Vikram Grand Project

A PROJECT REPORT ON
The
need of Customer Relationship Management in Real Estate In Ahmedabad

SUBMITTED TO
ANNAMALAI UNIVERSITY & THE NIS ACADEMY IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION YEAR 2013 EN NO: 4741100045 PROGECT GUIDANCE Mr. AJAY SHAD DEVELOPED BY VIMALKUMAR RAMANI
RURAL FINANCE (2013)
A DISSERTATION SUBMITTED TO
THE ANNAMALAI UNIVERSITY OF CHENNAI IN THE PARTIAL FULFILMENT OF THE REQUIREMENT
FOR
THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION (MBA) (2012-2013)
RESEARCH GUIDE Mr. AJAY SHAD
RESEARCHER VIMALKUMAR RAMANI
ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}
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DECLARATION
The projectr e p o r t e n t i t l e d The need of Customer Relationship Management in Real Estate In Ahmedabad has be ens u b m i t t e d toAnnamalai University, Chennai in partial fulfillment for the a ward of degree of Master of Business Administration. Ithe undersigned hereby declare that this report has been completed byme under theguidance of VIMALKUMAR RAMANI. Thereportisentirelytheresultofmyowneffortsandhasnotbeensubmittedeitherinpartorw holetoanyotherinstituteoruniversityforanydegree.
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CERTIFICATE NIS ACADEMY (MBA)

Certified that this Project Report Titled RURAL FINANCE is the bonafide work of MR. VIKRAM MALI (Enrolment No.474110049), who carried out the research. I also certify further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.
DIRECTOR AJAY SHAD
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INDEX
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Particulars
Meaning of a Rural Finance. Meaning of an Underdeveloped Economy. Characteristic of the Indian Economy an on underdeveloped Economy Natural Resources in Process of Economic Development in Rural India. Rural Market Countries in Total Indian Economy. Schemes & Facilities from the Various Banks. Various Finance Schemes Offered from Government. Need For Rural Finance Sources Of Rural Finance. Private Agencies Sources. Institutional Sources Of Finance. Challenges Of Rural Finance. Conclusion. Annexure. Recommendation Bibliography.
Page No. 11. 12-13 14-16 18-24 25-31 31-43 44-47 49-55 57 58-59 60-74 76-81 82 83 84-85 86
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PREFACE
Makingresearchonproject,asapartofthecurriculumoftheM.B.AprogramoftheAnnamalai University,theresearch&consequentreportonitallowsthestudentstopracticallymakemar ketresearchandstudy realworkenvironment. Thispracticallydevelopsafeelingaboutthedifficulties&challengesinthebusinessworld.On lytheoryknowledge does not important to complete education, practical experience must accompany theoretical knowledgetoaddmeaningtoeducation. Lastly, I have tried my level best to prepare the best informative report.
VIKRAM MALI
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ACKNOWLEDGEMENT
Itisalmostinevitabletoincurindebtednesstoallwhogenerouslyhelpedbysharingtheirinval uabletimeandrichexperiencewithme,withoutwhichthisprojectwouldhaveneverbeenacc omplished. It is my pleasant duty to express my thank to MBA PROGRAMME, NIS ACADEMY, AHMEDABAD and MY DIRECTOR Mr. AJAY SHAD for giving me the opportunity of doing General Training and Project work as a special subject and provides such a wonderful platform to represent ourselves as MBA students. I will fail in my duty if,Ido not acknowledge the help of the F A C U L T Y R U J A S U T A R I A fortheirvaluableguidanceandencouragement. Last but not the least I am thankful to my family, friends and faculty members who helped me in preparing my project work.
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EXECUTIVE SUMMARY
Rural Finance consistsof Informal & Formal sector. Fore.g.Of formal sector of finance include banks: Project, & contract Farmer schemes Reference is often made to microfinance. RuralFinance is aset of financial services thatare notlimited tofinance only. There is a big differencebetween underdeveloped &developed countries. The countries which have real perCapita income less than a quarter of the per capita income Of the united statesare underdeveloped countries.There are different features like low per capita income occupational pattern, heavy population pressure , low rate of capital formation. There are different natural resources in processof economic development in rural India. Like for eg. Land, water resources, fisheries, mineral resources, forests, marine resources, climate, rainfall & topography.There are different types of infrastructure facilities often referred towards economic & social development of rural India Like energy, power, transport. Agriculture helps for the export-import agriculture playing a very important role in Indian economy. There are different sources of Rural Finance as well as some Private agencies Sources also. There are some Institutions which provide the finance sources. There are different different schemes which is provided by government As well as bank. There is a need forrural finance. There are key challenges for rural financial services provisions like systemic risk, market risk, finance risk , etc.
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INTRODUCTION
MEANING OF AN RURAL FINANCE :
Rural finance comprises finance, savings and insurance (or insurance substitutes) in rural areas, whether provided through formal or informal mechanisms. The word 'finance' tends to be associated with enterprise development, whereas rural finance also includes savings and insurance mechanisms used by the poor to protect and stabilize their families and livelihoods (not just their businesses). An understanding of rural finance helps explain the livelihood strategies and priorities of the rural poor. Rural finance is important to the poor. The poorest groups spend the highest proportion of their income on food typically more than 60% and sometimes as much as 90%. Under these circumstances, any drop in earnings, or any additional expenditure (health or funeral costs, for instance) has immediate consequences for family welfare unless savings or loans can be accessed. Financial transactions are therefore an integral part of the livelihood system of the poor. Rural finance consists of informal and formal sectors. Examples of formal sources of finance include: banks; projects; and contract farmer schemes. Reference is often made to microfinance. Micro underlines the small loan size normally associated with the borrowing requirements of poor rural populations, and micro-finance schemes use specially developed pro-poor lending methodologies. Rural populations, however, are much more dependent on informal sources of finance (including loans from family and friends, the local moneylender, and rotating or accumulating savings and finance associations). Rural Finance is a set of financial services that are not limited to finance only.
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Meaning of an Underdeveloped Economy:

There is a big difference between underdeveloped and developed countries. The United Nations group of experts states, We have had some difficulty in interpreting the term underdeveloped countries. We frankly consider that, per capita real income is low when compared with the per capita real incomes of the United States of America, Canada, and Australia & Western Europe.Briefly a poor country.Theterm underdeveloped countries is relative. In practical, those countries which have real per capita incomes less than a quarter of the per capita income of the United States are underdeveloped countries. But recently UN publication prefers to describe them as Developing economies.The term developing economies signifies that though still underdeveloped, the process of development has been initiated in these countries. Thus, we have two economies developing economies &
developed economies. The World Bank issued in its World Development Report (1991) classified the various countries on the basis of Gross National Product (GNP) per capita. Developing countries are divided into: (a) Low income countries with GNP per capita of $580 and below in 1989; and Middle income countries with GNP per capita ranging between $ 580 and $ 6,000. As against them, the High-income Countries which are mostly members of the Organization for Economic Co-operation and development (OECD) and some others have GNP per capita of more than $ 6,000.
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Definition:
A country which has good potential prospects for using more capital or more labor or more available natural resources, or all of these, to support its present population on a higher level of living or if its per capita income level is already fairly high, to support a large population on a not lower level of living. As per this definition the problem of development is mainly the problem of development is mainly the problem of poverty and prosperity. The basic criterion then becomes whether the country has good potential Prospects of raising per capita income, or of maintaining an existing high level of per capita income for an increased population.
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RESEARCH METHODOLOGY
PRIMARY DATA
DATA COLLECTION
BANK
BOOKS
SECONDARY DATA PURPOSE OF THE STUDY

1) To study in detail the concept of rural finance. 2) To study in detail the implications in Indian context. WEBSITE
LIMITATION
1) This project is limited to Rural Sector of India as it is a vast topic. 2) This project content data from various banks but the field visit is only conducted in(SBI).
OBJECTIVES OF THE STUDY

A. To study the concept of rural finance. B. To study the IndianEconomic Scenario. C. To study the Need of Rural Finance. D. To study the Sources of Rural Finance. E. To study the Challenges of Rural Finance.
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Characteristics of the Indian Economy as an Underdeveloped Economy:

A. India is an underdeveloped economy.
It is a vast country having an area of 3.3 million sq. km. It has almost 5, 76,000 villages. The population of India is widely scattered over villages and towns. Nearly 75% of the population lives in rural & semi urban areas, while the rest lives in towns. There is doubt that the bulk of its population lives in conditions of misery. Poverty is not only acute but is also a chronic malady in India. At the same time, there exist unutilized natural resources. It is, therefore, quite important to understand the basic characteristics of the Indian economy, treating it as one of the underdeveloped but developing economies of the world.
B. Low per capita income: Underdeveloped economies are marked by the existence of low per capita income. The per capita income of an India is lowest in the world. The per capita income in Switzerland in 1989 was about 88 times, in West Germany about 60 times, in U.S.A. 61 times and in Japan 70 times of the per capita income in India. It is also important that developed economies are growing at a faster rate than the Indian economy and as a consequence, the disparity in the levels of income has become wider during period 1960-89.
C. Occupational pattern:
Primary producing. One of the basic characteristics of an underdeveloped economy is that it is primary producing. A very high proportion of working population is engaged in agriculture, which contributes a very large share in the national Income. In India, in 1981, about 71 per cent of the working population was engaged in agriculture and its contribution to national income was 36 per cent. In Asia, Africa and Middle East countries countries from two-thirds to more than four-fifths of the population earn their livelihood from agriculture and in most Latin American countries from two-thirds to three-fourths of population engaged in agriculture
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indeveloped countries is much less than the proportion of population engaged in agriculture in underdeveloped countries.
D. Heavy Population pressure:

