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With reference to Small Finance Banks (SFB), consider the following statements:
1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
2. At least 25 percent of its branches shall be in unbanked rural centers.
3. Priority sector must comprise 75% of their net credit.
Which of the statements given above is/are correct?
- a)1 and 2 only
- b)2 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'D'. Can you explain this answer?
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With reference to Small Finance Banks (SFB), consider the following st...
With reference to Small Finance Banks (SFB), the correct statements are:
1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
2. At least 25 percent of its branches shall be in unbanked rural centers.
3. Priority sector must comprise 75% of their net credit.
Let's discuss each statement in detail:
1. Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR):
Small Finance Banks (SFB) are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) just like other commercial banks in India. CRR is the percentage of their net demand and time liabilities that banks have to maintain with the Reserve Bank of India (RBI) in the form of cash. SLR, on the other hand, is the percentage of their net demand and time liabilities that banks have to maintain in the form of liquid assets like government securities, gold, etc. These ratios are regulatory requirements imposed by the RBI to ensure the stability and liquidity of banks.
2. Branches in unbanked rural centers:
Small Finance Banks (SFB) are mandated to open at least 25 percent of their branches in unbanked rural centers. Unbanked rural centers refer to areas where banking services are not easily accessible to the local population. This initiative aims to promote financial inclusion and ensure that banking services reach the underprivileged sections of society residing in rural areas.
3. Priority sector lending:
Small Finance Banks (SFB) are also required to lend a significant portion of their net credit to the priority sector. Priority sector includes sectors such as agriculture, micro, small and medium enterprises (MSMEs), education, housing, export credit, etc. The current requirement is that 75% of the net credit of Small Finance Banks should be allocated to the priority sector. This ensures that the credit needs of these sectors, which are crucial for the overall development of the economy, are adequately met.
In conclusion, all the statements given above are correct. Small Finance Banks are subject to the norms of CRR and SLR, they are required to open a certain percentage of branches in unbanked rural centers, and they must allocate a significant portion of their net credit to the priority sector. These measures are aimed at promoting financial inclusion, supporting rural development, and catering to the credit needs of priority sectors.
1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
2. At least 25 percent of its branches shall be in unbanked rural centers.
3. Priority sector must comprise 75% of their net credit.
Let's discuss each statement in detail:
1. Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR):
Small Finance Banks (SFB) are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) just like other commercial banks in India. CRR is the percentage of their net demand and time liabilities that banks have to maintain with the Reserve Bank of India (RBI) in the form of cash. SLR, on the other hand, is the percentage of their net demand and time liabilities that banks have to maintain in the form of liquid assets like government securities, gold, etc. These ratios are regulatory requirements imposed by the RBI to ensure the stability and liquidity of banks.
2. Branches in unbanked rural centers:
Small Finance Banks (SFB) are mandated to open at least 25 percent of their branches in unbanked rural centers. Unbanked rural centers refer to areas where banking services are not easily accessible to the local population. This initiative aims to promote financial inclusion and ensure that banking services reach the underprivileged sections of society residing in rural areas.
3. Priority sector lending:
Small Finance Banks (SFB) are also required to lend a significant portion of their net credit to the priority sector. Priority sector includes sectors such as agriculture, micro, small and medium enterprises (MSMEs), education, housing, export credit, etc. The current requirement is that 75% of the net credit of Small Finance Banks should be allocated to the priority sector. This ensures that the credit needs of these sectors, which are crucial for the overall development of the economy, are adequately met.
In conclusion, all the statements given above are correct. Small Finance Banks are subject to the norms of CRR and SLR, they are required to open a certain percentage of branches in unbanked rural centers, and they must allocate a significant portion of their net credit to the priority sector. These measures are aimed at promoting financial inclusion, supporting rural development, and catering to the credit needs of priority sectors.
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With reference to Small Finance Banks (SFB), consider the following statements:1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).2. At least 25 percent of its branches shall be in unbanked rural centers.3. Priority sector must comprise 75% of their net credit.Which of the statements given above is/are correct?a)1 and 2 onlyb)2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?
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With reference to Small Finance Banks (SFB), consider the following statements:1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).2. At least 25 percent of its branches shall be in unbanked rural centers.3. Priority sector must comprise 75% of their net credit.Which of the statements given above is/are correct?a)1 and 2 onlyb)2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to Small Finance Banks (SFB), consider the following statements:1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).2. At least 25 percent of its branches shall be in unbanked rural centers.3. Priority sector must comprise 75% of their net credit.Which of the statements given above is/are correct?a)1 and 2 onlyb)2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to Small Finance Banks (SFB), consider the following statements:1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).2. At least 25 percent of its branches shall be in unbanked rural centers.3. Priority sector must comprise 75% of their net credit.Which of the statements given above is/are correct?a)1 and 2 onlyb)2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
With reference to Small Finance Banks (SFB), consider the following statements:1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).2. At least 25 percent of its branches shall be in unbanked rural centers.3. Priority sector must comprise 75% of their net credit.Which of the statements given above is/are correct?a)1 and 2 onlyb)2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to Small Finance Banks (SFB), consider the following statements:1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).2. At least 25 percent of its branches shall be in unbanked rural centers.3. Priority sector must comprise 75% of their net credit.Which of the statements given above is/are correct?a)1 and 2 onlyb)2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to Small Finance Banks (SFB), consider the following statements:1. They are subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).2. At least 25 percent of its branches shall be in unbanked rural centers.3. Priority sector must comprise 75% of their net credit.Which of the statements given above is/are correct?a)1 and 2 onlyb)2 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
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