BANKING TRADE AND COMMERCE

MONEY-LENDERS.

Money-lenders were perhaps the only financial purveyors existing at the time when the old District Gazetteer of Chandrapur was published. But even in case of money-lending, the business was not very well developed over the larger part of the district except Chandrapur and Brahmapuri owing to the difficulties 0f communications. It was often found difficult by the money-lenders to make recoveries of loans or to make sound investments in land to turn it into a profitable proposition. The money-lending system as a whole was, therefore, much, less developed in Chandrapur district than anywhere else. Wherever it was practised, it was carried out mainly in kind and not in cash. As already noted above, Chandrapur, Brahmapuri and Sironcha were the only important centres of the money-lending business at that time.

Grain was ordinarily borrowed for both harvests, except in Sironcha where borrowing was confined to seed for the spring-crop of juari. Grain loans were often taken for mere subsistence by the poorer classes, in which case they were known as porga; the rates did not differ from those charged for loans of seed-grain. The system of borrowing known as lawani was said to be common in Brahmapuri. It was also found in the rice tract of the Chandrapur tahsil. It owed its existence in both tahsils to a succession of bad rice harvests. Under this system, the lender used to make an advance of cash stipulating for its repayment in grain at a fixed rate at harvest. This fixed rate was always considerably lower than the market rate Likely to prevail at the time, so that the borrower was at a great disadvantage, especially when the harvest was poor. But even in the remote parts of Gadhchiroli the rising prices of produce opened the eyes of the people to the drawbacks of this system. The system was, therefore, adopted rarely; it was resorted generally by the most help-less of the tenants.

In Sironcha a pernicious system of borrowing had reduced the tenancy to a state of absolute and abject dependence on their Sahukars, who in this part were usually Komti shopkeepers from Madras. The Komtis doled out everything the tenant required. Each cultivator had a running account for food, seed, clothes, and small sums of money: even money for rent came from this source. To recoup themselves the Komtis took possession of the borrower's crop before it had been removed from the threshing floor. The crop was then valued at a rate fixed by agreement amongst the Komtis, and credit was given to the cultivator at that rate. This was known as the Sahukar's rate. It was considerably below a just tariff. Not content with such rate, the Komtis privily swelled their gains by illicit recourse to a Sahukar's measure, a vessel with a generous capacity for all incomings. The helpless tenant was thus robbed and defrauded in every way.

There were two classes of money-lenders existing in the district at that time viz., the village Sahukars and those staying in urban areas.

About the village money-lenders there is no better account than is given in the Settlement Report of Mr. Hemingway which is summarised bellow. The village Sahukars of the district fill into two classes (i) the Sahukar class pure and simple, with a hereditary profession of money-lending, (ii) cultivating classes who supplemented their farming with a little Sahukari. The first class was more or less the same in their caste, manners and methods of cultivation as was obtained elsewhere in India. The large number of money-lenders belonging to this class were Komtis, immigrants from Madras or Gujarat Brahmins. Maratha Brahmins, Hindusthani Brahmins and a few Muhammedens came next in importance or extent of their business. Of these, the business of Gujrath Brahmins was never straightforward and they were often sharpers. They invented a number of sharp practices such as the machla system or the production of forged resignations of land and leases reserving sir rights. As opposed to this the treatment of Komti money-lenders (towards their clients) residing, mostly in Chandrapur town was generally moderate. But when they got possession of a village it took only a few years for them to get a mortgage on nearly every holding. Luckily the true Sahukar classes in this district had not yet obtained much land. In the north of Brahmapuri, both Buti and Chitnavis of Nagpur were rapidly increasing their clientele. In the distant parts of their sphere of influence they lent little money to tenants, but confined to the Malguzar classes, or small grain loans.

The second class of village Sahukar, the cultivator who supplemented his farming with little trade was found in all parts of the district. The Malguzars of this type were Kunbis, Kohlis, Gandlis and a few Gurdis. As village Sahukars these men with very few exceptions were extremely lenient to their clients and never deteriorated their village. They lent grain and only very small sums of money, and these loans were repaid regularly. Luckily the greater part of the district was financed by men of this type. The most oppressive indigenous Sahukar was the Mahar who had taken to lending money; his low caste seemed to assist him in resisting all attempts to oust him, when once a plot was leased for debt to him, and he had reaped the debt several times over from its produce.

Between Sahukars themselves, the ordinary rate for loans was Re. 0-7-9 per mensem or Rs. 5-13-0 per annum.

In the absence of any rules or regulations as regards the money-lender or his business anyone who could lay by some amount could follow the business of money-lending. Most of the money-lenders were, however, Gujrat or Marwar wanis who often combined the business of money-lending with that of shop-keeping and had an opportunity to exploit the borrowers as customers.

