Consider the following statements about NCERT’s appraisal of rural banking:
(A) Rapid expansion of the banking system helped farmers avail a variety of loans for their production needs.
(B) The positive effect of banking expansion on rural output was seen especially after the Green Revolution.
(C) Food security in India is reflected in the abundant buffer stocks of grains.
(D) Commercial banks are named as having failed most in deposit mobilisation and loan recovery.
(E) The expansion and promotion of the rural banking sector gained pace after the reforms.
How many of the statements given above are correct?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Three
The appraisal of rural banking lists gains first, then failures.
(A) Rapid expansion of the banking system helped farmers avail a variety of loans for their production needs. — Correct. More banks meant more loans for production needs.
(B) The positive effect of banking expansion on rural output was seen especially after the Green Revolution. — Correct. The gain came especially after the Green Revolution.
(C) Food security in India is reflected in the abundant buffer stocks of grains. — Correct. Large grain stocks show food security.
(D) Commercial banks are named as having failed most in deposit mobilisation and loan recovery. — Incorrect. Commercial banks are the possible exception; the other formal institutions failed.
(E) The expansion and promotion of the rural banking sector gained pace after the reforms. — Incorrect. It took a backseat after the reforms.
Three statements are correct.
NCERT (2026-27): “Rural Banking — a Critical Appraisal: Rapid expansion of the banking system had a positive effect on rural farm and non-farm output, income and employment, especially after the green revolution — it helped farmers to avail services and credit facilities and a variety of loans for meeting their prodution needs. Famines became events of the past; we have now achieved food security which is reflected in the abundant buffer stocks of grains. However, all is not well with our banking system. With the possible exception of the commercial banks, other formal institutions have failed to develop a culture of deposit mobilisation — lending to worthwhile borrowers and effective loan recovery. Agriculture loan default rates have been chronically high. … Thus, the expansion and promotion of the rural banking sector has taken a backseat after reforms. …” |