Critically evaluate the role of the rural banking system in the process of rural development in India.
Critically evaluate the role of the rural banking system in the process of rural development in India.
Rural banking has raised the level of rural farm and non-farm output, income and employment, especially after the Green Revolution.
The following are the advantages of an increase in rural banking facilities
(i) Raising farm and non-farm output by providing services and credit facilities to farmers.
(ii) Generating credit for self-employment schemes in rural areas.
(iii) Achieving food security which is clear from the abundant buffer stocks of grains.
However, the expansion and promotion of rural banking sector have taken a back seat after reforms, and it suffers from the following limitations
(i) Small and marginal farmers receive only a very small portion of the institutional credit.
(ii) Rural banking is suffering from the problems of a large amount of over dues and default rate.
(iii) The source of institutional finance is inadequate to meet the requirements of
(iv) There exist regional inequalities in the distribution of institutional credit.
To improve the situation, the banks should build relationship with farmers. Also, the farmers should be made to understand the importance of thrift and of efficient utilisation of the loaned amount.
Rural banking has raised the level of rural farm and non-farm output, income and employment, especially after the Green Revolution.
The following are the advantages of an increase in rural banking facilities
(i) Raising farm and non-farm output by providing services and credit facilities to farmers.
(ii) Generating credit for self-employment schemes in rural areas.
(iii) Achieving food security which is clear from the abundant buffer stocks of grains.
However, the expansion and promotion of rural banking sector have taken a back seat after reforms, and it suffers from the following limitations
(i) Small and marginal farmers receive only a very small portion of the institutional credit.
(ii) Rural banking is suffering from the problems of a large amount of over dues and default rate.
(iii) The source of institutional finance is inadequate to meet the requirements of
(iv) There exist regional inequalities in the distribution of institutional credit.
To improve the situation, the banks should build relationship with farmers. Also, the farmers should be made to understand the importance of thrift and of efficient utilisation of the loaned amount.
