What is the purpose of setting up Small Finance Banks (SFBs) in India?
- 1.To supply credit to small business units
- 2.To supply credit to small and marginal farmers
- 3.To encourage young entrepreneurs to set up a business, particularly in rural areas
Select the correct answer using the code given below:
- A.1 and 2 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
▶ Answer & Explanation
Correct answer: A. 1 and 2 only
Small Finance Banks (SFBs) were introduced by the Reserve Bank of India to further the objective of financial inclusion. Their primary mandate is to provide financial services, particularly credit, to unserved and underserved segments of the population, including small business units, marginal farmers, and micro-enterprises. While encouraging entrepreneurship is a broader goal of economic policy, the specific objectives of SFBs are focused on credit dissemination to these identified priority sectors.
Source: UPSC gs1 2017