BANKING TRADE AND COMMERCE

JOINT STOCK BANKS

Till the close of the 19th century Dhulia district had no banking company and the money-lending class, therefore, dominated the economy of the district. The first in the field of finance to appear was the Imperial Bank of India, which established its branch at Dhulia in 1922. It was converted into the State Bank of India in July, 1955. Following its establishment, other banks, too, opened their branches at various places in the district. By 1965, there were 10 joint stock banks in the district. [There were 66 branches of various banks in March 1971, of which 27 were of scheduled banks and 39 of co-operativa banks. They served a population of 4,12,909 from 30 villages and towns in the district].The names of these banks, their location and the date of their establishment are given below: -

The State Bank of India has the largest number of branches. These branches are directly controlled by the Head Office at Bombay.

The State Bank acts as an agent to the Reserve Bank of India and conducts Government transactions. In addition, it provides remittance facilities to scheduled banks, co-operative banks and cooperative societies. Its main function, however, is to extend credit facilities to the people in rural and urban areas. The role of the Bank 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 ornaments, (b) making advances against warehouse receipts and (c) making advances to cooperative and marketing societies by way of repledge of their stocks with the Bank.

Among the categories of loans and advances provided by the Bank the important are following:—

(1) Loans against gold ornaments.— This is the safest type of advance which provides financial assistance to all classes of people to overcome temporary difficulties. The rate of interest charged on such advances varies from 7 to 8¼ per cent. By 1964, the total advances against gold ornaments made by the Dhulia branch alone stood at about Rs. 1,50.000.

(2) Overdraft or loans against Government securities.— This, too, is regarded as a safe advance, which is granted against government securities at a rate of interest varying from 5½ to 6½ per cent.

(3) Advances against pledge of produce and warehouse receipt:— These are seasonal advances granted to merchants against acceptance of mercantile produce. They are renewed after six months or a year. Rate of interest charged is generally 6½ to 7½ per cent. Advances are also granted against warehouse receipts.

(4) Hypothecation advance.—This advance is granted to only well-known limited companies against hypothecation of goods and machinery at an interest of 6½ per cent per annum.

(5) In order to implement government policy of encouraging small-scale industries, the State Bank is taking active part in financing these industries on very moderate terms and conditions and at an interest rate varying from 6¼ per cent to 7¼ per cent.

The other joint stock banks in the district also provide the usual banking facilities to the public including the financing of trade and agriculture and storage and movement of agricultural produce. Their main object is to encourage the habit of banking especially in rural areas and to cater to the financial needs of rural population through their office. They receive deposits from the people and advance loans to them on securities. Rates of interest 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 periods only. Interest rates in such cases range from 8 to 9 per cent per annum. Loans to industries are also given, the rate of interest varying between 7 and 8 per cent. Advances to industries are given priority over advances to other types of customers. Besides the regular banking operations, the State Bank of India, Dhulia and the Punjab National Bank, Dhulia, provide facilities of safe deposit vaults.

The following table gives the security-wise analysis of advances granted by the banks as at the end of December 1963.

TABLE No. 13

SECURITY-WISE ANALYSIS OF ADVANCES GRANTED BY THE BANKS AS AT THE END OF DECEMBER 1963

DHULIA DISTRICT

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