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 Agricultural Credit Societies.
Which of the statements given above is/are correct?
Answer & explanation
Answer: (b) 2 only
Only statement 2 is correct: DCCBs are the middle tier of the short-term cooperative credit structure and channel funds to the village-level Primary Agricultural Credit Societies (PACS). Statement 1 fails because commercial banks, not cooperative banks, supply most crop loans.
- ✗ 1. NABARD's analysis of crop loans puts commercial banks at 65.30 per cent and all cooperative banks together at 17.97 per cent in 2019-20, with Regional Rural Banks at 16.73 per cent. DCCBs are only one part of the cooperative share, so they do not out-deliver Scheduled Commercial Banks.
- ✓ 2. The short-term cooperative credit structure runs State Cooperative Banks, then DCCBs at district level, then PACS at village level. PACS are refinanced through DCCBs and State Cooperative Banks, so DCCBs supply them with funds.
Remember · Short-term cooperative credit flows StCB, then DCCB, then PACS (village). Commercial banks, not cooperative banks, supply most short-term (crop) farm credit.
Sources
- NABARD, Trends and Patterns in Agriculture Credit in India (Vinod Kumar, 2021) ↗ “However, the share of Cooperative Banks and CBs has declined to 17.97 per cent and 65.30 per cent in 2019-20 and that for RRBs had improved significantly (16.73%) in 2019-20.”
- NABARD Annual Report, Empowering Rural Financial Institutions ↗ “The short-term cooperative credit structure (STCCS) consists of state cooperative banks (StCBs) at the state/apex level, district central cooperative banks (DCCBs) at the district level, and primary agriculture credit societies (PACS) at the village level.”
- PIB, Ministry of Cooperation: Utility of PACS ↗ “These are refinanced by NABARD through 351 District Central Cooperative Banks (DCCBs) and 34 State Cooperative Banks (StCBs).”
Question and answer: UPSC's official GS Paper I (2020, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·