Economics • Banking & FinanceEasy
What is the primary objective of establishing Regional Rural Banks (RRBs) such as the former Haryana Gramin Bank (now merged into Sarva Haryana Gramin Bank)?
A. To provide institutional credit and banking services to small and marginal farmers, agricultural laborers, and rural artisans✓ Correct Answer
B. To finance heavy multinational heavy-machinery export conglomerates exclusively
C. To regulate foreign exchange reserves and set international monetary policy rates
D. To issue sovereign currency notes and mint commemorative coins for the state
💡 Solution & Explanation
Regional Rural Banks were established under the Regional Rural Banks Act of 1976 following the recommendations of the Narasimham Working Group to bridge credit gaps in rural areas and uplift weaker sections. Sarva Haryana Gramin Bank operates extensively across rural districts of Haryana to mobilize local savings and extend priority sector lending. Priority sector lending mandates commercial banks to allocate a specified percentage of their advances to agriculture and allied rural activities.
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