1. A government and monetary authorities fix the rate of interest which is based on bank rate fixed by the RBI and consequent interest rates are charged by the commercial banks.
2. In this regard we have regional rural banks being set up in rural areas to benefit the rural artisans, small and marginal labourers and weaker sections of the society.
3. They provide credit assistance at concessional lending rates.
4. However, weaker sections of society including poor farmers and villagers pay very high rate of interest which they pay to the moneylenders or zamindars.
5. Therefore, for reducing rate of interest for such people, some necessary steps should be taken such as promoting cooperative societies etc.
