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Money and Banking (part – II)

📆 September 24, 2024

Total Questions: 268

201. When was the NABARD established ? [M.P.P.C.S. (Pre) 2023]

Correct Answer: (c) 12th July, 1982
Solution:NABARD is a regulatory body mandated with the regulation of regional rural banks and apex cooperative banks in India. It operates under the Ministry of Finance.
NABARD: Origin
  • Objective: It has been constituted for "matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India".
  • Setting Up: It came into existence to implement the National Bank for Agriculture and Rural Development Act 1981.
  • Based on the recommendations of the B. Sivaramman Committee, NABARD replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC).
    Structure: It is governed by a Board of Directors, who are appointed by the Union government. It includes;
  • The Chairperson;
  • The Managing Director;
  • 3 directors from amongst experts in rural economics, rural development, small-scale industries, and cottage industries, individuals having experience in the working of co-operative banks, regional rural banks, or commercial banks;
  • 3 directors from out of the directors of the Reserve Bank;
  • 3 directors from amongst the officials of the Central Government;
  • 4 directors from amongst the officials of the State Government.
    Functions
  • Implementation of Aid Projects: NABARD implements rural development projects of the World Bank, Asian Development Bank, commercial banks (CBs), and other financial institutions approved by RBI.
  • Supervises Small Banks: It supervises the functioning of the State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs).
  • Sustainable Growth: It indulges itself in activities of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development, and Farm Innovation.
  • Village Economic Prosperity: It facilitates credit flow for the promotion and development of agriculture, cottage, and village industries.
  • Support Rural Innovation: It has managed to attract funds for Rural Innovation, which involves funds designed to support innovative, risk-friendly, unconventional experiments in agriculture and related fields.
  • Training Facilities: It provides training facilities to all the institutions that are working towards rural upliftment or want to do so in the future.
  • Monitoring and Evaluating a Project: It has the responsibility of monitoring and evaluating the project or activity taking place in a rural area.
  • Rural Infrastructure Fund: It is obtained out of the shortfall in lending to the priority sector by scheduled commercial banks and implemented by NABARD.
  • Warehouse Infrastructure Fund (WIF): Using the facilities of NABARD, the union government provides loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.

202. NABARD provides refinance : [U.P.P.C.S. (Spl.) (Mains) 2004]

Correct Answer: (a) For agriculture and rural development
Solution:NABARD is a regulatory body mandated with the regulation of regional rural banks and apex cooperative banks in India. It operates under the Ministry of Finance.
NABARD: Origin
  • Objective: It has been constituted for "matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India".
  • Setting Up: It came into existence to implement the National Bank for Agriculture and Rural Development Act 1981.
  • Based on the recommendations of the B. Sivaramman Committee, NABARD replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC).
    Structure: It is governed by a Board of Directors, who are appointed by the Union government. It includes;
  • The Chairperson;
  • The Managing Director;
  • 3 directors from amongst experts in rural economics, rural development, small-scale industries, and cottage industries, individuals having experience in the working of co-operative banks, regional rural banks, or commercial banks;
  • 3 directors from out of the directors of the Reserve Bank;
  • 3 directors from amongst the officials of the Central Government;
  • 4 directors from amongst the officials of the State Government.
    Functions
  • Implementation of Aid Projects: NABARD implements rural development projects of the World Bank, Asian Development Bank, commercial banks (CBs), and other financial institutions approved by RBI.
  • Supervises Small Banks: It supervises the functioning of the State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs).
  • Sustainable Growth: It indulges itself in activities of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development, and Farm Innovation.
  • Village Economic Prosperity: It facilitates credit flow for the promotion and development of agriculture, cottage, and village industries.
  • Support Rural Innovation: It has managed to attract funds for Rural Innovation, which involves funds designed to support innovative, risk-friendly, unconventional experiments in agriculture and related fields.
  • Training Facilities: It provides training facilities to all the institutions that are working towards rural upliftment or want to do so in the future.
  • Monitoring and Evaluating a Project: It has the responsibility of monitoring and evaluating the project or activity taking place in a rural area.
  • Rural Infrastructure Fund: It is obtained out of the shortfall in lending to the priority sector by scheduled commercial banks and implemented by NABARD.
  • Warehouse Infrastructure Fund (WIF): Using the facilities of NABARD, the union government provides loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.

