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have been commended to the banks for adoption. It was being emphasized that
banking services may not necessarily be through brick and mortar branches
but can be provided through various forms of banking: mobile banking,
extension counters, satellite offices and kiosks and IT-enabled BCs. This
scheme has been further reinforced under the policy of “financial inclusion”. As
indicated elsewhere, the banks are adopting a lukewarm attitude towards this
arrangement and the achievement so far has been limited. The Governor and
Deputy Governors of RBI have been expressing serious misgivings regarding
the end results. Dr. Subbarao, in a speech in Chennai recently said: “I am also
conscious that the bulk of our effort so far has been from the supply-side –
opening branches, appointing BCs and opening accounts that remain largely
inoperative. If this is all that happens, the effort is both futile and wasteful”
(Quoted in CAB Report of August 2012).
Secondly, merging and strengthening of RRBs and promoting some
rural branches through them has been adopted. Merging and strengthening
of RRBs is a policy in the right direction, but then they can hardly meet the
branch requirements of vast areas of central, eastern and north-eastern India.
They are also financially and organisationally weak institutions,
Thirdly, revitalisation of the short-term as well as long-term cooperative
credit structure has been taken up and definitive programmes of action have
been put in place. In addition, we now have the Prakash Bakshi Committee
recommendations on the revitalisation of the short-term co-operative credit
structure to reckon with and to be acted upon. The report makes some very
revealing observations:
“ Though co-operatives are providing only 17% of agricultural
credit, the share of co- operatives in total number of agricultural
accounts held by the banking system is substantial. Co-operatives
provided agricultural credit to 3.09 crore farmers during 2011-12
compared to only 2.55 crore farmers by commercial banks and 82
lakh by RRBs. In fact, cooperatives financed 67 lakh new farmers
during 2-11-12 compared to 21 lakh new farmers by commercial
banks and only 9 lakh new farmers by RRBs.
“The success of co-operatives in reaching out to new farmers or
those who had gone out of the active credit fold of the banking
system is the real impact of the implementation of the Vaidyanathan
revival package and implementation of the agricultural debt waiver
and debt relief scheme in its true spirit.” (pp.10-11)
