Consider the following statements:
- 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
- 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?
Detailed Explanation:
Answer: Option 2 — 2 only
Statement 1 is incorrect because Scheduled Commercial Banks (SCBs) dominate short-term agricultural credit delivery in India, accounting for approximately 75-80% of the total credit, significantly more than District Central Cooperative Banks (DCCBs). Statement 2 is correct as DCCBs form the intermediate tier in the Short-Term Cooperative Credit Structure (STCCS) and one of their primary functions is to channel funds to Primary Agricultural Credit Societies (PACS) at the grassroots level.
❌ Statement 1 – Incorrect: SCBs deliver the largest share of short-term agricultural credit (75-80%), far exceeding DCCBs' contribution.
✅ Statement 2 – Correct: DCCBs serve as the district-level intermediary, providing funds to PACS which operate at the village level.
📝 Short Notes: Agricultural Credit Structure in India
| Component | Details |
|---|---|
| Short-Term Cooperative Credit Structure (STCCS) | Three-tier system: State Cooperative Banks (StCBs) → District Central Cooperative Banks (DCCBs) → Primary Agricultural Credit Societies (PACS) |
| Agricultural Credit Delivery Share | Scheduled Commercial Banks: ~75-80% Regional Rural Banks: ~15-20% Cooperative Banks (including DCCBs): ~5-10% |
| PACS (Primary Agricultural Credit Societies) | Grassroots-level cooperative societies providing credit directly to farmers; total ~1 lakh PACS across India |
| DCCBs Functions | • Mobilize deposits at district level • Provide funds to PACS • Act as link between StCBs and PACS • Finance agricultural and allied activities |
| Long-Term Credit Structure | State Cooperative Agriculture and Rural Development Banks (SCARDBs) → Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) |
Question 4 of 5 Financial Inclusion
Practice PYQ questions from this topic across all years
The money multiplier in an economy increases with which one of the following?
The Services Area Approach was implemented under the purview of