203. The Apex Institution to finance agriculture credit in India is : [U.P.P.C.S. (Pre) 2005]

Correct Answer: (b) NABARD
Solution:NABARD is a regulatory body mandated with the regulation of regional rural banks and apex cooperative banks in India. It operates under the Ministry of Finance.
NABARD: Origin
  • Objective: It has been constituted for "matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India".
  • Setting Up: It came into existence to implement the National Bank for Agriculture and Rural Development Act 1981.
  • Based on the recommendations of the B. Sivaramman Committee, NABARD replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC).
    Structure: It is governed by a Board of Directors, who are appointed by the Union government. It includes;
  • The Chairperson;
  • The Managing Director;
  • 3 directors from amongst experts in rural economics, rural development, small-scale industries, and cottage industries, individuals having experience in the working of co-operative banks, regional rural banks, or commercial banks;
  • 3 directors from out of the directors of the Reserve Bank;
  • 3 directors from amongst the officials of the Central Government;
  • 4 directors from amongst the officials of the State Government.
    Functions
  • Implementation of Aid Projects: NABARD implements rural development projects of the World Bank, Asian Development Bank, commercial banks (CBs), and other financial institutions approved by RBI.
  • Supervises Small Banks: It supervises the functioning of the State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs).
  • Sustainable Growth: It indulges itself in activities of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development, and Farm Innovation.
  • Village Economic Prosperity: It facilitates credit flow for the promotion and development of agriculture, cottage, and village industries.
  • Support Rural Innovation: It has managed to attract funds for Rural Innovation, which involves funds designed to support innovative, risk-friendly, unconventional experiments in agriculture and related fields.
  • Training Facilities: It provides training facilities to all the institutions that are working towards rural upliftment or want to do so in the future.
  • Monitoring and Evaluating a Project: It has the responsibility of monitoring and evaluating the project or activity taking place in a rural area.
  • Rural Infrastructure Fund: It is obtained out of the shortfall in lending to the priority sector by scheduled commercial banks and implemented by NABARD.
  • Warehouse Infrastructure Fund (WIF): Using the facilities of NABARD, the union government provides loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.

204. The Apex Institution in the sphere of Agriculture Credit is : [U.P. Lower Sub. (Spl,) (Pre) 2004]

Correct Answer: (c) NABARD
Solution:NABARD is a regulatory body mandated with the regulation of regional rural banks and apex cooperative banks in India. It operates under the Ministry of Finance.
NABARD: Origin
  • Objective: It has been constituted for "matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India".
  • Setting Up: It came into existence to implement the National Bank for Agriculture and Rural Development Act 1981.
  • Based on the recommendations of the B. Sivaramman Committee, NABARD replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC).
    Structure: It is governed by a Board of Directors, who are appointed by the Union government. It includes;
  • The Chairperson;
  • The Managing Director;
  • 3 directors from amongst experts in rural economics, rural development, small-scale industries, and cottage industries, individuals having experience in the working of co-operative banks, regional rural banks, or commercial banks;
  • 3 directors from out of the directors of the Reserve Bank;
  • 3 directors from amongst the officials of the Central Government;
  • 4 directors from amongst the officials of the State Government.
    Functions
  • Implementation of Aid Projects: NABARD implements rural development projects of the World Bank, Asian Development Bank, commercial banks (CBs), and other financial institutions approved by RBI.
  • Supervises Small Banks: It supervises the functioning of the State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs).
  • Sustainable Growth: It indulges itself in activities of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development, and Farm Innovation.
  • Village Economic Prosperity: It facilitates credit flow for the promotion and development of agriculture, cottage, and village industries.
  • Support Rural Innovation: It has managed to attract funds for Rural Innovation, which involves funds designed to support innovative, risk-friendly, unconventional experiments in agriculture and related fields.
  • Training Facilities: It provides training facilities to all the institutions that are working towards rural upliftment or want to do so in the future.
  • Monitoring and Evaluating a Project: It has the responsibility of monitoring and evaluating the project or activity taking place in a rural area.
  • Rural Infrastructure Fund: It is obtained out of the shortfall in lending to the priority sector by scheduled commercial banks and implemented by NABARD.
  • Warehouse Infrastructure Fund (WIF): Using the facilities of NABARD, the union government provides loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.

