PROVISION Ol<' BOIUU)\V1N<; KAClUTIIiS. 366 



aggregations of shares rather than as assoeiations of members 



OCT O 



co-operating for mutual relief. 



Profits arise in this presidency chiefly from an unusual source, viz, 

 the unpunctuality of the members. 



Profit, in fact, is generally obtained from fines, entrance fees and 

 minor payments and from profits on withdrawals. 



Loans. The money raised by subscriptions or by deposits is lent 

 out chiefly to members ; in Madras city personal security is, in some 

 cases, accepted, but generally only good mortgages and pledges of 

 jewellery or Government paper. In the rnofussil, on the contrary, 

 personal security is more common than mortgages, which in some of 

 the largest Nidhis are either expressly excluded, or obtain but a small 

 percentage of the loans, and then only with the addition of a personal 

 surety. The reasons assigned for this difference will be seen 

 immediately ; and afford much ground for thought ; briefly and chiefly 

 they are that in Madras personal security is shunned because of 

 personal distrust due to a prevalence of fraudulent practices, and to the 

 facilities for bankruptcy, while mortgages are favoured because of a 

 good system of title and of ease in recovery of debts ; in the mofussil, 

 mortgages are avoided because of difficulties of title and the effect of 

 the Revenue law for the recovery of arrears, while personal security is 

 accepted because mutual confidence exists between members residing in 

 the same village or town, and intimately known as neighbours. It is, 

 however, curious that even in mofussil Nidhis, mortgages take rank 

 prior to personal security in the sequence of preference, and are 

 granted at lower interest ; this is due either to the fact that the rules 

 are borrowed direct from Madras, or to an opinion that mortgages 

 per se are safer than personal security ; if it is the latter, it follows that 

 mortgages are not largely accepted because of the difficulties of title 

 and encumbrances. 



The commercial bill is not in use as a method of credit; the cash 

 credit is also absent. 



These loans are granted in the usual way, needing no description ; 

 there is a committee to receive applications, valuers and appraisers and 

 a decision. Loans are granted to about half or three-quarters of the 

 estimated value of the property, if mortgages ; to a somewhat higher 

 value, if pledges. 



Securities are various, viz, paid-up or partly paid-up shares, jewels, 

 Government paper, land and house property and personal security, 



