Credit availability in the rural areas of India becomes a prime focus when around 2/3rd of the population lives there. Since its establishment, Regional Rural Banks (RRBs) have functioned as an essential channel of making credit accessible to the weaker sections of society, such as marginal farmers and small craftsmen, who were previously exploited at the hands of moneylenders. This paper seeks to analyse two key determinants of the deposits of RRBs, which are, first, the number of RRB branches and, secondly, the per capita income of the population of a state. Through a cross-sectional regression analysis for the year 2023, the study finds that both the explanatory variables exhibit a significant impact on the mobilisation of deposits in the RRBs, with the number of branches having a dominant role. These results have key importance from a policy perspective. The government can achieve the twin objectives of bolstering financial literacy and minimising the leakages in the Cash-transfer schemes of any rural region by opening up more RRB branches, which will simultaneously increase the deposits in the RRBs. Further, if the government aims to achieve a higher savings rate in the economy, then one avenue for it will be to invest in MSMEs, rural industries, etc., which shall increase the per capita income, and subsequently, the deposits in the banks..
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