How and why of rural banking / by C. L Khemani and B. Yerram Raja

During the past one and half decades, structural and organisational interventions were attempted both by the Government and the Banking Industry to strengthen the credit infrastructure in rural areas. The door steps of the banks, today, are within the easy reach of the poor. While the finan cial intermediaries have scaled the expected heights qualitatively, management of credit in rural areas qualitatively leaves much to be desired.

The vigorous branch expansion in rural areas, introduction of Lead Bank Scheme and micro-level credit planning, and what was once a small lending reaching the status of a large portfolio in an other wise urban-oriented commercial banking system, left behind several inadequacies in the areas of knowledge and attitudes of staff at different levels in the management heirarchy. While the commer cial banks attained within fifteen years the credit level reached by the cooperatives in eight decades, both the sectors attained the same level of over dues, causing anxiety and concern to the banking industry and to the government.

Though the situational and directive manage ment have been strengthened to reach the retail rural outlets, there are still large gaps and the rural branch manager is not able to lay his hands readily on any material for instant guidance in day to day aspects of credit management. The aim of this book is to fill this gap so that qualitative improve ment in rural lendings can be achieved. We have directed our efforts in this modest attempt, to the ground level operative.

The statistical supplement at the end should serve, both the researcher and the student on Banking, a ready reference, supported by the con ceptual base provided for herein.