The main problem in India is the high level of birth rates coupled with a falling level of death rates. The rate of growth of population which was about 1.31 per cent per annum during 1941-50 has risen to 2.11 per cent during 1981-91. The chief cause of this rapid spurt to population growth is the steep fall in death rate from 49 per thousand during 1911-20 to 9.6 per thousand in 1990; as compared to this, the birth rate has declined from about 49 per thousand during 1911-20 to 29.9 per thousand in 1990. The fast rate of growth of population necessitates a higher rate of economic growth in order to maintain the same standard of living of the population. To maintain a rapidly growing population, the requirements of food, clothing, shelter, medicine, schooling, etc. all rise. Thus, a rising population imposes greater economic burdens and, consequently, society has to make a much greater effort to initiate the process of growth.
E. Prevalence of chronic unemployment and underemployment:

In India labor is an abundant factor and, consequently, it is very difficult to provide gainful employment to the entire working population. In developed countries, unemployment is of a cyclical nature and occurs due to lack of effective demand. In India unemployment is
structural and is the result of a deficiency of capital. The Indian economy does not find sufficient capital to expand its industries to such a capacity that the entire labour force is absorbed.
F. Low rate of capital formation:

Other basic characteristic of the Indian economy is the existence of capital deficiency which is reflected in two ways first, the amount of capital per head available is low; and secondly, the current rate of capital formation is also low. Following table reveals that gross capital formation in India is less than that of developed countries.
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INDIAN ECONOMIC SCENARIO
Natural Resources In Process Of Economic Development In Rural India:

To achieve the development in national output, it is essential to combine natural resources, human resources & capital. The existence or the absence of favorable natural resources can facilitate or retard the process of economic development. Natural resources include land, water resources, fisheries, mineral resources, forests, marine resources, climate, rainfall and topography.
Land Resources:
The total geographical area of India is about 329 million hectares, but statistical information regarding land classification is available for only about 305 million hectares; this information is based partly on village papers and partly on estimates. We can explain land utilization pattern from the following table:-
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Land utilization pattern, 2004-05 (million hectares)

Particulars 1. Total geographical area 2. Total reporting area 3. Barren land not available for cultivation 4. Area under forests 5. Permanent pastures and grazing land 6. Cultivable waste lands, etc. 7. Fallow lands 8. Net area sown 9. Area sown more than once 10. Total cropped area (8+9) Area 328.73 304 41.56 68.86 10.91 13.88 9.76 142.02 48.74 190.76 Percent -100 13.63 22.6 3.6 4.57 3.2 46.6
Forest Resources:
Forest is an important natural resource of India. They have a moderating influence against floods and thus they protect the soil against erosion. They provide raw materials to a number of important industries, namely, furniture, matches, paper, rayon,Construction, tanning, etc. The total area under forests was 68.86 million hectares in 1997-98 which was about 22.6 percent of the total geographical area; a recent estimate has put it at 75 million hectares or 23 percent of the total geographical area. Forests in India are mostly owned by states (95%); a small portion is under the ownership of corporate bodies and private individuals.
Water Resources:
India is one of the wettest countries in the world, with average annual rainfall of 1100 m.m. Indias water policy, since Independence, has mainly concentrated on highly visible large dams, reservoirs and canal systems, but has ignored minor water works such as tanks, dug wells and tube wells.
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Fisheries:
Broadly speaking, fishery resources of India are either inland or marine. The principal rivers and their tributaries, canals, ponds, lakes, reservoirs comprise the inland fisheries. The rivers extend over about 17,000 miles, and other subsidiary water channels comprise 70,000 miles. The marine resources comprise the two wide arms of the Indian Ocean and a large number of gulf and bays along the coast. About 1.8 million fishermen draw their livelihood from fisheries, though they generally live on the verge of extreme poverty. Out of a total catch of 3 million tons of fish in 1988-89, over 1 million tones came from inland fisheries and nearly 2 million tons from marine sources. India is the seventh largest producer of fish in the world and is second in inland fish production, which contributes 45 per cent of total production in the country. Fish production reached the level of 5.4 million tons in 1997-98, comprising 3.0 million tons of marine fishery and 2.4 million tons of inland fishery and is expected to reach 5.6 million tons in 1998-99 with 3.0 million tons of marine fishery and 2.6 million tons of inland fishery, respectively. During 1998-99, the export of marine products came down to US$ 1,038 million from US$ 1,208 million.
Infrastructure In Process Of Economic Development In Rural India:

The prosperity of a Rural India depends directly upon the development of agriculture and industry. Agricultural production however requires power, finance, transport facilities, etc. Industrial production requires not only machinery & equipment but also skilled man-power, management, energy, banking facilities, marketing facilities, transport services which include railways, roads, shipping, communication facilities, etc. All these facilities and services constitute collectively the infrastructure of an economy and the development and expansion of these facilities are an essential pre-condition for increasing agricultural & industrial production in a rural area.
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Types of Infrastructural facilitiesoften referred towards economic and social development of rural India: Energy:
The most important single factor which can act constraint on economic growth of a country is the availability of energy. There is a direct correlation between the degree of economic growth, the size of per capita income and per capita consumption of energy. Since energy is an essential input of all productive economic activity, the process of economic development inevitably demands increasing higher levels of energy consumption. There are broadly two sources of energy commercial energy & non-commercial energy. Following are the various commercial energy:- coal & lignite, Oil & gas, Hydro-electric resource, Uranium. & noncommercial energy is Fuel wood, Agricultural wastes, Animal dung
Power:
Electric power, which is one form of energy, is an essential ingredient of economic development and, it is required for commercial and non-commercial uses. Commercial uses of power refer to the use of electric power in industries, agriculture and transport. Noncommercial uses include electric power required for domestic lighting, cooking, use of mechanical gadgets like the refrigerators, air conditioners, etc. With the growth of population and with the increase in the use of modern gadgets in daily life, it is quite natural that the demand for electricity for domestic use should grow at a fast rate.
Transport:
If agriculture and industry are regarded as the body and the bones of the economy, which help the circulation of men and materials. The transport system helps to broaden the market for goods and by doing so; it makes possible large-scale production through division of labor. It is also essential for the movement of raw materials, fuel, machinery etc., to the places of production.
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Modes of transport & communication facilities: Indian Railways:

The most important form of transport system in India is the Indian railways, which is also the countrys largest single undertaking with a capital investment of around Rs. 15,000 cores. In 1950-51, railway route length was 53,600 kms but by 1990-91 it had increased to nearly 62,400 kms-an increase at the rate of 0.4 percent per annum
Roads & Road Transport:

Road transport plays an important role in rural economy of country, since it is most suitable for short distances. It has also the advantage of door-to-door service, flexibility, speed and reliability. The utility of other modes of transport such as railways, internal waterways, ports, etc. increase when linked to the road .Transport system. Road construction and maintenance generate sizeable employment opportunitiesfactor of great importance in the context of growing population and growing unemployment in the country. The rural road network now connects about 70 percent of our villages.
Inland water transport:

Inland water transport is the cheapest mode of transport, for both long and short distances, so far as the points of origin and destination of traffic are concerned. It is cheap as energy consumption is low. India has over 14,500 kms. Of navigable inland waterways comprising a variety of river systems, canals, backwaters, creeks, etc.
Communications:
The communication system comprises posts and telegraphs, telecommunication system, broad casting, television and information services. By providing necessary information about the markets and also supplying necessary motivation, the communication system helps to bring buyers and sellers together effectively and helps to accelerate the growth of the economy.
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Rural Market Contribution In Total Indian Economy

When you consider a rural market then the measure part of the rural business directly or indirectly connected with agriculture. In this condition, whenever you study about rural market you have to consider the impact of agriculture towards Indian Economy.
Profile of Rural people:If we classify the rural people by their occupation, we find cultivators as the predominant occupation group who account 72% of rural households.
Distribution of rural households by their profession or business activity
Occupation Cultivators Agricultural laborers Other non-cultivators Artisans All house holds
Percentage of Households 72 15 11 2 100
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However this group of cultivators contain both prosperous and well as marginal cultivators within itself. This is rural Indias picture where 20% of rural households (mostly cultivators) control about 66% of assets in rural India. In this way rural population broadly divided into 6 categories: A. Proprietors of land include feudal tribute gatherers like seminars, rich moneylenders and traders who acquire large tracts of land and companies or persons who own large populations. B. Rich farmers who belong to dominant caste of the area. C. Small peasants or marginal farmers owning uneconomic land holdings. D. Tenant farmers operating on rented lands belonging to large land holders and working on small uneconomic land holdings. E. Agricultural laborers who work on lands of landlords and rich farmers. F. Artisans and others, which include the unemployed also.
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Agricultural Impact on National Economy:

Agriculture is a backbone of the Indian Economy. It is important to note that importance is given to industrialization in last four decades; agriculture is largest industry in the country.
Agricultural Production:
The agricultural sector as a whole is estimated to record a real growth rate of 6.6 per cent during 1998-99. The overall growth in agricultural production during 1998-99 has been provisionally estimated at 6.8 per cent, as against a negative growth rate of (-) 5.4 per cent during 1997-98. In spite of the damage caused to the cotton crop in Punjab by excessive rains and unexpected cyclonic storms in Andhra Pradesh in October 1998, cotton production was estimated to be higher at 13.3 million bales in 1998-99, as against 11.1 million bales produced in 1997-98. Similarly, the sugarcane output is expected to touch 282.7 million tons during 1998-99, compared to 276.3 million tons during 1997-98. The production of oilseeds is also likely to be higher at 25.3 million tons during 1998-99, as against 22.0 million tons during 1997-98.
Food grains Production:

