BANKING SECTOR REFORMS AND EQUITY – A SUB-REGIONAL ANALYSIS IN ANDHRA PRADESH

The changes in government policies are continuous to correct the ill effects of its
earlier policies. In this study an attempt is made to examine the equity aspect due to
reforms in the banking sector at sub-regional level in the state of Andhra Pradesh
covering the period 1985 to 2004. The analysis indicates that the share of rural areas
in number of branches, number of accounts, deposits and credit declined during pre
and post liberalisation periods. Despite declining shares in most of the parameters
especially those of credit and deposits, there is positive growth in both the periods.
However, the growth of these parameters is more in urban areas. The distribution of
credit among the sectors indicates that the share of agricultural sector in accounts
and credit declined during pre and post liberalisation periods. The share of agricultural
credit declined in all the regions during pre and post liberalisation periods. This is
true with respect to credit and number of credit accounts. In the case of other sectors,
the share in accounts and credit increased in both the periods. Though, the share in
the agriculture sector declined in all the regions, per account credit increased in all
the regions during both the periods. It may be concluded that liberalisation has
increased inequalities. But the rate of increase in inequalities is arrested to a certain
extent in the recent past. But if one looks at the growth of credit given to different
sectors and growth of credit in rural and urban areas, one may not come to this kind
of conclusion.