BANKING TRADE AND COMMERCE

SMALL SAVINGS.

The movement for small savings was started in 1946. Its object then was to counteract the evil effects of inflation which was the aftermath of the post-war period. The object, however, underwent a change when the Planning Commission later on relied on this movement to finance its expenditure on capital schemes of the five Year Plans. Since the Sino-Indian War, the Small Savings Drive was looked upon as an instrument for building up the defence of the Nation.

The Small Savings Schemes include the following categories: -

(1) Post-office Savings,

(2) 12-Year National Defence Certificates,

(3) 10-Year Defence Deposit Certificates,

(4) 15-year Annuity Certificates,

(5) Cumulative Time Deposits, and

(6) Prize Bonds.

Post Office Savings Banks.-Of all these schemes, the Post Office Savings Deposit is the most common scheme. The Post Office Savings Banks are the important sources for collection of small savings from people especially of limited means. They are also useful to people in the rural areas where there is an absence of an alternate agency. The savings banks deposits earn interest at the rate of Rs. 4 per annum. Balances in these banks can he kept up to Rs. 25,000 in case of individual accounts and up to Rs. 50,000 in case of joint accounts. By 1966-67 there were in this district 225 post-offices doing savings banks' work. They are distributed over the district as under: -

TAHSIL-WISE: DISTRIBUTION OF POST OFFICE SAVINGS BANKS

The total number of accounts and the amount deposited in them is as follows:-

Figures of the number of accounts and the amounts deposited show a rising trend from 1964-65 to 1966-67.

National Savings Certificates.-Before the introduction of the Defence Deposit Certificates there were in existence National Savings Certificates of different maturities. Of these, the 12-Year National: Savings Certificates were started in June 1957. The seven-year and the ten-year Savings Certificates, too, were started about the same time. The total outstanding investment in the National Savings Certificates of different maturities stood at Rs. 4,24,500.00 by 1966-67.

12-Year National Defence Certificates.-These certificates are available in denominations of Rs. 5, 10, 50, 100, 500, 1,000, 5,000 and 25,000. They can be purchased from the post-offices transacting savings bank business. They earn an interest of 4.75 per cent compound or 6.25 per cent simple interest per annum free of income-tax. The amount is returned at the end of 10 years from the date of deposit. Another person, an adult or minor may be nominated for receiving the amount of the certificate when it becomes due, in the event of death of the holder.

10-Year Defence Deposit Certificates.-These certificates issued in denominations of Rs. 50 and multiples thereof earn 4½ per cent interest annually free of income-tax and arc available from all the offices of the Reserve Bank of India, branches of the State Bank of India and its subsidiary banks, Treasuries and Sub-treasuries and Head and Sub-post Offices.

These certificates have replaced the old Ten-Year Treasury Savings Deposit Certificates issued in 2 series, the one with 3¹/2 per cent interest and the other with 4 per cent. The following statement gives the subscriptions for them received at Chandra-pur and Warora in Chandrapur district from 1951-52 to 1961-62:-

By 1966-67 the total investment in these certificates amounted to Rs. 3,07,865.

15-year cash Annuity Certificates.- These certificates were issued from 2nd January 1958. They are sold in denominations of Rs. 1,330, Rs. 3,325, Rs. 6,650, Rs. 13,300 and Rs. 26,600 and guarantee a monthly payment of Rs. 10, Rs. 25, Rs. 50, Rs. 100, Rs. 200 on them, respectively, for a period of 15 years. The return on them works out at 4.25 per cent per annum compound interest. The investments are available for a single adult, two adults jointly and a guardian on behalf of a minor. Institutions, corporations and firms cannot make investments in these Annuity Certificates.

The Government of India have now allowed to holders of 15- year Annuity Certificates the facility of surrendering their certificates at any time after a period of one year from the date of deposits and obtaining the commutation value thereof. The holder of a certificate can also nominate a person who shall be entitled to the certificate and the payment thereon, in the event of his own death.

Since the commencement of the Annuity Deposit Scheme, amounts aggregating Rs. 13,650 were received up to 31st July 1968 at the branches of the State Bank of India in Chandrapur district towards the 15-Year Annuity Certificates.

The Cumulative Time Deposit Scheme.-This scheme facilitates regular saving in an easy manner. As such, it is very simple and flexible and suits everyone's needs. Under this scheme deposits can be made in the denominations of Rs. 5. The maximum monthly deposit is Rs. 200 in a five or ten-year deposit account and Rs. 300 in a 15-year deposit account. The total deposits during the entire period of the accounts shall not exceed Rs. 54,000 or Rs. 1,08,000 in case of joint accounts. The return on these deposits is free of income-tax. The interest at maturity works out to about 3.3 per cent per annum compound on a five-year account. 3.8 per cent on a 10-year account and.4.3 per cent per annum compound on a 15-year account.

The account can be opened at any post office transacting savings bank business and operated by an adult or two adults jointly. The account can also be opened by a minor in his own name or by a guardian on behalf of the minor in which case the guardian can operate the account. Withdrawal of the deposits can be made in multiples of Rs. 10 subject to a limit of 50 per cent of the deposit once in the case of five-year account, twice in the case of a ten-year account and thrice in the case of a 15-year account after the account has been in operation for at least one year.

The scheme gives the depositor the facility of transferring one's savings from Post-office to Cumulative Time Deposit account. There is also the facility that a person can now make payments in the Cumulative Time Deposit account even by depositing savings stamps instead of cash. Besides, the deposits into Cumulative Time Deposit accounts count for rebate of: income-tax in the same manner as contribution to Provident Fund and life insurance premium and subject to the same limits.

The Cumulative Time Deposit Scheme is ideal for cultivating regular savings habit. By this scheme not only the future of an investor is made secure, but also the costs of the various projects of the Five-Year Plans are met.

In this district the total deposits collected under this scheme amounted to Rs. 5,67,038 by 1965-66.

It will he seen from the foregoing account that the Small Savings Schemes have played a very useful and important role in attracting savings of the people especially of small means. People, too, have been gradually realising the importance of savings by the Small Savings way and prefer investment to locking their capital in gold. Due to the intensive drive by the State Government, the rural areas have also been covered and a greater response is expected from them. There is all the while a growing tendency among people to deposit more and more under this scheme.

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