The production of kharif food grains estimated at 102.5 million tonnes during 1998 showed a marginal growth of 1.4 per cent over the production achieved (101.1 million tonnes) in 1997. The Rabifood grains production for 1998-99 is expected to go up to 98.4 million tonnes compared to 91.3 million tonnes in 1997-98. The food grains production is estimated to be 200.9 million tonnes in 1998-99 compared to 192.4 million tonnes during 1997-98, recording an impressive increase by 4.4 per cent (Advance Estimates). During 1998-99, efforts have also been initiated by various government agencies to double the food production in the next decade.
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Growth Rate
Crop Rice Coarse cereals Pulses Food Grains 2005-06 8.4 1.4% 8.2% 6.3% 2006-07 -4.0% -4.0% -2.7% -0.6% 2007-08 5.6% 8.4% 10.9% 6.7%
Agricultural Exports and Imports

AgricultureExports:
The share of exports of agriculture and allied products in the total exports had declined marginally, from 18.9 per cent during 1997-98 to 17.8 per cent during 1998-99. During the same period, the value of exports of agriculture and allied products amounted to US$ 5,994 million, showing a decline of 9.6 per cent from a level of US$ 6,634 million in 1997-98. Major items of agricultural exports were basmati and non-basmati rice, raw cotton, meat, oil meals, tea, coffee, unmanufactured tobacco, cashew, spices, fresh and processed fruits and juices, vegetables and marine products, etc.
Agriculture Imports:
Agricultural imports related to food and other items constituted 5.8 per cent of the total imports during 1998-99, as against 4.0 per cent during corresponding period of the previous year. Important agricultural items imported during the year were vegetable oils (edible), sugar, wheat and fruits & nuts. During 1998-99, the volume of agricultural imports aggregated US$ 2,409 million, as against US$ 1,678 million during the corresponding period of the previous year, recording a growth of 43.6 per cent.
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Agricultural markets:
There were 7,062 agricultural regulated markets operating in India, 162 agricultural commodities considered for grading standards and 3,253 cold storage with capacity of 8.73 million tonnes as on end March 1998. With the introduction of economic reforms, futures trading were permitted in coffee, cotton, castor oil and jute goods during 1997-98. Earlier futures trading were permitted in gur, potato, castor seed, pepper, turmeric, etc. Further, during 1998-99, futures trading were introduced in oilseeds, oil cakes and edible oils. A network of co-operatives at the national, state and primary level operates to help farm producers with access and further reach for sale of produce. As per the Annual Report (199899) of Ministry of Agriculture, Government of India, the value of agricultural produce marketed through co-operatives has registered a remarkable growth of 21.6 per cent, from Rs.9, 500 crore in 1994-95 to about Rs.11, 551 crore in 1995-96.
Agriculture role in Indian Economy:

Agriculture for Industrial Development:
Indian agriculture has been the source of supply of raw materials to our leading industries. Cotton and jute, textiles, sugar, plantations all these directly depend on agricultural output. There are many industries, which depend on agriculture indirectly. Many of our small scale and cottage industries like handlooms, oil crushing, etc depend on agriculture for their raw materials. But then, in recent years, agriculture is losing its significance to industries such as iron and steel, engineering, chemicals, etc. However in recent years, the importance of food processing industries is being increasing recognized both for generation of income and generation of employment.
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Agriculture in economic planning:

Importance of agriculture in the national economy is indicated by many facts. For example, agriculture is main support for transport sector as railways and roadways secure bulk of their business from the movement of agricultural goods. Further it is seen that good crops implying large purchasing power with the farmers lead to greater demand for manufactures and therefore better prices. In other words prosperity of farmers is also the prosperity of the industries and vice-versa. Agriculture is backbone of the Indian economy and the prosperity of agriculture can also stand for the prosperity of the economy. At the same time it is true that per capita productivity in agriculture is less than in the industry. Many scholars think that so long as the Indian Economy is dominated by agricultural activity, per capita income will not rise to an extent, which is necessary and desirable.
Capital Formation in Agriculture

The falling public investment in agriculture has been a cause for concern because it is crucial for the development of infrastructure like irrigation, electricity, agriculture research, roads, markets and communications. Investment in agriculture declined from 1.6 percent of GDP in 1993-94 to 1.3 per cent in 1998-99 (Table 8.24). This decline was due to a fall in public investment in agriculture from Rs 4,467 crore in 1993-94 to Rs 3,869 crore in 1998-99. There has, in fact, been a continuous decline in public investment in agriculture from 1994-95 till 1998-99. Although, the declining trend in public investment was halted in 1999-2000, with the public sector capital formation rising to Rs 4122 crore from a level of Rs 3869 crore in preceding year, there has not been any improvement in the share of investment in agriculture in GDP from the preceding years level of 1.3 percent. This calls for a review of our policies which have led to diversion of scare resources in the form of subsidies for fertilizers, rural electricity, irrigation, finance and other agricultural inputs, away from the creation of productive assets.
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Schemes & Facilities from the various banks

NABARD:-
RURAL NON-FARM SECTOR FINANCE SCHEME

Rural Non-Farm Sector (RNFS) holds the key to faster economic development of the country. It has potential and promise for generating employment and increased income in the rural areas. Hence, NABARD has identified financing, development and promotion of RNFS as one of its thrust areas.
Schemes from NABARD for non-farming sector: COMPOSITE LOAN SCHEME (CLS) - under ARF
A. Borrowers: Rural artisans, handicraftsmen, small entrepreneurs, groups of individuals, partnership firms, co-operative societies, NGOs, etc. B. Refinance ceiling-Maximum of Rs. 10 lakh per borrower. C. Repayment period -3 to 10 years with suitable need based moratorium not exceeding 18 months. D. Eligible activities -All manufacturing, processing, and approved service activities.
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INTEGRATED LOAN SCHEME (ILS) - under ARF

A. Borrowers:Individuals, artisans, groups of individuals, associations (formal and informal), proprietary/ partnership firms/ co-operative societies, registered institutions/ trusts, voluntary agencies, private and public limited companies, etc. B. Refinance Repayment period 3 to 10 years with suitable need based moratorium not exceeding 18 months. C. Eligible activitiesmanufacturing, processing and approved service activities in the cottage, village and tiny industry sector and modernization/ renovation/ expansion/ diversification of existing units.
Small Road and water Transport Operators SCHEME (SRWTO) Under ARF
A. Borrowers Individuals, groups of individuals, including partnership/ proprietary firms and co-operative enterprises. The borrowers should be from the rural areas and should utilize the vehicle mainly for transportation of Rural Farm and Non-Farm Products and inputs and passengers to/ from marketing centers. The borrower or his employee should possess a valid driving licensed and the vehicle should be duly registered with the Regional Transport Authority as public transport vehicle. B. Refinance ceiling Maximum of Rs.15 lakh per borrower C. Repayment period 5 years with moratorium of 6 months. D. Eligible vehicles Transport vehicles including Light Motor vehicles, Jeeps, Auto rickshaws, Water transport units (boats, launches etc.)
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Schemes under pre - sanction procedure

Term Loan to SSI units(through CBs & Scheduled PCBs)
Individuals, Proprietary / Partnership concerns, Private/ Public Limited Companies, Promotional/ Developmental Organizations, State Level Federations/ Corporations, Joint Sector Undertakings.
Term Loan to Industrial Co-operatives (through SCBs)

Industrial Co-operative Societies identified as viable/ potentially viable by the State Government.
Project Finance for Agro-Industries (through CBs, Scheduled PCBs and SCBs) Borrowers
A. State level corporations such as agro-industries corporations, forest/ tribal development corporations, KVIC/ KVIB, state level cooperative societies/ federations, co-operative marketing/ processing and industrial societies, joint sector undertakings, registered societies in KVIC/ KVIB fold. B. Public/ private limited companies, partnership firms and proprietary concerns.
Repayment period: 3 to 10 years with moratorium of 12 months.
Soft Loan Assistance Scheme for Margin Money

Beneficiaries and purpose:Entrepreneurs having necessary talent/ skills, but who lack
monetary resources to meet the margin requirements stipulated under the relevant schemes covering both ARF and prior sanction.To set up new units as well as for modernization/ renovation/ expansion/ diversification of existing units even if the units were not initially refinanced by the Bank.
Eligibility criteriaRefinance will be available on the banks' satisfying the eligibility criteria
based on recovery performance/the position of NPAs, as prescribed by NABARD from time to time.
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FARM SECTOR FINANCE SCHEME:

Refinance Assistance for financing farm mechanization Tractors:
(a) The quantum of refinance in respect of financing for acquisition of second tractor has been enhanced from existing level of 40% to 90% (95% in case of SCARDBs) of the loan amount as in the case of first tractor. (b) Though the minimum land holding required for financing tractors is 8 acre perennially irrigated land, necessary discretion has been given to banks to evolve their own area specific norms, if need be, and report such norms evolved by them to the concerned RO of NABARD. (c) Refinance facility for financing purchase of second hand tractors has been extended to Gujarat in addition to Punjab, Haryana and Rajasthan.
Power Tillers:
(a) Though the minimum land holding required for financing power tillers is 6 acres of perennially irrigated land, necessary discretion has been given to banks to evolve their own area specific norms, if need be, and report such norms evolved by them to the concerned RO of NABARD. (b) Banks have also been advised to give focused attention on financing power tillers by preparing a three year banking plan for a compact area for the benefit of the small farmers.
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Swarnajayanti Gram Swarozgar Yojana (SGSY)

SGSY, formed by restructuring ongoing self employment programmes, viz. IRDP, TRYSEM, DWCRA, etc., is under implementation from 01 April 1999. The programme envisages formation of SGSY Groups and their linkage with the banks. Individuals as also SGSY group members, below poverty line are assisted under the programme.
Scheme for setting up of Agriclinic and Agribusiness centers

