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GS Paper IUPSC Prelims 2020
Banking & Financial System
Question No. 156Interactive Test Mode
00:00
+2-0.66

Q156. Consider the following statements: 1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks. 2. One of the most important functions of DCCBs is to provide funds to the Primary Agriculture Credit Societies. Which of the statements given above is/are correct?

Consider the following statements:

  1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks.
  2. One of the most important functions of DCCBs is to provide funds to the Primary Agriculture Credit Societies. Which of the statements given above is/are correct?
Select the correct option below (or cross out options to eliminate)
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Official Answer Key & Detailed Solution

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Official UPSC Answer KeyUPSC Prelims 2020 • Indian Economy

Correct Answer: Option (B) — 2 only

Concept & Option Breakdown

Standard Reference Verified

Statement 1 is incorrect: Scheduled Commercial Banks (SCBs) account for the vast majority (around 75–76%) of agricultural credit disbursed in India, followed by Regional Rural Banks (RRBs) and Cooperative Banks.

Statement 2 is correct: DCCBs operate at the district level in the three-tier rural cooperative credit structure and serve as a crucial intermediary by mobilizing deposits and providing credit to Primary Agricultural Credit Societies (PACS) at the village level.

Elimination Heuristic & Exam Approach

Commercial banks possess much larger balance sheets and broader credit networks than district-level cooperative banks, making it unlikely for DCCBs to lead total agricultural credit delivery.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2020 (Q156)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Banking & Financial System
Official Answer KeyOption (B) — 2 only

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Frequently Asked Questions — UPSC Prelims 2020 Q156

What is the official answer for UPSC Prelims 2020 GS Paper I Question 156 (Indian Economy)?

The official UPSC answer key for this 2020 Indian Economy (Banking & Financial System) question is Option (B): "2 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2020 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Banking & Financial System". You can explore all repeated questions from Banking & Financial System in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Banking & Financial System UPSC Prelims question using option elimination?

Commercial banks possess much larger balance sheets and broader credit networks than districtlevel cooperative banks, making it unlikely for DCCBs to lead total agricultural credit delivery.

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