In the three-tier structure of short-term rural cooperative credit, which institution works at the village level?
- A.State Cooperative Bank
- B.District Central Cooperative Bank
- C.Primary Agricultural Credit Society
- D.Regional Rural Bank
Correct answer
Explanation
The correct answer is C, the Primary Agricultural Credit Society. Short-term rural cooperative credit is built in three tiers: the State Cooperative Bank at the apex of the state, the District Central Cooperative Bank at the district level and the Primary Agricultural Credit Society in the village, where the farmer actually borrows. Funds flow down the tiers and the society deals directly with its members.
Option A is the top tier and is the state's own cooperative apex bank, linked to the Reserve Bank and to NABARD. Option B is the middle tier and lends to the village societies rather than to farmers. Option D, a Regional Rural Bank, is not part of the cooperative structure at all; it is a commercial bank created under the Regional Rural Banks Act, 1976 with the Centre, a sponsor bank and the State as shareholders. Do not mix the two rural channels, cooperative and RRB.
Read the full article: Types of Banks in India: Classification, Functions and MCQs
Practice Questions
View allWhat is the primary function of a commercial bank?
- A.Issuing currency notes and coins
- B.Conducting monetary policy
- C.Granting loans and accepting deposits
- D.Regulating the money supply
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A commercial bank exists to gather savings from those who have a surplus and lend them to those who need funds, and it earns from the gap between the interest it pays depositors and the interest it charges borrowers.
Read the full explanation →Which among the following is a public sector bank?
- A.Axis Bank
- B.ICICI Bank
- C.Bank of Baroda
- D.Yes Bank
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It was founded in 1908 by Maharaja Sayajirao Gaekwad III, nationalised in the first round of July 1969, and the Government of India still holds the majority of its shares, which is what makes a bank a public sector bank.
Read the full explanation →SEWA (Self-Employed Women's Association) Bank, a cooperative bank in Gujarat, was launched in India in ______.
- A.1974
- B.1894
- C.1994
- D.1874
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Women of the Self-Employed Women's Association at Ahmedabad, who worked as vendors, headloaders and home-based workers, pooled their own share capital and registered a cooperative bank of their own in 1974 because ordinary banks would not deal with borrowers who had no collateral and no paperwork.
Read the full explanation →Which of the following functions of Reserve Bank of India are correct? I. Banker to Banks II. Currency Issuer
- A.Only I
- B.Neither I nor II
- C.Both I and II
- D.Only II
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The Reserve Bank is banker to banks: every scheduled bank keeps an account with it, holds its cash reserve ratio there, settles payments with other banks through those accounts and can borrow from it when short of funds.
Read the full explanation →Scheduled banks in India are those banks which are included in which schedule of which Act?
- A.First Schedule of the Banking Regulation Act, 1949
- B.Second Schedule of the Reserve Bank of India Act, 1934
- C.Second Schedule of the Banking Regulation Act, 1949
- D.Seventh Schedule of the Constitution
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A bank is placed in that Schedule once it has the prescribed paid-up capital and reserves and satisfies the Reserve Bank that its affairs are not conducted in a manner harmful to depositors.
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