An enquiry into the regional distribution of banking in Maharashtra comparing the rural and urban areas of the state and various divisions and districts dispels the commonly held notion that the state is a well-banked one. The aggregated indicators of banking development conceal the reality of an extremely wide divide in the distribution of banking between the urban and rural areas. This is essentially a reflection of the district-wise divide between Mumbai and the other districts, particularly those from central and eastern Maharashtra or Amravati, Nagpur and Aurangabad divisions, which have been identified in the literature as economically backward districts and have also been associated with a high incidence of agrarian distress in recent times. With a thrust on the policy of financial inclusion since 2005, there has been an increase in the number of bank branches in underbanked districts of the state. However, this increase has not helped in correcting the regional divide in bank credit and hence, most districts other than Mumbai continue to be significantly credit-deprived.
