Question

Explain the steps taken by the government in the with regards to the following:

Rural credit facility

Answer 1

1. Expansion of Institutional Credit: The government expanded institutional credit to farmers through cooperatives and commercial banks. This expansion aimed to ensure that farmers have better access to formal credit sources rather than relying on informal lenders.
2. Nationalisation of Banks: The nationalisation of commercial banks in two phases (14 banks in 1969 and 6 more in 1980) led to greater attention by nationalised banks towards meeting the credit needs of agriculture and rural sectors.
3. Establishment of Regional Rural Banks (RRBs): In 1975, Regional Rural Banks were created specifically to cater to the credit needs of rural people, including small and marginal farmers, agricultural laborers, and rural artisans.
4. Creation of NABARD: In 1982, the government set up the National Bank for Agriculture and Rural Development (NABARD). NABARD coordinates the activities of different financial institutions operating in the rural sector and serves as the apex development bank for agriculture and rural development.