BANKING TRADE AND COMMERCE

section i-BANKING AND FINANCE

Money-Lenders.

The practice of lending money seems to have come about when money was introduced as a medium of exchange in the economy of the district. Most of the transactions that took place earlier were in terms of barter, and restricted to local needs. Money as a medium of exchange was found popular owing chiefly to its convenience and was adopted widely over the district. Unfortunately there is no record of any of the monetary transactions carried on during the early period.

At the time when the old District Gazetteer of Yeotmal was published, that is in 1908, there were quite a large number of money-lenders in the district. Among them the most conspicuous were Marwadis but there were also numerous Komtis and a few Brahmans, Khatris, Kunbis, Telis, Sonars and Muhammedans. They were all landlords. There were also numerous small money-lenders scattered among the villages. They were often grain dealers, and sometimes cotton dealers. Petty money-lending was to some extent done by the Rohillas, Muhammedans from the Afghan frontier, whose methods were inclined to be summary. A few of them were quite rich. They were said not to have much custom in Pusad taluk because few people found themselves obliged to borrow from such formidable creditors. In Wani taluk it is said that there used to be a number of Rohillas but there were none left because the Kunbis beat them and drove them out. This does not appear probable but there were in fact few Rohillas in the District.

The debtor class consisted mostly of cultivators who almost always preferred to borrow from a money-lender, paying perhaps twelve per cent interest, rather than from Government at six per cent. The chief reason seemed to be that there was great delay in getting the money from Government, or at least so the people  thought. It was also believed that certain subordinate servants of Government exacted irregular fees.

Loans from money-lenders or private loans fell into two great classes, loans at interest and loans on Sawai. In the former case interest, Wyaj was calculated monthly. The lowest rate was, charged when one well-to-do money-lender borrowed from another. The common rate in such a case would have been eight annas a month, that is, six per cent per annum, although lower rates were also known. Cultivators who borrowed on their land had to pay more, ordinarily one rupee a month, or twelve per cent per annum, though the rate varied from twelve annas to two rupees a month. A poor man who could offer as security only his house and personal effects had to pay more and anyone who borrowed from a Rohilla, much more.

Sawai was a system by which the borrower must repay one-quarter more than he had received, whether he made the payment immediately or only after a long interval. The loan, however, was generally taken for seed-grain or for food while the crops were in the ground, and was repayable at harvest. There was sometimes the further condition that if repayment was not made by a certain date, interest was to be charged on the total sum. Sawai was said to be less common than the former way of charging interest. It was practically never used except for sums of less than one hundred rupees lent to poor people: but it was common among the poor cultivators, men who had only two or three pairs of bullocks. The rule of damdupat was enforced against Hindus by the civil courts all over Berar, though it did not apply to Muhammedans, and though some Hindu moneylenders in the district said that they did not recognise the practice. The rule was that a decree could not be given for a sum exceeding twice the sum originally lent, even if. the interest would accumulate over a long period of time. There were however, ways of evading this.

It was said that perhaps three-quarters of the cultivators of the district were in debt, but the debt was very seldom burdensome. Debt was incurred both for expenses of cultivation and for marriage and other ceremonies. The chief expenses of cultivation were sowing and weeding, the latter being the more serious. Cultivators usually sowed their own juari but often borrowed either money or seed for cotton or for Rabi crops. On the Wun side they commonly borrowed and returned the seed itself at either Sawai or Nimi Sawai, that is returning either one-quarter or one-eighth more than they received. On the Darwha side they borrowed money to buy seed and returned either money or seed at market rates. The term lawani was sometimes used to mean any loan of seed to be repaid in money. and sometimes to mean a loan to be repaid in kind at a fixed rate. In the former sense it was contrasted with a loan biyane, to be repaid in seed, and was very common in the west of the district. In the latter sense it had been very uncommon since the famine of 1899-1900, when it caused great hardship.

In the absence of any legislative or statutory control over the money lenders, the position of the debtors went on deteriorating. The money-lenders followed a number of malpractices to recover their dues from the debtors. In order to put a stop to this situation the then Government passed an Act known as the Central Provinces and Berar Money-lenders Act of 1934. The Act was applied to all the persons in Vidarbha region who intended to follow money-lending business. The Act was in operation till 31st January 1960.

Bombay Money-lenders Act, 1946.

From February 1960, the Bombay Money-lenders Act, 1946 has been made applicable to Yeotmal district along with the other parts of the Vidarbha region,

Under the provisions of the Act the State Government is authorised to appoint Registrar-General, Registrars and Assistant Registrars of Money-lenders for the administration of the Act and to define areas of their duties. Every Registrar is to Maintain a register of money-lenders in his jurisdiction. The moneylenders are compelled to take out licences for carrying out the business of money-lending. The Registrar, the Assistant Registrar or any other officer under this Act may require any moneylender to produce any record or document in his possession which is relevant for his purposes. Every money-lender has to keep and Maintain a cash-book and a ledger in a prescribed form and manner. He has also to deliver a clear statement to the debtor about the amount, security, etc. of his transactions. The State Government is authorised to fix maximum rates of interest for any local area or class of business of money-lending in respect of secured and unsecured loans. The money-lender is prevented from molesting the debtor while recovering his dues, and molestation is treated as an offence and is penalised. It is also laid down by the Act that no debtor who cultivates land personally and whose debts do not exceed Rs. 15,000 will be arrested or imprisoned in the execution of a decree for money passed in favour of money-lenders whether before or after the date on which the Act comes into force.

The Act was amended subsequently, the important amendments being the introduction of the pass-book system, provision of calculating interest on katmiti system and facilities to certain classes of money-lenders permitting them to submit quarterly statements of loans to the Registrar of Money-lenders. The Act was amended once again in 1955 when money-lending without a valid licence was made a cognisable offence. In 1956 special measures were adopted to protect the interests of the backward class people. Accordingly, the Registrars and the Assistant Registrars were instructed to take special care while checking the accounts of money-lenders in respect of these transactions with the backward class people.

By 1959-60 when the Bombay Money-lenders Act of 1946 was applied, there were in all 797 money-lenders in Yeotmal district. Their number, however, went on decreasing year by year so that by 1965-66 there were only 384 money-lenders in the district. The decrease in their number is due to more and more agriculturists who were Mainly their debtors, seeking financial accommodation from the Government in the form of tagai loans. Of late the modern joint-stock and commercial banks have also come forward to assist agriculturists by way of loans to help their productive activities. The legal restrictions imposed by the Money-lenders Act have on the other hand, exercised, deterrent effect on the money-lending business, as many of the money-lenders do not renew their licences.

The following tables give the tahsil-wise number of the licensed money-lenders in Yeotmal district and the loans advanced by them to traders and non-traders in the district.

TABLE No. 1

TAHSIL-WISE DISTRIBUTION OF LICENSED MONEY-LENDERS IN YEOTMAL DISTRICT FROM 1959-60 TO 1965-66

TABLE No. 2

ADVANCES MADE BY LICENSED MONEY-LENDERS TO TRADERS AND NON-TRADERS IN YEOTMAL DISTRICT FROM 1959-60 TO 1965-66

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