FINANCE

POST OFFICE SAVING BANKS AND NATIONAL SAVINGS CERTIFICATES

The Post Office Savings Banks constitute by far the most important source for the collection of small savings especially from people of small means. The agency of the Post-Office Savings Bank 'is very much suited to the rural areas where there are very little banking facilities. Moreover, as an agency of the Government, it enjoys complete confidence of the people. Today the Post-Office Savings Banks provide a large net-work of offices spread throughout the country and could be developed without incurring considerable expenditure. Savings Bank activity constitutes one of the numerous functions of the post offices and can, therefore, be carried on economically which is not possible in case of other banking institutions.

The district is served with a considerable number of post offices. In 1957, there were 149 post offices in the district doing savings bank work as well, with the Head office at Ratnagiri. Out of them 48 were sub-offices and 100 were branch offices. The following table gives an account of the savings banks in the district.

This table clearly shows that since 1954, the total number of accounts with the Post Office Savings Banks increased along with the total amounts invested in these banks. An increase in the number of Post Office Savings Banks especially in the rural parts of the district, would encourage an expansion in savings in the future.

The post-office savings scheme is one in which even the poorest can participate. A person can open his account with Rs. 2 at any post office which does savings bank work. An account may be opened by an individual himself or by two persons, jointly, payable to (i) both or (ii) either. Interest allowed for this deposit on individual and joint account is two and half per cent, for the first 10,000 rupees and two per cent, on the sum exceeding this amount. The maximum amount an individual can deposit is Rs. 15,000. The same facilities are accorded to non-profit-making institutions and co-operative societies. The Small Savings Campaign thus affords the cheapest facility to every citizen to contribute his humble mite to national development.

The Twelve-Year National Plan Saving Certificates.

A new series of these Twelve-Year National Plan Savings Certificates has been issued by the Government of India with effect from June 1957. The then existing Seven-Year and Twelve-Year National Savings Certificates and Ten-Year National Plan Certificates were discontinued.

The new certificates carry a higher rate of interest yielding on maturity, a return of 5.4 per cent, per annum simple interest and 4.25 per cent, per annum compound interest free of income-tax. They are available at all post offices conducting savings bank business in denominations of Rs. 5, Rs. 10, Rs. 50, Rs. 100, Rs. 500, Rs. 1,000 and Rs. 5,000. Besides this, these new certificates have certain other advantages. They have protection from loss or damage; they are very liquid and they carry a high degree of security.

In Ratnagiri district, the total amount of investment in the Twelve-Year National Savings Certificates was Rs. 7,89,750 in 1954-55, while the amount of withdrawal in the same year was Rs. 3,37,418.05. In the next year, i.e., in 1956-57, the amount invested showed a decline and the amount withdrawn an increase. The corresponding figures of investment and withdrawal for the year were Rs. 7,60,735 and Rs. 4,92,710.17, respectively.

Ten-Year Treasury Savings Deposit Certificates.

Ten-Year Treasury Savings Deposit Certificates bearing an income- tax free interest at four per cent, per annum can be purchased at offices of the Reserve Bank or the State Bank and branches of the State Bank of Hyderabad and the Bank of Mysore. They are available also at all treasuries and sub-treasuries where there are no aforesaid offices of banks.

The Treasury Savings Deposit Certificates are sold in denominations which are multiples of Rs. 50 and investment in the same can be made by cash or cheque. The maximum that can be invested varies according as the investor is an individual or an institution. The interest is paid annually on the completion of each period of twelve calendar months from the date of deposit. This type of investment is suitable particularly for those who want to keep their capital intact and earn regular annual interest for normal recurrent expenditure. The certificates have other facilities too. They are exempt from income-tax, can be hypothecated and can be encashed before the date of maturity, with due allowance for discount. The total amount invested in these certificates in Ratnagiri district during the seven years from 13th August 1951 to 31st March 1958, was Rs. 2,59,600.

The following table gives year-wise figures of total subscriptions received for Ten-Year Treasury Savings Deposit Certificates.

TABLE No. 12.

TOTAL SUBSCRIPTIONS RECEIVED FOR TEN-YEAR TREASURY SAVINGS DEPOSIT CERTIFICATES.

This table reveals that since August 1951, the total investment in these certificates increased from Rs. 6,000 to Rs. 46,200 in 1957, which shows the increasing popularity of these certificates amongst the people.

Fifteen-Year Annuity Certificates.

This is an ideal scheme for investing accumulated savings in one lump sum which yields a regular monthly income for the investor and his family. The amount invested in these certificates is refunded together with compound interest of approximately 4.25 per cent, per annum by way of monthly payments spread over a period of fifteen; years. The amount paid to the investor each month is free of incometax and super-tax.

The Fifteen-Year Annuity Certificates are available at all places where Treasury Savings Deposit Certificates are sold. They were issued from 2nd January 1958 in multiples of Rs. 3,325 up to Rs. 26,600, securing to the holder a substantial monthly payment. The investor can draw this monthly payment at any treasury or sub-treasury in India or at any of the Public Debt offices at Bombay, Calcutta, Delhi, Madras and Bangalore. He can also keep the certificates with Public Debt Office for safe custody and get monthly return over it.

The Fifteen-Year Annuity Certificates also received popular support in this district. During the period of two years from 1954 to 1956 the total amount subscribed to these certificates amounted to Rs. 10,500.

Cumulative Time Deposit Scheme.

This scheme was started in January 1959. It gives opportunity to small savers to provide for specific purposes such as marriage, higher education, building a house, etc. The scheme is operated through post offices. There are two types of accounts, one of five years maturity value and the other of ten years maturity value. The interest on these deposits at maturity works to about 3-28% and 4.13%, respectively. Any adult or two can open an account but it should not exceed Rs. 12,000 during the entire period. Withdrawals from the accounts are allowed once during the currency of a five-year account and twice in the case of a ten-year account. The amount of withdrawal should not exceed 50% of the total amount of deposits made and the account must have been in operation for more than a year. The amount withdrawn will be deducted from the amount payable under the account, together with simple interest thereon at 6 per cent, per annum.

Small Savings Agent.

In order to intensify the small savings campaign into a mass movement, the Government has started various schemes which are in operation under executive instructions issued by the State Government and the Government of India. The schemes are as follows: -

(1) The General Authorised Agency Scheme open to all citizens including Government servants, co-operative societies, scheduled banks and social welfare institutions.

(2) The internal Agency Scheme.

(3) The Primary Teachers' Agency Scheme.

(4) The Rural Agency Scheme.

(5) The Extra-Departmental Branch Post Master Scheme.

(6) Women's Savings Campaign Agency Scheme.

Besides these schemes individuals are also allowed to canvass the sale of Twelve-Year National Plan Savings Certificates and Treasury Savings Deposit Certificates on a commission basis at the rate of one and half per cent, and half a per cent, respectively.

TOP