Prelims 2017 · Economy · Question 65
What is the purpose of setting up of Small Finance Banks (SFBs) in India?
- To supply credit to small business units
- To supply credit to small and marginal farmers
- To encourage young entrepreneurs to set up business particularly in rural areas.
Select the correct answer using the code given below:
Answer
1 and 2 only
1. To supply credit to small business units — Correct. RBI’s licensing guidelines for Small Finance Banks explicitly mention serving small business units, micro and small industries, and other unorganized sector entities.
2. To supply credit to small and marginal farmers — Correct. This is directly stated in the objective of SFBs as part of financial inclusion.
3. To encourage young entrepreneurs to set up business particularly in rural areas — Incorrect. This is not a stated objective in RBI’s SFB guidelines. SFBs may indirectly help entrepreneurs through credit access, but the purpose is not specifically to encourage young entrepreneurs or rural start-ups as framed here.
Therefore, only statements 1 and 2 are correct.