Question

With reference to the co-operative credit system in India, which of the following statements is/are correct?

1. Primary Agricultural Credit Societies are the short-term co-operative credit structure functioning at the grassroots (Gram Panchayat) level.
2. They are not regulated by the Reserve Bank of India.

Select the correct option using the options given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer 1

Answer:

1 c BOTH 1 AND 2

2 a 1 ONLY

Explanation:

CARRY ON LEARNING

Answer 2

Option C - Both 1 and 2

More Information

■ The co-operative credit system in India :-

• The rural co-operative credit system in India is primarily mandated to ensure the flow of credit to the agriculture sector.

• It comprises short-term and long-term co-operative credit structures.

• The short-term co-operative credit structure operates with a three-tier system - Primary Agricultural Credit Societies (PACS) at the village level, Central Cooperative Banks (CCBs) at the district level and State Cooperative Banks (StCBs) at the State level.

• PACS are outside the purview of the Banking Regulation Act, 1949 and hence not regulated by the Reserve Bank of India.

• StCBs/DCCBs are registered under the provisions of the State Cooperative Societies Act of the State concerned and are regulated by the Reserve Bank.

• Powers have been delegated to National Bank for Agricultural and Rural Development (NABARD) under Sec 35 A of the Banking Regulation Act (As Applicable to Cooperative Societies) to conduct the inspection of State and Central Cooperative Banks.

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