Impact of Technology in Rural Banking

In the world of banking and finance nothing stands still. The biggest change of all is in the, scope of the business of banking. Banking in its traditional from is concerned with the acceptance of deposits from the customers, the lending of surplus of deposited money to suitable customers who wish to borrow and transmission of funds. Apart from traditional business, banks now a days provide a wide range of services to satisfy the financial and non financial needs of all types of customers from the smallest account holder to the largest company and in some cases of non customers. The urban banks are far ahead with the technology. In rural banks changes are happening but not as fast in urban areas. The range of services offered differs from bank to bank depending mainly on the type and size of the bank.

Historically, rural markets have been less competitive for the financial services industry, if simply because lower population density and higher transportation costs have discouraged infiltration. That's changed, of course. By lowering transaction costs and allowing complex human interaction independent of distance, the information revolution offers the possibility to enhance competition in rural areas. Private sector Banks also realized the potential in rural market. In the early 2000's ICICI bank began setting up internet kiosks in rural Tamilnadu along with ATM machines.

Now What are rural banks doing about it? The range of [rural] institutions involved is likely to be different, often narrower than that serving urban communities, and competition for rural loans is often not as keen as it is for urban loans. The structure of non metro financial service markets and the way in which they operate remain remarkably similar to the structure and processes in place half a century ago. But the rural are not lagging behind more metropolitan areas in its adoption of PC and Internet use. Current market conditions suggest that the percentage of households and farmers "wired" and able to access financial services electronically is poised to grow rapidly. Now the common man can use ATMs and enjoy the benefits of e-banking.

Technology has been one of the most important factors for the development of mankind. Information and communication technology is the major advent in the field of technology which is used for access, process, storage and dissemination of information electronically. Growth in Banking industry is fast with the use of technology in the from of ATMs, on-line banking, Telephone banking, Mobile banking etc., plastic card is one of the banking products that cater to the needs of retail segment has seen its number grow in geometric progression in recent years. This growth has been strongly supported by the development of in the field of technology, without which this could not have been possible of course it will change our lifestyle in coming years.