It is being suggested that the commercial banks in India should reduce their holdings of non-performing assets. Does it mean that the former should abandon social priorities? (UPSC 1994, 20 Marks, )

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Introduction

Non-performing assets (NPAs) are a major concern for commercial banks in India as they can impact the overall financial health of the banking sector. It is important for banks to reduce their holdings of NPAs to ensure stability and profitability.

Current Scenario: High levels of NPAs in Indian commercial banks have been a significant concern, impacting their profitability and stability.

Impact on Bank Health:

o NPAs reduce the income-earning potential of banks.

o High NPAs necessitate higher provisioning, reducing the available capital for lending.

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Explain the essential feature of Differential Rate of Interest scheme. (UPSC 2003, 2 Marks, )

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Introduction

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What does “priority sector lending” mean? (UPSC 2004, 2 Marks, )

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Introduction

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“In the villages itself no form of credit organization will be suitable except the cooperative society.” – All India Rural Credit Survey. Discuss this statement in the background of agricultural finance in India. What constraints and challenges do financial institutions supplying agricultural finance face? How can technology be used to better reach and serve rural clients? (UPSC 2014, 13 Marks, )

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Introduction

Agricultural finance plays a crucial role in the development of the agricultural sector in India. The All-India Rural Credit Survey emphasizes the importance of cooperative societies in providing credit to farmers in villages. Technology can be leveraged to overcome these challenges and better serve rural clients.