PROVISION OF BORROWING FACILITIES. 251 



5 per cent., instead of 9 per cent., so as to admit of the loan 

 of 6i lakhs being paid off in about 21 years, no margin would be 

 left for the ryots on which to borrow from the bank during that 

 period. And if they can do altogether without borrowing for 20 

 years, there is obviously no reason for the existence of the bank. 

 It would indeed be simpler, and not more anomalous or hazardous, 

 tha,t Government should advance direct to the ryots the funds 

 needed to relieve them of their present embarrassments. 



6. The scheme further proposes that Government shall lend the 

 bank the sum necessary for the liquidation at 4 per cent., the bank 

 charging the ryot 9 per cent. As it is, in effect, contemplated that 

 Government shall both provide and recover these advances, it is not 

 clear why the bank should have a profit of 5 per cent, on the tran- 

 saction, and why the ryot should not have the benefit of the lower 

 rate of interest. 



7. But there appears to be a still graver objection to the proposed 

 operations. The paid-up capital of the bank is to be, it would seem, 

 two lakhs of rupees, of which one lakh is to be invested in Government 

 securities as a reserve fund, and one lakh only to be employed in the 

 business of the bank. But within two years the bank is to repay, 

 with 4 per cent, interest the loan of 6J lakhs advanced to it by Govern- 

 ment for purposes for liquidation, while the ryots will refund that 

 advance only by instalments spread over a long series of years. There 

 is nothing to show the source from which the bank is to obtain the 

 necessary 6 \ lakhs. It is apparently intended that it should be by 

 means of debentures, that is to say, by borrowed capital. I do not 

 find it explained what security can be offered to debenture-holders, 

 and it is difficult to understand how the bank could be regarded as 

 solvent even at the outset. 



8. Assuming, however, that these very grave preliminary 

 difficulties can be overcome, that the existing debts of the agriculturists 

 have been entirely cleared off, and that they are in a position to deal 

 freely with the bank, I am not satisfied that the business which it 

 could transact would be of such a kind as to meet all the ordinary 

 requirements of the ryots. In the first place, I am informed that the 

 existing sowkars are not merely money-lenders, but that they purchase 

 produce, and supply the ryots with a market. I do not understand 

 whether the bank is to undertake this function ; and whether it is 

 to become the great dealer in produce for the tract over which 