The money-lenders during those days followed all sorts of malpractices with a view to extracting as much as they could from the debtors who were mostly tenants or tenant-cultivators and whose need for loans was very imperative. Most of them usually kept a Journal or daybook called kirdvahi and a ledger called khatawani. Sometimes there were two journals, a rough one and a fair one. Those who advanced petty loans to cultivators kept only one book. Accounts were finally settled every year after harvest. The money-lenders followed a number of other mal-practices such as girah-kholai (purse opening), demand for advanced interest, insertion in written documents of sums considerably in excess of money actually lent, etc., and put the debtors to considerable molestation and trouble.

It was with a view to redressing the grievances of the debtors and putting a stop to the malpractices of money-lenders that legal enactment was felt necessary. An Act known as the Central Provinces and Berar Money-lenders Act, 1934', was, therefore, passed by the then State Government and made applicable to all the persons who intended to carry on money-lending business. The Act was in operation till the reorganisation of States in 1956. After reorganisation, the Bombay Money-lenders Act of 1946 was made applicable to Chandrapur district which then formed a part of Maharashtra.

According to this Act, the State Government is authorised to appoint Registrar-General, Registrar and Assistant Registrars of Money-lenders for the purposes of this Act, and to define the areas of their duties. Every Registrar is to maintain a register of money-lenders in his jurisdiction. Money-lenders cannot carry on their business except for area under licence and except in accordance with terms of licence. They are further required to keep and maintain a cash-book and a ledger in a prescribed form and manner. They are also compelled to deliver a clear statement to their debtor about the language, amount, security, etc., of their transactions. By this Act molestation of a debtor by the creditor in recovery of loans is treated as an offence and is to be penalised.

The Act was subsequently amended, the important amendments being in regard to the introduction of 4-A and 5-A forms and the "Pass Book" system, provision of calculating interest on katmiti system and facilities to certain classes of money-lenders permitting them to submit quarterly statements of loans to the Registrar of Money-lenders. Further amendment was effected in 1955 by which money-lending without licence was made a cognisable offence. In 1956, special measures were adopted to protect Backward Class people. The Registrars and the Assistant Registrars were instructed to take special care while checking the accounts of money-lenders in respect of their transactions with Backward Class people.

From 5th July 1952, the structure of interest rates was revised. Accordingly, the maximum rates of interest were raised from 6 to 9 per cent per annum on secured loans and from 9 to 12 per cent per annum on unsecured loans. The money-lenders were also allowed to charge a minimum interest of rupee one per debtor per year, if the total amount of interest chargeable according to the prescribed rates in respect of the loans advanced during the year amounted to less than a rupee.

Since the Act came into operation, it has been possible to keep proper check and supervision over the money-lending business in the district. Most of the money-lenders have been com-plying with the provisions of the Act. The system of Savai and Duni is nowhere to be found, nor is there any trace of the usurious practices as were followed by the money-lenders before.

From 1st February, 1960, the Co-operative Department was entrusted with the work of the administration of the Money-lenders' Act and the Assistant Registrar of Co-operative Societies worked as Assistant Registrar of Money-lenders.

The following table gives the tahsil-wise distribution of money-lenders who were either given new licences or whose licences were renewed from 1st February 1960 to 31st July 1964. Prior to this period 222 money-lenders had already been issued licences by the Sub-Registrar's office under the Central Provinces and Berar Money-lenders' Act.

TABLE No. 1

TAHSIL.-WISE DISTRIBUTION OF MONEY-LENDERS HOLDING VALID LICENCES IN CHANDRAPUR DISTRICT.

From the table it is clear that Chandrapur tahsil has the highest number of money-lenders in the district and Warora comes next, whereas Rajura has only two money-lenders possessing valid licences. It is possible that in Chandrapur district, which is economically very backward, a number of money-lenders might still be carrying on the money-lending business Without holding valid licences. The district is inhabited by a large number of Adiwasi people whose ignorance may be exploited by the money-lenders. The Adiwasis are being pursuaded to approach the co-operative societies rather than to go to money-lenders for meeting their credit and other needs. The co-operative department, on its side also is keeping a close watch on the activities of the money-lenders and trying to safeguard the interests of the debtors and seeing that they are not put to any harassment or molestation by the money-lenders while effecting their recoveries.

The total advances made by the money-lenders to traders and non-traders in the district from 1st August 1939 to 31st July 1964 is given in table No. 2.

TABLE No. 2

TOTAL ADVANCES BY MONEY-LENDERS TO TRADERS AND NON-TRADERS IN CHANDRAPUR DISTRICT (1959-60 TO 1963-64).

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