Banking industry plays a vital role in the rapid and all round development of the economy.They act as an 'engine for economic growth' by providing multifarious services. In the global world the relationship between banks and economic activities are very close. Majority of the economic transactions are carried out withthe help of banking world. In a country like India, rural sector plays asignificant role in the economy. It affects directly or indirectly, almost all the economic activities of the country. Rural sector can be rightlyconsidered as the backbone of the economy. So the rural development cannot be neglected in the developing era. The government of India istrying its level best to help the rural sector through public sector commercial banks. The government is trying hard to encourage thefarmers providing finance for seeds, irrigation,electricity, tools, pesticides etc. The commercial banks are playing an important role in the rural development. Now a day's both priority sector as well as non-priority sector are testing the fruits of banking industry. In recent years, rural development has emerged as a distinctive field of policy and practice and of research.