What is the purpose of setting up of 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 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 were established to further the objective of financial inclusion by providing financial services to unserved and underserved segments of the population. This includes extending credit to micro and small enterprises, as well as small and marginal farmers, thereby supporting economic activity in these crucial sectors. Their mandate is to cater to the needs of specific sectors and demographics that were previously not adequately served by traditional banks.
Source: UPSC gs1 2017