In the post-economic reforms era, Indian agriculture has been subjected to various external And domestic forces that have compelled the farmers to change their product-mix as well as organization of the farming. Distress has set in the rural economy in many areas, even forcing farmers to commit suicides as an extreme reaction. The major changes that have directly impacted the agricultural sector are financial sector reforms, decontrolling of fertilizer prices, freeing of imports of agricultural commodities, etc., Of these, the financial sector reforms have been crucial in view of its influence on rural credit delivery. The rural credit plays a very crucial role in agriculture and rural economy. And, any disturbance in its delivery mechanism can cause cascading effects. Demand for credit emanates from demand for inputs and services needed for various farm operations. It constitutes a major portion of liquidity with farmers and imparts the needed purchasing power to the capital starved farmers. In this context, this paper has charted out recent developments in the evolution of rural credit system, highlighting a few structural constraints. The paper has first discussed a few structural problems in the rural credit system that hampered the credit delivery and has then described measures taken to improve it.