Question

Why India has opted for multi-agency system of rural banking? ​

Answer 1

India has opted for multi agency system of rural banking because:

•Agriculture sector mainly depends on credit inputs these days.

•There has been tremendous increase in the bank branches in the rural areas.

•Govt. has adopted the policy of `multi-agency approach' in agricultural credit. •In order to reduce the competition amongst the commercial banks in the rural areas, a policy of "Service Area Approach" has been adopted since 1988.