PROVISION OP BORROWING FACILITIES. 



rupee paid up. To this, however, may be added additional profits 

 which in certain Funds amount to about 8 annas per share per 

 annum, equal to nearly 1J per cent, equated upon the average amount 

 at credit during a term ; hence a saving subscriber gets about 7 J per 

 cent, per annum on his savings. These shares prove, therefore, good, 

 and, if the rules are observed, a perfectly safe investment. 



Their chief function in this country is, however, that of 

 obtaining and repaying loans ; as a rule only members can obtain 

 a loan, and to become a member a man must take one or 

 more shares, every loan must be a multiple of the share value, e.g., 

 if the matured share value be Rs. 100 and the loan be Rs. 500, the 

 borrower must take five shares ; the loan is then repaid by the simple 

 process of regularly paying his ordinary monthly subscriptions, phis 

 interest. It is in this insensible and gradual method of repayment 

 that one important advantage of the Nidhis resides. 



Deposits. These are generally receivable up to an ordinary 

 maximum of Rs. 5,000 for any one account, the minimum varying 

 from Rs. 25. In some cases they are repayable at call, but this is 

 rare ; notice of fifteen days to one month is usually necessary ; 

 cheques are not generally in use, but a form of demand with the 

 pass-book as in Savings banks. Repayment of deposits must, by the 

 rules, take precedence of all other demands for funds, so that on a heavy 

 run loans would be impossible for a considerable period. In some 

 Nidhis only fixed term deposits for three, six and twelve months are 

 received. Some Nidhis only accept deposits from shareholders ; 

 generally, however, they are taken from any person offering. In some 

 Funds directors are bound to or do lend under the name of deposits 

 whenever the Fund is in need of ready money to pay off matured 

 shares, or to meet demands for good loans. Generally speaking, 

 deposits in the mofussil are made in large sums by a few people ; 

 they are not the petty deposits of the masses ; in some Nidhis a 

 minimum, e.g., Rs. 25 is prescribed for each in payment. 1 It is, 

 however, said that these deposits are in many cases made by money- 

 lenders ; not necessarily professional lenders, but persons who have 

 accumulated or inherited money and utilize it in lending on good 

 security. Some join as directors and deposit funds in order to 

 develop business, so as to obtain profits without individual risks and 

 trouble ; others are mere depositors. The connection of money-lenders', 

 at least of this class, with the Funds is noteworthy, especially as so 



