2*76 



to find half the capital required to work the concern. The 

 Government obtains its loans at about 3-| per cent, interest, 

 and it might well be content with an interest of 4 per cent, 

 on the capital subscribed by it, especially when a guarantee 

 fund is constituted to meet losses. It should guarantee the 

 capital subscribed by private individuals, together with 4 per 

 cent, interest. Loans should be granted to applicants on 

 the security of immovable property. As it is not desirable 

 to make loans obtainable on too easy conditions at the com- 

 mencement, thereby tempting people to bori'ow money un- 

 necessarily, the rate of interest charged for loans granted by 

 the bank might be fixed at 9 per cent, and gradually reduced 

 to 6 per cent, in course of time. The dividend payable to 

 private shareholders might be limited to 6 per cent., any 

 excess above it being credited to a guarantee fund. Any 

 excess above 4 per cent, falling to the shares subscribed by 

 Government might, likewise, be credited to the guarantee 

 fund. In course of time it would be possible to find funds 

 by issuing debentures in amounts as small as Rs. 50 and 

 thereby reduce both the interest guaranteed to private share- 

 holders and the interest charged to applicants for loans ; but 

 at the outset a reasonably high rate is necessary in both cases. 

 The control and inanagement of the bank should be vested in 

 a council of 20 or 30 persons, of whom one-third might be 

 nominated by Government and the remaining two-thirds 

 elected by the shareholders, the Tahsildar of the taluk being 

 ex-ojflcio President. The council might meet half yearly to 

 settle the scheme of business for the ensuing half year and 

 fix the rates of interest to be charged, &c., and the transac- 

 tion of business might be entrusted to a committee composed 

 of about half a dozen persons, of whom one-half might be 

 Government officials and the remainder non-official persons, 

 with the Sub-Registrar at the taluk station as Secretary. 

 The Sub-Registrar is peculiarly qualified for this duty, as he 

 has command of the official registers of transactions affecting 

 immovable property and the means for acquainting himself 

 with the market value of lands offered as security for loans 

 applied for. The loans might be made repayable by instal- 

 ments or by a sinking fund so adjusted as to extinguish the 

 debt in 10, 15 or 20 years, the longer period being allowed in 

 the case of loans for substantial improvements to land, such 

 as wells and other works of irrigation or drainage. There 

 would be no enquiry as to the purposes for which the loan was 

 required ; but if the improvement has actually been made, the 

 borrower should be allowed, on furnishing proof thereof, to 

 convert a loan for a short period into one for a longer period. 



