Consider the following statements:In terms of short-term credit delivery to the agriculture sector,

Question

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 Agriculture Credit Societies.Which of the statements given above is/are correct?

Accepted Answer

District Central Co-operative Banks (DCCBs) are a type of rural co-operatives, along with State Co-operative Banks (StCBs) and Primary Agricultural Credit Societies (PACS). Short-term co-operatives are arranged in a three-tier structure in most of the states, with StCBs at the apex level, DCCBs at the intermediate level and PACS at the grassroots level.1. Although the focus of rural cooperative lending is agriculture, the share in credit flow to agriculture of rural cooperatives is only 12.1%, as compared to 76% of Scheduled Commercial Banks (SCBs), and 11.9% of Regional Rural Banks. Hence statement 1 is incorrect.2. DCCBs mobilise deposits from the public and provide credit to the public and PACS. Hence statement 2 is correct.