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ORIGIN OF RURAL CREDITRural credit developed in India in three
phases
1) cooperative agencies (1947-1969)
2) Commercial banks (1969)
3) Regional Rural Banks (1975)
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Credit needs of the farmers can be
based on two factors
Agricultural credit needs can beclassified into three categories:
1.Short Term (for periods up to 15months)
2.Medium Term (from 15 months up to 5years)
3.Long Term (above 5 years)
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Loans for :
1.Purchase of Seeds.
2.Purchase of Fertilizers.,3.Purchase of Pesticides,Feeds.
4. Marketing of Agriculture
produce, Livestock.5. Repair of Wells.
6.Payments of Wages etc.
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Farmers require loans for
consumption as well.
Between the moment of
marketing of agricultural
produce and harvesting ofnext crop there is long interval
of time and most of farmers
dont have much income to
sustain in this period. Also
times of flood drought,
damages to crop etc.
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Farmers unproductive loans are
basically for the purposessuch as :
Litigation
Performance of Marriages,
Birth or Death,
Religious functions,Festivals.
.
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Sources of agricultural finance can bedivided into two categories:
NON INSTITUTIONAL SOURCES.
INSTITUTIONAL SOURCES
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Money Lenders
Traders
Commission Agent
Landlords
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CO-OPERATIVE CREDIT SOCIETY.
COMMRCIAL BANK.
REGIONAL RURAL BANK (RRB).
NATIONAL BANK FOR AGRICULTUR AND RIAL
DEVELOPMENT (NABARD).
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The co-operative movement started in
India with a view to provide funds the farmers
for agriculture purpose at low interest rate
and protecting them from money lenders
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The foundation for building a broad base
of agricultural credit structure was
laid by the Report of the All-India Rural
Credit Survey (AIRCS) of 1954. The
provision of cultivator credit in 1951-52was less than 1% for commercial banks.
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The Government of Indiaset up Regional Rural
Banks (RRBs) on October 2, 1975. The banks
provide credit to the weaker sections of the rural
areas, particularly the small and marginal farmers,agricultural labourers, artisans and small
entrepreneurs.
Initially, five RRBs were set up on October 2,1975 which were sponsored by Syndicate Bank,
State Bank of India, Punjab National Bank, United
Commercial Bank and United Bank of India.
http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Credit_(finance)http://en.wikipedia.org/wiki/Artisanhttp://en.wikipedia.org/wiki/Entrepreneurhttp://en.wikipedia.org/wiki/Syndicate_Bankhttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/United_Commercial_Bankhttp://en.wikipedia.org/wiki/United_Commercial_Bankhttp://en.wikipedia.org/wiki/United_Bank_of_Indiahttp://en.wikipedia.org/wiki/United_Bank_of_Indiahttp://en.wikipedia.org/wiki/United_Commercial_Bankhttp://en.wikipedia.org/wiki/United_Commercial_Bankhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Syndicate_Bankhttp://en.wikipedia.org/wiki/Entrepreneurhttp://en.wikipedia.org/wiki/Artisanhttp://en.wikipedia.org/wiki/Credit_(finance)http://en.wikipedia.org/wiki/Government_of_India7/29/2019 Origin of Rural Credit
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Total Branches- in India branches is 2349
(16%). Till date in rural banking in India, thereare 14,475 rural banks in the country of which
2126 (91%) are located in remote rural areas.
The lending rates of RRB will be lesser to
compare to commercial bank lending.
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NABARD is set up as an apex Development Bank with amandate for facilitating credit flow for promotion and
development of agriculture, small-scale industries, cottage
and village industries, handicrafts and other rural crafts. In
discharging its role as a facilitator for rural prosperityNABARD is entrusted with
1.Providing refinance to lending institutions in rural areas
2.Bringing about or promoting institutional developmentand
3.Evaluating, monitoring and inspecting the client banks
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25 YEARS OF DEDICATION TO RURALPROSPERITY
NABARD completed 25 years of its eventful and
trailblazing existence on 12 July 2Clearly NABARD's
benevolent hand has been silently at work in supporting
rural resurgence in various ways and its stakes are quiteenormous. A glance at the figures will give a fair idea. It has
channelised a whopping Rs. 1,21,000 crore under its
investment credit programme and RIDF since inception,
which includes Rs. 8795 crUnder production credit theBank sanctioned limits of Rs. 12570 crore during 2006-07
crore disbursed during 2006-07
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ROLE OF RBI IN RURAL CREDIT
YEAR NUMBER OF Sh f i l b k i
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TRENDS AND PROGRESS
YEAR NUMBER OF
BANK S IN
RURAL AREAS
Share of commercial banks in
rural credit
(in %)
1969 1443 14
1972 5274 21
1975 7112 25
1978 12534 28.6
1981 19453 35.6
1984 25541 38.1
1987 30585 42.9
1990 34867 40.7
1993 35360 34.4
1996 32981 32.8
1999 32840 35.5
2002 32443 34.8
2005 32082 36.7
2008 30572 42.9
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SHARE IN RURAL CREDIT (IN %)Sources of credit 1951 1961 1971 1981 1991
Non-institutional 92.7 81.3 68.3 36.8 30.6
of which:
money lenders 69.7 49.2 36.1 16.1 17.5
institutional 7.3 18.7 31.7 63.2 66.3
of which:
Cooperative societies 3.3 2.6 22.0 29.8 35.2
commercial banks 0.9 0.6 2.4 28.8 35.2
unspecified 3.1
total 100.0 100.0 100.0 100.0 100.0
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IN TODAYS INDIA 70% OF THE TOTAL POPULATION LIVES IN RURAL PART.
OUT OF WHICH MOST OF DEPENDS UPON AGRO BASED ACTIVITIES.HENCE, IT IS VERY ESSENTIAL TO PROMOTE CREDIT FACILITIES IN RURALAREA. EARLIER THE CONDITION OF RURAL CREDIT IN INDIA WAS VERYPOOR. PEOPLE PF RURAL AREA WERE EXPLOIT BY VARIOUS NON-INSTITUTIONAL OR MONEY LENDERS. IT WAS VERY ESSENTIAL TO
IMPROVE THE CONDITION OF RURAL CREDIT FOR DEVELOPMENT OFCOUNTRY.
AFTER INDEPENDENCE VARIOUS MEASURES HAVE BEEN TAKEN FOR FORRURAL DEVELOPMENT. FOR INSTANCE, VARIOUS COOPERATIVESOCIETIES, COMMERCIAL BANK, RURAL REGIONAL BANKS ETC WEREESTABLISHED FOR THE SAME. THE ESTABLISHMENT OF NABARD WAS THE
GREAT RELIEF FOR THE RURAL MASSES. NOW THE CONDITION OF THE RURAL INDIA IS IMPROVING DUE TO
IMPROVEMENT IN RURAL CREDIT. RRBS ARE PLAYING VERY ESSENTIAL
ROLE IN CURRENT RURAL LENDING. NOW THIS IS NEED OF HOUR TOINCREASE THE NUMBER OF BRANCHES OF RRBS AND TO IMPROVE THE
FACILITIES IN THE SAME BY NABARD AND GOVERNMENT OF INDIA. IT
WILL BE GREATER CONTRIBUTION IN DEVELOPMENT OF THE COUNTRY.
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