There is another related matter which has been causing me some anxiety. We have been placing considerable emphasis on removal of regional imbalances in industrial growth and banks are being looked upon as instruments for correcting this imbalance. Unfortunately, growth and development of banking itself seem to show increasing regional imbalance. The performance in the eastern parts of the country has been particularly disappointing. It will be necessary to analyse closely the factors underlying the disparate performance of branch expansion, deposit mobilisation and bank transactions in the various States and to devise ways and means for correcting the imbalance speedily.

Lending activities too have to take on a new orientation. Many of you have drawn up schemes to help the weaker sections of society which have had little access so far to banking facilities. Advances to some of these sections such as agriculture, small-scale industry, road transport operators, and self-employed persons have continued to rise both in volume of outstandings and number of accounts. When we talk of priority sectors, the emphasis is on the needs of the common man, the man who is engaged, or is willing to be engaged, in a productive endeavour which is socially useful and economically viable, but is handicapped for lack of finance on reasonable terms. It is also an emphasis on the needs of the backward regions which are stagnating for lack of enter­prise and finance. It also brings into focus the needs, often inarti­culate, of sharecroppers in agriculture, of Adivasis in hills and forests, and those communities, spread all over the country, which have suffered long from the injustices of a caste-ridden society. In a sense, this is a question of attunement to a new concept of banking. One question which we must ask ourselves is whether we are mentally prepared to accept banks as instru­ments of social and economic change. It is my firm conviction that the banks have to perform a very basic task of giving a new orientation, a new social content and meaning to our programmes and policies. I am not inclined to accept that this necessarily in­volves undue risks or that all such financing is essentially un­economic.

In formulating his credit policy a banker has, no doubt, to ask himself certain important questions. For instance, does the lend­ing help to generate more productive and viable employment? Does it help to rectify regional imbalances? Does it help to give a sense of participation in development to the members of the classes which have so long been outside the pale of banking? In framing the terms and conditions of a loan, is the best mean being struck between the bank's conventional interests and the borrower's ability to comply? It is also very relevant to enquire whether the loan envisaged goes to further speculation in goods, commodities or shares, or help conspicuous consumption and add to inflationary pressures. The other relevant question is whether the loan is going to help a few in empire-building and their unscrupulous use of economic power for exploitation. I trust you would be able to evolve proper guidelines for lending which will be operationally workable and economically and socially justifiable.