Which of the following is NOT an institutional source of rural credit in India?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Moneylenders
The institutional structure of rural credit is made up of commercial banks, RRBs, cooperatives and land development banks. Moneylenders are private, non-institutional lenders.
Option (1) Moneylenders — False. They are non-institutional lenders who lent at high interest rates.
Option (2) Cooperative credit societies — True. Cooperatives are institutional.
Option (3) Land development banks — True. They are institutional.
Option (4) Regional rural banks — True. RRBs are institutional.
NCERT (2026-27): “5.3 Credit and Marketing in Rural Areas … The institutional structure of rural banking today consists of a set of multi-agency institutions, namely, commercial banks, regional rural banks (RRBs), cooperatives and land development banks. They are expected to dispense adequate credit at cheaper rates. …” “… At the time of independence, moneylenders and traders exploited small and marginal farmers and landless labourers by lending to them on high interest rates and by manipulating the accounts to keep them in a debt-trap. …” |