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Imperial Gazetteer of India, v. 4, p. 525.

Xvi] CURRENCY' AN-D BAJVKIAG local) amounted to iS crores, and their reserve to more than 71 crores. The greater part of the capital of the exchange banks is, however, employed out of India. Taking the Indian share at one-third, the total capital available in I903 for financing the major operations of Indian trade amounted to about I5i crores. In the same year the aggregate of the deposits in the Presi- dency banks, in the Indian branches of the exchange banks, and in the other joint-stock banks was 47-5 crores, of which about 3 crores represented Government balances in the Presidency banks. As a matter of fact, the great banker of the country is the Government itself, since it holds the greater part of its own cash balances, has the sole control of the paper currency, and controls exchange by its transactions with the Secretary of State. Of recent years the condition of the banking arrangements Proposed in India has formed the subject of frequent consultation Central Bank lfor between the Government and the mercantile community. The India. deliberations have centred round two main questions: firstly, whether the Government could not with advantage transfer some part of the great responsibility which it now accepts in connexion with the currency and other financial matters to a banking institution; and secondly, whether the existing banking facilities are adequate to the needs of the growing trade of India, and if not, h :w they may best be extended. The plan which at first commended itself to the Government of India was the amalgamation of the three Presidency banks into a single Central Bank constituted on a sterling basis and with access to the London money market. It was believed that such a bank would be able to relieve the Government of its present heavy responsibilities, and would secure the advantages arising from the control of the banking system by a solid and powerful central institution. Many objections were made to the proposal, and the Government reluctantly came to the con- clusion that the circumstances were for the time being unfavourable to the policy of the centralization scheme. At present the Government has under consideration the question whether certain of the restrictions placed by law on the business of the Presidency banks might not be relaxed with safety. They are, for instance, debarred, as the law now stands, from raising money in the English market. As regards the trade question, careful investigation does not Adequacy bear out the allegation, which has been frequently made, that of existing banking existing banking facilities are seriously inadequate to cope with facilities. trade requirements; but it leads to the conclusion that these