Publication

This paper discusses the provision of formal financial services in rural India and the government-owned institutions that deliver them. It explores whether there is tension between coverage of poorer clients in remote areas and financial viability. The author suggests that there is no binding tension between the two and that there has been some growth in the average size of the account. However, regional rural banks (RRBs) remain geared to small clients. It argues that, overall, the crucial ingredient is the quality of the branch management and that profitability is strongly correlated with proactive and well-judged management.