In pursuance of the announcement made by the Union Finance Minister in the budget speech for the year 2001-02, National Bank in consultation with the Ministry of Agriculture, GOI and select banks formulated a scheme for financing Agriculture Graduates for setting up Agriclinic and Agribusiness Centres The scheme aims at supplementing the existing Extension Network to accelerate the process of technology transfer to agriculture and supplement the efforts of State Agencies in providing inputs and other services to the farmers.
Scheme for financing farmers for purchase of land for Agricultural purposes
In response to the Honorable Union Finance Minister's emphasis on the need to step up priority sector lending and to examine financing farmers for purchase of land for agricultural purposes, the Working Group constituted by Indian Banks Association formulated a above scheme in consultation with the Government of India, RBI and NABARD. The objective of the Scheme is to finance the farmers to purchase, develop and cultivate agricultural as well as fallow and waste lands as also consider financing purchase of land for establishing or diversifying into other allied activities.
Eligibility(i) Small and marginal farmers i.e... Those who would own maximum of 5 acres of
non- irrigated land or 2.5 acres of irrigated landincluding purchase of land under the scheme and (ii) Share croppers / Tenant farmers are eligible.
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Central Sector Capital Subsidy scheme for Investment Promotion (IPS)

A Central Sector Capital Subsidy scheme (Investment Promotion Scheme) launched by the Government of India in collaboration with NABARD for development of privately owned nonforest wastelands in the country is under implementation since 1998. Of the 40 schemes covering about 1500 ha sanctioned till date, the coverage is mostly confined to the States of Tamil Nadu, Andhra Pradesh and Maharashtra, with Tamil Nadu accounting for more than 20 schemes. The scheme provides for subsidy upto 25% of bank loan with a ceiling of Rs. 25 lakh for taking up plantation and other on-farm developments in private wastelands. In view of the availability of substantial area under non-forest wasteland in all States and the need to develop them, a nationwide awareness and publicity campaign was launchedby the Government of India in association with NABARD for popularizing the Investment Promotion Scheme (IPS). As a part of this effort, workshops are being organized by NABARD in different States/ regions.
Refinance Scheme for financing Farmers Service Center (FSC)

NABARD has decided to extend 100% refinance facility to banks for financing Farmers Service Centres (FSC) set up in collaboration with Mahindra Shubhlabh Services Ltd (MSSL) for providing various extension services to farmers including supply of agri-inputs. FSC is intended to benefit farmers by way of higher yields and productivity through private sector participation in technology transfer and extension services.
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Scheme for Rural Finance

SBI Caters to the needs of agriculturists and landless agricultural laborers through a network of 6600 rural and semi-urban branches. There are 972 specialized branches which have been set up in different parts of the country exclusively for the development of agriculture through finance deployment. These branches include 427 Agricultural Development Branches (ADBs) and 547 branches with Agricultural Banking Divisions (ADBs) and 2 Agricultural Business Branches at Chennai and Hyderabad catering to the needs of hitech commercial agricultural projects. The Bank has achieved tremendous growth in agricultural finance. As on March 2001, it has covered 48 lakh farmers with loan outstanding of Rs. 14962 crores, accounting for 28% of total agricultural advances of Public Sector Banks (PSBs)
A) Crop Loan
SBI offers financial assistance to meet cultivation expenses for various crops as short Term Loan. With a repayment period not exceeding 18 months, the Crop Loan is extended in the form of direct finance to cultivators.
Eligibility-Agriculturists, Tenant farmers and Share Croppers who actually cultivate the lands
are eligible for these loans. All categories of farmers - Small/Marginal (SF/MF) and others are included.
B) Produce marketing loan scheme

The Bank extends financial assistance to help farmers store produce on their own to avoid distress sale. The repayment period of the produce marketing loan (PML) does not exceed 6 months. Further, this facilitates immediate renewal of crop loans for next crop.
Eligibility-All categories of farmers - Small/Marginal (SF/MF) and others - are eligible.
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The Bank verifies the following aspects before granting the loan: 1)Service Area Approach. 2) Stocks at the borrowers' residence/go down. 3) Stock statement for valuation. Loan Amount Upto Rs.25,000 Security to be furnished DPN, DPN take delivery letter Hypothecation of stocks. Hypothecation properties. of stocks. Mortgage of
Above Rs.25,000
C) Kisan finance card scheme

The SBI offers the Kisan Finance Card for farmers under short-term finance introduced as per RBI/NABARD guidelines, providing a running account facility to farmers to meet their production finance need and contingency needs.
EligibilityAll agricultural clients having good track record for the last two years are eligible for the Kisan Finance Card. Minimum finance limit: Rs.3000/- New borrowers requiring crop loans can also avail this product. Finance limit is based on operational land holding, cropping pattern and scale of finance. Withdrawals can be made using easy and convenient withdrawal slips. The Kisan Finance Card is valid for 3 years, subject to annual review.
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D) Agriculture term loans

SBI gives agricultural term loans in the form of direct finance to cultivators to create assets facilitating crop production/income generation. Repayments span not less than 3 years and not exceeding 15 years. Activities broadly covered are land development, minor irrigation, farm mechanization, plantation and horticulture, dairying, poultry, sericulture, dry land, waste land development schemes, etc.
Eligibility-All categories of farmers-small/medium-and agricultural labourers are eligible for

agricultural term loans, provided they have necessary experience in the activity and the required land area.
E) Land Development Schemes

The SBI gives finance solutions for land development programmes in the form of direct finance to cultivators aimed at better productivity. Loans under this head cover various activities like land clearance (removal bushes, trees, etc.), land leveling and shaping, contour/graded bunding, bench terracing for hilly areas, contour stone walls, staggered contour trenches, disposal drains, reclamation of saline/alkaline soils and fencing.
Eligibility:Loans cover various activities like digging of new wells (open/bore wells),
deepening of existing wells (traditional/inwell bore), energisation of wells (oil engine/electrical pump set), lying of pipe lines, installing drip/sprinkler irrigation system and lift irrigation system.
F) Minor Irrigation Schemes

SBI provides finance for creating new source of irrigation by exploiting underground water, energisation of wells, conveyance of water, judicious use of available water, etc. Loans cover various activities like digging of new wells (open/bore wells), deepening of existing wells (traditional/inwell bore), energisation of wells (oil engine/electrical pump set), lying of pipe lines, installing drip/sprinkler irrigation system and lift irrigation system.
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G) Farm Mechanization Schemes

SBI provides finance for purchase of farm equipment and machinery for agricultural operations. This mode of finance covers activities ranging from: Purchase of tractors, trailers, cultivators, cage wheels, power tillers, combine harvesters, power sprayers, dusters, etc.
Eligibility-is ascertained on the basis of minimum area requirements: Tractors - 8 acres of

irrigated area Power tiller - 5 -6 acres Combine harvester - 20 acres H) Financing of Combine Harvesters: A farmer should own minimum 8 acres of irrigated land. Non-farmer entrepreneurs capable of utilizing combine harvester for custom hiring work are also eligible. Combine harvester should be utilized for a minimum of 1000 hours of productive work in a year. Unit cost will include cost of combine harvester and accessories, if any.
I) Kisan Gold Card Scheme: EligibilityFarmers with excellent repayment record for at least past 5 years. New farmers are not eligible for the product.
Purpose-Investment finance for which term loans are ordinarily sanctioned. The scheme also
includes major family expenditures like marriages and education of children.
J) Land Purchase Scheme: Eligibility-Small/marginal farmers, tenants, share-croppers owning less than 5 acres of
irrigated / 2.5 acres irrigated land in their own name and landless agricultural labourers are eligible to avail loan under the scheme, provided they are our existing borrowers with record of prompt repayment of loans. Own land before and after purchase should not exceed 5 acres irrigated / 2.5 acres irrigated.
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Security-Land to be purchased with Bank finance will be mortgaged as security. No other

security will be insisted upon.
Repayment-Entire loan will be repayable in 10 years in half-yearly installments. Adequate

gestation period will be allowed for development of land for cultivation.
Self Help Groups (SHGs) :

SHGs are self-managed homogeneous groups of economically backward people that promote savings among themselves and pool the savings. These pooled resources are supplemented by external resources i.e. bank finance when these groups gain experience. The Self Help Groups Linkage Programme of SBI is under implementation since 1992. At the end of March 2001, the Bank has financed 25,000 self-help groups with aggregate finance limit of Rs 46 crore.
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Various Finance Scheme Offered From Government:

Maharashtra Rural Finance Project (MRCP) - India - out line of the project features and Impact General: Access to finance has long been considered a major poverty alleviation strategy in
India. A variety of finance-linked programmes supplemented by subsidies have been implemented. The Integrated Rural Development Programme (IRDP) operating since 1978-79 has been a major national rural poverty alleviation programme with a large finance component. Under this programme, nearly 53 million families below poverty line were assisted with bank finance of Rs.31 billion and subsidy of Rs. 10.5 billion upto 31st March 1998, but its impact had not matched the resources spent. This was due to reasons like provision of supply rather than demand-led finance, loans not tailored to meet needs of individual enterprises, lack of aftercare support, and weak linkages lack of supervision over loan utilization etc. Further, there was no effective involvement of the people at any stage of implementation of the programme. As a result, the incidence of high overdue and high transaction cost for the banks in financing the rural poor became a matter of concern for the policy-makers.
Maharashtra Rural Finance Project (MRCP)

