44 PROVISION OF BORROWING FACILITIES. 



3. We consider that banks of this kind if they could be successfully 

 started, might be of considerable benefit to the country. There are, 

 however, special difficuties to be encountered in India, which are not 

 met with elsewhere in the way of their establishment. Improvi- 

 dence of cultivators and uncertainty of seasons are elements which 

 are liable to interfere with a bank's success; and though these 

 difficulties might be met by prudent management, yet the bank could 

 not hope to succeed unless it could start in a field where the agricul- 

 tural classes were unencumbered with debt, or were enabled to 

 liquidate their existing debts on reasonable terms. 



4. When, therefore, we considered the subject in 1882 in connec- 

 tion with the Land Improvement Bill, we came to the conclusion 

 that more assistance must be given by the State to an agricultural 

 bank in India on its inception than is necessary in other countries. 

 More especially is this the case in a part of the country like the 

 Deccan, where the need for a such a bank on the one hand is 

 greatest, and the difficulties arising from the indebtedness of the 

 population and from the precariousness of the seasons are, on the 

 other hand, most serious. If the experiment succeeded, similar banks 

 might probably be started with less aid or without any aid from the 

 State, and the benefits likely to arise from such institutions seemed 

 to us so great that we were prepared to give cordial support to a 

 poineer bank. We saw that it would be necessary to clear the way 

 for the bank by liquidating the debts of the agriculturists within 

 the selected area, on the understanding that our advances would be 

 taken over by the bank when it started business. We also saw that 

 confidence must be given to the promoters of the bank by allowing 

 it, for a time at least, to recover its loans through the revenue courts, 

 by assigning in some cases priority to its loans, and by remitting 

 stamp duty and other dues for a certain period in its favour. In 

 return for this assistance we considered that the bank should limit its 

 rate of interest to 12 per cent, and that its management should 

 conform to regulations framed by us somewhat on the model of 

 those prescribed for the Credit Foncier in Egypt, with which our 

 colleague, MAJOR (now SIR E.) BARING, was well acquainted. On 

 these lines we sketched out a scheme which we thought well worthy 

 of an experimental trial, although we were not prepared to go beyorrV 

 a limited experiment which might enable us to determine by the 

 trial of practical experience the conditions under which banks of 



