Monkeying with Rural Credit

Monkeying with Rural Credit THE government and the Reserve Bank of India have decided to permit commercial banks to close down loss-making rural branches. It is deplorable that decisions such as this one which have profound implications for the rural economy are being taken in a most casual and piecemeal manner. It may be pointed out that what has been done is only to give banks the option so as to enable them to rationalise their branch network and improve their profitability. But what kind of signals does such a decision provide to the banking and financial system? As it is, under the influence of the new economic policy and the constant harping on profitability, banks have begun to look down upon the social banking aspects of their responsibilities.