Which of the following grants/grant direct credit assistance to rural households?
- 1.Regional Rural Banks
- 2.National Bank for Agriculture and Rural Development
- 3.Land Development Banks
Select the correct answer using the codes given below.
Answer & explanation
Answer: (c) 1 and 3 only
Regional Rural Banks and Land Development Banks lend directly to farmers and rural households. NABARD is an apex refinance and development body. It funds the banks that do the lending and does not give credit directly to households.
- ✓ 1. RRBs are part of the multi-agency rural banking structure. They lend directly to rural borrowers such as small and marginal farmers, agricultural labourers and artisans.
- ✗ 2. NABARD was set up in 1982 as the apex body to coordinate rural financing institutions. It supports rural development by funding the banks that give the loans, so its assistance to households is indirect (refinance).
- ✓ 3. Land Development Banks are part of the multi-agency rural credit structure. They give long-term loans directly to farmers, for example for land improvement and farm investment.
Remember · NABARD is the apex refinancing and development bank for rural credit. RRBs, cooperatives, Land Development Banks and commercial banks are the ones that lend directly to rural households.
📘 Read it in NCERT: Class 11 Indian Economic Development, Ch 5 (practise this chapter) · Class 7 Exploring Society: India and Beyond (Part 2), Ch 8 (practise this chapter)
Sources
- NCERT Class 11 · Indian Economic Development, Chapter 5 “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.”
- NCERT Class 7 · Exploring Society: India and Beyond (Part 2), Chapter 8 “National Bank for Agriculture and Rural Development (NABARD) supports rural development by funding banks that give loans for farming, village industries, and infrastructure like roads and irrigation.”
Question: UPSC Civil Services (Preliminary) 2013, General Studies Paper I. Explanation: Minimalist IAS, checked 25 Oct 2026 (how we verify). ·
