Financial Management: A Predictor For Examining The Regional Rural Banks’s Performance

Abstract

A strong financial system is necessary for healthy and vibrant economy. It will result in achieving faster rate of economic growth. A banking sector constitute predominant element in financial services and performance of economy of any country. Therefore banking system occupies an important place in country’s economy. In a developing countries like India, where the propensity to consume is high and saving of people are low, banks play important role. Banks contributing attracting more deposits from the people and deploying these saving for various sectors in the economy. The purpose of the study is to examine the factors of financial management which determines the regional rural banks’ performance in lieu of the operational efficiency, capital adequacy, ratios, deposits etc. RRBs were setup in India for the purpose of taking banking service to the doorsteps of rural public, particularly in places without banking services The objectives of RRBs to develop the rural economy in providing for the purpose of development of agriculture, commerce, agriculture industry, small scale industries, cottage industries and other productive activities in the rural areas, credit and other facilities particularly to the small farmers, agricultural labour and small entrepreneur. For this study to explore the factors, factor analysis has been applied and finally explored five factors which are included in the financial management. To study the same, regional rural banks of M. P. have been selected and through self-structured questionnaire, data was collected from the bank officials.