Question

Which of the following is an institutional source of rural credit?

• A. Regional Rural Banks
• B. Landlords
• C. Traders
• D. Money lenders

Hint:

Whenever asked about institutional or non-institutional sources of credit, remember that banks and financial institutions are institutional sources, while individuals like money lenders are non-institutional.

Answer 1

The Correct Option is A

Step 1: Institutional Sources of Credit.
Institutional sources of credit include formal financial institutions like banks and cooperatives.
Regional Rural Banks (RRBs) are a prime institutional source of rural credit, established to provide credit to the rural population.
Step 2: Non-Institutional Sources.
Landlords, traders, and money lenders are non-institutional sources of credit. They provide informal loans with higher interest rates.
Step 3: Conclusion.
Thus, the correct answer is Regional Rural Banks, which is an institutional source of credit.