A Study On Social Banking In India
- IJLLR Journal
- Mar 23
- 2 min read
Pratichi Jha, KIIT School of Law
ABSTRACT
Social banking in India reflects a voluntary reorientation of a commercial banking paradigm of profitability to an inclusive financial technology aimed at spreading social justice and economic equity. Based on the constitutional perspective of a welfare state, social banking aims to institutional credit infrequent and underserved groups in the society especially rural groups, small farmers, micro-entrepreneurs, women, and weak groups. This paper thoroughly reviews the development, legal networks, the institutional processes, and up-to-date significance of social banking in India.
The paper is a historical account of social banking that has evolved in the period of social control and bank nationalization up to the post-liberalization period defined by financial inclusion and digitalization. It examines the jurisprudential importance of historic constitutional events, especially of R.C. Cooper v. Union of India and the further constitutional changes which undermine the rights of individual property through the enlargement of social-economic goals. It underlines the contribution of Priority Sector Lending (PSL) as the regulatory framework of social banking, especially the updated RBI Master Directions (2025), as the indicator of changing understanding of social justice, sustainability, and inclusive growth. In addition, the study assesses significant institutional structures like Regional Rural Banks (RRBs), NABARD, and Self-help Group (SHG) interlinkages, and their role in providing rural credit and developing MSMEs. Fields of particular concern are the Pradhan Mantri Jan Dhan Yojana (PMJDY) as a radical tool of digital financial inclusion, backed by real-world examples which prove its effectiveness in the savoring behavior, direct benefits transfer, and female financial inclinations.
The research also covers the chronic issues that social banking is facing especially by increasing non-performing assets, lack of credit with rural MSMEs and financial sustainability. It concludes by finding that social banking has been central in ensuring inclusive economic progress despite the challenge posed by operations and structure constraints. The paper suggests that social banking will be needed to enhance the credit quality, financial literacy, and technology-based governance to support the long-term vision of the inclusive growth and Vikshit Bharat 2047 in India.
