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      Question

      Which of the following grants/grant direct credit

      assistance to rural households?  1) Regional Rural Banks  2) National Bank for Agriculture and Rural Development  3) Land Development Banks  Select the correct answer using the codes given below. 
      A 1 and 2 only Correct Answer Incorrect Answer
      B 2 only Correct Answer Incorrect Answer
      C 1 and 3 only Correct Answer Incorrect Answer
      D 1, 2 and 3 Correct Answer Incorrect Answer

      Solution

      Let’s analyse each institution: 1) Regional Rural Banks (RRBs) — Provide direct credit RRBs lend directly to rural households, especially small and marginal farmers, artisans, and rural poor. 2) National Bank for Agriculture and Rural Development (NABARD) — Does NOT provide direct credit NABARD mainly provides refinance to: • RRBs • Cooperative Banks • Commercial Banks It does not directly lend to rural households (except in very rare pilot schemes, which are not considered mainstream operations). 3) Land Development Banks (LDBs) — Provide direct credit LDBs provide long-term loans to farmers for: • land development • purchase of machinery • irrigation projects • other agricultural improvements Thus, they directly lend to rural households.

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