Role of of Regional Rural Banks on Rural Farmers - A Study of Mysore District-India

Abstract

Regional Rural banks were established in 1975 under the Regional Rural Banks (RRB) act. They are local level banking organizations operating in different states of India. They have been created with a view to serve the rural sector of India. They give financial service to the people. It performs various functions like providing banking facility to the rural people, distribution of wages as well as pension and other functions like locker facilities, debit and credit card. We need Regional Rural Banks in India because a major part of our population lives in rural area. As people live in these areas there are a lot of farmers who needs money for farming. We know that farming is the backbone of this country and if farming gets developed India would be on its way to become a developed economy but due to the exploitation done by the moneylenders Indian farmers are not able to progress. By the help of regional rural banks who will provide loans to farmers at very low rate of interest, India would be on its way to progress. The present paper highlights the factors which need to be addressed for their effective implementation for the contribution for a developed economy. This study examined the impact of rural banking on rural farmers in Mysore district. The convenient sampling procedure was used to select 90 farmers and 12 bank employees at the regional rural banks studied for the research. Frequencies, percentages were used to analyze the data collected from the regional rural banks. The article clearly states that higher rate of interest on loans will reduces the loan borrowing ability of the farmers. That is, higher interest rates tend to have an adverse effect on the development or growth of the farmers or businesses in India since they depend very much on availability and accessibility to funds.