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?

QUESTION

Medium

Economy

Prelims 2020

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?

Select an option to attempt

Explanation

Statement 1 is incorrect. In the Indian agricultural credit system, Scheduled Commercial Banks (SCBs) contribute the largest share of short-term credit (roughly 75-80%), followed by Regional Rural Banks (RRBs). District Central Cooperative Banks (DCCBs), which are part of the cooperative credit structure, deliver significantly less credit compared to SCBs.

Statement 2 is correct. The Short-Term Cooperative Credit Structure (STCCS) in India typically follows a three-tier structure:

State Cooperative Banks (StCBs) at the apex/state level.
District Central Cooperative Banks (DCCBs) at the district level.
Primary Agricultural Credit Societies (PACS) at the village/grassroots level. One of the primary functions of DCCBs is to mobilize resources and provide financial assistance/funds to the PACS within their jurisdiction.

Hence, option B is the correct answer.

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