rural banking a critical evaluation
 

From buying the seeds to selling the harvested crops in the market a farmer needs finance. Before the importance of institutional credit system was made aware among the farmers loans from moneylenders were very popular. These moneylender gave  loans to farmers at very high interest rates and manipulated their accounts in such a way that continuously they are in debt trap . For this only in the year 1969 social banking system was introduced , 1987 NABARD was introduced, Regional Rural banks was introduced. Apart from theses, various land development banks, micro credit programs were introduced.
ASSESSMENT OF RURAL BANKING- 
 Rural banking completely changed the system o getting credit among the farmers. 
MERITS-
1. Elimination of moneylenders - Now farmers can directly access the bans and cooperative societies for getting a loan with very low interest rate.
2. Low interest rate - Usually the loans which are given by banks and cooperative societies has very low interest rate especially for farmers.
3. Encourage thriftiness -Getting a loan from a self help groups or being a par of SHGs itself encourages refund savings attitude among the farmers and thriftiness.
4. Allied services - The cooperative societies and the self help groups not only gives credit but also through pooling up of resources and agricultural products through this we can assemble , process, grade and market the products which are produced and sell them.

DEMERITS -
1. Credit are usually acquired to meet the consumption needs for the farmers.
2. No proper awareness regarding the advantages of formal credit system.
3. Lot of political intervention prevented the important schemes of the government to reach the poor.
4. Loans were still acquired from moneylenders because the commercial banks asks for a collateral.