BANKING TRADE AND COMMERCE

section i-BANKING AND FINANCE

Of the various credit institutions described in this section the moneylender takes the first and the foremost place. During the period when hardly any other credit organisation existed, the money-lender played an important role both in the matter of capital accumulation and in meeting the credit needs of the people who were largely agricultural tenants. But as the ways and means employed by him in the recovery of dues proved to be too severe to the tenants and objectionable on grounds of social justice, the then Government passed the Money-1 ender's, Act in 1934 which resulted in substantially curbing the monopolistic influence of the money-lender and regulating his business. It was, however, the rise of the modern joint-stock banks and their rapid expansion in the post-war period that brought about an important change in the credit structure of the economy. The banks facilitated development and growth of trade and industry and encouraged the savings habit of the people who had preferred hoarding. Next to banks the role played by the co-operative societies as part and parcel of the co-operative movement is an important one. Beginning as ordinary credit societies to satisfy the primary credit needs of the agriculturists from rural areas, the co-operative movement has spread all over the district and touched almost all the spheres of life of the people from urban and rural areas. Co-operation, in fact, has become the psalm of our planning programme. Another important development in the field of finance is the emergence of the State as a active participant in the economic affairs of the country and also as the chief regulator or controller of its policies. The rapid expansion of the public sector after Independence has not only served to keep the prices of commodities down to the competitive level but has also helped to increase the efficiency and working of the private units. The State has at the same time assisted a number of small units or individuals through financial assistance and grant of togai loans and subsidies. The ever-increasing role of the State activities is being financed by such organisations as the Life Insurance Corporation. The State's Small Savings drive has also been making a remarkable contribution towards it. The following pages attempt a review of their developments.

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