India being predominantly an agriculture economy whose two-third population resides in the rural area needed some reform for the rural population for the Indian economy to grow. In pre-independent India, cooperatives were among the major institutions providing finance to the rural population, as there were few rural branches of Commercial Banks. The All India Rural Credit Survey Committee in 1952 observed that a large share of the credit requirements of rural households particularly the poor, came from traditional sources such as relatives, traders, landlords and moneylenders (NABARD). It was felt that credit need of the rural sector can not be met by the cooperatives alone, there was a wave of nationalization of banks and priority sector lending by scheduled commercial banks. It called for financial inclusion for which a committee was set up. Although, the multi-agency approach was adopted for enhancing rural credit, the Banking Commission in the year 1972, observed that despite the massive expansion of branch network of commercial banks in the rural