205. The Apex bank of agriculture sector is : [U.P.R.O./A.R.O. (Mains) 2014]

Correct Answer: (c) NABARD
Solution:NABARD is a regulatory body mandated with the regulation of regional rural banks and apex cooperative banks in India. It operates under the Ministry of Finance.
NABARD: Origin
  • Objective: It has been constituted for "matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India".
  • Setting Up: It came into existence to implement the National Bank for Agriculture and Rural Development Act 1981.
  • Based on the recommendations of the B. Sivaramman Committee, NABARD replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC).
    Structure: It is governed by a Board of Directors, who are appointed by the Union government. It includes;
  • The Chairperson;
  • The Managing Director;
  • 3 directors from amongst experts in rural economics, rural development, small-scale industries, and cottage industries, individuals having experience in the working of co-operative banks, regional rural banks, or commercial banks;
  • 3 directors from out of the directors of the Reserve Bank;
  • 3 directors from amongst the officials of the Central Government;
  • 4 directors from amongst the officials of the State Government.
    Functions
  • Implementation of Aid Projects: NABARD implements rural development projects of the World Bank, Asian Development Bank, commercial banks (CBs), and other financial institutions approved by RBI.
  • Supervises Small Banks: It supervises the functioning of the State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs).
  • Sustainable Growth: It indulges itself in activities of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development, and Farm Innovation.
  • Village Economic Prosperity: It facilitates credit flow for the promotion and development of agriculture, cottage, and village industries.
  • Support Rural Innovation: It has managed to attract funds for Rural Innovation, which involves funds designed to support innovative, risk-friendly, unconventional experiments in agriculture and related fields.
  • Training Facilities: It provides training facilities to all the institutions that are working towards rural upliftment or want to do so in the future.
  • Monitoring and Evaluating a Project: It has the responsibility of monitoring and evaluating the project or activity taking place in a rural area.
  • Rural Infrastructure Fund: It is obtained out of the shortfall in lending to the priority sector by scheduled commercial banks and implemented by NABARD.
  • Warehouse Infrastructure Fund (WIF): Using the facilities of NABARD, the union government provides loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.

206. In relation to Agricultural Finance and Refinance which institution is the biggest ? [U.P.P.C.S. (Mains) 2014]

Correct Answer: (b) NABARD
Solution:NABARD is a regulatory body mandated with the regulation of regional rural banks and apex cooperative banks in India. It operates under the Ministry of Finance.
NABARD: Origin
  • Objective: It has been constituted for "matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India".
  • Setting Up: It came into existence to implement the National Bank for Agriculture and Rural Development Act 1981.
  • Based on the recommendations of the B. Sivaramman Committee, NABARD replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC).
    Structure: It is governed by a Board of Directors, who are appointed by the Union government. It includes;
  • The Chairperson;
  • The Managing Director;
  • 3 directors from amongst experts in rural economics, rural development, small-scale industries, and cottage industries, individuals having experience in the working of co-operative banks, regional rural banks, or commercial banks;
  • 3 directors from out of the directors of the Reserve Bank;
  • 3 directors from amongst the officials of the Central Government;
  • 4 directors from amongst the officials of the State Government.
    Functions
  • Implementation of Aid Projects: NABARD implements rural development projects of the World Bank, Asian Development Bank, commercial banks (CBs), and other financial institutions approved by RBI.
  • Supervises Small Banks: It supervises the functioning of the State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs).
  • Sustainable Growth: It indulges itself in activities of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development, and Farm Innovation.
  • Village Economic Prosperity: It facilitates credit flow for the promotion and development of agriculture, cottage, and village industries.
  • Support Rural Innovation: It has managed to attract funds for Rural Innovation, which involves funds designed to support innovative, risk-friendly, unconventional experiments in agriculture and related fields.
  • Training Facilities: It provides training facilities to all the institutions that are working towards rural upliftment or want to do so in the future.
  • Monitoring and Evaluating a Project: It has the responsibility of monitoring and evaluating the project or activity taking place in a rural area.
  • Rural Infrastructure Fund: It is obtained out of the shortfall in lending to the priority sector by scheduled commercial banks and implemented by NABARD.
  • Warehouse Infrastructure Fund (WIF): Using the facilities of NABARD, the union government provides loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.

