The study examines the effect of bank management on rural economic development with particular reference to commercial bank credit and rural economic development in Nigeria. The presence of a unit root in the time series data was tested using Augmented Dickey–Fuller (ADF) test, within the context of Ordinary Least Square (OLS) framework, and a double-log equation. Estimated regression model indicates that there is a positive and significant relationship between rural contribution to GDP (RGDP), a surrogate for rural economic development, and commercial banks credit to agriculture. The paper also reveals a passive commitment of the bank to financing SMEs and its weak drive for rural deposit mobilisation. The paper therefore, underscores the relevance of bank finance to enhancing rural and SMEs development to the nations’ economy. The paper recommends that monetary authority in Nigeria should ensure that banks adhere to monetary policy targets in order to enhance the campaign for rural economic development, and deepen financial inclusion of rural dwellers and small scale businesses, otherwise failure of which will continue to hurt rural lending and SMEs financing. Realizing that not so much have been achieved in the area of rural deposit mobilization, the paper also makes a campaign for an aggressive rural deposit mobilization by commercial banks.
Keywords: Bank management, commercial bank credit, rural economic development, small and medium scale enterprises, Nigeria.