Banks record in the matter of deposit mobilisation has been fairly impressive. A number of innovative schemes for attracting deposits has been introduced. Banks personnel have caught the message correctly in this respect. All this is very well, but is certainly not adequate. If the banks have to discharge their social responsibility adequately, they should be as aggressive towards credit extension as towards deposit mobilisation. And it is not indiscriminate lending that is called for but lending with a social purpose to enable all productive endeavours to get going and become viable.
It is possible to have more than one interpretation of the term social responsibility of banks. Let me first refer to one interpretation which seems to be quite fashionable with the traditional bankers. It is said that "the paramount social objective of banks is to protect the interests of the depositor". To my mind this is a very narrow way of looking at such a comprehensive concept as the social responsibility of banks. Of course, the banks are the trustees of the depositors' savings and they have to do everything to justify the trust reposed in them, but there ought to be some difference between cold iron safe and a banking institution charged with social responsibility. A strong iron safe is a useful piece in the sense that the contents inside it are well protected against fire and burglary, but that is not certainly the concept of a bank. It must make sure that the deposits entrusted to it are used more productively than would have been the case if they were still with the saver. A bank is thus a bridge between the saver and the investor and to be a useful bridge it must be easily accessible to both.
The "social responsibility" of banks can only be defined in terms of the tasks that the banks are assigned to do in relation to national programmes and priorities. Currently, we are passing through a challenging phase of development. The main accent of our economic policy is on developing the economy along lines that will make the life richer and better not only for a few but for all. Unless we can show positive results in terms of the upliftment of a vast majority of the poor in this country, the word 'development' would begin to lose its meaning. In this national endeavour, the banks have been assigned a definite role and one would judge their performance not in terms of the profitability rate but the terms of the positive contribution that they may make by providing funds and other advice to the unemployed for starting a small business, to the struggling farmer badly in need of fertilizers or improved quality seeds, to the young, brilliant electronic engineer bubbling with ideas but lacking in funds and to several others whom the lack of funds constitutes the thin line between success and ruin.