Indigenous bankers bear banking business. According to Indian Central Banking Enquiry Committee (1931) an indigenous banker is defined every bit “Any private or private theater receiving deposits together with dealing inwards hundies or lending money“. One of the distinguishing features of indigenous bankers is that they furnish credit yesteryear discounting hundies. Both coin lenders together with indigenous bankers are constituent of the unorganized coin market. It is an ancient organisation of finance inwards India. Until formal organisation of commercial banking came into being inwards the middle of the eighteenth century, major constituent of banking inwards Republic of Republic of India was carried through indigenous banking system.
Characteristics of Indigenous Bankers
Indigenous bankers utilization their ain funds for lending activity. Deposits accepted from Earth assort entirely a modest constituent of their working capital. Some of the of import characteristics of Indigenous Bankers are
- There are real few formalities inwards the operations of indigenous bankers.
- They are flexible inwards their working hours. Their establishments are modest together with economical, which makes them accessible to modest together with misfortunate borrowers. They furnish prompt together with personalized services without undue delay.
- Indigenous bankers rely to a greater extent than on the data they obtain from the borrowers through personal contacts that they maintain. They teach data pertaining to the yesteryear history, concern together with fiscal set of the borrower. They likewise endure along a closed picket on the activities of the borrower.
- They practice non hold accounts inwards a systematic manner. They utilization the vernacular for maintaining accounts.
- Their operating costs are lower than those of commercial banks.
- They may accuse unlike rates of involvement according to the require every bit good every bit repayment capacity of the borrowers.
Operations together with Functions of Indigenous Bankers
Indigenous bankers occupy a unique set inwards the fiscal organisation of the country. Development of commercial banks inwards the province mightiness lead hold reduced their importance, but has non eliminated them altogether. They perform the next functions.
- They convey deposits
- They bargain inwards hundies together with bills of exchange. They buy, sell together with discount hundies.
- They sanction diverse types of loan together with advances on safety such every bit land, crops, gold, silver, fifty-fifty on the footing of personal security.
- They transfer funds from 1 house to some other through discounting hundies.
- They furnish finance to traders, artisans, together with modest industrialists. They practice non lend direct to agriculturists.
Future of Indigenous Bankers
Many pregnant changes lead hold been taken house afterwards 1947. Various types of fiscal institutions lead hold been develop both inwards the banking every bit good every bit inwards cooperative sector together with likewise inwards non-banking sector. Commercial banks were nationalized and lead hold been required to finance priority sector. There has been a cracking expansion of the network of branches of scheduled commercial banks inwards the country. These changes together with evolution lead hold reduced the importance of the indigenous bankers significantly. Inspite of increase of the network of fiscal institutions, the indigenous bankers are making their presence together with trying to play its due role fifty-fifty though it is a modest one. Indigenous bankers are surviving because of their unique characters that they posses.