It has been aptly reiterated that “by providing finance, development follows” as finance is the lifeblood of economic development. Credit plays a significant role in the Indian economic system also. Indian economy is agriculture-based where agriculture is regarded as the cornerstone that provides a source of livelihood to its rural population. The credit is a synergist that even out the process to stimulate the farm and non-farm sector development including rural industrialization business and service segment of the economy. This paper attempts to review the evolution of rural credit in India and study its status and growth hitherto. Analyzing the background policy interventions in the Indian rural financial system will help in understanding the various phases of credit delivery patterns. The paper also throws light on whether people in rural areas are actually depending on formalized credit for meeting their financial needs or are still dependent upon informal sources.