280 



lowest bidder among the members the amount bid. Thus, 

 one of the members in want of money might consent to 

 receive Rs. 1,400 in lieu of the sum of Rs. 1,600 he is entitled 

 to receive. The difference of Rs. 200 is divided amonsf the 

 other members, and the process is repeated year after year 

 during the whole period of the agreement. The aggregate 

 annual amount payable under the 16 agreements registered 

 in Kasarg(5d Sub-Registrar's office was Rs. 15,000, and the 

 periods for which the agreements were to be in force varied 

 from 9 to 20 years. Members who fail to pay a particular 

 instalment are charged interest at 24 per cent., which is 

 debited to the contributions already made by them. Similar 

 ' chit ' or ' kuri ' agreements are very common in Malabar, 

 Tinnevelly and Madura districts. The arrangement is a 

 cumbrous one and difficult to work owing to failures and 

 casualties. xvTevertheless, the fact that people enter into 

 such arran2"ements shows how sorely they stand in need of 

 banking facilities. 



As regards funds to be provided by Government, I do 

 not think that a very large sum will be necessary at the out- 

 set, as the scheme will have to be experimentally introduced 

 in a few places, and it seems to me that Government will 

 really incur no risk whatever in connection with the scheme. 

 The Government might safely place at the disposal of the 

 banks a portion of the Savings Bank deposits, which will thus 

 earn interest for Government, instead of lying idle as at 

 present. The balance on 1st April 1892 to the credit of 

 depositors in Post Office Savings Banks throughout India 

 was upwards of 7 crores of rupees, the amount appertaining 

 to the Madras Presidency alone being above 63 lakhs of 

 rupees. The balance on hand of these deposits is likely 

 to grow rapidly from year to year. In fact, the limits of 

 yearly deposits in the Post Office Banks, which were origin- 

 ally fixed at Rs. 500, were reduced to Rs. 200 in 1889, because 

 the amount deposited was so large that it was considered 

 that Government was likely to suffer loss by keeping so 

 much money idle in their hands, while paying interest to the 

 depositors. 



98. Of the great utility of land credit banks in furnish- 

 ing, on reasonably easy terms, the capital 



The utility of Land - j r • ^^. 1 ■ j. 'i. 



Credit Banks. required tor agricultural improvement, it 



is not necessary to write at any length. 

 It is obvious that if peasant proprietors have to borrow 

 money at 12 or 18 per cent, interest, the only improvements 

 that can be carried out without loss are those which will cost 



