Preview

Rural Banking

Powerful Essays
Open Document
Open Document
10516 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Rural Banking
RURAL BANKING IN INDIA

Introduction

Rural banking in India has been the subject of study Survey Committee Report in 1954, literally thousand of reports have examined and investigated the problems relating to the credit delivery for agriculture and rural area. Latest magnum opus on the subject is the National Agricultural Credit Review report 2000. The Expert Committee on Rural Credit (Chairman: Professor V.S.Vyas) submitted its report in 2002.One more High Power Committee headed by Professor Vyas set up by the Reserve Bank of India recently to review and advice on improving credit delivery to agriculture has also given its report.

As the majority of the Indian population lives in rural areas, there is an urgent need to deliver citizen services to them in a cost effective way with assured quality. This involves mainly the following:

−> Enabling the ready access at the place of the villagers.

−> Reducing transaction cost to make the services affordable.

−> Reduction in delays.

−> Improving the quality of services available.

The criticality of this need may be seen from the fact that even with concerted and extensive attempts to meet the credit needs of the farmers for agricultural operations etc., informal agencies including money lenders are currently providing substantial portion of the total credit to this sector. Besides, the agricultural credit flows themselves are inadequate and the gross capital formation can be improved only if substantial amount of investment funds flow to the rural areas in the form of credit. Likewise, there is also a need to provide market information, extension services, marketing support and government and other public services to the people in a cost-effective manner. For achieving financial inclusion and economic growth, the

You May Also Find These Documents Helpful

  • Good Essays

    I will also see to it that credit facilities are liberalized. Banking services will be extended to the rural areas. With this end in view, Banks will be encouraged to open their braches even in remote villages. Indian farmer is proverbially poor, and owning to his poverty and illiteracy he has always been exploited by the local money lenders. Instructions will be used to the banks (through the Reserve Bank of India) that the needy farmers be given loans on easy and liberal terms. This will enable them to purchase good quality seeds, fertilizers,…

    • 763 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    8. World Bank. 1999. India: Towards Rural Development & Poverty Reduction, Volume 1: Summary, Report No. 18921-IN, Rural Development Sector Unit, South Area Region, Washington, D.C.…

    • 5964 Words
    • 24 Pages
    Powerful Essays
  • Powerful Essays

    Lead Bank Scheme

    • 1351 Words
    • 6 Pages

    The Banking industry in India has made considerable progress especially during the last 3 decades, to emerge as one of the accredited agencies of rural development.The orientation towards rural economy gained momentum only after nationalization of major commercial Banks. For various reasons, they took roots mainly in the urban and metropolitan centers and bulk of loans and advances was directed to large and medium scale industries. No serious attempt was made by banks to finance agricultural sector.…

    • 1351 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    *ASHISH SHARMA (R.R.M. COLLEGE, Neemuch) Agriculture plays an important role in the development of the Indian economy. It accounts for about 19-21 per cent of GDP and about two thirds of the population is dependent on the sector. The importance of farm credit as a critical input to agriculture is reinforced by the unique role of Indian agriculture in the macroeconomic framework and its role in poverty alleviation. Agricultural finance is a subset of rural finance dedicated to financing agricultural related activities such as input supply, production, distribution, wholesale, processing and marketing. Financial service providers face distinct challenges when dealing with this sector. For example, the seasonal nature of production and the dependence on biological processes and natural resources leaves producers subject to events beyond their control such as droughts, floods or diseases. The modern agriculture has increased the use of inputs specially for seed, fertilizers, irrigational water, machineries, implements etc. which has increased demand for agricultural credit. The adoption of modern technology, which is capital intensive, has commercialized agricultural production in India. Besides, the farmer's income is seasonal while his working expenses are spread over time. In addition, farmer's inadequate savings require the uses of more credit to meet the increasing capital requirements. Furthermore, credit is a unique resource, since it provides the opportunity to use additional inputs and capital items now and to pay for them from future earnings.…

    • 2543 Words
    • 11 Pages
    Good Essays
  • Powerful Essays

    financial inclusion

    • 3121 Words
    • 11 Pages

    In partnership with the National Bank for Agriculture and Rural Development, the UN aims to increase financial inclusion of the poor by developing appropriate financial products for them and increasing awareness on available financial services and strengthening financial literacy, particularly amongst women. The UN's financial inclusion product is financed by the United Nations Development Programme.…

    • 3121 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    Micro-Finanace in Bangladesh

    • 9909 Words
    • 40 Pages

    The objective of this study is to identify the rural finance situation of Bangladesh. The organized rural finances condition. The prime organizations to offer rural finances throughout the country. The impediments to render rural finances.…

