The relationship-based nature of community bank lending helps small businesses that often lack the detailed balance sheets or detailed income statements required by larger banks. 13 Even when small businesses do have the right paperwork, large banks are still less likely to engage in lending at small bank levels.
Thus, the financial sector, in particular the banking system, is utilised as a conduit by the Government’s fiscal policy, to subsidise select activities or vulnerable  2  BIS Review 131/2007  sections, and RBI plays a supporting role in enabling such measures while emphasising the longer term goals of a conducive credit culture.