The government is keen to carry the benefits of several welfare programs for the rural people. From ages, the government agencies have been doing the task, and there are complaints of huge corruption and scams. Statistics revealed that out of each rupee dedicated to the rural people, hardly 10 percent used to reach to the real beneficiaries. Since no effective network of banks was there, the government didnt have any other choice. However, the situation has changed dramatically in last two decades, and now the benefits of the schemes get credited to the bank account using the network of banking services in rural India.
The corruption and leakage of money stopped due to the new mechanism, and people are saved from moneylenders, bribes, and bureaucracy. The programs intended to change the lives of the rural people are succeeding in doing so.
There are still many challenges to overcome
Undoubtedly, there is a drastic change in the scenario but looking at the vastness and magnitude of our country there are still a lot of things to do.
The biggest challenge is to win the confidence of rural people. They have a misconception that there is a pocketful of money required to open the bank account. Also, sometimes villagers think that the money in their bank account will be taken by the government without informing them. Of course, these rumors or incorrect assumptions wont do any good. Awareness and counseling are the only ways of convincing people.
Some private banks (or even co-operative banks as well) insist opening accounts with a handsome money, which is a big issue for the majority of rural people. The government should keep a close eye on it and put controls on the same.
Since the transaction costs carrying to the rural areas are higher than the urban areas, private banks avoid taking the responsibility. It is important that the government looks into the fact and reimburse a part of the transaction charges to make it economically viable.
Customer education is another big issue. Since the literacy rate and awareness are low in the interior parts of the country, the customers need to be educated about the basics of bank transactions. People scare by the sight of bank officials. They think that the government officials will charge money for it. Convincing them about the government plans is a big issue.
With the course of time, the situation will improve. The rural banking sector will flourish and add a great value to the countrys economy.

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