The RBI monthly bulletin has shown a new development in the banking sector. In a development which shows expansion of agriculture credit, the monthly bulletin shows that the number of small loan accounts held with nationalised and cooperatives banks have significantly risen during last few years. According to the bulletin, the share of number of small loan accounts in the agriculture credit sector increased by 17% from 35.5% in 2004 out of the total small accounts to 41.8% in 2006.

However, another trend shown by the bulletin is not very good news for the banks. Whereas the agriculture credit is expanding, the domain of personal loans is shrinking. During the same period of the increase in agriculture credit, the share of small personal loan accounts went down from 41.8% to 35.5%. But the share of small borrowers in the banking sector continues to go down with their share of accounts dropping down from 96.4% in March 2001 to 90.3% in March 2006 and their share of the total loan volumes shrinking from 19.7% to 16.4% during the period.

These new developments have been showcased in the Survey of Small Borrowal Accounts, which was conducted by RBI recently. It had covered 33.8% of the 7.71 crore small borrower accounts with credit limits of Rs 2 lakh. The survey also brings to light that though the share of small borrowers continues to decline, the share of agriculture loans in the total small loans went up substantially from 33.4% to 41.2% an increase of 8.8 percentage points just over in two years. However, the share of the amount outstanding against agriculture loans only went up 2 percent from 29.1% to 31.1% during the period.