INSTITUTIONALISATION OF FINANCIAL SERVICES IN INDIA

IMPORTANT MILESTONES

1. TACCAVI LOANS UNDER TACCAVI LOAN ACTS, 1871-79

Government extending loans at the time of widespread calamity

2. (a) LAND IMPROVEMENT LOANS ACT, 1871

(b)LAND IMPROVEMENT LOANS ACT, 1893 Government
extending long term loans for investment in land

3. AGRICULTURAL LOANS ACT, 1884 short term loans for purchase

of seeds, cattle etc.

4. DECCAN AGRICULTURAL RELIEF ACT, 1879

For regulating moneylenders business in the wake of agrarian
disturbances arising out of cotton crisis in the then Bombay

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5. ABORTIVE ATTEMPT BY MADRAS GOVERNMENT IN 1892 TO
SET UP AGRICULTURAL AND LAND BANKS F.A. Nicholsons
recommendation turned down by Board of Revenue

6. AGRICULTURAL BANK SET UP IN MYSORE IN 1894

FOLLOWED BY 64 OF SUCH BANKS BY 1898 Did not thrive
long

7. ABORTIVE ATTEMPTS TO SET UP CREDIT SOCIETIES UNDER

COMPANIES ACT, 1882 IN UP, PUNJAB AND BENGAL

8. FOLLOWING RECOMMENDATION OF FAMINE COMMISSION

(1901), COMMITTEE HEADED BY SIR EDWARD LAW
RECOMMENDED CONTINUED EXPERIMENT WITH CREDIT
SOCIETIES

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9. FOLLOWING EDWARD LAW COMMITTEE REPORT, CO- OPERATIVE
SOCIETIES ACT, 1904 INTRODUCED

10.CO-OPERATIVE SOCIETIES ACT- II OF 1912- 3 tier financial structure

created (PACS, CCB, Apex Bank)

11. (a) MALCOM DARLINGS REPORT (1935) AND STATUTORY

REPORT OF RBI (1937) pointed to insignificant dent into the role of
money lenders.
(b) 2-TIER STRUCTURE FOR MEETING FARMERS LONG TERM
CREDIT REQUIREMENTS PROPOSED

12. ALL INDIA RURAL CREDIT SURVEY (AIRCS) COMMITTEE (1951):

Co- operatives accounted for only 3.1 percent of rural debt
(a) Integrated Scheme of Rural Credit (ISRC) State partnership
through contribution to the share capital of co-operative credit
institutions suggested
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(b) Conversion of private sector Imperial Bank of India into public
sector State Bank of India recommended
13. CROP LOAN SYSTEM (production-oriented system of lending
) introduced
since mid-1960s following Mehta Committees recommendation
(1963)

14.(a) AGRICULTURAL REFINANCE CORPORATION (ARC) set up

by RBI on July 01, 1963

ARDC (November 1975)

NABARD (July 12, 1982) following recommendation of

CRAFICARD
(b) Rural Electrification Corporation (REC) set up by
RBI In 1963
15.ALL INDIA RURAL CREDIT REVIEW COMMITTEE
(AIRCRC), 1966.
Rehabilitation of weak CCBs recommended

16.LEAD BANK SCHEME INTRODUCED IN 1969 following

recommendation of Study Group of National Credit Council. 4
17. SCHEME FOR FINANCING PACS BY PUBLIC SECTOR
AND OTHER COMMERCIAL BANKS AS A TRANSITIONAL
MEASURE INTRODUCED BY RBI (1970) later endorsed by
Study Group of National Credit Council.
(The Study Group on Scheme of financing PACS (1978) and
CRAFICARD (1981) pointed to failure of the scheme )

18. REGIONAL RURAL BANKS (RRBs) SET UP FROM

OCTOBER 02, 1975

19. SERVICE AREA APPROACH (SAA) TO RURAL LENDING

INTRODUCED FROM APRIL 1989.

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20. SHG-BANK LINKAGE FOR PROMOTION OF MICRO
FINANCE introduced on a pilot basis in 1992-93

21. RELEASE OF GUIDELINES BY RBI FOR ESTABLISHMENT OF

LOCAL AREA BANKS (LABs) (1996)

22. KISAN CREDIT CARD (KCC) SCHEME INTRODUCED (1998-

99) following recommendation of High Power Committee on
Agriculture Credit (Chairman R.V.Gupta), 1997-1998. KCC made
revolving credit facility accessible to the farming
community