveller's cheques, and so on.

Whereas the State 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 of 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 nationalisation of banking in 1969 was an important event in the economy of the district as of the country. The branches of the nationalised banks in the district provide finance on liberal terms for agriculture and small¹ industries as also to self-employed enterprising persons. The statistics about the same are however not available.

In the following table is given the list of banks in Bhandara district with details regarding the date of establishment, names of places of location and number of offices.

TABLE No. 29

JOINT STOCK BANKS IN BHANDARA DISTRICT.

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