What is the purpose of setting up of Small Finance Banks (SFBs) in India? 1. To supply credit to small business units 2. To supply credit to small and marginal farmers 3. To encourage young entrepreneurs to set up business particularly in rural areas. Select the correct answer using the code given below:

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.