Against this backdrop the MRCP supported by IFAD was evolved as an innovative approach to poverty reduction with peoples participation. The strategy for implementation of this project has been devised in such a manner that the rural poor assume centre-stage and their participation ensured at all stages of the project viz. planning, implementation and monitoring. The experience gained shows that once the peoples participation is invoked at the planning stage itself a strong sense of ownership of the project develops among the people which stimulates them to actively involve in the subsequent phases of the project. The MRCP being implemented with an outlay of US$ 48.35 million is financed by an IFAD loan of US$ 29.2 million supplemented by a contribution of US$ 14.97 million from Government of
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India/Government of Maharashtra and US$ 1.65 million from participating banks. The Project which is implemented by a number of banking institutions, Government agencies and NonGovernmentalOrganization (NGOs) since 1994-95 was designed with the principal goal.
Finance-Cum-Subsidy Scheme for Rural Housing. Introduction:- The Finance-Cum-Subsidy Scheme for Rural Housing has been conceived for
rural households having annual income up to Rs.32,000/-.
Objective- To enable/facilitate construction of houses for all rural households who have
some repayment capacity.
Target Group- The target group under the scheme will be the rural households having an
annual income of Rs. 32000/- only. However preference will be given to rural households who are below poverty line.
Salient Features:
Subsidy unto Rs.10, 000/- per eligible household in plain areas and Rs.11, 000/- in hilly/difficult areas.
Loan unto Rs."2"0,000/- per household. Sanitary latrine and smokeless chulha are integral part of the house.
Achievement:The scheme has been launched with effect from 1 April, 1999 and is in the
process of implementation.
Funding Pattern: Funds are shared by the Centre and State in the ratio of 75:25. Implementing Agency:The Implementing Agency for the Finance Cum Subsidy Scheme for
Rural Housing may be the State Housing Board, State Housing Corporation, specified Scheduled Commercial Bank, Housing Finance Institution or the DRDA/ZP.
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Council for Advancement of Peoples Action & Rural Technology (CAPART):

Recognizing the need for an organization that would coordinate and catalyze the development work of voluntary agencies in the country, particularly to ensure smooth flow of benefits to the underprivileged and socio-economically weaker sections of society, Government of India, in September, 1986 set up the Council for Advancement of Peoples Action and Rural Technology (CAPART), a registered society under the aegis of the Department of Rural Development, by merging two autonomous bodies, Namely, Peoples Action for Development of India (PADI) and Council for Advancement of Rural Technology (CAPART). The main objectives of the CAPART are:A. To encourage, promote and assist voluntary action for the implementation of projects intending enhancement of rural prosperity. B. To Strengthen and promote voluntary efforts in rural development with focus on injecting new technological inputs; C. To act as a catalyst for the development of technology appropriate for rural areas.
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NEED FOR RURAL FINANCE

RURALFINANCE: NEED & IMPORTANCE
Rural finance is important to the poor. The poorest groups spend the highest proportion of their income on food typically more than 60% and sometimes as much as 90%. Under these circumstances, any drop in earnings, or any additional Expenditure (health or funeral costs, for instance) has immediate consequences for family welfare unless savings or loans can be accessed. Financial transactions are therefore an integral part of the livelihood system of the poor. Rural finance consists of informal and formal sectors. Examples of formal sources of finance include: banks; projects; and contract farmer schemes. Reference is often made to microfinance. Micro underlines the small loan size normally associated with the borrowing requirements of poor rural populations, and micro-finance schemes use specially developed pro-poor lending methodologies. Rural populations, however, are much more dependent on informal sources of finance (including loans from family and friends, the local moneylender, and rotating or accumulating savings and Finance associations).
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LENDING TO THE RURAL POOR: THE ISSUE

At the 1997 Micro-Finance Summit, James Wolfensohn, President of the World Bank, said that micro-finance is not the single answer to poverty, but an important One. This widely held belief underpins much of the interest in rural finance, although it has some important shortcomings some researchers argue that the better-off of the poor are usually those served by micro-finance, since the ultra-poor seldom join micro enterprise loan programmes. The poorest benefit more from small savings schemes, consumption loans, or emergency funds. Rural finance would not be the focus of so much development effort was it not for widespread market failure (i.e. failure to provide the services people want) in rural financial services in developing countries. Reasons for market failure include: The lender does not know the default risk of each potential borrower and to Collect this information is costly; It is costly to ensure that the potential borrowers take those actions which make loan repayment more likely; It is difficult and costly to enforce repayment; and Rural Finance and Natural Resources the cost of providing services to the rural poor is high because the rural poor are located in remote areas, want to borrow small amounts, are often illiterate, lack experience of banks, and lack collateral, all of which necessitate the development of tailored approaches.
IMPLICATIONS OF THIS FOR AGRICULTURAL ACTIVITIES

All these types of market failure apply to lending to the agricultural and other natural resource-based sectors in developing countries. Lack of information on the risk of default is particularly germane to agricultural enterprise. Farmers do not keep records, so it is difficult for them to produce the information that might convince a bank of their finance worthiness. Rural market transactions are largely informal, so it is difficult for the bank to collect independent information on prices. Farming is clearly a risky business because of weather, pests and market fluctuations and it is difficult for a bank to assess the degree of risk associated with particular activities. The rural poor do not have track records, or referees who
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will vouch for their competence and reliability. Making sure that farmers stick to their business plan, using loans as intended, and carrying out tasks to schedule, is also costly, although this might make loan repayment more likely. Enforcing repayment is also difficult this requires monitors who know when crops are sold, or agreements with merchants to pay the farmer net of what s/he owes the bank, or effective penalties such as seizure of assessor prosecution. Farmers rarely have collateral acceptable to banks. They may not have clear title to the land they farm, or even if they do, rural land markets may not function well enough for land to be considered a bankable asset. Poor farmers, moreover, rarely have other bankable assets. They might own a bicycle, and have a store half full of grain, but were a bank to seize such assets the cost of doing so would probably exceed their sale value. The poorer the farmer, the less are his/her chances of borrowing from the formal sector. Women, particularly poor women, face even more problems in obtaining finance. Land title, where it exists, is usually held by men. Women often have little control over other factors of production, particularly for the bankable cash cropping activities. In some countries women may only borrow in the names of their husbands, if at all, and literacy rates for poor women are almost always lower than those for men. The irony is that numerous studies show that women tend to repay loans more reliably than men. Numerous projects, government schemes and NGOs engage in loan programmes targeted at the poor. Some of these work well, but the majority are unsustainable because of high and subsidized costs, and high rates of default. The poor depend overwhelmingly on the informal sector.
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FINANCIAL MECHANISMS USED BY RURAL POOR

The poor borrow from family and friends. This is an extremely important source of finance, but is inadequate in situations where everyones need arises at the same time (purchasing seasonal inputs, or replanting late because the rains have failed).Moreover, locally obtained funds are very vulnerable to covariate risk, i.e. risk that affects everyone, such as crop failure. The poor borrow from moneylenders, shopkeepers, pawnbrokers and merchants. Interest rates are usually high and loans are taken out for short periods. Such lenders Rural Finance are usually based within the community they know their clients; they know their clients businesses; and they can apply pressure from within the community to ensure that loans are repaid. Sometimes the loan will be guaranteed (loans from pawnbrokers for instance), or linked to crop sales. The latter may be on extremely poor terms for the farmer. Green loans are made in Zimbabwe, for instance, against a standing crop. The farmer takes such a loan because s/he is desperate for cash before the harvest (when there is a general shortage of cash in the farming community), but in return relinquishes all his/her right to the crop on a specified plot. In India, fish Merchants lock fishermen into lifelong indebtedness, by making loans that are repaid through fish sales at pre-arranged (below market) prices. For many rural people, borrowing from these sources is a last resort, but even though the cost of borrowing may be high, such lenders provide an important source of cash in rural communities where there are few, if any, alternatives. Where finance is not available, households may have to deplete their asset base (spend savings, or sell jewels or livestock) or go without essential items, including food. The discussion of finance tends to direct attention towards productive finance, i.e. finance for the purpose of generating income. However, poor people often need mechanisms to protect their livelihoods: they need finance to overcome consumption shortfall, or to smooth consumption patterns; and they need insurance or insurance substitutes to protect fragile and high-risk livelihoods. Multi-peril crop insurance schemes targeted at the poor have generally been expensive failures. This is largely because of high
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administrative costs and political difficulty in charging fair premiums and enforcing impartial loss adjustments. Rural populations use insurance Substitutes, such as: Savings (money or assets, including livestock, which can be accessed at times of Need); Risk-reducing behavior (for example, low-yielding but drought-tolerant crop choices); and Investment in social capital (for example, developing ties with peers or relatives to increase access to potential assistance in times of need). The demands that can be made on extended family simultaneously help poor people protect their livelihoods and make them less reliable in repaying formal loans, because family demands on cash resources may be unpredictable, but socially unacceptable to resist. Savings mechanisms are very important to the poor. By foregoing current consumption, future options are preserved for consumption or investment. Savings a type of insurance and the poor may prefer to save rather than to invest. Precautionary savings increase household resilience and the capacity to absorb risks. So strong is the need for safe-keeping of income (from their own personal consumption, consumption by others, or from theft), that in some countries people will actually pay money-guards to look after their savings (which do not accumulate interest). Rotating and accumulating savings and finance associations are another mechanism used by poor people to establish a savings habit (regular contributions are made by all members to a common fund, and the pooled resources are then disbursed to each member in turn). Yet once again, the ultra-poor are excluded from such associations because they cannot commit to regular payments. Rural Finance and Natural Resources These mechanisms are important and provide insight into why farmers pursue certain strategies. Reducing risk may be more important than increasing yields; accumulating savings may be more important than investment; and farmers may keep cattle as savings, rather than as an income-generating venture in their own right.
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SOURCES OF RURAL FINANCE

