BANKING TRADE AND COMMERCE

CO-OPERATIVE MOVEMENT

The co-operative movement, in the main, covers the growth of co-operative credit societies, multi-purpose societies, land mortgage banks, non-agricultural credit societies and the central co-operative bank. The movement may be said to have started in Kolaba District in 1910, when the first co-operative society was established at Dahiwali in Karjat Taluka. The object in starting this movement was to make available to the agriculturists cheap credit and to develop amongst them a sense of co-operation, mutual help and economy. Most of the earlier co-operative societies were established in this district with this object in view. Later, the scope of this movement was enlarged considerably as it helped to solve varied problems relating to rural development.

In 1960 there were 645 co-operative societies of 23 different types working in the district. They were as follows: ―

Agricultural Co-operative Credit Societies.

These societies are engaged in the supply of short-term and intermediate term (i.e., not exceeding five years) finance to agriculturists. The area of operation of a society is usually a village, but sometimes it covers other villages or hamlets nearby. Residents within this area who satisfy certain conditions laid down in the bye-laws, can become its members. These societies work on the principle of unlimited liability.

Funds of the society are raised in any or all of the following ways, viz., (a) entrance fees, (b) issue of shares, (c) receiving deposits from-(1) members, and (2) non-members residing within a radius of five miles from the village where the society is located and (d) raising loans and receiving overdraft facilities from other co-operative credit societies or from financing institutions.

The societies accept savings deposits and fixed deposits of a duration of not less than six months. Savings deposits are accepted from members only on conditions laid down in the bye-laws. The rate of interest on deposits is fixed by the managing committee, with the previous approval of the financing agency.

These societies advance short-term and intermediate-term loans for agricultural and domestic purposes. Short-term loans are granted for purposes of meeting expenses on seed, manure, weeding, etc. Intermediate-term loans are granted for two purposes, viz., (i) purchase of bullock-carts, iron implements, etc., and for ceremonial expenses, the period of the loan being three years, and (ii) payment of old debts and works of land improvement, the period of loan being five years.

The comparative statement given below indicates the progress achieved by Agricultural and Multi-purpose Societies (excluding Co-operative Grain Banks and Societies) during recent years. It would be seen that both the number and the membership of these societies recorded a satisfactory progress.

TABLE No. 4

STATEMENT SHOWING OPERATIONS OF AGRICULTURAL CREDIT SOCIETIES (LIMITED), EXCLUDING LAND MORTGAGE BANKS

continued..

*Limited and Unlimited.

continued..

*Limited and Unlimited.

TABLE No. 5

STATEMENT SHOWING OPERATIONS OF AGRICULTURAL CREDIT SOCIETIES (UNLIMITED), EXCLUDING LAND MORTGAGE BANKS

TABLE No. 6

OPERATIONS OF PRIMARY LAND MORTGAGE BANKS

In 1960 there were 315 Agricultural and Multi-purpose Societies with a membership of 37,309. They had a share capital of Rs. 13,32,697 and a working capital of Rs. 40,01,172. During 1958-59, they received Rs. 2,28,261 as loan from the Government and Rs. 22,08,807 as loan from the Central Financing Agency. The percentage of villages covered by them now stands at 82.11 while that of agricultural population served by them at 28.9. The increase in the share capital, reserve and other funds shows the inherent strength and vitality of the movement. Though the movement so far is largely a credit movement, it is also assuming a multi-purpose aspect. Thus many of the societies especially in National Extension Service Blocks have undertaken the work of distribution of improved seeds and manures. Some of them meet domestic requirements on indent basis, while many others work as agents for the sale of National Savings Certificates. Some societies have built their own godowns and have started activities of marketing of agricultural produce.

Multi-purpose societies, thus, broaden the basis of the primary co-operative unit and cater to multifarious and inter-related needs of the agriculturist population.

Primary Land Mortgage Bank.

These banks are meant to provide for the long-term credit needs of the cultivators. They grant loans on the security of the landed property offered by the borrowers, for (i) redemption of old debts, (ii) improvement of agricultural land and the adoption of improved methods of cultivation, (iii) installation of costly agricultural plant and machinery, (iv) improvement on land, etc. Till 1960 there was not a' single primary land-mortgage bank in this district.

