Question
State any three main drawbacks of rural banking.

Answer

The main drawbacks of rural banking are:
  • With the exception of commercial banks, other formal institutions of rural banking sector have not been able to develop a culture of deposit mobilisation.
  • On the top of it the loan default rates in the rural areas have been chronically very high.
  • Lack of a desired rapport between rural banking and the borrowers in these areas has been found.

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