The role of commercial banks in the development of rural Bangladesh [গ্রামীন উন্নয়নে ব্যাংকের ভূমিকা]

Although, our economy is mainly agricultural, banks play an important role in the development of our rural areas. The rural branches of banks provide various services to farmers, rural farmers, businessman and disadvantaged groups and help them to develop themselves thereby.

♦ Our banking sector consist of three kinds of banks. Such as state owned commercial banks, private commercial banks, and foreign private commercial banks. Among them nationalized commercial banks and some other private banks and more particularly some specialized banks are in operative rural areas. The foreign private banks are not interested to open their branches in rural areas.

♦ The role of bank in rural development is manifold. Banks are functional in the process of savings, capital formation, investment, production, in the rural economy.
♦ Banks motivate the people for savings through various programs and collect the dispersed savings of the people. Further, banks invests it in rural economy.

♦ Banks provide the rural small businessmen with loans from deposited money which plays a crucial role in the rural development. Specially, the micro-credit programs of different banks made the rural landless people bankable and provided them with required capital for businesses and other economic activities.

♦ Banks play a crucial role in rural capital formation. Banks collect the dispersed savings of the rural people through different deposit schemes. Then distribute loans to them for starting a productive as well as any other self sufficient economic activity.

♦ Commercial and specialized banks, specially state owned commercial banks distribute agricultural loans to rural people which make them able to invest in their firms and lands. As most of our farmers are poor they can not invest enough to increase the production. So bank loans help them to increase their production through proper irrigation, fertilization and so on.

♦ Banks play a crucial role in sustaining and developing our small and cottage industries. Because, most of our small and cottage industries are being closed due to lack of enough capital.

♦ Banks can provide our unemployed youths with training and loan to start business or to invest in a farm. Such training and income generating projects can make our youths self reliant, lessen the intricate problem of unemployment and improve the standard of living in our rural areas.

♦ Bank plays a crucial role in mentioning the disadvantaged groups in community under some special programs. Even through making the disadvantaged people economically self sufficient, banks play important role to empower them and lessen the social inequality thereby.

♦ Inspite of such prospects as discussed above, banks in our country are not effective enough in rural development. A number of causes are responsible for such failure among whom some notable causes are as under:

♦ There are some problems in bank management which disrupt  the very process of loan distribution as well as the collection. Hence, loans specially government loans are not being distributed through proper channel and manner.

♦ Our people are not oriented to savings and investment. They lacks motivation for savings and investment.
♦ The people can not utilize the distributed money or loan properly. Even banks also are not undertaking training programs to make them able to utilize the loan properly.

♦ People have to face serious complexities to get loans. Besides, people who get loans do not return in time.

♦ Inspite of some limitation, role of banks in rural development in our country is praiseworthy. Specially, the micro-credit program, primarily introduced by Grameen Bank, has become widespread and played a crucial role in the well being of rural poor. However, our government, private bank authorities should undertake more comprehensive programs for rural development.