207. NABARD is related to : [M.P.P.C.S. (Pre) 2015]

Correct Answer: (c) National Bank for Agriculture and Rural Development
Solution:NABARD is a regulatory body mandated with the regulation of regional rural banks and apex cooperative banks in India. It operates under the Ministry of Finance.
NABARD: Origin
  • Objective: It has been constituted for "matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India".
  • Setting Up: It came into existence to implement the National Bank for Agriculture and Rural Development Act 1981.
  • Based on the recommendations of the B. Sivaramman Committee, NABARD replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC).
    Structure: It is governed by a Board of Directors, who are appointed by the Union government. It includes;
  • The Chairperson;
  • The Managing Director;
  • 3 directors from amongst experts in rural economics, rural development, small-scale industries, and cottage industries, individuals having experience in the working of co-operative banks, regional rural banks, or commercial banks;
  • 3 directors from out of the directors of the Reserve Bank;
  • 3 directors from amongst the officials of the Central Government;
  • 4 directors from amongst the officials of the State Government.
    Functions
  • Implementation of Aid Projects: NABARD implements rural development projects of the World Bank, Asian Development Bank, commercial banks (CBs), and other financial institutions approved by RBI.
  • Supervises Small Banks: It supervises the functioning of the State Cooperative Banks (StCBs), District Cooperative Central Banks (DCCBs), and Regional Rural Banks (RRBs).
  • Sustainable Growth: It indulges itself in activities of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development, and Farm Innovation.
  • Village Economic Prosperity: It facilitates credit flow for the promotion and development of agriculture, cottage, and village industries.
  • Support Rural Innovation: It has managed to attract funds for Rural Innovation, which involves funds designed to support innovative, risk-friendly, unconventional experiments in agriculture and related fields.
  • Training Facilities: It provides training facilities to all the institutions that are working towards rural upliftment or want to do so in the future.
  • Monitoring and Evaluating a Project: It has the responsibility of monitoring and evaluating the project or activity taking place in a rural area.
  • Rural Infrastructure Fund: It is obtained out of the shortfall in lending to the priority sector by scheduled commercial banks and implemented by NABARD.
  • Warehouse Infrastructure Fund (WIF): Using the facilities of NABARD, the union government provides loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.

208. In India, the Bank NABARD does not provide refinance to : [U.P.P.C.S. (Mains) 2002]

Correct Answer: (c) Export-Import Bank
Solution:National Bank for Agriculture and Rural Development (NABARD) was established in 1982. It provides refinance to Scheduled Commercial Banks, Regional Rural Banks (RRBs) and State Land Development Banks. NABARD does not provide refinance to Export -Import Bank.

209. The nodal agency for implementing the 'Rural Infrastructure Development Fund Programmes' is : [U.P.P.C.S. (Spl.) (Mains) 2008, U.P.P.C.S. (Mains) 2004,2009]

Correct Answer: (a) NABARD
Solution:NABARD is the nodal agency for implementing the 'Rural Infrastructure Development Fund Programmes'. The Rural Infrastructure Development Fund (RIDF) was created in 1995. 96 in NABARD, with an initial corpus of Rs. 2000 crore. NABARD releases the sanctioned amount for 39 eligible activities under RIDF on reimbursement basis except for the initial mobilisation advance @ 30% to North Eastern & Hilly States and 20% for the other States. With the allocation of Rs. 40,001.98 crore for 2022-23 under RIDF XXVIII, the cumulative allocation has reached Rs. 4,58,410.71 crore, including Rs. 18,500 crore under Bharat Nirman.

210. When was the first Regional Rural Bank formed ? [M.P.P.C.S. (Pre) 2012]

Correct Answer: (d) 1975
Solution:The first Regional Rural Bank 'Prathama Grameen Bank' was set up at Moradabad (U.P.) on 2nd October, 1975. Out of five initial stage RRBs in the country, remaining four were set up at Malda (West Bangal), Gorakhpur (U.P.), Bhiwani (Haryana) and Jaipur (Rajasthan).
  • RRBs are banks formed in collaboration by the Central Government, State Governments, and Sponsoring Commercial Banks to give loans to rural areas.
  • Their mission is to fulfill the credit needs of the relatively unserved sections in rural areas: small and marginal farmers, agricultural labourers, and socio-economically weaker sections.
  • The RRBs mobilize financial resources from rural/semi-urban areas and grant loans and advances mostly to small and marginal farmers, agricultural labourers, and rural artisans.
    Origin:
  • The Narasimham Committee on Rural Credit (1975) recommended the establishment of RRBs.
  • The establishment of RRBs finds its route in the ordinance passed on 26th September 1975, and the RRB Act of 1976.
  • Prathama Grameen Bank was the first RRB bank and was established on 2nd October 1975.
    RRBs perform various functions in the following heads:
  • Providing banking facilities to rural and semi-urban areas.
  • Carrying out government operations like the disbursement of wages of MGNREGA workers, distribution of pension, etc.
  • Providing Para-Banking facilities like locker facilities, debit and credit cards, mobile banking, internet banking, UPI etc.
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