The Role of Rural Banks in Socio-Economic Development of India-A Contemporary Insight

Abstract

The important of the rural banking in the economic development of a country cannot be overlooked. As Gandhi said “real India lies in village” and village economy is the backbone of Indian economy. Without the development of the rural economy, the objective of economic planning cannot be achieved. Hens, banks and other financial institutions are considered to be a vital role for the development of the rural economy in India. Regional Rural Banks (RRBs) were established in October 2, 1975 and are playing a pivotal role in the economic development of the rural India. The main goal of establishing Regional Rural Banks in India is to provide credit to the rural people who are not economically strong enough, especially the small and marginal farmers, artisans, agricultural laborers and even small entrepreneurs. The present study is a modest attempt to make an appraisal of the rural credit structure and the role played by RRBs in the development of rural economy. The objective of this paper is to analyses the rural credit and the role played by the RRBs in the priority and non-priority sector landings. The present research paper is exploratory in nature and makes use of secondary data. The relevant secondary data have been collected mainly through the data bases of reserve Bank of India (RBI), National Bank for Agriculture and Rural Development (NABARD). The journals like the banker and the Journal of Indian Institute of Bankers have also have been referred. An attempt is made there in this paper to examine the rural credit structure of the India and Gujarat state in the role played by the RRBs. The study is confined only to the specific area like loan and advance made by the RRBs especially priority and none-priority sectors for the six years period starting for 2002-2003 to the year 2008-2009. In order to analyze the data and draw conclusion in this study Mathematical tools like percentage and growth rate.

KEYWORDS: Loans and advance, Priority and non-priority sectors, Rural credit