1. Home
  2.  |  
  3. India: An Overview  |  

Operations of Commercial Banks

Aug 29, 2014 17:03 IST

    A commercial bank is a bank that offers services such as making business loans, offering basic investment products & accepting deposits.

    1. Augmentation in bank credit to the rural areas after nationalization has produced strains in the structure owing to swift development & diversification. One of the tribulations of such quick development has been the decline in the worth of scheme preparation, mainly under the anti - poverty programmes.

    2. Opening of huge number of branches in rural areas which do not have sufficient business potential, increase in establishment expenses and in non - performing advances exaggerated the profitability of the banks unfavorably.

    3. The commercial banks have botched to fill the geographical gap in the accessibility of credit not roofed by the cooperatives.

    4. The recovery position of the commercial banks is awful.

    5. The rural credit - deposit ratio turned down from 1.58% in the year 1991 to 0.73% in year 2001 which shows that deposits mobilized from rural India were being utilized somewhere else.

    6. The predicament of synchronization not only between one commercial bank & another but also between commercial banks & cooperative credit structure, on the one hand & between Government departments & banks, on the other, has assumed grave dimensions.

    7. Loan disbursal to small & marginal farmers slowed down stridently in the 1990s. The alternative provided to commercial banks to meet priority sector lending targets by investing in Rural Infrastructure Development Fund & placing deposits with Small Industries Development Bank of India reduced the rate of enlargement of direct finance to small & marginal farmers.

    Find Information on:

    Problems of RRBs


    Read more:Banks , Commercial Banks

    Latest Videos

    Register to get FREE updates

      All Fields Mandatory
    • (Ex:9123456789)
    • Please Select Your Interest
    • Please specify

    • ajax-loader
    • A verifcation code has been sent to
      your mobile number

      Please enter the verification code below

    This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy. OK