BANKING PENETRATION IN RURAL AREAS AND VILLAGES: TRENDS AND CHALLENGES.

Wealth in rural India is growing, which was not the case 7-10 years back. Financially remunerative farming and the real estate boom of the past decade has put many farmers in the league of at least rupee millionaires making them an attractive proposition for bankers. Rural banking in India plays a vital role in development of rural economy. The commercial banks, Regional Rural Banks are found in rural pockets of our country to help the rural people for their all round development. Rural banking is rightly called as an engine of rural growth. Therefore, there is need to develop a profitable model of rural banking. The overall position of Rural Banking in India is not quite encouraging. The banker offers almost everything from a plain savings product, to loans for businesses and wealth management advice to the rural population and creating new strategies to woo rural customers with deeper pockets for whom a State Bank of India was almost synonymous to banking as Life Insurance Corporation of India was for insurance. But do the villagers trust private banks? How does one break the strong affinity towards public sector banks? Since the rural banking is supposed to be a bank for poor people, it's presence in all the states of country especially in underdeveloped States can make things better. The government seems to be instrumental in spreading the branches of regional and rural banks at grass root level to provide such banking service to the really needy rural people. In this context, the purpose of this paper is to assess the level of banking penetration in rural areas and villages in the different states focusing on present position, emerging trends, and the challenges ahead in rural banking. The present paper is a qualitative analysis and secondary data was collected from various sources including journals, magzines, books and the internet. [ABSTRACT FROM AUTHOR]