Deposits Mobilization By Baroda District Central Co-Operative Bank Ltd. (A Cooperative Bank of Gujarat)

Abstract

Agriculture plays a dominant role in the Indian Economy, providing employment for 70 percent of the people and contributing 42 percent to the Gross National Product (GNP). Agriculture has been and will continue to be the life line of the Indian economy. Agriculture is the most important sector of the Indian Economy from the perspective of poverty alleviation, and employment generation. Agriculture is affected by several factors like irrigation, HYV, marketing of agriculture products, advanced techniques, fertilizer, credit and other capital equipment etc. Credit is one of the major factors affecting the agricultural development. There are two source of agriculture credit. First is "Noninstitutional" and Secondly is "Institutional". The Non-Institutional source is very costly as compared to the institutional because the interest rates ofnon-institutional sources are very high. The rate ofinterest is differing man to man and purpose to purpose. The reason being the monopoly of money lenders and another is non availability of institutional source. In 1951-52, money lenders supplied 70 percent of the total amount borrowed by farmers. The first action was taken by the British Government in context of institutional credit for agriculture sector. The British Government made provisions for agricultural credit of two types- the first was Land Improvement Loans Act of 1883 and second was Agriculture Loans Act, 1884. Under these laws, long-term loans, popularly known as 'Taccavi' loans were given to the farmers for understanding land improvement measures like constructing embankments, tanks, water-sources, and the like with a maximum repayment period of35 years. In the later stages, short:term loans were provided for the purchase of seeds, cattle, manure and implement. "Taccavi" loans played an important role during times of famines, floods and drought. These loans were routed through the revenue department of the state government. The second step was taken 1904 in context of institutional loans for agriculture as a co-operative movement. The co-operative movement owes its origin to England, where a great philosopher, Robert Owen, gave the idea of 'Self-Help through Mutual Help' to mitigate the suffering of the exploited class of the society. The co-operative movement was introduced in India in the early years of the 20'h century, with the main objective of relieving the peasantry's burden of debt and for providing credit through a local agency on the principles of thrift, self-help and mutual aid. The Co-operative Societies Act, 1904, was introduced on the recommendation of the Law Committee appointed by the Government oflndia under the chairmanship of Edward Law. Indian Co-operative Movement picked up momentum, especially after the world war. By 1950, the co-operative credit movement had emerged as a developed, sound satisfactory banking system in most of the Indian Union. The co-operative banking structure consists of two wings that are short-term and long-term.