Peculiar circumstances responsible for the establishment of this bank were the necessity to have banking agency to give loans to tenant cultivators to enable them to purchase occupancy rights over the land tilled by under the Saurashtra Land Reforms Act of 1949, and thereby to ensure speedy implementation of this enactment. Accordingly, this Bank was formed in a co-operative fold on the lines of mortgage banking as elsewhere in the country. In its initiate stage of lending, this bank gave loans to nearly 56,000 tenants cultivators amounting to Rs. 2.64 crores and thereby it enabled them to become owners of the land tilled by them for years. Thus for the first time in the country, the land reforms measurers of the state government were successfully and speedily implemented through the media of Land Mortgage Bank. Thereafter this bank undertook mortgage banking activities by giving loan to farmers for various agricultural and allied activities.