Dr.Sougata Chakrabarti and Dr. Debdas Rakshit
Rural Co-operative Banks (RCBs) play a crucial role in day-to-day lives of rural population. Happenings in recent years have called to question the relevance and purpose of the RCBs. RCBs will face a far more competitive environment in the coming years relative to what was. The evolving regulatory and supervisory landscape emerging for cooperative banks, the developments in the rural business will also need to be factored in as RCBs set about readjust their survival plans. Rural people are finding difficulties in identifying suitable products from a large volume of information leads to an information asymmetry between the bank and the rural customer. In such a situation, financial education can greatly help the consumers to narrow this information divide. Financial literacy efforts involves educating them about the benefits of being part of the formal financial system and managing short term volatility in incomes and meeting unexpected emergencies without getting trapped in unnecessary debt. RCBs cannot move up to the next stage of banking unless all necessary safeguards have been validated by the regulators/supervisors. Regulators/supervisors have a key role in overseeing the RCBs’ transition to the next stage. RCBs have a critical role to play in ensuring that they are equipped with the necessary skills to deal with rapidly changing rural economic scenario.