Explain about rural credit and urban credit
Answers
What is Rural Credit in India?
Rural economy growth generally depends on the funds, from one interval to another interval, to understand high-rise productivity in non-agriculture and agriculture areas. The interval gap from sowing the seed to the understanding of post-production revenue is comparatively long, the farmers lend money from different fronts to match the primary investment on fertilizers, seeds, tools, and other personal expenses.
Post-independence, traders and moneylenders took advantages of poor peasants and landless workers by lending money to them on huge-interest rates and also influencing their accounts and trap them.
What is Urban Credit in India?
In Maharashtra State, only those urban credit societies can be called as ‘banks’ which conduct banking business in accordance with Sec. 277F of the Indian Companies Act, 1913 or Sec. 5(b) of the Banking Regulation Act, 1949 and should have a paid-up share capital exceeding Rs. 20,000.
Urban co-operative banks are confined to the municipal area of a town. They are of types: (i) unit banking type, and (ii) branch banking type.
Urban co-operative banks usually meet the needs of specific types or groups of members pertaining to a certain trade, profession, community or even locality.
Urban Co-operative Banks are also called Primary Co-operative Banks (PCBs) by the Reserve Bank. The Reserve Bank of India defines PCBs as ‘small-sized co-operatively organised banking units which operate in metropolitan, urban and semi-urban centres to cater mainly to the needs of small borrowers, viz., owners of small scale industrial units, retail traders, professionals and salaried classes’.