An Evaluation of the Performance of Institutional Credit Agencies in Karnataka

42 Pages Posted: 4 Feb 2008

Date Written: February 2, 2008


Credit is considered as essential lubricant to grease the production channels of agriculture, industry and services to stimulate their smooth operation. Credit has been part of human existence from time immemorial. The level of Sophistication and progress in utilizing and controlling credit has improved along with the improvement in Civilization. Credit is regarded as life blood of commerce. credit planning and management, performance has become very important in the modern world. Credit now is an integral part of the developing as well as developed economies.

The underdeveloped economies along with many scarcity also lack capital, the capital formulation is less because of low rate of saving and investment. Ragnar Nurkse points to the vicious circle of underdevelopment equilibrium operating in underdeveloped countries in which low income leads to low saving which means low investment and then low income. If the vicious circle has to be broke if involves intervention by the state in the process of economic development.

The Government of India nationalized 14 major Indian banks in the private sector having deposits of Rs. 50 crores and over each as on the last Friday on June 1969 with effect from 19th July 1969. By nationalizing the major banks, the Government secured control over what Mrs. Indira Gandhi described as "the commanding heights of economy". The government of India nationalized six more banks in 1980.

But unfortunately in India despite knowing the importance of domestic credit, the domestic credit as a percentage to its GDP is very less. The domestic credit in India, when compared to the developed economies or the even to the East Asian Economies is very less. The bank credit in India as percentage to GDP was 47% at end of March 2006 and it was 51% by end of March 2007.

The paper evaluates the performance of instituional credit agencies in karnataka

Keywords: Evaluation, RBI, Institutional Credit Agencies, Commercial Banks, RRBs, India, Karnataka

Suggested Citation

Keshava, Shanthappa Rathnamma, An Evaluation of the Performance of Institutional Credit Agencies in Karnataka (February 2, 2008). Available at SSRN: or

Shanthappa Rathnamma Keshava (Contact Author)

Bangalore University ( email )

Bangalore, Karnataka 560056
+91-0-9480 584 544 (Phone)

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