126
found that, except for the initial thrust after bank nationalisation, the scheduled
commercial banks again tended to neglect rural areas in their branch banking
programmes. Therefore, the government was forced to set up regional rural
banks (RRBs) for the specified underdeveloped districts though, as the
Report
of the Working Group on Rural Banks
, July 1975 (Chairman: M. Narasimham)
had repeatedly emphasized,
“the setting up of new institutions should not in any way lead to a let up
in the pace of either rural branch expansion or extension of rural credit
by the commercial banks……..” (pp.12-13).
or
“The rural banks are not being set up as substitutes for commercial or
cooperative banks” (p.12).
The Initial Success
Alongside the opening of rural bank branches between 1970 and 1991,
shares of rural deposits and rural credit in aggregate deposits and credit had
risen. More significantly, with the prescribed targets of 60% credit-deposit
ratio, the C-D ratios of rural branches had touched 61-97% by the beginning of
the 1990s (Table 4.36).
These positive developments have uniformly suffered a setback after the
beginning of the 1990s. No doubt, rural C-D ratios appear much higher based
Table 4.36: Population Group-wise C-D ratio as per sanction and utilization
Year/Population
Jun-80
Mar-90
Mar-00
Mar-06
Group
Sanction
Sanction Utilization Sanction Utilization Sanction Utilization
Rural
54.5
61.2
97.1
40.4
49.3
55.8
88.2
Semi-Urban
47.2
49.1
48.5
34.7
40.0
50.1
57.8
Urban
60.0
55.6
52.9
41.9
42.1
57.0
64.1
Metropolitan
87.0
69.9
58.0
78.9
73.2
87.5
76.3
All-India
67.2
60.7
60.7
56.0
56.0
72.4
72.4
Year/Population
Mar-08
Mar-09
Mar-10
Mar-11
Group
Sanction Utilization Sanction Utilization Sanction Utilization Sanction Utilization
Rural
60.3
106.5
57.1
85.1
59.3
91.6
60.0
79.6
Semi-Urban
53.2
59.5
50.0
58.7
52.1
59.9
53.2
63.1
Urban
58.4
65.5
55.6
60.6
59.1
62.8
61.6
70.2
Metropolitan
87.2
75.7
86.9
78.4
85.9
77.4
88.4
79.9
All-India
74.4
74.4
72.6
72.6
73.3
73.3
75.6
75.6
Source:
RBI, Banking Statistics: Basic Statistical Returns of Scheduled Commercial Bank in India, March
2011 (Vol. 40) and earlier issues
