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In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activites?
  • a)
    Commercial Banks
  • b)
    Co-operative Banks
  • c)
    Regional Rural Banks
  • d)
    Microfinance Institutions
Correct answer is option 'A'. Can you explain this answer?
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In India, which of the following have the highest share in the disburs...
In India, the highest share in the disbursement of credit to agriculture and allied activities is held by commercial banks. Let's delve into the reasons behind this:

1. Role of Commercial Banks:
Commercial banks play a crucial role in providing financial support to the agricultural sector in India. They have a wide network of branches and a strong presence in both rural and urban areas, making them easily accessible to farmers and other stakeholders in the agriculture sector.

2. Credit Facilities:
Commercial banks offer a range of credit facilities tailored to the specific needs of the agriculture sector. These include crop loans, term loans for the purchase of agricultural machinery and equipment, working capital loans, and livestock loans, among others. These credit facilities are designed to meet the diverse requirements of farmers, enabling them to invest in agricultural activities and enhance productivity.

3. Government Initiatives:
The Indian government has introduced various initiatives to promote agricultural credit and financial inclusion. One such initiative is the Priority Sector Lending (PSL) target, which mandates that commercial banks allocate a certain percentage of their lending to priority sectors, including agriculture. This has further propelled the role of commercial banks in disbursing credit to the agriculture sector.

4. Extensive Branch Network:
Commercial banks have an extensive branch network across the country, which enables them to reach farmers in remote and rural areas. This widespread presence ensures that farmers have access to credit facilities and financial services without having to travel long distances.

5. Technological Advancements:
Commercial banks have embraced technological advancements to streamline and enhance their lending processes. Online banking, mobile banking, and digital platforms have made it easier for farmers to apply for loans, track their applications, and receive funds in a timely manner. This has facilitated the disbursement of credit to agriculture and allied activities.

In conclusion, commercial banks have the highest share in the disbursement of credit to agriculture and allied activities in India due to their role as financial intermediaries, the range of credit facilities they offer, government initiatives, their extensive branch network, and technological advancements.
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In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activites?a) Commercial Banks b) Co-operative Banks c) Regional Rural Banks d) Microfinance Institutions Correct answer is option 'A'. Can you explain this answer?
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