Sources of Rural Finance
There are mainly two sources available to the farmers private agencies & institutional. Private agencies means relatives, landlords, agricultural moneylenders, professional private moneylenders, traders & commission agents, others. Where institutional agencies
area.Commercial banks, b. the state bank, c. co-operative societies & land mortgage banks d. agricultural finance Corporation.Private agencies giving 93% of the total finance requirements in 1951-52 and institutional sources including government giving for only 7% of the total finance needs. But in 1960-61, the share of private agencies came down to 81.3 which was as follows:- Relatives 8.8%, Landlords 0.6%, Agricultural moneylenders 36.0, Professional private moneylenders 13.2%, traders & commission agents 8.8%, other sources 13.9. That time institutional sources were 18.7 and the break up was government 2.6%, Co-operative 15.5%, Commercial banks 0.6%. As per the All India Debt and Investment Survey (1981), estimated that the share of private agencies had further slumped to about 37% & share of institutional finance jumped to 63% break up was 30% of co-operative & 29% of commercial banks. Government & Reserve Bank of India is supporting commercial bank & co-operatives to meet the growing demand for agricultural finance
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Private Agencies Sources Money lenders:

Though there are drawbacks, moneylenders are by far the most important source of agricultural finance in India. That we have already seen before, it is therefore, clear that the basic problem of the agricultural economy of India is the huge indebtedness of farmers and their exploitation by private moneylenders. For that government of India make provisions in act as follows a. maintenance of accounts in prescribed forms, b. furnishing of the receipts and periodical statements, c. fixing of maximum rates of interest, d. Protection of the debtors from molestations and intimidations, e. licensing of moneylenders, and f. penalties for infringement of the provisions. The basic objectives of such legislative enactments can be stated as: I. to bring about an improvement in the terms on which private finance was available to agriculturists and to place legal restrictions on the unreasonable exactions of moneylenders, II.To enable civil courts to do greater justice as between lenders and borrowers than was possible in the prevailing circumstances under the ordinary Code of Civil Procedure.
Traders & commission agents:

Traders & commission agents supply funds to farmers for productive purposes much before the crops mature. They force the farmers to sell their produce at low prices and they charge a heavy commission for themselves.
Landlords & others:

Farmers, predominantly small farmers & tenants, depend upon landlords and others to meet their financial requirements. This source of finance has all the defects associated with moneylenders, traders and commission agents. Interests rates are exorbitant. Often the small farmers are cheated and their lands are appropriated. What is worse, this source of finance is becoming more importantfrom 3.3 percent in 1951-52 to 14.5 percent in 1961-62 but declined to 8.8 percent in 1981?
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Institutional sources of finance

These are the funds made available by co-operative societies, commercial banks, & regional rural banks & state governments also. The need for institutional finance arises because of the weakness or inadequacy of private agencies to supply finance to farmers. Private finance is defective because:A. It is based on profit motive &, therefore, it is always exploitative. B. It is very expensive and is not related to the productivity of land. C. It does not flow into most desirable channels and to most needy persons. D. It is not available for making agricultural improvementsand much of the necessary improvements are not undertaken as funds are not available for long periods at low rates of interest E. It is not properly integrated with the agriculturists other needs.
Problems in Institutional sources:

The government was of the view that multi-agency approach to rural finance was the real solution to the emancipation of small farmers from the clutches of the money-lenders. But within a short period, number of problems has surfaced such as: A. There was no coordination between different agencies operating in the same area and, as a result, there was multiple financing, over-financing in some areas and under-financing in others. B. Despite the adoption of lead bank scheme and district finance plans, the different agencies often failed to formulate and develop meaningful agricultural finance programmes in given blocks and districts. C. Despite guidelines issued by RBI, different agencies adopted different procedures and policies in the matter of providing loans and their recover. The result was unnecessary competition among the different agencies. D. There were practical problems in the recovery of loans when different agencies had lent to the same person against the same securities. Ultimately, there were heavy overdue.
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E. The major problem faced by lending institutions, particularly co-operatives, is the most unsatisfactory level of overdue. The ration of overdue to that of demand is around 40 to 42 percent in the case of co-operatives and 47 percent in the case of Regional rural banks. Accordingly, health of rural finance institutions, both co-operative and commercial banks, is in a very sad state in several parts of the country.
Co-operative finance societies

It is the cheapest and the best source of rural finance. The rate of interest is low. Since 1951, the co-operative finance movement has started helping the farmers in a big manner. During 1989-90 there were about 88,000 primary agricultural finance societies. The stranglehold
of the moneylenders on the peasants is not met by the co-operatives. Besides, the small farmers find it difficult to meet all their finance requirements from the co-operatives.
Primary Agricultural Finance Society:

The co-operative movement was started in India largely with a view to providing agriculturists funds for agricultural operations at low rates of interest and protects them from the clutches of moneylenders. The organization of the co-operative finance for short period may be briefly outlined as follows: A co-operative finance society, commonly known as the primary agricultural finance society (PACS) may be started with ten or more persons, normal belongs to a village. The value of each share is generally nominal so as to enable even the poorest farmer to become a member. The members have unlimited liability, that is each member is fully responsible for the entire loss of the society in the event of failure. This will mean that all the members should know each other intimately. The management of the society is under an elected body consisting of President, Secretary & Treasurer. The management is honorary, the only paid member being normally. Loans are given for short periods, normally for one year, for carrying out agricultural operations, and the rate of interest is low. Profits are not distributed as dividend to
shareholders but are used for the welfare of the village. In the construction of a well, or maintenance of a school, and so on. The usefulness of the primary finance societies has been
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rising steadily. In 1950-51, it advanced loans worth Rs.23 crores; this rose to Rs. 200 crores in 1960-61, and to Rs. 4200 crores in 1988-89.
Financial Strength of PACs.:

To make all primary agricultural societies viable and ensure adequate and timely flow of cooperative finance to the rural areas the Reverse Bank of India, in collaboration with State governments, had been taking a series of steps to strengthen weak co-operative banks and to correct regional imbalances in co-operatives development. Steps were taken to reorganize viable PACs and for amalgamation of non-viable societies with farmers service societies or large sized multipurpose societies. These efforts are being intensified by providing larger funds to weak societies to write off their losses, bad debts and overdue.
PACs and Weaker Sections:

The major objective of the co-operative development programmes is to ensure that the benefits of co-operative activities flow increasingly to weaker sections including scheduled castes and scheduled tribes. The government seeks to achieve this through expanding the membership of the weaker sections in the existing PACs and ensuring larger flow of funds and services to them. In the tribal areas, large sized multipurpose societies are being organized mainly for the benefit of the tribals.
Co-operative Central Banks:

These are federations of primary finance societies in specified areas normally extending to the whole district menace they are sometimes called as district co-operative banks. These banks have a few private individuals as shareholders who provide both finance of management. Their main task is to lend to village primary societies, but they were expected to attract deposits from the general public. But the expectation has not been fulfilled and many of the co-operative central banks act as intermediaries between the State Co-operative Bank on the one hand and the village primary finance societies on the other.
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State Co-operative Bank:

This bank forms the apex of the co-operative finance structure in each state. It finances and controls the working of the central co-operative banks in the State. It serves as a link between the Reserve Bank of India from which it borrows and the co-operative central banks and village primary societies. The State Co-operative Bank obtain its working funds from its own share capital and reserves, deposits from the general public and loans and advances from the Reserve Bank now NABARD has formulated a scheme for the rehabilitation of weak central cooperative banks. NABARD is providing liberal assistance to the State Governments for
contributing to the share capital of the weak central co-operative banks selected for the purpose. The State Co-operative bank is not only interested in helping the co-operative finance movement but also in promoting other co-operative ventures and in extending the principles of co-operation.
Problem of overdue to Co-operative finance :

A highly distressing fact of co-operative finance is the heavy overdue of co-operative finance institutions, now estimated between Rs.9, 000 crores to Rs.10, 000 crores. According to the RBI study team on overdue lack of will and discipline among cultivators to repay loans was the principal factor responsible for the prevalence of overdue of co-operatives. Defective lending policy pursued by co-operatives, the apathy of management in taking quick action against recalcitrant members and absence of favorable climate were other contributing factors.Apart from these commonly factors normally responsible for a high level of overdue, intervention of external forces such as loan waivers, concession in various forms towards repayment of principal and interest has also affected the recovery performance of finance institutions to a significant extent. The problem is further aggravated on the account of the state governments in ability to meet the financial commitments to co-operative banks. In recent years, the farmers are getting organized and one of their chief demands of the farmer union is to cancel their debts to the co-operative societies and banks. States have meekly surrendered to such demands to write off the debts in a matter of extreme concern, as
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it hampers the recovery of dues from the farmers. The problem of loan overdue is a matter of serious concern, as it affects the recycling of funds and finance expansion on one hand and economic viability of the lending institutions, specially the co-operatives and RRBs, on the other.
Land development banks

