| COMMERCIAL
BANKS
The commercial banks form the core of the organised banking system and constitute quantitatively the most important group of financial intermediaries in the country, compresing both scheduled and non-scheduled banks. Deposits paid up capital and borrowings from the Reserve Bank of India form the resources of the commercial banks. Commercial banks are the most important intermediaries for promoting and mobilizing the savings and for allocating investment among the different productive sectors. The short term and medium term credit needs of both industry and agriculture are met by the commercial banks and they also help finance developmental plans by investing funds in the government securities. Initially, the commercial banks were concentrating only on the financing of the trade and industry. However, with the nationalization of the banks, they are now actively involved in the disbursement of agricultural credit. On account of the branch licensing policy adopted by the RBI, the rural branches of the commercial banks account for a large percentage of the total network and the Agricultural Development Branches, Gram Vikas Kendras and Rural Service Centres were set up to cater exclusively to the needs of agriculture and the allied activities. Under the ‘Lead Bank Scheme’ all districts were allotted to commercial banks that were entrusted with the responsibility of preparing credit plans for their lead districts. The ‘Village Adoption Scheme’ was formulated by commercial banks to carry out leading operations in contributing significantly to the development of agriculture. |
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