Just as my currency proposal takes as a nucleus the existing cash and Shanghai tael for building up a constructive programme, so my banking proposal takes the existing native banks as the nucleus for building up a sound banking system in this country. Success in either currency or banking depends very much on the co-operation of the public. Even Dr. Vissering, who strongly advocates the formation of a central bank, expects that the existing native banks would oppose his scheme; he is quite right and, I may add, they would take every step to nullify the scheme. The existing native banks can have very little to do with the control of the central bank, especially when the latter has to do a great deal towards the regulation of the proposed gold reserve. The central bank again is bound to prove an unwieldy organization, and, in view of the large extent of territory to be covered, it is more likely to be under the full control of the Government than otherwise; any step taken, even partly, to make it independent of the state, is likely to be of no avail. My scheme obviates all such difficulties. First of all, the district banks cover a limited area and hence would not be unwieldy organizations. Secondly, the existing native banks would be the shareholders of the district banks, along with the Government; hence they have every interest in helping the institutions to succeed. Thirdly, the functions do not extend to foreign exchange or artificially to maintain the value of reserves. Fourthly, they would be under the control of the Government, only in so far as the circulation of currency and the regulation of bank interests are concerned. The measure of independence from interference by the Government in the proposed district bank will be immensely more than in the case of a state bank. Lastly, the district bank will be the bank of banks in each locality; it will be an example to the native banks, as also the medium by which some sort of control could be exercised. This control would be altogether different to direct Government control, the reason being that such control is exercised from within, and not by an adventitious agency. As each existing bank in a locality would necessarily be a member of the district bank, any irregularity on the part of one of the members could not only be easily detected, but severely punished with impunity - a function which neither the Government nor the Bankers' Guilds have so far been able to do. The Government was able to do nothing, because it was not able to render any help to the banks and, further, it was an adventitious agency. The Bankers' Guilds in different places were loose organizations, neither consultative nor executive, with no power of any kind; naturally they were only able to pass pious resolutions in matters of importance. The district bank will combine usefulness with authority and at the same time remain autonomous.