Q. 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?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer: (b) 2 only
Notes:
- Cooperative bank is an institution established on the cooperative basis and dealing in ordinary banking business.
- In rural India, there exists a 3-tier rural cooperative structure.
- Tier-I: It includes state cooperative banks (StCBs) at the state level;
- Tier-II: It includes central cooperative banks (CCBs) at the district level; and
- Tier-III: It includes primary agricultural credit societies (PACSs).
- According to a report of the RBI, in 2016-17, scheduled commercial banks contributed the major share (78- 80%) in agricultural and allied credit. Cooperative institutions also play a significant role in extending agricultural credit and the share of all cooperative banks/institutions (i.e. StCBs, DCCBs and PACSs put together) constituted 15-16%. The RRBs contributed the remaining 5% of the agricultural credit.
- The most significant function of the district central cooperative bank (DCCB) is to provide financial support to the Primary Agricultural Credit Societies (PACS) that are affiliated to it in the district.
