In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities?
- ACommercial BanksCorrect
- BCooperative Banks
- CRegional Rural Banks
- DMicrofinance Institutions
Explanation
The correct answer is Commercial Banks.
In India, Commercial Banks account for the largest share of institutional credit to the agriculture sector, typically contributing over 75 percent of the total disbursement. While Cooperative Banks and Regional Rural Banks play a significant role in rural areas, their combined share is much smaller than that of Commercial Banks.
Commercial Banks are able to lead in credit disbursement due to their vast network, larger capital base, and the implementation of Priority Sector Lending targets mandated by the Reserve Bank of India. These targets require banks to allocate 18 percent of their adjusted net bank credit to the agriculture sector. Microfinance Institutions contribute the smallest share among the given options.
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