Non-Agricultural Credit Societies.

These are mostly urban societies supplying credit to members who are generally traders, artisans, factory-workers, salary-earners, etc., residing in towns. These societies include urban banks, salary-earners' societies and community societies.

The area of operation of a society of this type is usually restricted to a town or a part of a town or even a factory or a department. Membership is open to all persons, residing within the area of operation and the liability of members is limited. No person, however, can become a member of more than one society without the previous sanction of the Registrar or Assistant Registrar. Capital is raised by issue of shares, accepting deposits on current savings and fixed accounts and borrowings from the central financing agency. The limit to outside borrowing is restricted to eight times the paid-up share capital plus the accumulated reserve and building funds minus the accumulated losses.

Advancing loans to its members is the main function of these societies. Loans are advanced on personal security, on mortgage of property or on the security of valuables pledged or produce hypothecated. Cash credits are allowed and overdrafts sanctioned on any of the securities mentioned above. These societies undertake modern banking operations like issue of hundis and drafts and collection of cheques, hundis, drafts, etc.

Following tables give the working of these societies.

TABLE No. 7

OPERATIONS OF NON-AGRICULTURAL CREDIT SOCIETIES (LIMITED)

TABLE No. 7-contd.

OPERATIONS OF NON-AGRICULTURAL CREDIT SOCIETIES (LIMITED)

TABLE No. 8

OPERATIONS OF NON-AGRICULTURAL CREDIT SOCIETIES (URBAN BANKS)

TABLE No. 8-contd.

OPERATIONS OF NON-AGRICULTURAL CREDIT SOCIETIES (URBAN BANKS)

The table reveals that the number of non-agricultural credit societies including urban banks was 22 in 1960. Their membership was 9,991, and they had funds to the tune of Rs. 1,46,710. From these funds and from deposits obtained locally these societies have raised nearly 90.4 per cent of their total capital. Investments of these banks have also risen considerably.

The number of urban banks stood at seven. There is a growing demand for banking facilities in urban areas in this district and as such most of the urban banks are doing good business. They have also been instrumental in popularising the banking habit among the urban population of the district. The data reveals two facts: firstly, satisfactory progress of the urban banks and secondly, their all-round development. The marked increase in the amount of investment of these banks is due to their investment of surplus funds in the National Plan Loan stocks issued by the Government of India and also in other public loans floated by Government.

District Central Co-operative Bank.

The Central Bank is the financing agency for the primary co- operative societies of the district. It also serves as a balancing centre in that it accepts the surplus funds of one society at a reasonable rate of interest and transfers them to another which is in need of more capital than the amount it possesses.

Constitution.

The liability of the members of the bank is limited and its membership consists of both co-operative societies and individuals. Membership is open to individuals with a view to providing opportunities to those persons who desire to he the members of primary societies but cannot do so on account of the principle of unlimited liability on which they function.

Funds.

The funds of the Central Bank consist of (i) share capital, (ii) reserve and other funds, (iii) deposits from societies and the general public, and (iv) loans or overdrafts from scheduled banks. Share capital and reserve funds form the major portion of the owned capital of these banks. They also receive deposits and raise loans. The major part of the working capital of the bank is derived from short-term deposits. The banks are allowed to accept deposits from local bodies including municipalities on certain conditions. Besides deposits, the Central Bank can raise loans from the apex bank. It receives overdraft facilities from the apex bank or the State Bank of India for purposes of exchange transactions or for other needs.

Function.

Financing of agricultural credit societies within its area of operation is the main function of the bank. In order to enable central banks to meet the financial needs of the members of primary societies other than urban banks and sales societies, against security of agricultural produce and valuables and also to provide crop finance in certain cases, they are allowed to provide for nominal membership in their bye-laws.

The Central Bank undertakes all banking business, i.e., collection and discounting of bills, opening of current accounts, purchase and sale of securities, and issue of cheques and drafts, etc. In places where multi-purpose societies or sale societies cannot be organised or worked successfully, the Central Bank is advised to make arrangements for the sale of agricultural produce, particularly of agriculturists who come within the purview of the Bombay, Agricultural Debtors' Relief Act and who are allowed to Become nominal members for obtaining crop finance.