The need for long-term loan is being satisfied by land development banks (formerly the were called land mortgage banks). The objective of such banks is to provide long-term finance to the cultivators against the mortgage of their lands. The loans from the land development banks are quite cheap and are spread over a long period of 15 to 20 years. It is, therefore, convenient to borrow from these banks if previous debts have to be cancelled or if additional land is to be purchased or if improvements have to be made. Though land development banks have been making considerable progress in recent years in this country, they have not really contributed much to the financial need of the farmers. Most farmers are not even aware about this bank & 70% of the land development banks are located in the three South Indian States of Tamil Nadu, Andhra Pradesh & Karnataka. The loan sanction by this bank has been increase annually from Rs. 3 crores to Rs. 770 crores between 1950-51 and 1989-90. Major drawback of this bank is they lend against the security of land, and big landlords have taken advantage of them and, by and large, small peasants have not benefited from them.
The Structure of LDBs:The long term finance structure consists of the central land development banks (generally one for each State) and primary land development banks. In some States, there are no primary land developments banks but in their place, there are branches of central land development banks.
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Problems of LDBs:Land development banking is yet to take strong roots in India barring few States. However, LDBs have contributed in large measure to agricultural development by lending specially for minor irrigation. All their loans are for productive purposes benefiting mostly the small farm holders. Though land development banking has made considerable progress in recent years, it has not really contributed much to the improvement of the financial position of the farmers. A large number of factors are responsible for the relative ineffectiveness of LDBs.
Over dues Problems:Mounting overdue in most of the LDBs have crippled the structure badly, in recent years. Overdue at the level of primary land development banks have been put between 42 to 44 percent. Overdue have caused innumerable financial problems besides limiting the capacity of LDBs to lend and operate as viable units. The financial discipline imposed on the banks in the matter of eligibility to undertake fresh lending based on recovery performance has been the main limiting factor quantitative growth of finance operations. To some extent, the banks themselves are to be blamed for this predicament due to faulty loaning policies, inadequate supervision, over-utilization of loans, ineffective measures for recovery etc. Which have contributed to the deterioration in recovering the loans?
Commercial Banks
The commercial banks in India have long confined their operations to urban areas, receiving deposits from the urban public and financing trade and industry in urban public and financing trade and industry in urban areas. Commercial banks are extending financial support to agriculture both directly and indirectly direct finance is extended for agricultural operations for short and medium period. Indirect finance to farmers is made through providing advances for the distribution of fertilizers, other inputs, etc, and also through financing primary agricultural finance societies. Financing of investment in agriculture is a major aspect of the farm finance activities of banks Finance needs of service units providing services for warehousing, processing, marketing, transporting, and repairing of tractors etc.
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Direct Finance by Commercial Banks:At the time of bank nationalization, it was clearly conceded that the commercial banks did not have the necessary experience or the personnel to deal with the farmers directly. While the co-operative had been specializing in rural finance since the beginning of the century. Even then the nationalized banks were expected to go vigorously in the support of the farmers in general and the small cultivators in particular. In the initial stages, for obvious reasons the nationalized banks concentrated their attention on large cultivators and other special category farmers such as those engaged in raising high-yielding varieties of food-grains. At present short term crop loans accounted for nearly 40 to 45% of the total loans disbursed by the commercial banks to the farmers. Term loans for varying periods for purchasing pump-sets, tractors and other agricultural machinery, for construction of wells and tube-wells, for the development of fruit and garden crops, or leveling and development of land, etc. are provided. These term loans accounted for about 35 to 37% of the total loans disbursed by commercial banks. Finally, commercial banks extend loans for such activities such as dairying, poultry farming, piggery, bee keeping, fisheries and others these loans account for 15 to16%. Region wise, southern region accounts for the bulk of finance disbursed by commercial banks viz. 52% of the total finance extended.
Indirect Finance by Commercial Banks:

Even though the scope for direct financing by commercial banks would be limited for some years to come, there is a considerable scope for indirect financing by commercial banks. For instance, commercial banks are financing co-operative societies to enable them to expand their production finance to the farmers. More especially they increasingly finance co-
operatives engaged in marketing and processing of agricultural produce or in the activities ancillary to agriculture such as dairy farming, poultry farming, etc. In this connection, the Stated Bank of India and its subsidiaries are already playing an active role in financing coANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}
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operative marketing and processing. Commercial banks are providing indirect finance for the distribution of fertilizers and other inputs. Commercial banks extend finance to manufacturing or distribution firms and agencies and cooperatives engaged in the supply of pump-sets and other agricultural machinery on the hirepurchase basis. They finance the operations of the Food Corporation of India, the state governments and others in the procurement, storage and distribution of food grains. Finally, commercial banks increasingly subscribe to the debentures of the central land development banks and also extend advances to the latter. This enables land development banks to expand their medium and long-term advances to farmers for the purpose of land improvement and land development.
Commercial Banks & Small Farmers:

It has been estimated that nearly 70 percent of farmers owning less than 2 hectares of land are not getting bank finance; only large landowners have been found finance worthy and suitable for banks advances. But such a situation cannot continue for long. Under the direction of the Planning Commission, Small farmers Development Agencies have been set up to identify small farmers and work out economically viable schemes of agricultural development. Commercial banks have to group them into various categories for finance support so as to enable them to become viable cultivators. For instance, in areas where the subsoil water table is high, the small cultivator has to be helped by banks to convert his dry holding into wet holding. With pump set loan, the cultivator can change the cropping pattern into double or even multiple cropping activity. As regards small cultivators near urban areas and with irrigation facilities, commercial banks can help them to go in for poultry farming and maintaining one or two vegetable cultivation or combine it with small milch cattle.
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Problems of Commercial Banks in Agricultural Finance: The finance needs of the agricultural sector in the next few years are estimated to rise to Rs.50, 000 to Rs.60, 000 crores. To meet the needs is an enormous task, and responsibility will have to be borne by co-operatives and commercial banks. As resources available to
commercial banks in the agricultural sector will naturally be limited, it is important that every commercial bank attempts to make optimum use of its limited resources in this sector. In the field of financing of agriculture, the problem is not merely quantitative but also of coverage vis--vis the organization and the personnel available to the nationalized banks. The majority of the rural population consists of small farmers. Further, there are 5, 50,000 villages spread throughout the country. To reach all of them with only about 47,000 banking offices is, no doubt, a stupendous task. Even with the completion of branch extension programmes of the commercial banks now in hand or those which may be undertaken during the next 5 to 10 years, commercial bank may not be in a position to cover many of the villages. Moreover in recent years, the rural branches of commercial banks in general and branches of RRB in particular, have been under severe financial strain on account of higher transaction cost involved in handling of large number of small size loan accounts and somewhat lower interest income as a result of concessional rate of interest on small size loans. The lower proportion of current deposits in total deposits of rural branches has also placed them at a disadvantage with regards to cost of resources. Finally, the presence of overdue, particularly after the implementation of Agricultural and Rural Finance Debt Relief Schemes, 1990 has further adversely affected the viability of rural branches of commercial banks. Under these conditions, if the development of agriculture is not to suffer for want of finance and if there has to be some improvement in the lot of innumerable small farmers, new dimensions will have to be given to schemes of financing agriculture.
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Regional Rural Banks:

These banks were first set up in 1975 specifically to give direct loans and advances to small and marginal farmers, agricultural labourers, rural artisans and other of small means. The loans are given for productive purposes. There were 196 RRBs which have been lending around Rs. 3600 crores annually by way of loans to rural people. Over 90 percent of the loans of RPBs are given to the weaker sections in rural areas. The regional banks, though basically scheduled commercial banks, differ from the latter in certain respects: The area of regional rural banks is limited to a specified region comprising one or more districts of a State. The regional rural banks grant direct loans and advances only to small and marginal farmers, rural artisans and agricultural labourers and other of small means for productive purposes. The lending rates of the regional rural banks should not be higher than the prevailing lending rates of co-operatives societies in any particular State. The sponsoring banks and the Reserve Bank of India provide many subsidies and concessions to RRBs to enable the latter to function effectively
Concessions to RRBs:
From the beginning, the sponsor banks have continued to provide managerial and financial assistance to RRBs and also other concessions such as lower rate of interest on the latters borrowing from sponsor banks. Further, the cost of staff deputed to RRBs and training expenses of RRB staff are borne by the sponsor banks. The Reserve Bank of India has been granting many concessions to RRBs.
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Progress of RRBs:
There are now 196 regional rural banks in 23 States with 14,500 branches. As at the end of September 1990 the regional rural banks had advanced Rs.3,560 crores by way of short-term crop loans, term loans for agricultural activities, for rural artisans, village and cottage industries, retail trade and self employed, consumption loans etc. Nearly 90 percent of the loans of RRBs were provided to the weaker sections. State wise Uttar Pradesh found large number of offices.
Objectives of RRBs:
A. RRBs had followed instructions given by RBI and Government of India regarding loan policies, procedures, etc. B. The basic aim of setting up RRBs viz, developing the rural economy by providing finance for the development of agriculture, trade, commerce industry and other productive activities in rural areas, was being fulfilled and C. RRBs had successfully maintained their image as a small mans bank by confining their finance facilities to the target groups viz, small marginal farmers, agricultural labourers, artisans and small enterprises for productive activities. D. The recovery position on the whole was not satisfactory.
Problems in functioning of RRBs:

A. On account of the many restrictions place on the business they can undertake, RRBs have low earning capacity. B. The wage and salary scales of RRBs have been rising and, in fact, with the recent award of a tribunal, their scales would approximate those of commercial banks; with the increase in salary scales, an important rationale for the setting up of RRBs has ceased to exist. C. The sponsoring banks are also running their own rural branches in the very area of operations of the RRBs; this has given rise to certain anomalies and to avoidable expenditure on controls and administration.
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Reserve Bank of India :

RBI had shown keen interest in agricultural finance and maintained a separate department for this purpose. RBI extended short-term seasonal finance as well as medium-term and longterm finance to agriculture through State level co-operative banks and land developments banks. RBI had also set up the Agricultural Refinance Development Corporation (ARDC) to provide refinance support to the banks to promote programmes of agricultural development, particularly those requiring term finance. With the widening of the role of bank finance from agricultural development to rural development the Government propo9sed to have a more broad-based organization at the apex level to extend support and give guidance to finance institutions in matter relating to the formulation and implementation of rural development programmes. A National Bank for Agriculture and Rural Development (NABARD) or National Bank was, therefore, set up to take over the agricultural finance functions of RBI on the on hand and the refinance functions of ARDC on the other.
NABARD: An OverviewA. NABARD is an apex institution affianced with all matters concerning policy, planning and operations in the field of finance for agriculture and other economic activities in rural areas. B. NABARD operates throughout the country through its Head Office at Mumbai, 25 Regional Offices and on Sub-Office, located in the capitals of all the states/union territories. It also has 4 training establishments. It is an apex refinancing agency for the institutions providing investment and production finance for promoting the various developmental activities in rural areas. It takes measures towards institution building for improving absorptive capacity of the finance delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of finance institution, training of personnel, etc. It co-ordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments,
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Reserve Bank of India and other national level institutions concerned with policy formulation. It prepares, on annual basis, rural finance plans for all districts in the country; these plans form the base for annual finance plans of all rural financial institutions It undertakes monitoring and evaluation of projects refinanced by it.
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CHALLENGES OF RURAL FINANCE

