Question

As per the reports published in various newspapers, RBI has asked banks to make plan to provide banking services in villages having population of 2000. This directive issued by the RBI will fall in which of the following categories?

• A. Plan for financial inclusion
• B. Efforts to meet Priority sector lending
• C. Extension of Internet and Branchless banking
• D. None of these

Answer 1

The Correct Option is A

As per reports in various newspapers, the Reserve Bank of India (RBI) has issued a directive for banks to create a plan for providing banking services to villages with populations of 2000 or more. Understanding the nature of this directive requires a closer look at the possible applications and objectives of such a mandate. 

1. Plan for financial inclusion: Financial inclusion aims to extend financial services to underserved and unbanked regions, ensuring that every citizen has access to necessary banking facilities. Setting up services in villages with at least 2000 people aligns perfectly with this objective, as it seeks to integrate rural populations into the mainstream financial system by providing them with convenient access to banking services.

2. Efforts to meet Priority sector lending: While related to financial inclusion, priority sector lending specifically requires banks to provide a certain portion of their loans to particular sectors identified as crucial for economic growth. This directive, however, is not directly about lending but about service availability, so it does not fit this category.

3. Extension of Internet and Branchless banking: This option refers to leveraging technology to provide banking services without physical branches, often through digital or internet platforms. While this could be a method used under a financial inclusion plan, the directive itself doesn't explicitly center on digital or branchless banking.

4. None of these: Since the directive clearly matches the objectives of financial inclusion, this option is not correct.

Conclusively, the RBI's plan for banks to extend services to villages with populations of 2000 falls under the category of Plan for financial inclusion.