How the Gramin Banks are bringing about a change in our villages?


Whereas the Gramin Banks have proved to be a blessing for the prosperity of our villages, it also has emerged as a lucky mascots for the Gramin Banks as well. It is both way traffic. The farmers of villages have stood as strong bulwarks for the Banks. A prosperous farmer means a prosperous Bank. This article attempts to explain just how this has been made possible.

Sohan lakara, a small farmer living in the nondescript village of piparapatti in Bihar had 5 bighas land under his possession. He wanted to till and cultivate this land thtough the scientific modern methods. But for this to do, he needed money. He wanted to spend the money taken from bank according to his own volitions. Therefore, he made use of the KCC (kisan credit card). He got 3 lacks paid through this from the local Gramin Bank. He started the farming of mentha. When the profit got yielded through this, he paid back the Bank's loan first of all. Now Sohan Lakara began taking land of othrs also on rent and did the cultivation on them. To invest in this cultivation, he took loan from Bank.

The farmers have been benefited the most by the opening of the Gramin Banks. They have noy to wander hither and thither to get loans. Every type of agricultural loan are now made available from the Bank paving the ways for the growth and the prosperity of both the villages as well as the villagers.

On the other hand is the instance of Harkhu Mahato of the same village. He had 10 bigha of arable land but he wanted to do business. For this he took 5oooo rupees of loan from the village money lender. He opened a shop of making items of iron. Despite labouring day in and day out, he could not save enough to repay the debt of the money lender and the burden went on increasing due to the hard rate of interest. Then he was advised by a friend to take loan from the bank. He took a loan of 1 lack of rupees from the Bank and paid back the loan taken from the money lender. After this, he started doing business and agriculture both. He is living a relaxed and happy life ever since. He himself confesses had the Gramin bank not extended him the loan he could never have succeeded in paying back the money lender's debt till his whole life.

Gramin Bank is essential


The biggest motive behind the nationalization of banks was to extricating the poor farmers from the grips of the village money lenders thereby expanding it up to the areas of the villages. Banks were always reluctant in opening Banks branches in villages because it was not a profitable proposition. After the nationalization, Banks branches wee opened in villages in massive scale.

The RBI made guidelines for the Banks in which it was asked to extend loan up to a limit of 60 % against the total deposit and asked to disburse the balance 40 % left in rural areas. In the Banking parlance, this is called CD Ratio. Gramin Banks were opened in a massive scale in the rural areas. The nationalised Banks opened their branches in the rural areas and as its lead Banks, Gramin Banks were also opened in villages under their sole supervision and guidance. An effort was made afterwards in massive scale to open self help groups, KCC, farmer's Insurance, harvest insurance, loaning advanced to purchase agricultural equipments and many things more.


For assigning the credit limits to farmers under the KCC scheme of things, assessment of farmers yields at the block levels were undertaken and the limits fixed for taking loans from Banks. The limit that a farmer can utilise hovers between 1 lack and 3 lacks. The farmer can utilise this loan as per his own volition as he deems fit and there is no Banks interference into it. He is free from the Banks pressure. The farmer has to pay 8 % interest on it.

For the awakening up of the farmers of the villages, Banks have opened up clubs in the villages. There are at least 5 members in the clubs. Banks advertise their agricultural expansion products through these clubs. Banks provide some fund to run kisan clubs. These club members explain to farmer how to make the best possible uses of the loan taken from the Banks. The Banks loan them without much of paper works. Government interferences are non existent here.

Kisan is the strength of Gramin Banks


When the private Banks joined the fray in the country several challenges came into the ways of nationalized Banks after the Banks were nationalised in 1990. Private Banks gave better services than the nationalised Banks. Customers were making a beeline to open their accounts in the private Banks and the existing nationalised Banks too took flight to the private Banks deserting the nationalised Banks. Private Banks grew, prospered and thrived at the expense of the old obsolete nationalised. These private Banks were completely computerised fitted with the CBS (core banking system) as well as networked and connected with the entire country enabling people do business with the Bank being present in any corner of the country. This made their investments lower. It was felt during those days as if the nationalised Banks were on verge of extinction. Many smaller Banks had to merge with the bigger ones to thwart the menace facing extinctions.

These steps resulted in the Gramin Banks emerging as a strong foundation for the nationalised Banks. Today, the strongly growing village economy is acting as the bulwark to these nationalised Banks which is unbeatable by the private Banks.

Gramin Banks-a blessing for the villagers


Just as the Gramin Banks proved to be a blessing for the villagers, for Banks also, the gramins of the villages have proved to be a boon in disguise. No nationalised bank can even think of competing with the Private players without the Gramin Banking. The need of the hour is for the Gramin Banks to extend excellent services to the village with full honesty. It is also equally imperative for the villagers to make good uses of the loans taken and return the outstanding due in their names on time to the Banks. The both way traffic will smoothly run for longer period never clogging the routes. Where the farmers are prosperous, there the Gramin Banks are making rapid strides.

Conclusion:
Punjab National Bank is an ideal example for all other nationalised Banks to follow suits. Based upon the prosperous farmers of Punjab farmers, this Bank has emerged as the strongest Lead Bank of Gramin Banking. The other stronger players are Allahabad Bank, SBI, United Bank and some others in the Gramin Banking.


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