Banking services in rural areas of Shviamogga district in Karnataka state: An empirical study

The study was conducted on the banking services amongst people in the rural areas of Shivamogga district. The main objective was to study the banking services amongst people in general, with special reference to rural areas of Shivamogga district and to analyze the deposits and borrowing habits amongst people. The study also analyzed people understanding of the various facilities made available to them by the government through commercial banks, cooperative banks and primary land development banks.

The banking habits amongst people was examined using empirical data from stratified and area sampling, which covered over 80 households around the rural areas of Shivamogga district. Results of the present study indicate that although banks have been set up to provide finance, people do not have an easy access to these sources. Majority of the respondents opined that the interest rates charged by the banks are high. As a result of this people in rural area prefer co operative societies over banks. The cumbersome process of fulfilling documentary requirements for obtaining a loan acts as a deterrent to the illiterate people who are approaching there sources. Though the interest rates have been kept lower in banks, most of the people in rural areas prefer informal loans through money lenders because of timely and adequate availability of loans. It is therefore, essential to address these issues in order to improve the banking services in rural areas amongst people in Shivamogga district. It is with this background that this research paper analyses banking services in rural areas in general and in Shivamogga district of Karnataka state in particular.