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Journal of Indian Institute of Management Bangalore

IIM Bangalore offers Degree-Granting Programmes, a Diploma Programme, Certificate Programmes and Executive Education Programmes and specialised courses in areas such as entrepreneurship and public policy.

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About IIMB

The Indian Institute of Management Bangalore (IIMB) believes in building leaders through holistic, transformative and innovative education

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Review of Local Area Banks and Policy Implications for Narrow Banks in India

Local Area Bank

Author(s) Name: M S Sriram and Aparna Krishna

Journal Name : Economic and Political Weekly

Volume : Vol. L, No. 11, March 2015, Pg: 52-60

Year of Publication : 2015

Abstract :n the recent past there has been renewed discussion on the possibility of setting up narrow banks to focus on including the population left out of the formal financial sector. Reviewing the experience of local area banks and the landscape of financial inclusion, this paper identifies internal contradictions in the approach to narrow banks -- primary objectives, structures, limitation of size and geography, mainstream banking standards, evaluation of performance. Despite these issues, the existing banks are indeed performing (under severe constraints), and do not give cause for anxiety on solvency and stability.