future lies with those companies who see the poor as their customers”
~C.K.Prahalad
WHAT IS RURAL BANKING ?
It is a form of services that provide solution to the financial needs of the consumers in Rural areas.
Objectives Of Banking Services In Rural Areas Poverty Alleviation Objectives:
The objectives is to uplift the mass of population residing in the rural areas who are currently below the poverty line by extending credit to the smallest-scale economic activity. activity.
Financial Intermediation Objectives: The approach involves increasing the accessibility of banking services to the poor in a commercially sustainable manner.
EVALUATION OF THE RURAL BANKING AFTER INDEPENDENCE
Pre-Nationalization Pre-Nationalization period
The presence of banking sector was very limited.
In 1951 informal credit accounted 70% of rural rur al lending and less than 1% of rural rur al household debt came from commercial bank.
Nationalization of banks
14 Largest Indian commercial banks were nationalized in 1969.
The central aim was to provide the t he banking services to all sections of society.
Business of a rural bank The
granting of loans and advances, particularly to small and marginal farmers and agricultural laborers, whether individual or in groups and to co-operatives societies
The
granting of loans and advances, particularly to artisans, small entrepreneurs and persons of small means
Initiatives for rural banking development
Haryana State Cooperative Apex Bank Limited
NABARD
United Bank of India
Syndicate Bank
Co-operative bank
ESTABLISHMENT OF NABARD
National
Bank Bank for Agricultural and Rural Development was established in July 1982.
The main aim was to provide credit facilities to the farmers through co-operatives & regional rural banks.
They were responsible for all matters concerning policy , planning & operations in the field of credit for agricultural & other economic activities in the rural areas.
Objectives Of regional rural banks
Bridging the credit gap in rural areas.
Check the outflow of rural deposits to urban areas.
Reduce regional imbalances and increase rural employment generation
Role of rbi in rural credit
Micro – Finance Finance
Kisan Credit Card
Agricultural Insurance
Marketing of Mutual Fund Units
challenges in marketing of banking services in rural market
Lack of adequate financial market. Low value of loans for poor sections. Lack of collateral.
Low density of population. Underdevelopment Underdevelopment of rural infrastructure. Lack of financial discipline. Rural interest subsidy
OPPORTUNITIES
Sourcing of agricultural produce from India for global markets.
Govt. thrust.
Increasing corporate interest in agri-business.
Strengthening loan recovery.
Lower level of Non-Performing Assets (NPA) in rural areas.
Lower cost of labour , infrastructure & cost of living.