Chapter 3 Brief history of Agricultural finance Flashcards

1
Q

What was the primary focus of India’s first five-year plan in 1951?

A

The primary focus was on developing the primary sector, including agriculture.

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2
Q

What was emphasized by the National Credit Council in 1968 regarding commercial banks?

A

The National Credit Council emphasized that commercial banks should increase their involvement in financing priority sectors, especially agriculture and small-scale industries.

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3
Q

What was the average population per bank branch in India in 1969?

A

The average population per bank branch was 64,000.

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4
Q

What was the 1:3 ratio prescribed by the Reserve Bank of India in 1969?

A

The ratio prescribed was for opening 1 branch in rural/semi-urban centres for every 3 branches in urban centres.

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5
Q

What was the role of the cooperative sector in agricultural credit before 1970?

A

The cooperative sector was the primary channel for institutional credit to agriculture during the first two decades after independence.

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6
Q

What landmark policies were introduced in the 1970s for agricultural credit?

A

The Lead Bank Scheme and Priority Sector Lending were introduced to channel agricultural credit and promote rural development.

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7
Q

What was the purpose of the Regional Rural Bank Act of 1976?

A

The act aimed to provide sufficient banking and credit facilities for agriculture and rural sectors.

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8
Q

What was the establishment of NABARD in 1982 aimed at?

A

NABARD was established to promote agriculture and rural development in India.

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9
Q

What model did NABARD introduce in 1992 to enhance financial inclusion?

A

NABARD introduced the Self-Help Group (SHG) model to further financial inclusion of excluded segments.

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10
Q

What initiative was introduced by the Reserve Bank of India in 1989?

A

The Reserve Bank introduced the Service Area Approach (SAA) and Annual Credit Plan (ACP) system to reach rural areas.

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11
Q

What economic reforms started in the 1990s related to agricultural finance?

A

The economic reforms focused on financial soundness and operational efficiency of financial institutions, including rural financial institutions.

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12
Q

What was the nationwide farm loan waiver announced in 1990?

A

The farm loan waiver in 1990 had a cost of ₹100 billion to the national exchequer.

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13
Q

What is the Rural Infrastructure Development Fund (RIDF) established in 1995?

A

RIDF, established with NABARD, funds rural infrastructure projects to deepen credit absorption capacity in states.

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14
Q

What is the SHG-Bank Linkage programme introduced by NABARD?

A

The SHG-Bank Linkage programme is a partnership model involving SHGs, banks, and NGOs, introduced as a pilot project in 1992-93.

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15
Q

When was the Kisan Credit Card (KCC) introduced?

A

The Kisan Credit Card was introduced in 1998 to provide hassle-free credit to farmers.

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16
Q

What is the Ground Level Credit (GLC) policy introduced in 2003-04?

A

The GLC policy sets annual targets for agriculture and allied sectors, which banks are required to achieve during the financial year.

17
Q

What policy initiative was introduced in 2004-2005 for agricultural credit?

A

The initiative aimed to double the volume of credit to agriculture over a period of three years and expand the reach of formal finance.

18
Q

What financial scheme was introduced in 2006-07 to reduce interest rates for farmers?

A

The Interest Subvention Scheme (ISS) was introduced to enable farmers to avail farm credit at reduced interest rates.

19
Q

What are the Business Correspondents (BCs) and Business Facilitators (BFs) introduced in 2006?

A

BCs and BFs were introduced to enhance financial inclusion and extend banking services to remote areas.

20
Q

What model did NABARD introduce in 2006 for tenant farmers and share-croppers?

A

NABARD introduced the Joint Liability Group (JLG) model to provide credit access to tenant farmers and share-croppers.

21
Q

What was the Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS) of 2008?

A

The ADWDRS involved waiving institutional debt for small farmers and offering a one-time settlement opportunity to others, involving ₹525.166 billion in write-offs.

22
Q

What incentive was introduced in 2009-10 for prompt repayment of loans?

A

The Prompt Repayment Incentive (PRI) of 3% was introduced to reduce the effective interest rate to 4% for farmers who repaid loans on time.

23
Q

What changes were made to the Priority Sector Lending (PSL) guidelines in 2012?

A

The PSL guidelines were revised to widen eligible activities and shift focus from ‘credit in agriculture’ to ‘credit for agriculture’.

24
Q

What sub-target was set under the revamped PSL guidelines for small and marginal farmers in 2015?

A

A sub-target of 8% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure was prescribed for small and marginal farmers.