GS PrelimsAgricultureGovernment Policies and Schemes for Agriculture2011

In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities ?

A

Commercial Banks

B

Cooperative Banks

C

Regional Rural Banks

D

Microfinance Institutions

Correct Answer: Option A

Explanation

1. The question asks which category of financial institutions in India holds the highest share in providing credit to agriculture and allied activities. 2. Commercial Banks have consistently been the largest disbursers of agricultural credit in India. Data from the Reserve Bank of India (RBI) confirms that Commercial Banks account for the majority share of institutional credit to the agricultural sector. 3. While Cooperative Banks have a wide reach, particularly in rural areas, their total disbursement volume is less than that of Commercial Banks. 4. Regional Rural Banks (RRBs) were specifically created to cater to rural and agricultural credit needs, but their overall share remains lower than both Commercial and Cooperative Banks. 5. Microfinance Institutions typically provide smaller loans and their contribution to the total agricultural credit volume is significantly smaller compared to the banking sector. 6. Therefore, Commercial Banks hold the highest share.

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