GS PrelimsEconomyBanking2020

Consider the following statements : 1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks. 2. One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies. Which of the statements given above is/are correct?

A

1 only

B

2 only

C

Both 1 and 2

D

Neither 1 nor 2

Correct Answer: Option B

Explanation

1. Statement 1 is incorrect. In terms of overall short-term credit delivery to the agriculture sector, Scheduled Commercial Banks (SCBs) have the largest share, followed by cooperative banks (including DCCBs) and then Regional Rural Banks (RRBs). DCCBs do not deliver more credit than SCBs. 2. Statement 2 is correct. The rural cooperative credit structure in India is typically three-tiered. DCCBs operate at the district level and serve as a vital link between the State Cooperative Bank and the Primary Agricultural Credit Societies (PACS) at the village level. One of the primary and most important functions of DCCBs is indeed to mobilize funds and provide them to PACS for onward lending to farmers. 3. Therefore, only statement 2 is correct.

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