Banking Sector Reforms in India and Agriculture Credit

Abstract

At the time of independence, banking system was largely urban oriented and newlineremained out of the reach of rural population. Commercial banks mostly confined newlinetheir lending to trade, commerce and industry and treated agriculture as an outcaste. newlineAnd as agriculture is the very important sector for the sustained growth of the Indian newlineeconomy. About 70% of the rural households and 8% of urban households are still newlineprimarily dependent on agriculture for employment. Since banks did not pay any newlineattention to the farming, the agriculturists were abiding to borrow at a very higher newlinerate of interest with heavy terms and conditions from the money lenders. So, after newlinerecognizing the importance of agriculture for the development of India, the newlineGovernment of India and the Reserve Bank of India have played a major role in newlineestablishing institutional framework for increasing credit requirements for the newlineagricultural sector. So the basic aim of the thesis titled Banking Sector Reforms in newlineIndia and Agriculture Credit is to establish a sound and viable banking system newlinewhich would help in the development of the economy. newlineIn this study, the researcher would focus on the following points: newlineand#1048707; To examine all India level trends of institutional credit to agriculture before newlineand after the introduction of the banking sector reform, and analyze the newlinecontributing factors. newlineand#1048707; To examine the relative share of different agencies in lending to agriculture newlinein pre and post reform period. newlineand#1048707; To examine various policy measures of banking sector reforms. newlineand#1048707; To examine the performance of Commercial Banks regarding rural and newlineagricultural credit during the study period. newlineand#1048707; To examine the performance of RRBs regarding rural and agricultural credit newlineduring the study period. newlineThe purpose of the study is to analyze the positive as well as negative after newlineeffects of these reforms on agricultural credit in India. newline