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UPSC Prelims 2020 · Agriculture · Farm Money
Consider the following statements: Which of the statements given above is/are correct?
- 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.
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Show the answer and explanation
Answer: (b) 2 only
DCCBs fund PACS; commercial banks lend the most.
Statement by statement
1. ✗ WRONG Scheduled commercial banks give far more short-term farm credit than DCCBs.
2. ✓ CORRECT DCCBs fund the Primary Agricultural Credit Societies (PACS) in the three-tier cooperative system.
Why the others are wrong
(a) Accepts DCCBs as the biggest lenders.
(c) Accepts DCCBs as the biggest lenders.
(d) Rejects the DCCB–PACS link.
The trap
Cooperatives are “for farmers”, so they feel like the biggest lenders.
🔒 Short-term cooperative credit: StCB (state) → DCCB (district) → PACS (village). Commercial banks lead farm credit.