Critically evaluate the role of the rural banking system in the process of rural development in India.
With the nationalisation of the commercial banks after 1969, the concept of social banking came into existence. It implies extending institutional credit at moderate rate of interest. The National Bank for Agricultural and Rural Development (NABARD) has made a significant progress in the field of rural credit. It cannot be denied that the institutional credit has freed the farmers from the trap of money lenders and mahajans. But, on the other hand, institutional credit is not free from deficiencies. The rural or institutional credit has invariably been associated with security or collateral. Consequently, a substantial number of farmers cannot avail credit. Also, the commercial banks failed to encourage the habit of thrift among farmers. In addition to this, the leniency on the part of the government to collect taxes was another setback in the rural banking. This further led to the emergence of the feeling among the farmers of not repaying the borrowed amount. This increased the defaulter's rate and led to financial unfeasibility for the rural banks.
Match the following:
|
1. Prime Minister 3. Quota 4. Land Reforms 5. HYV Seeds 6. Subsidy |
A. Seeds that give large proportion of output C. Chairperson of the planning commission D. The money value of all the final goods and services produced within the economy in one year. E. Improvements in the field of agriculture to increase its productivity F. The monetary assistance given by government for production activities. |
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With the nationalisation of the commercial banks after 1969, the concept of social banking came into existence. It implies extending institutional credit at moderate rate of interest. The National Bank for Agricultural a...
Step-by-step explanation:
• With the nationalisation of the commercial banks after 1969, the concept of social banking came into existence
• It implies extending institutional credit at moderate rate of interest
• The National Bank for Agricultural and Rural Development (NABARD) has made a significant progress in the field of rural credit
• It cannot be denied that the institutional credit has freed the farmers from the trap of money lenders and mahajans
• But, on the other hand, institutional credit is not free from deficiencies
Students often lose marks by skipping steps, writing incomplete explanations, or misunderstanding keywords used in the question.
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