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:

1. 1 and 2 only
2. 2 only
3. 1 and 3 only
4. 1, 2 and 3

Explanation

Option 1 is correct

• Regional Rural Banks were established to directly provide credit to rural households, especially small and marginal farmers, agricultural labourers, and weaker sections.

Option 2 is incorrect

• NABARD provides indirect credit assistance to rural households by refinancing and providing credit facilities to other institutions operating in rural areas, such as cooperative banks and regional rural banks.

Option 3 is correct

• Land Development Banks (cooperative institutions) extend long-term loans directly to farmers for activities such as land improvement, irrigation, and agricultural development, thus providing direct credit assistance.

Answer: (c) 1 and 3 only; Difficulty Level: Easy