BANKING TRADE AND COMMERCE
Small Savings Schemes: The Small Savings Movement in India is of recent origin. It was started during 1945 as a method of mopping up the purchasing power to fight the rising spiral of inflation. The Planning Commission later on recognised small savings as the most important source of financing Government expenditure on capital schemes included in the Five-Year Plans. The Government of India
have been trying to intensify small savings as a mass movement aimed at cultivating a national habit of thrift. Of the planned resources for the Fourth Five-Year Plan such as taxation, open market operations, borrowing, etc., small savings are considered to be one of the effective modes of mobilising the savings of the people in the least painful way. Small savings are thus a good weapon for collecting valuable resources for building up a happy and prosperous India.
The following categories of investments have been classified as small savings investments:-
(1) Post office savings bank deposits,
(2) Twelve-year national plan savings certificates,
(3) Ten-year treasury savings deposit certificates,
(4) Fifteen-year annuity certificates,
(5) Cumulative time deposit scheme.
Post Office Savings Bank Deposits: The post office savings bank deposits constitute by far the most important source for the collection of small savings especially from people of small means. The agency of the post office savings bank is very much suited to the rural areas where there are very little banking facilities. Moreover as an agency of the Government, it enjoys complete confidence of the people. Savings bank activity constitutes one of the many functions of the post offices and can, therefore, be carried on economically.
The post office savings scheme is one in which even the poorest can participate. An account can be opened at any post office with as small a sum as Rs. 2 by an individual or by two persons jointly. The maximum limit of investment is Rs. 15,000 for an individual. These facilities are also extended to non-profit-making institutions and co-operative societies.
Twelve-year National Plan Savings Certificates: A new series of the twelve-year national plan savings certificates was issued by the Government of India with effect from June 1957, when the then existing seven-year and twelve-year national savings certificates and the ten-year national plan certificates were discontinued.
Ten-year Treasury Savings Deposit Certificates: Ten-year treasury savings certificates bearing interest at the rate of four per cent per annum can be purchased at the offices of the Reserve Bank of India or the State Bank of India and the branches of the State Bank of Hyderabad. They are available also at all treasuries and sub-treasuries where there are no offices of the aforesaid banks.
The treasury savings deposit certificates are sold in denominations which are multiples of Rs. 50. The interest is paid annually on the
completion of each period of twelve calendar months from the date of deposit. This type of investment is suitable particularly for those who want to keep their capital intact and to earn regular annual interest. The certificates have other advantages also. They are exempted from income-tax, can be hypothecated and can be encashed before they reach maturity, with an allowance.
This is an ideal scheme for investing accumulated savings in one lump-sum which yield a regular monthly income for the investor and his family. The amount invested in these certificates is refunded together with compound interest at approximately 4.25 per cent per annum by way of monthly payments spread over a period of fifteen years.
The fifteen-year annuity certificates are available at all places where treasury saving deposit certificates are sold. They were issued from 2nd January 1958, in multiples of Rs. 3,325 up to Rs. 26,600 securing to the holder a substantial monthly payment. The investor can draw his monthly payment at any treasury or sub-treasury in India or at any of the Public Debt Offices. He can also keep the certificates with the Public Debt Office for safe custody and get monthly return over it. The total amount subscribed towards these certificates approximated only to Rs. 3,325 till June 1959 in the district.
Cumulative Time Deposit Scheme: This scheme was started from 2nd January 1958 to provide opportunity to small savers to save for specific purposes such as marriages, higher education, housing, etc. The scheme is operated through post offices. There are two types of accounts, one of five years maturity value and the other of ten years maturity. Any adult or two can open an account but it should not exceed Rs. 12,000 during the entire period. Withdrawals from the accounts are allowed once during the span of five years and twice in the case of ten-year accounts.
Table No. 15 gives the data regarding small savings schemes in Ahmadnagar district for the years 1965-66 and 1971-72. The table indicates that in 1965-66 and 1971-72 the target for collection of small savings in the district was fixed at Rs. 25 lakhs and Rs. 40 lakhs, respectively. Gross collections of small savings during these two years were recorded to be Rs. 2,00.66 lakhs and Rs. 3,31.58 lakhs and the net collections were found to be Rs. 14.96 lakhs and Rs. 1,33.50 lakhs, respectively.