Banking development in rural area: A tool for rural financial inclusion
In India nearly 70% of population is living in rural areas. In India all regions are not equally developed or included in the growth process resulting in unequal distribution of benefits of economic development among the people across the country. There wide gap between rural and urban regions in terms of economic development. Financial exclusion of rural people is one of the causes for rural poverty. In India compared to urban regions, rural India is deprived of institutional and non- institutional finance. Institutional finance through Banks is the lifeblood of modern economic system without which no system can survive. Adequate Banks/institutional credit is considered to be the most important factor, which if suitably provided, will go a long way to put the Indian rural economy on a sound footing (Selvaraj 1998). So rural development and their functions have been on the priority agenda of our policy makers since independence and considerable efforts have been made to develop the rural credit system as means of rural development (Joshi 1997, Tyagi and Singh 1998). Rural development is not merely development of rural areas but also the transforming of the rural people into self-reliant and self-sustaining communities. Through the weapon called ‘Financial Inclusion’ that is achieved through rural banking development and thereby providing financial services to all regions of the country and achieve the balanced development of the economy. In this article, through the analysis of secondary data, an attempt has been made to highlight the role of banks in the development of rural India through ‘Financial inclusion’.