Correct option is C
The correct answer is (c) Commercial Banks
In India, Commercial Banks have the highest share in the disbursement of credit to agriculture and allied activities. This is due to their extensive network, larger capital base, and priority sector lending mandates.
Key Points:
Additional Information:
- Within the agriculture sector, the allied sectors like horticulture, animal husbandry, dairy, and fisheries have an important bearing on the overall economic growth.
- Public Sector Lending (PSL) is mandated by the RBI, making it a requirement for domestic and foreign banks to offer loans to specific sectors and sub-sectors within the nation’s economy.
- Priority Sector includes the following:
- Agriculture
- Micro, Small, and Medium Enterprises
- Export Credit
- Education
- Housing
- Social Infrastructure
- Renewable Energy
- Others
- At present, institutional agricultural credit is mainly disbursed by commercial banks, cooperative banks, and Regional Rural Banks (RRBs) under the multi-agency approach.
- The commercial banks disburse around 60% credit, followed by cooperative banks around 30%, and RRB and others.
- As per RBI directions, Domestic Scheduled Commercial Banks are required to lend 18% of the Adjusted Net Bank Credit (ANBC) or Credit Equivalent to Off-Balance Sheet Exposure (CEOBE), whichever is higher, towards agriculture.
- Similarly, in the case of RRBs, 18% of their total outstanding advances are required to be towards agriculture, and a sub-target of 8% has been set for lending to small and marginal farmers.
- India set a target of making available agricultural credit of up to Rs 15 lakh crore in the financial year 2020-21.
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