There is no doubt that banks have crucial role to play in the growth and development of Indian economy. While there are numerous banks in cities and towns, so far there have been few banks in the rural areas. That is why in the last few years stress has been placed on the extension of banking -facilities to rural areas. More and more banks have been established in rural Ares. These banks play a very significant role in boosting rural economy. Loans are advanced on easy terms, deposits are mobilized and Indian farmer is freed from the clutches of the local money-Lander. Through bank loans modernization of Indian agriculture has become possible. Scientific farming has become a reality.
While there can be no denying the fact that the banks can do much towards boosting Indian agriculture, there is also no doubt that the indiscriminate opening of bank branches can also be harmful. The expansion of the banking industry must be well planned and well through of new branches should be opened only in areas where they and their staff can enjoy reasonable security. The recent spate of bank-robberies makes it quite clear that safety-factor must be assigned the highest priority. They should also be economically viable. Uneconomic bank branches cause much more harm than good. They, thus become a heavy burden on the national economic. Uneconomic branches cannot play any significant role in boosting agriculture and removing the hardship of the farmer. Newly established banks branches should be manned by suitable, enlightened and well-trained staff. Provision of comfortable accommodation for the staff in close vicinity of a branch is also essential for its success. New branches must not be opened till such infra-structure has been arranged for.
In short expansion of the banking industry and the setting up new branches is a must, but it must not be haphazard and indiscriminate.