07-11-2017, 11:51 AM
Rural banking has become an integral part of India's financial markets, with a majority of the Indian population still living in rural or semi-urban areas. The Government of India and the Reserve Bank of India have continuously worked to achieve full financial inclusion, that is, timely and sufficient access to financial services and credit at an affordable cost, to the great extent of our country. Pradhan Mantri Jan Dhan Yojana is one of the recent initiatives of the new government that has definitely helped to bring banking to every home. This scheme over time will significantly reduce the gap between rural and urban areas in terms of financial inclusion, but the fact that about 70% of India's population remains rural and the penetration of banking facilities is as low as only 24%, that is, only this percentage of people in these areas have formal bank accounts, can not be ignored. Several regional rural banks have been established under the 1976 Rural Rural Banks Act to provide a continuous source of credit for agriculture and other activities. These banks were established with the aim of reaching all corners of the country and meet the financial needs of rural society composed of small and marginal farmers, agricultural workers, self-help groups, artisans, etc. The credit to the weaker sections was made without problems. free and given at cheap prices or in favorable conditions.
RBI has also encouraged the expansion of these banks by performing the following:
• Allow non-target group financing for RRBs.
• Recapitalisation and restructuring of RRB.
• Simplification of loan procedures according to the recommendations of the Gupta Committee
• Special credit plans
• Kisan credit cards
• Deregulation of the active rates
• Direct financing for SCBs
• Various relaxations in investment policies and business without funds
• Allow direct access to refinancing assistance at favorable rates for RRBs.
