Banking Sector Reforms and Progress of Regional Rural Banks in India (An Analytical Study)

A retrospect of the events clearly indicates that the Indian banking sector has come far away from the days of nationalization. The Narasimham Committee laid the foundation for the reformation of the Indian banking sector. Constituted in 1991, the Committee submitted two reports, in 1992 and 1998, which laid significant thrust on enhancing the efficiency and viability of the banking sector. As the international standards became prevalent, banks had to unlearn their traditional operational methods of directed credit, directed investments and fixed interest rates, all of which led to deterioration in the quality of loan portfolios, inadequacy of capital and the erosion of profitability. Rural banking was a neglected subject before nationalization of banks. Since the day of antinational significant reforms have taken place in the area of rural banking with the introduction of the lead bank scheme in India, establishment of regional rural banks and potential linked plans of NABARD etc. In this paper an analysis has been made to identify evolutions and progress of commercial banks in rural area. The study is based on secondary data collected form annual reports of the banks, district credit plans, block development office records, statistical table, district plans, various five year plans prepared by the planning commission India, reports of various committees and commissions set up by the government, RBI reports- trends and progress of banking in India, monthly and annual reports of various banks, various research articles, journals, magazines and news papers.