ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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From 50 Years Ago: No Finance for Assam

Weekly Notes from Volume XIV, No 49, December 8, 1962.

There is a disturbing report that prominent Indian Scheduled Banks have stopped discounting inland bills drawn on traders in Assam and that they are now merely collecting the bills at the risk of the drawers of the bills. This has naturally led to some panic and crisis of confidence in business circles. At a critical period the banks have thus been responsible for spreading panic, instead of allaying it, and shaking the confidence of the people in the border areas. This action of the banks should be treated as utterly irresponsible. Coming in the wake of earlier reports that many Assam tea gardens were at a standstill, being unable to pay their employees because all the currency lodged with the Tezpur Treasury had been deliberately burnt, it goes to show that even our financial machinery, easiest to run and control, can get out of gear so easily.

What has the Reserve Bank been doing? Instead of tinkering with the tiers, if it devoted a little more attention to the practical needs of the situation, it would have played a much more effective part in keeping the economy going. It is unfortunate that the Reserve Bank, even at a critical period like this, should continue to behave in its usual wooden and lethargic manner. It could have, and should have, instructed the bankers to desist from such irresponsible action and worked out at the same time some scheme in consultation with the Government for guaranteeing advances to people in the border areas.

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