The branch licensing policy and the directed lending route have been the two pillars on which the efforts for financial inclusion have rested for a long time. The bank licensing policy, mandating a certain ratio of rural bank branches for each license for urban branch, has often been criticised by banks as coming in the way of their business interests.
However, there is strong research evidence to suggest that this social banking experiment in India has been successful in improving the credit flows to the rural population and even in lowering poverty as a result.