Q. Consider the following statements regarding the agriculture credit in India:
1. Central government fixes agriculture credit disbursement targets for the banking sector every year.
2. Domestic Scheduled Commercial Banks are required to lend 18% of the Adjusted Net Bank Credit (ANBC) to agriculture.
3. Regional Rural Banks are required to lend 50% of their total outstanding advances towards agriculture.
Which of the statements given above is/are correct?

[A] 1 only

[B] 1 and 2 only

[C] 3 only

[D] 1, 2 and 3

Answer: B
Notes:

Government fixes agriculture credit disbursement targets for the banking sector every year. 

  • As per RBI directions, Domestic Scheduled Commercial Banks are required to lend 18% of the Adjusted Net Bank Credit (ANBC) or Credit Equivalent to Off-Balance Sheet Exposure (CEOBE), whichever is higher, towards agriculture.  
  • A sub-target of 8% is also prescribed for lending to small and marginal farmers including landless agricultural labourers, tenant farmers, oral lessees and share croppers.  
  • Similarly, in the case of Regional Rural Banks 18% of their total outstanding advances is required to be towards agriculture and a sub-target of 8% has been set for lending to small and marginal farmers. 

Source: Ramesh Singh