Question

Which of the following provides long term loans ?

• A. Primary Agricultural Credit Society
• B. Land Development Bank
• C. Commercial Bank
• D. None of these

Hint:

Remember the time frames for agricultural credit: PACS = Short-term (e.g., for seeds, fertilizers). Land Development Banks = Long-term (e.g., for tractors, land purchase).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The question asks to identify the financial institution specifically designed to provide long-term credit, particularly in the agricultural sector.

Step 2: Detailed Explanation:
\[\begin{array}{rl} \bullet & \text{Primary Agricultural Credit Societies (PACS): These are grassroots-level cooperative credit institutions. They primarily provide short-term and medium-term loans to farmers for seasonal agricultural operations.} \\ \bullet & \text{Land Development Banks (LDBs): Now known as Land and Agriculture Development Banks, these are specialized banks that provide long-term loans to farmers for purposes like purchasing machinery (tractors), land improvement, minor irrigation, etc. The loan period can extend from 5 to 20 years.} \\ \bullet & \text{Commercial Banks: While commercial banks do provide a range of loans, including some long-term ones, their primary focus is not exclusively on long-term agricultural credit in the way LDBs are. LDBs are the specialized agency for this purpose.} \\ \end{array}\]

Step 3: Final Answer:
Land Development Banks are the institutions that specifically provide long-term loans for agricultural development.