In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities?
Answer & explanation
Answer: (a) Commercial Banks
Commercial banks have the highest share of institutional credit to agriculture in India. They overtook cooperative banks in the 1990s, and by the late 2000s they disbursed several times more than cooperatives or Regional Rural Banks.
- ✓ (a) NABARD agency-wise data in the Economic Survey 2008-09 show commercial banks disbursed Rs 1,81,087 crore in 2007-08 and Rs 2,02,856 crore in 2008-09 (provisional). That is far above any other agency.
- ✗ (b) Cooperative banks were the dominant agricultural lenders until the 1990s, when they lost that position to commercial banks. In 2007-08 they disbursed Rs 48,258 crore, about a quarter of what commercial banks lent.
- ✗ (c) Regional Rural Banks have the smallest share of the three bank groups. They disbursed Rs 25,312 crore in 2007-08 and Rs 25,852 crore in 2008-09 (provisional).
- ✗ (d) Microfinance institutions are not among the agencies in the official agency-wise tally of institutional agricultural credit, which covers cooperative banks, RRBs and commercial banks. Their lending to agriculture is small compared with the banks.
Remember · Since the 1990s, commercial banks have led institutional agricultural credit, followed by cooperative banks and then RRBs. Cooperatives were dominant before then.
Sources
- Economic Survey 2008-09, Ch. 5 Financial Intermediation and Markets: agency-wise institutional credit to agriculture (source: NABARD) ↗ “Cooperative banks 23716 26959 31424 39786 42480 48258 35747 RRBs 6070 7581 12404 15223 20435 25312 25852 Commercial banks 39774 52441 81481 125477 166485 181087 202856”
- RBI Occasional Papers: Current Issues in Agriculture Credit in India: An Assessment ↗ “Notwithstanding their wide network, co-operative banks, particularly since the 1990s have lost their dominant position to commercial banks.”
Question: UPSC Civil Services (Preliminary) 2011, General Studies Paper I. Explanation: Minimalist IAS, checked 25 Oct 2026 (how we verify). ·
