Q. 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 : b) 2 only
Question from UPSC Prelims 2020 GS Paper
Explanation:
1. Agricultural Credit in India
An RBI report from 2016–17 states that scheduled commercial banks provided the majority of credit (78–80%) for agriculture and related industries. A considerable portion of agricultural credit is also extended by cooperative institutions; collectively, StCBs, DCCBs, and PACSs account for 15–16% of all cooperative banks and institutions. The remaining five percent of the agricultural credit was provided by the RRBs. Therefore, the first statement is untrue.
Source: Reserve Bank of India – Reports (rbi.org.in)
2. Role of DCCBs in Agricultural Credit
One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies. This statement is correct. One of the key roles of District Central Cooperative Banks (DCCBs) is to serve as a link between the state cooperative banks at the apex level and the Primary Agricultural Credit Societies (PACS) at the grassroots level. DCCBs provide necessary funds to PACS, which in turn offer agricultural and rural credit to individual farmers. This hierarchical structure enables the flow of funds from the top (State Cooperative Banks) through the DCCBs to the PACS, ensuring that agricultural credit reaches the grassroots level where it is most needed.
