Inter district and inter sectoral disparities in banking development in Kerala

Abstract

The reduction of glaring inter-regional and inter-sectoral imbalances m banking development had been one of the prime concerns of planners and policy makers in India. For this purpose a variety of policy measures were introduced by the Government of India and RBI since the nationalisation of 14 major commercial banks in 1969. This study was undertaken to examine the extent and pattern of inter-district and inter-sectoral disparities m banking development in all the eleven districts of Kerala existing in 1973. Data relating to the districts of Pathanamthitta, Wayanad and Kasargod which cane into existence after 1975 were allocated to those districts which covered these areas on a pro-rata basis. The study was primarily based on secondary data collected from the Basic Statistical Returns relating to banks published by the RBI. The study covered all scheduled commercial banks including Regional Rural Banks for the period from 1973 to 1988. The inter-temporal coefficient of variation and disparity ratio were worked out from the time series data to understand the trend in inter-district and inter-sectoral disparities during the study period. The computation of component scores from the ranks of each district during each year of the study period m respect of the diterminants helped to understand the relative position of each district in the selected indicators. The districts were classified according to percentage achievement of each district compared to the state mean with respect to each of the indicators m order to find out the extent of disparity for three selected years viz. 1573/ 1980 and 1988. The path correlation is computed to examine the relative role of the selected factors contributing to inter-district disparities. The coefficient of variation and disparity ratio m respect of all the indicators except credit-deposit ratio and per capita industrial advances exhibited a declining trend m inter-district and inter-sectoral disparities during the study period. In respect of these two indicators there was no clear trend. At the same time of the coefficient of variation and disparity ratio were significantly higher m respect of the indicators of inter sectoral disparities compared to the inter-district disparities. Among the determinants of inter-district disparities the highest coefficient of variation and disparity ratio were observed m the case of per capita credit. On the other hand the disparity was seen to be the lowest m credit-deposit ratio. At the same time, the per capita industrial advances showed the highest variation in respect of inter-sectoral disparities, while the other indicators exhibited more or less same pattern of variation.