Till 1960 the Bombay State Co-operative Bank was functioning as the Central Financing Agency for this district through its three branches at Karjat, Panvel and Alibag. On 30th September 1960, a District Central Co-operative Bank was established in this district at Alibag. It has just started functioning.

Other Types of Societies.

Besides the above-mentioned societies, there are a number of other miscellaneous societies working in the District. They include the Purchase and Sale Societies, Consumers' Societies, Grain Depots and Grain Societies, Co-operative Housing Societies, Fisheries Co-operative Societies, Taluka Development Boards, Farming Societies, Lift Irrigation Societies, Milk Supply Societies, etc. Moreover, there are also marketing organisations. The role of these societies has been recognised at all levels. Their working is described hereafter.

Purchase and Sale Societies.

Purchase and Sale Societies have been started at taluka places in this district in order to help agriculturists get fair price for their produce and supply them goods such as cement sheets, manure, cloth, etc., which are required for their agricultural and domestic requirements.

The first Purchase and Sale Society of this type was started in 1944 at Panvel in this district. In 1960, there were eleven societies working in this district. They have made considerable progress.

Consumers Societies.

The Consumers' Societies were started so that their members may derive benefits by buying commodities at concessional rates. By the end of June 1960, there were in all eleven consumers' stores with 635 members. These societies worked quite successfully during the war years. Distribution of foodgrains and cloth was done through them. Of these societies the names of Khopoli Co-operative Consumers' Syndicate, Tata Camp and the Co-operative Consumers' Society at Mangaon should be specially mentioned for their successful working. The share capital of the 11 societies in this district comes to Rs. 32,710, reserve and other funds to Rs. 38,223 and borrowings to Rs. 8,975.

Grain Depots and Grain Societies.

With the intention of making available to the agriculturists the required supply of seeds and to help them acquire the necessary stocks of grain to maintain their families the Government started Grain Depots in several villages in 1939. In the beginning loans to these depots were made in kind, by way of foodgrains. Deposits in kind were also accepted from village people. The operations of Grain Depots were carried on under the supervision of Revenue authorities.

Grain Depots and Banks.

In 1960 there were about 671 grain depots run by the Revenue department in this district. With a view to organising them on a co-operative basis, the Government started to convert them into grain societies. The total number of grain depots so far convert ed into Co-operative Grain Societies is 39. By the end of June 1960, there were 47 grain banks with 2,947 members. Their paid-up capital, deposits of individual members and other deposits were Rs. 46,558, Rs. 260 and Rs. 561, respectively, while the statutory and other reserves came to Rs. 59,498 and Rs. 13,630 respectively. Their advances by way of loans to their members amounted to Rs. 53,220 and recovery to Rs. 28,652 fill 1960.

Co-operative Housing societies

Co-operative Housing Societies exist in both rural and urban areas. They are formed for backward class people and middle class people. Out of these societies, eight societies were registered with the object of getting the benefit of the Post-War Reconstruction Scheme No. 219. Out of these eight societies, five societies possessed lands and two societies constructed 35 tenements.

There were in 1960 twelve Co-operative Housing Societies in all. Of these six were meant for scheduled castes, two for scheduled tribes and four for other persons. Together they had a membership of 363 persons. Their paid-up capital, reserve and other funds and total borrowings came to Rs. 1,24,715, Rs. 8,161 and Rs. 41,068 respectively. Their total assets and liabilities amounted to Rs. 3,12,349 and Rs. 3,22,879, respectively.

Fisheries Co-operative Societies.

Next to agriculture, fisheries is an important industry in this district. Fisheries societies were started so that people engaged in the occupation might make better progress by working on cooperative lines. These societies numbered eleven in 1960 and their membership came to 1,371. Their total paid-tin capital, reserve and other funds and total borrowings were Rs. 18,205, Rs. 7,860 and Rs. 24,288 respectively. They borrowed from the Government and from other sources. The societies advanced loans to the extent of Rs. 22,901 in 1960, and recovered Rs. 13,541. They received Government aid of Rs. 1,720 by way of subsidies.

The Alibag Sahakari Macchimar and Sale Society is treated as a Taluka Society and has been issued a licence for importing fishing machinery. Its activities arc expected to be expanded in the near future.

