Performance Banking and Rural Development

Development of the rural areas has been the major focus of growth in the third world countries since long and India is no exception to this. However, owing to varied development approaches the aim of achieving a speedier growth in rural sector has been beset with many a bottleneck. Rural development is basically a micro approach, which has to be entwined with macro objective depending on the micro perspectives. This study dwells on a micro, how different rural development programmes are being financed by the local branches of commercial and cooperative banks, by considering region-wise and sector-wise total deposits, advances, recovery and loan outstanding. Apart from crop cultivation, minor irrigation and land development, the other programmes considered refer to small scale industries and other priority and non-priority sectors. Special emphasis is laid on programmes like IRDP and PMRY whose shares show a very low level, indicating the need for spreading up of assistance in many rural development schemes. Besides, the macro analysis of commercial banks provides their varies levels of performance in terms of several indicators. While the contribution of private banks and foreign banks has been showing a slow growth in this liberalization era, the public sector banks dominate the current banking scenario in the country. However, their performance is subject to fluctuations as and when policy changes are being made and a steady growth pattern in term is yet to be realized in full. Further, some of the efficiency indicators become volatile during some years indicating a greater role for risk management, necessitating both intensification (within the country) and extension (outside the country) with better performance so as to be locally as well globally competitive. This book will be of special interest to bankers and policy makers in delineating the relative contribution of various commercial and cooperative banks at the local level and how branch specification as to the policy prescription and activity will opt for an appropriate matching process between various rural development programmes and institutional build-up process.