CHALLENGES IN RURAL FINANCE Twelve Key Challenges in Rural Finance
Rural finance has been recognized as an important element and catalyst to rural development. Millions of dollars have poured into rural finance, especially agricultural finance, in the past and yet rural communities have little to show for it. Donors, governments and bankers became disillusioned with the results. Today there is renewed interest in learning from the past and experiment for the future to meet the seemingly illusive goal of increasing rural farm and non-farm investment and assets through the ready access to appropriate and sustainable financial services by all households. In addition, rural finance has begun to be seen in a
broader spectrum than just agricultural and farm finance alone, but is rightly now being defined as farm finance and non-farm finance, savings, insurance, transfers, clearing, equity finance, and other services, and is not restricted to institutional lines of finance.Twelve key challenges for achieving this goal are laid out below, as foreseen by rural finance specialists. While these are recognized obstacles to overcome, are they the most important questions? What are the root causes and with which ones can we have the most impact? What is missing? What is not important? Should the focus be more on adapting products to fit the constraints or on addressing the constraints? How must the responses to the key issues fit together in order to be effective.
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Key challenges for rural financial service provision Vulnerability Constraints

1. Systemic Riskrural incomes, especially among the agriculturalists, are highly susceptible to similar risks at the same time. Weather is the most uncontrollable and often devastating risk but disease and plagues are similarly important. Failures in agriculture affect not only the farmer households and the production and marketing linkages but also the rural non-farm economies that revolve around and depend upon those income flows. The most problematic by far is farm finance because of higher risk. 2. Market Riskespecially in developing countries, there both cyclical and seasonal price fluctuations of agricultural commodities, not only due to local production variation but also affected by outside forces such as political price and exchange controls, subsidies and globalization. 3. Finance Riskcollateral, especially mortgage, is a missing element in most rural finance, thus increasing the risk of the lender. Similarly, collateral substitutes may be costly in both financial terms as well as social stigma risk terms as can be the case with peer lending. Other support services and information networks such as finance bureaus are often not available to help lower the risk. For term lending, a financial gap risk between sources and uses of funds poses another risk constraint. 4. Investment Returns rural capital revolves slowly, with often one or less frequently two crops per year. For investment capital, the returns are even lower and in spite of that are often faced with very low profit margins. Hence the margins for error are much less than for example in commerce or most microfinance, which tend to have high returns per unit of funds invested and higher profit levels.
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5. Low Investment and Assets the relative poverty in rural areas causes common crises to become major crises due to the lack of asset cushion. Any loss of expected income through sickness or production losses cause significant impact. In compensation, traditional networks and production risk minimization become more important than profit maximization. The small asset base also reduces savings and borrowing capacity, thus constraining economies of scale in the use or provision of services. 6. Geographical Dispersion rural areas in many countries are characterized by a low population density and high dispersion, which is coupled with a relatively low market potential. The low market potential is usually accompanied by poor services, making access and communication difficult, and hence causes high operating costs for both production and marketing, as well as for access and delivery of services. 7. Infrastructural Capacity poor communication, pitiful roads, unequipped schools and missing social and health services decrease efficiency of operations, discourage new services and increase the outflow of the most talented and resourceful persons and a reluctance of educated families to live in rural communities. 8. Technical Capacity and Training a relatively unskilled rural population reduces opportunity for ready access and adaptation to new technologies and employment. The lack of capacity affects not only the productivity and competitiveness in the changing marketplace, but also the ability to find trained staff for service provision. 9. Social Exclusion cultural, linguistic, gender, racial, religious and educational constraints affect market and financial integration. Such barriers reduce production and marketing efficiencies. These are required in order to compete effectively in the marketplace and thereby generate income and levels of assets needed to reduce poverty and vulnerability. HIV/AIDS makes this even worse in many countries.
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10.Institutional Capacity while there is an abundance of organizations in rural areas, the relative capacity is lacking. This includes management and technical capacity, size/economies of scale, competitive viability, economic integration and often risk-bearing capacity. Even when urban based institutions have the capacity to reach into rural areas, there is little incentive to do so. An exception to the capacity constraint is at the micro level where the social fabric is often strong. It can be sufficient for the low level of operations typically undertaken. With sufficient organization and experience, these groups may also form linkages with intermediaries of higher institutional capacity. 11.Political and Social Interference loans can be forgiven, savings can be withheld, interest rates can be capped, mortgages can be rendered useless and payments can be suspended due to decree. Even danger is not uncommon; hence uncertainty can become an insurmountable hurdle. 12.Regulatory regulations and/or a lack of enforcement of them hinder rural as well as urban environments. Land tenure regulations, banking laws, exchange rate manipulation and tax considerations are examples of such constraints that destabilize and/or hinder viability of business and financial operations in rural areas.
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Agriculture and its associated activities are found constituting the economic base and the main source of livelihood and employment for the people in the state. However, unprecedented growth of population on one hand and decreasing rate of available agriculture land along with degradation of supporting natural resources as required for sustaining crop productivity on the other have been seriously forcing the problems of sustaining livelihood for farming communities. It is becoming difficult to do the farming activity without external or internal sources. In this context the significance of extending finance to non-farm sector becomes only alternative but it also required finance assistance for its development. Means a lot of hard work & government awareness is required to flow the finance assistance in Rural Economy. But various schemes which are provided by the various banks & government should be specific in its eligibility criteria to stop the misuse of these funds by large farmers and to ensure that the finance reaches the farmers who are in need of finance.
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ANNEXURE QUESTIONARE
1) 2) 3) 4) 5) 6) 7) 8) 9) NAME OF THE BANK:SBI BANK. How much loan is provided by the bank? What is the rate of interest charged? Do you have any branches in rural areas? What are the various services provided by your bank? What are the various schemes provided by the bank to the rural poor? What are the penalty charged by the bank, if the loan is not repaid on time? What are the terms&conditions for accessingrural finance? Do you provide any specialschemes to rural poor?
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After the observation following suggestions can be made
Interest rates: Interest rates must be different for different categories. First it should be
concessional rate exclusively for small and marginal farmers at 1.5% to 11.5% &Secondly, there should be a higher rate of interest applicable to the rest of the agricultural borrowers upper limit for it is15.5%
Infrastructure Development: tempo of agricultural lending has been low in the eastern
regional states like Bihar, Orissa and West Bengal & in the North Eastern States. So Agricultural and Rural Infrastructure Development Corporation should be setup in these areas which will concentrate on building up necessary backward and forward linkages and supporting services as well as formulate location specific schemes for accelerating the transformation of agriculture and to arrange for funding of the schemes.
Insurance scheme:Crop insurance scheme which was introduced in India from Kharif 1985
covering major cereal crops, oilseeds and pulses. The sum insured was limited to Rs.10, 000 per farmer irrespective of quantum of crop loan and the total sum insured would be limited to 100 percent of the crop loan disbursed. Proper research should be done by statutory crop Insurance Corporation.
Rationalization:In present scenario each village is allotted to a commercial bank branch

under the Service Area approach. As per the analysis each block should be allotted to a bank which has the largest presence in the block through its branches. Which will reduce the cost of supervision, improve quality of monitoring and be beneficial to the customers
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BIBLIOGRAPHY
Sr.No. 1. Name Indian Economy Author RuddarDatt. K.P.M. Sundharam. 2. State journals 3. Agricultural Financing In India 4. Economic Survey, 199899. Monthly Review of the Indian Economy, CMIE, March-April 1999 S.N.Ghosal Bank of India
5.
Rural Marketing
Romeo S. Mascarenhas
WE BIBLIOGRAPHY
www.nabard.org www.rbi.gov www.sbi.co.in
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A PROJECT REPORT ON

need of Customer Relationship Management in Real Estate In Ahmedabad

RURAL FINANCE (2013)

THE ANNAMALAI UNIVERSITY OF CHENNAI IN THE PARTIAL FULFILMENT OF THE REQUIREMENT

THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION (MBA) (2012-2013)

RESEARCH GUIDE Mr. AJAY SHAD

RESEARCHER VIMALKUMAR RAMANI

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

CERTIFICATE NIS ACADEMY (MBA)

DIRECTOR AJAY SHAD

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

Meaning of an Underdeveloped Economy:

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

SECONDARY DATA PURPOSE OF THE STUDY

OBJECTIVES OF THE STUDY

RURAL FINANCE (2013)

Characteristics of the Indian Economy as an Underdeveloped Economy:

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

D. Heavy Population pressure:

E. Prevalence of chronic unemployment and underemployment:

F. Low rate of capital formation:

RURAL FINANCE (2013)

INDIAN ECONOMIC SCENARIO

Natural Resources In Process Of Economic Development In Rural India:

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

Land utilization pattern, 2004-05 (million hectares)

RURAL FINANCE (2013)

Infrastructure In Process Of Economic Development In Rural India:

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

Modes of transport & communication facilities: Indian Railways:

Roads & Road Transport:

Inland water transport:

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

Rural Market Contribution In Total Indian Economy

Distribution of rural households by their profession or business activity

Percentage of Households 72 15 11 2 100

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)

ANNAMALAI UNIVERSITY {NIS ACADEMY AHMEDABAD}

RURAL FINANCE (2013)