Comprehensive Rural Development Through Credit

Deposit Mobilisation by ARDBs

The programme for Deposit mobilization by ARDBs (then LDBs) in the past did not make much headway because of the many restrictive provisions in the scheme prescribed by Reserve Bank of India in 1972. NABARD has recently constituted a working group under the Chairmanship of Dr. M.C.Bhandari, Executive Director of NABARD, to recommend suitable scheme for mobilizing Deposits by ARDBs successfully. On the basis of the recommendations of this working group, the ARDBs are allowed to mobilize deposits at the rate of interest determined by themselves without any reference to the rates offered by State/Central Cooperative Banks. The Central Government has also exempted the deposit collected by ARDBs from deducting the Income Tax at source.

The proposal of this Bank to launch a Deposit mobilization scheme in line with the above guideline of NABARD is yet to be cleared by State Government, as it holds a view that sufficient fund were already available and no necessity to raise funds through Deposit mobilization by ARDBs in the State. More than twelve State SCARDBs in the country are now implementing the Deposit Mobilization Programme as per the guideline issued by NABARD. At the national level it is advised to go aggressively in mobilizing Deposits and should implement separate lending programmes mainly to cater the short-term consumption/personal credit needs of ARDB borrowers.

The mobilization of Deposits by moping up the rural savings will be the best means of augmenting the resource base of ARDBs in the State. In spite of high density of Bank branches and better Deposit mobilization programmes by ST Credit structure in the State; it is estimated that only about 50% of the rural savings potential could be tapped so far.