Question

what steps have been taken by the government to improve the rural credit system

Answer 1

The strategy devised by the government for the purpose of improving rural credit system rests on three pillars;
expansion of the institutional structure directed lending to disadvantaged borrowers and sectors and lower interest rates.The chosen institutional vehicles for the task were cooperatives, commercial banks and Regional Rural Banks [RRBs] the emphasis was on the promotion of cooperatives, followed by a concerted push by commercial banks during the post nationalisation period to establish branches in the rural areas and the creation of new institutional structures evolution of Lead Bank Scheme and area approach, enunciation of concept of targets for priority sector
and weaker section lending and special credit subsidy programmes for the poorer sections of rural and urban areasa policy of cross subsidisation and refinance from the RBI and later NABARD was put in place simultaneously.