Trend and Progress of Banking in India

The fall in prices in February-March 1952 and the restricted availability and increased cost of bank credit discouraged inventory accumulation in particular the speculative holding of stocks and in the 1952 slack season the return of funds to the banks even outstripped the extension of credit in the preceding busy season. [...] The smaller volume of Reserve Bank credit to the banking system reflects the more comfortable position of the banks on the eve of the busy season and their ability to meet the somewhat reduced rquirements of the season largely from their own resources. [...] On the In the case of non-scheduled banks as a result of the extension of the Banking Companies Act to Part B States and the consequent increase in the number of reporting banks from 306 in December 1951 to 425 in December 1952 the breakdown of their assets and liabilities is not strictly comparable with that of the earlier year. [...] A few banks defaulted in the maintenance of statutory reserves (in terms of Section 42(r) of the Reserve Bank of India Act in the case of scheduled banks and Section 18 of the Banking Companies Act in the case of non-scheduled banks); these defaults however were of a casual nature and were soon rectified. [...] During the year however certain proposals were rejected by the Amalgamations Reserve Bank as the proposed amalgamations were not considered to be beneficial to the depositors of the banks."19 Mention was made in last year's Report of the proposal of the Government of Rajasthan for the transfer of certain assets and liabilities of the four State banks to the Bank of Rajasthan.