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UPSC Prelims 2020 Paper-1 📅 04 Oct, 2020

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
Result Summary
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UPSC Prelims
2020 • 04 Oct, 2020 • Paper-1
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?
Correct Answer
2 only
Credit Volume Discrepancy: Despite their grassroots presence and historical mandate, cooperative banks command a much smaller slice of the overall agricultural ......
Ref/Book : UPSC Prelims 2020
Ref. Subject Economy
Chapter -
Ref. Topic Banking & Finance
Pg. No -
💡 Analysis & Explanation
Credit Volume Discrepancy ▼
Despite their grassroots presence and historical mandate, cooperative banks command a much smaller slice of the overall agricultural credit pie. Today, massive Scheduled Commercial Banks (like SBI, HDFC) completely dominate agricultural lending, delivering vastly more credit than DCCBs. Thus, statement 1 is factually incorrect.
Structural Hierarchy of Cooperatives ▼
In India's three-tier cooperative credit structure, the State Cooperative Bank sits at the apex level, the DCCB operates in the middle at the district level, and the Primary Agricultural Credit Societies (PACS) function directly at the village level.
Core Mandate ▼
A fundamental and most critical function of the DCCB is to act as the primary financing agency, channeling capital down to these grassroots PACS so they can lend directly to farmers. Statement 2 is entirely correct.
Conclusion ▼
Only the structural function described in the second statement is accurate.
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