The question asks to identify the financial institution that has the largest share in providing credit to agriculture and allied activities in India. This requires knowledge of the structure and contribution of different financial institutions to agricultural credit.
Correct Option: A) Commercial banks. Commercial banks have the largest share in the disbursement of credit to agriculture and allied activities in India. This is primarily due to their extensive branch network, larger financial resources, and the emphasis placed on priority sector lending by the government and the RBI, which mandates a significant portion of their lending to go to sectors like agriculture.
The question asks why "teaser loans" offered by commercial banks are a cause of economic concern. We need to evaluate each statement provided to determine its correctness in this context.
A) 1 only. Statement 1 correctly identifies the risk of default associated with teaser loans due to their sub-prime lending characteristics, which is a significant economic concern.
The question asks to identify the services rendered under microfinance. Microfinance aims to provide a range of financial services to low-income individuals and groups who typically lack access to conventional banking and related services. We need to evaluate each listed service to determine if it falls under the ambit of microfinance.
Correct Option: D) 1 2 3 and 4
The question asks about the components of Priority Sector Lending (PSL) by banks in India. To answer this, one needs to know the categories defined by the Reserve Bank of India (RBI) under PSL.
Correct Option: D) All of the above. Priority Sector Lending in India encompasses credit to agriculture, micro and small enterprises, and various categories falling under weaker sections, among others. The RBI periodically updates the list of eligible categories under PSL, but these three are consistently major components.
The question asks to arrange different types of liquid assets in decreasing order of liquidity. Liquidity refers to the ease with which an asset can be converted into cash without significant loss of value. We need to evaluate each asset based on this criterion.
Based on this analysis, the decreasing order of liquidity is: Currency > Demand deposits > Savings deposits > Time deposits.
Mapping this to the given options:
So, the correct sequence is 4-1-3-2.
Correct Option: D) 4-1-3-2
The question asks about the regulatory functions of the Reserve Bank of India (RBI) concerning commercial banks. We need to identify which of the given aspects fall under the RBI's regulatory purview.
All four statements describe functions that are indeed regulated by the Reserve Bank of India. The RBI's mandate includes ensuring the sound functioning, stability, and growth of the banking sector.
D) 1, 2, 3 and 4 — All the listed functions (liquidity of assets, branch expansion, merger of banks, and winding-up of banks) are under the regulatory control of the Reserve Bank of India, as per the Banking Regulation Act, 1949, and its role as the central banking authority.