Although, our economy is mainly agrarian, banks plays an important part in the development of our rural areas. The rural branches of banks provide various services to farmers, rural farmers, businessmen and disadvantaged groups and help them to develop themselves thereby.
Our banking sector consists of three kinds of banks-State Owned Commercial Banks(SOBs), Private Commercial Banks and Foreign Private Banks. Among them, Nationalized Commercial Banks and some other private banks and more particularly some specialized banks are operative in rural areas. The foreign private banks are not interested to open their branches in rural areas.
The role of bank in rural development is manifold. Banks are functional in the processes of savings, capital formation, investment, production in the urban savings. for example
Our banking sector consists of three kinds of banks-State Owned Commercial Banks(SOBs), Private Commercial Banks and Foreign Private Banks. Among them, Nationalized Commercial Banks and some other private banks and more particularly some specialized banks are operative in rural areas. The foreign private banks are not interested to open their branches in rural areas.
The role of bank in rural development is manifold. Banks are functional in the processes of savings, capital formation, investment, production in the urban savings. for example
- Banks motivate the people for savings through various programs and collect the dispersed savings of the people. Further, bank invest it in rural economy.
- Banks provide the rural small businessmen with loans from deposited money which plays a crucial role in rural development. Specially, the microcredit programs of different banks made the rural landless people bankable and provided them with required capital for business and other economic activities.
- Bank plays a crucial role in rural capital formation. Bank collect the dispersed savings of the rural people through different deposit schemes. Then distribute loans to them for starting a productive as well as any other self-sufficient economic activity.
- Commercial and Specialized banks, specially State Owned Commercial Banks distribute agricultural loans to rural people which make them able to invest in their firms or lands. As most of our farmers are poor they can do invest enough to increase the production. So bank loans help them to increase their production proper irrigation, fertilization and so on.
- Banks play a crucial role in sustaining and developing our small and cottage industries. Because, most of our small and cottage industries are being closed due to lack of enough capital.
- Banks can provide our unemployed youths with training and loan to start business. These type of steps can make our youths self-reliant, lessen the intricate problem of unemployment and improve the standard of living in our rural areas.
- Banks plays a crucial role in mentioning the disadvantaged groups in community under some special programs. Even, through making the disadvantaged people economically self-sufficient, banks play important role to empower them and lessen the social inequality thereby.
