ROLE OF REGIONAL RURAL BANKS IN THE SUSTAINABLE DEVELOPMENT OF INDIAN RURAL ECONOMY

Abstract

In India's ambitious pursuit of attaining developed nation status by 2047, the imperative for sustainable rural economic development stands as a cornerstone, given the country's predominantly rural demographic. With seventy percent of the population residing in rural areas, the advancement of this sector is not just desirable but essential for India's overarching developmental goals and societal well-being. However, rural communities face a significant obstacle in the form of limited access to capital, constraining their ability to engage in agriculture and allied activities. To address this challenge, Regional Rural Banks (RRBs) were established in 1975. This study delves into the deposit mobilization and loan disbursement patterns of RRBs from 2012-13 to 2021-22, using data extracted from NABARD reports. Employing curve estimation through SPSS, the study observes a consistent upward trajectory in both deposits (P<0.001) and loans (P<0.001), albeit with fluctuations in credit-deposit ratios (P>0.05). Notably, loans directed towards the priority sector outstrip (P<0.001) those towards non-priority sectors (P>0.05), aligning with directives from the Reserve Bank of India (RBI). These findings underscore the vital role played by RRBs in facilitating rural economic development and emphasize the significance of prioritizing access to credit in fostering sustainable growth in rural communities.

Keywords: Banking, Credit, Economic Development, Rural Communities.