[Solved] 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?

Q89. 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

Answer: B

Explanation:

Scheduled commercial banks contributed the major share (78 – 80 per cent) in agricultural and allied credit. So, Statement 1 is incorrect.

Co-operative institutions also play a significant role in extending agricultural credit and the share of all co-operative banks/institutions (i.e. StCBs, DCCBs and PACS put together) constituted 15-16 per cent. The RRBs contributed the remaining 5 per cent of the agricultural credit.

District Central Cooperative Banks (DCCBs)

• It is a rural cooperative bank operating at the district level in various parts of India.

• It provides finance to all the co-operative societies in the district, and conducts the activities and provides banking services according to the provisions of the co-operative act and banking act. They act as a link between the primary credit co-operative society and the State Co-operative Bank.

• At the district level, DCCB works as a banker of state government. Educational institutions, Zilla Parishad, Panchayat Samiti, Gram Panchayat, cooperative societies, etc have accounts in this bank.

• All the financial transactions of the co-operative sector are conducted through DCCB.

DCCBs have three sources of funds:

o Their own share capital and reserves

o Deposits from the public and

o Loans from the state co-operative banks

The main functions of the DCCBs are:

• To meet the credit requirements of member-societies

• To perform banking business

• To act as a balancing centre for the Primary Agricultural Credit Societies (PACS) by diverting the surplus funds of some societies to those which face shortages of funds. So, Statement 2 is correct.

• To undertake non-credit activities

• To maintain close and continuous contact with PACS and provide leadership and guidance to them

• To supervise and inspect the PACS and

• To provide a safe place for the investment of the resources of PACs

• They also lend directly to the public for non-agricultural purposes within the area of operation of their branches.

Question Here

Explanation Here