In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities?
✓ Correct answer: a) Commercial Banks
ExplanationIn India, Commercial Banks have the highest share in the disbursement of credit to agriculture and allied activi- ties.As of 2019-20, they accounted for approximately 76.83% of the total agricultural credit disbursed because:Priority Sector Lending (PSL) norms require banks to lend at least 18% of their Adjusted Net Bank Credit (ANBC) to agriculture.Commercial banks have the widest reach and higher lendingInstitutions like NABARD help commercial banks in refinancing agricultural loans.Most KCC loans are provided by commercial banks.RBI & Government have encouraged commercial banks to expand rural branches and digitize farm credit.Options (b) is incorrect: Cooperative banks have been pivot- al in providing credit to the agricultural sector, particularly in rural areas.These banks cater to small farmers, especially those with lower creditworthiness who may not have access to commercial banks.Despite their importance in the past, coopera- tive banks’ share in agricultural credit has declined due to several factors:Weak Financial Health:Limited ReachDeclining
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