money supply, banking & financial institutions section 3 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (c)

Answer: (a)

Answer: (d)

The Kisan Credit Card (KCC) scheme is an innovative credit delivery mechanism to meet the production credit requirements of the farmers in a timely and hassle-free manner.

The scheme is under implementation in the entire country by the vast institutional credit framework involving Commercial Banks, RRBs and Cooperatives and has received wide acceptability amongst bankers and farmers.

Kisan Credit Card Scheme aims at providing adequate and timely credit support from the banking system under a single window to the farmers for their following needs:

To meet the short-term credit requirements for the cultivation of crops

1. Post-harvest expenses
2. Produce Marketing loan
3. Consumption requirements of farmer household
4. Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery etc.
5. Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc.

The following people are eligible for this scheme

1. All Farmers – Individuals / Joint borrowers who are owner cultivators
2. Tenant Farmers, Oral Lessees & Share Croppers
3. Self Help Groups or Joint Liability Groups of Farmers

Answer: (c)

When the government offers high rates on its own savings scheme then banks are apprehensive of reducing their deposit rates as it will lead to people depositing money in government savings schemes rather than in banks.

When the banks are not able to reduce their deposit rate, they do not reduce the lending rate also as it will squeeze/reduce their profits.

It hinders monetary policy transmission and benefits mostly rich people.

[Ref: Economic Survey 2015-16 Vol-I, Page 96, Small Savings]

Answer: (b)

Those transactions which happen between Indian residents and Foreigners or non-resident Indians (NRIs) are recorded in India’s balance of payment.

In the first statement, an Indian resident is earning income from abroad from a foreign entity and in the second statement also, an Indian family is getting money free from an NRI.

So, both will be recorded in India’s balance of payments under the current account.