13-09-2012, 04:50 PM
Agricultural credit reforms in INDIA
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The All India Rural Credit Survey Committee (1954), visualizing cooperatives as an exclusive agency for providing credit to agriculture, urged a well defined role for commercial banks in delivering credit for agriculture in specialized areas, such as marketing, processing, storage and warehousing. It also recommended establishment of the State Bank of India and through it, extension of commercial banking facilities to rural and semi-urban areas.
The Agricultural Refinance Corporation (ARC) was set up by the Reserve Bank in 1963 to provide funds by way of refinance.
The social control and the subsequent nationalization of major commercial banks in 1969 (and in 1980) acted as a catalyst in providing momentum to the efforts of leveraging the commercial banking system for extending agricultural credit.
In order to emphasize the developmental and promotional role assigned to the ARC in addition to refinancing, the Corporation was renamed as the Agricultural Refinance and Development Corporation (ARDC) by an amendment to the Act in 1975.
According to the recommendations of the Narasimham Working Group (1975), Regional Rural Banks (RRBs) were establishment of a separate banking structure, capable of combining the local feel and familiarity of rural problems characteristic of co-operatives and the professionalism and large resource base of commercial banks.