    • 9909 Words
    • 40 Pages
    Good Essays
  • Good Essays

    Nabard Guidelines

    • 1150 Words
    • 5 Pages

    1. serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas…

    • 1150 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Abstract: Formal financial system includes the banking sector and what is the perception of rural people regarding the activities of formal financial system was discussed on the full abstract. The term rural finance is about providing financial services- secure savings, credit, money transfer and insurance in rural areas. The past study showed that for the rural people, secure and flexible saving schemes are more important than access to credit. It is difficult to understand rural peoples mind and offer the services according to their needs. When talking about loans for investment and working capital, it enables the rural people to make investments, and purchase agricultural inputs and working capital. But besides these, there lies another view which said that loans are not always favourable; some poor borrowers experience difficulties in repaying their debts, due either to circumstances beyond their control (sickness, theft, etc). The perception of rural customer regarding formal financial system also effects due to the reason that in recent years several microfinance institutions such as SHG (Self-Help Group), BISWA (Bharat Integrated Social Welfare Agency), NBFC are engaged to serve the poor section of the society. As a result, majority of the developing world’s rural population does not have access to the formal financial system.…

    • 1148 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    The significance of agriculture in bringing about economic growth and development of a nation cannot be underestimated, the reason why a nation possesses sustainable food security, is because it produces enough food to feed her citizens and even export these goods to other needy countries thereby generating foreign exchange which in turn increases the national income in the long-run. The agricultural sector serves all other sectors in the economy especially the industrial sector. The problem facing the Nigerian agricultural economy is inadequate capital and credit for start-up, investment and expansion. Monetary policy through its influence on the financial sector of the economy plays a major role in making credit available to the agricultural sector.…

    • 12527 Words
    • 51 Pages
    Powerful Essays
  • Good Essays

    Agricultural Loan

    • 471 Words
    • 2 Pages

    Agricultural loans are available for a multitude of farming purposes. Farmers may apply for loans to buy inputs for the cultivation of food grain crops as well as for horticulture, aquaculture, animal husbandry, floriculture and sericulture businesses. There are also special loans to finance the purchase of agricultural machinery such as tractors, harvesters and trucks. Construction of biogas plants and irrigation systems as well as the purchase of agricultural land may also be financed through special types of agricultural finance. Here is some information about the kind of agricultural credit and loans provided by public sector banks in India. In 1981, the government came out with the National Bank for Agriculture and Rural Development Act that lead to the formation of National Bank for Agriculture and…

    • 471 Words
    • 2 Pages
    Good Essays
  • Good Essays

    financial inclusion

    • 2088 Words
    • 9 Pages

    “STUDY ON IMPACT OF FINANCIAL INCLUSION IN RURAL AREAS WITH SPECIAL REFRENCE TO SBI IN MANDLA DISTRICT”…

    • 2088 Words
    • 9 Pages
    Good Essays
  • Good Essays

    The self service concept in the modern business is considerable recognition these days. It plays a vital role in reducing costs to an organization by facilitating automated interface between service provider and a customer. The term financial inclusion is offering of services at a lower cost to major sections of the rural people. Open access to public goods and services is a main thing of an open and efficient society. As banking services is in the nature of public goods, it is essential that availability of banking services to the entire population without discrimination is the prime objective of the public policy. In India, banking industry has shown tremendous growth in volume and complexity during a last few decades. Despite making sufficient improvements in all the areas relating to financial viability, profitability and competitiveness, there are concerns that banks have not been able to reach the vast portion of the population. Especially the underlying sections of the rural areas, into the reach of banking services. Globally there are many efforts made to study and know the causes of financial inclusion and design strategies to ensure financial inclusion of the poor and the needy. The reason for this may vary depending upon the various regions and also the strategy but total efforts are needed for the financial inclusion as it can really lift the standard of living of the poor and the needy. In the Mid Term Review of the policy(2005-2006), RBI exhorted the banks with a view to have better financial inclusion, to make the availability of No Frills account either with zero balance or very low minimum balances as well as low charges that would make such accounts available to the vast section of the population. The nature of the account and the number of transaction in such accounts would be restricted and…

    • 367 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Rbi Functions in India

    • 674 Words
    • 3 Pages

    This paper has been authored by Dr. Narayan Chandra Pradhan. Rural Credit market in India is characterized by the coexistence of both formal and informal sources of finance and the market is fragmented. In this paper author attempt to describe the credit supplied by non-institutional agencies as informal while institutional agencies as formal sources of credit. RBI conducted both All-India Rural credit survey 1951-52, RBI(1954), and All-India Rural Debt and Investment survey 1961-62, RBI(1965) and NSSO conduct four rounds of All-India Debt and Investment Survey from 1971-72 to 2002-03.…

    • 674 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    manipalassignment@gmail.com Project Synopsis Rural Banking in India manipalassignment@gmail.com Table of contents Title of the Project: 3 Rural Banking in India 3 Project Guide 3 Introduction about the Banking: 4 Introduction about Project and Topic: 10 Project Aims and Objective: Error! Bookmark not defined. Analysis and Findings Error!…

    • 1231 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    Rural Development

    • 667 Words
    • 3 Pages

    2) NABARD: set up with a mandate of facilitating credit flow for promotion and development of agriculture as well as evolved to occupy a pivotal position in the financial inclusion efforts…

    • 667 Words
    • 3 Pages
    Good Essays

Related Topics