BANKING TRADE AND COMMERCE

SMALL SaviNGS

The small savings movement was started in India in 1945 with the intention of mopping up resources and curbing inflationary pressures in Post-War years. The Planning Commission later adopted it as an important means to finance expenditure on capital schemes included in the Five-Year Plans.

The following categories of investments have been classified as small savings: —

(1) Post-office savings certificates.

(2) 12-Year national plan savings certificates, issued from 1st June 1957 including past holdings of 12-Year and 7-Year national savings certificates as well as 10-Year national plan certificates issued before June 1957.

(3) 15-Year treasury savings deposit certificate issued from 1st June 1957 including past holdings of treasury deposit certificates issued before that date.

(4) 15-Year annuity certificates.

(5) Cumulative Time Deposit Scheme.

Post-office Savings Bank: The Post-office savings banks constitute an important source for the collection of small savings, especially from people of small means. The agency of post-office savings banks is well suited to the rural areas where there are meagre banking facilities. Moreover, as an agency of the Government, they enjoy complete confidence of the people. Keeping savings banks accounts constitutes one of the functions of the post offices and can, therefore, be carried on economically which is not possible in case of other banking institutions.

Twelve-Year National Plan Savings Certificates: The Government discontinued the seven-year and twelve-year national savings certificates and ten-year national plan certificates and issued the twelve-year national plan savings certificates with effect from June 1957. The latter are available at all postal savings banks in the denominations from Rs. 5 to Rs. 5,000. They yield an income-tax free simple interest of 5.41 per cent and compound interest of 4.25 per cent at maturity, that is at the end of twelve years.

Ten-Year Treasury Savings Deposit Scheme: The Ten-year treasury savings deposit scheme was started in 1951. Originally the deposits were to be multiples of Rs. 100 only with a ceiling on the maximum amount that may be invested, the ceiling varying according to the nature of the holders. From January 2,1958, deposits have been accepted in multiples of Rs. 50 only. These were available at the Reserve Bank of India, branches of the State Bank of India doing treasury work and treasuries and sub-treasuries. The deposits are repayable at par on the expiry of ten calendar years from the date of deposit.

Fifteen-Year Annuity Certificates: These certificates were issued since 2nd January 1958 and are sold in multiples of Rs. 1,330 up to Rs. 26,600 and yield the amount together with compound interest of approximately 4.25 per cent every year by way of monthly payments, spread over 15 years. Jointly one could invest up to Rs. 53,200. These certificates are also available at such places where treasury savings deposit certificates are sold.

Cumulative Time Deposit Scheme: It is an easy way to save regularly. The scheme is very simple, flexible, and suits everyone's need. Under this scheme people can deposit every month Rs. 5, Rs. 10, Rs. 20, Rs. 100, Rs. 200, or Rs. 300, at a post-office for a period of 5, 10 or 15 years. At the end of the period it brings a handsome lump sum to the investor. The return is free of income-tax. Interest at maturity works out to about 3.3 per cent per annum compound on a ten year account and 4.3 per cent per annum compound on a 15 year account.

By 1969, there were 67 pay roll saving groups, 540 small savings agents, 35 bachat offices, 35 bachat schools, and 35 bachat, grams in the district.

In the following table are given the statistics regarding collections and withdrawals made by the above agencies for all the schemes described above in the district up to 30th September 1969.

TABLE No. 27

STATISTICS REGARDING COLLECTION AND WITHDRAWALS OF SMALL SaviNGS IN BHANDARA DISTRICT.

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