It is needless to say that credit is important key element in the sphere of every economic activity but in respect of rural reconstruction and development the supply of credit means the creation of opportunities for those who cannot undertake production activities. Credit also becomes significant element in rural sector. The thinking in the highest quarters in India seems to give the impression that rural transformation and reconstruction can be achieved mainly by pumping credit to rural economy. In 20 Points Programme (new) it has been urged that Banks should provide credit to capable and determined people in rural areas who are handicapped for want of capital. By investing capital in rural and co-operative sectors, the problem of unemployment can largely be eradicated.