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 Agriculture Credit Societies. 

Which of the statements given above is/are correct? 

(a) 1 only 

(b) 2 only 

(c) Both 1 and 2 

(d) Neither 1 nor 2 

Answer: b 

Explanation:  

 Flow of  short term Institutional Credit to Agriculture sector in India(Rs.crore)

Source: Department of Agriculture, Cooperation & Farmers Welfare

In terms of short-term credit,  Commercial banks provide the highest institutional credit to agriculture.

Rural co-operative banks: These banks have a three tier structure:

i) PACS : Primary agricultural credit societies at the village levels. These societies can be formed

by a group of ten farmers, they provide loan to small and marginal farmers.

ii) District central co-operative banks (DCCBs): They are confederation of PACS at the district

level, they lend to PACS.

iii) State co-operative banks: They operate in the apex level in the states, they act as link between

NABARD and the lower levels.

Hence statement 1 is incorrect and 2 is correct.

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