Farming Societies.

Farming Societies include collective farming societies, joint farming societies and tenant farming societies. By the end of June 1960, there were six Tenant Farming Societies in the district with a membership of 225 persons. They commanded an area of 17 acres and 18 gunthas. Their paid-up share capital, reserve and other funds and total borrowings from Government and other sources were Rs. 3,430, Rs. 441 and Rs. 15,700 respectively. Total assets and liabilities of these societies came to Rs. 17,456 and Rs. 13,664 respectively.

Gram Swaraj Mandals.

Besides farming societies there were three Gram Swaraj Mandals with a membership of 66 persons. They commanded 113.94 acres of land. Their paid-up capital amounted to Rs. 660 while reserve and other funds, to Rs. 66 only.

Lift Irrigation Societies.

To increase agricultural production by irrigating land with the help of lift pumps, lift irrigation societies have been started. In 1960 there were three societies of this type working in the district. Two in Panvel and Khalapur talukas utilised water of Patalganga river. These societies were given pumps by Government under National Extension Service Scheme. The third society was started at Bhada in Mangaon taluka. It obtained a loan of Rs. 3,740 and a subsidy of Rs. 3,740 from the Government for installation of an engine and pumping sets. The society commands 25 acres of area. The paid-up capital, reserve and other funds and total borrowings of these societies were Rs. 1,695, Rs. 1,032 and Rs. 8,280 respectively.

Taluka Development Boards.

Taluka Development Boards in the district were formed to help the agriculturists get improved types or implements, seeds and manures and to advise them on matters relating to agricultural production. All the programmes relating to demonstration, public instruction and general welfare of people in the district are expected to be carried out by these Boards. The progress of these Boards till 1959 can be seen from the following table:―

TABLE No. 9

Milk-supply and Crop-protection Societies.

In addition to the above societies there were two milk-supply societies and one crop-protection society in Kolaba district. The total paid-up capital and reserve and other funds of the former came to Rs. 2,000, and Rs. 54 respectively, while those of the latter came to Rs. 90 and Rs. 18 respectively.

Taluka Co-operative Supervising Unions.

Taluka Co-operative Supervising Unions were started in the district with the intention of giving direction, advice and assistance to the agricultural and multi-purpose societies in villages after a regular and careful inspection of their work. They supervise the societies affiliated to them and make their working effective. They also help these societies to get loans from the Central Co-operative Banks and to recover the amounts.

Till 1950 there was only one union in the district. In 1960 there; were four unions of this type with 295 societies affiliated to them. Their total income including the Government grant of Rs. 6,783 was Rs. 6,891, while the expenditure exceeded the income by Rs. 143. The societies secure their deposits in three ways, viz.: (i) by obtaining grants from Government, (ii) by contributions, and (iii) by donations.

District Co-operative Board.

Over and above all these societies there is a District Co-operative Board established in 1950 with a view to propagating the co-operative spirit among the people and to give training to the members of co-operative societies regarding their work. The Board had 52 primary societies, eight central supervising unions and 34 individuals as its members by June, 1960. The Board has done useful work and has received Rs. 5,808 as grant from the Government.

Societies in Sarvodaya area.

Sarvodaya area comprises a compact block of 57 villages from Alibag, Roha and Murud talukas of the district. The scheme aims at an all-sided development in fields of education, social welfare, co-operation, etc. In 1960 there were nine societies of this type working in the district.

It would be clear from the account of the Co-operative Societies presented above that the progress of co-operative movement in the district is very limited. Although the number of societies has increased during war time and though they have served their members and the public through their distributive functions, the main work of granting adequate credit to the agriculturists was not given full attention to. Agricultural credit movement has great scope in the district; the need is to organise more agricultural primaries to cover all villages and to bring as much of rural population as possible in the co-operative fold. Similarly, with a view to linking credit with marketing the Taluka Co-operative Purchase and Sales Unions should be put to active work. As the processing of paddy plays a vital role they need to be given preference over other types of societies.

Attempts to regulate markets at all the taluka places are in progress. Marketing Committees are, therefore, expected to come up one after another at important trade centres.

TOP