The creation of a distinct credit agency needs special justification, if rural banks are proposed to correct some of the deficiencies of commercial banks and cooperatives. It is advisable to examine those defects in their proper context and take remedial action at the level of the commercial banks or cooperatives. Justification for regional rural banks can be provided in terms of a special institution geared to serve special programmes like Small Farmers' Development Agencies, Tribal Development Blocks, etc.