Cooperative And SFBs

Question 1

Which entity owns and operates cooperative banks?

Answer 1

Members who are also customers

Cooperative banks are owned by their members, who are also the customers of the bank.

Question 2

What is the specialization of cooperative banks?

Answer 2

Agricultural products and community-based activities

Cooperative banks often focus on serving the needs of agricultural sectors and local communities.

Question 3

Name the first cooperative bank in India and its headquarters.

Answer 3

Anyonya Co-operative Bank Ltd. (ACBL), Vadodara, Gujarat

This bank was established to support the cooperative banking movement in India.

Question 4

What type of banks are Urban Cooperative Banks?

Answer 4

Banks in urban and semi-urban areas lending primarily to small borrowers and businesses

Urban Cooperative Banks cater to the financial needs of small borrowers in urban settings.

Question 5

What is the role of State Cooperative Banks?

Answer 5

Central apex banks and custodians of cooperative structure

State Cooperative Banks play a crucial role in overseeing and supporting the cooperative banking system.

Question 6

What year was the Credit Societies Act passed?

Answer 6

1904

This act was significant in establishing the framework for cooperative credit societies in India.

Question 7

What report was published in December 1954 related to rural credit?

Answer 7

Rural Credit Survey Report

This report assessed the state of rural credit and provided recommendations for improvement.

Question 8

What are the three fundamentals of the Rural Credit Structure?

Answer 8

• State partnership
• Coordination of credit and economic activities
• Trained administration

These fundamentals are key to creating an effective rural credit system.

Question 9

What are the two categories of Urban Cooperative Banks?

Answer 9

• Scheduled
• Non-Scheduled

These categories help classify banks based on their compliance with certain regulatory requirements.

Question 10

What is a significant advantage of cooperative banks over village money lenders?

Answer 10

Lower cost credit and more productive borrowing

Cooperative banks typically offer loans at lower interest rates compared to informal lenders.

Question 11

What are some limitations of cooperative banks?

Answer 11

• Financial constraints
• Unable to meet all farmers’ credit needs
• Increasing overdue loans

These limitations can affect the sustainability and effectiveness of cooperative banks.

Question 12

Which institution was established on 19th July 1982 to support RRBs?

Answer 12

NABARD

NABARD stands for National Bank for Agriculture and Rural Development.

Question 13

What is the main goal of Small Finance Banks (SFB)?

Answer 13

Increasing financial inclusion

SFBs aim to provide financial services to underserved populations.

Question 14

Under which Act are SFBs listed?

Answer 14

Companies Act 2013

This act provides the legal framework for the establishment and operation of SFBs.

Question 15

Do SFBs have geographical restrictions like RRBs?

Answer 15

No

SFBs can operate in any geographical area without the restrictions that apply to RRBs.

Question 16

Which committees recommended the establishment of SFBs?

Answer 16

• Nachiket Mor Committee
• Usha Tharoor Committee

These committees provided insights into the need for SFBs to enhance financial inclusion.

Question 17

When did RBI issue licensing guidelines for SFBs?

Answer 17

November 27, 2014

This date marks the formal introduction of SFBs in the Indian banking landscape.

Question 18

How many SFBs currently operate in India?

Answer 18

12

This number indicates the growing presence of SFBs in the Indian banking sector.

Question 19

Which was the first Small Finance Bank?

Answer 19

Capital Small Finance Bank

This bank was a pioneer in the SFB sector in India.

Question 20

Where is Capital Small Finance Bank located?

Answer 20

Jalandhar, Punjab

This location is significant as it is where the first SFB was established.

Question 21

What is the minimum equity capital required for SFBs?

Answer 21

Rs 200 crore

This capital requirement ensures that SFBs have sufficient financial backing to operate.

Question 22

What percentage of Adjusted Net Bank Credit (ANBC) must SFBs lend to priority sectors?

Answer 22

75%

This mandate ensures that SFBs contribute to the financing of priority sectors in the economy.

Question 23

What is the minimum loan size that at least 50% of the SFB loan portfolio should consist of?

Answer 23

Up to Rs 25 lakh

This requirement helps SFBs focus on smaller loans that cater to local needs.

Question 24

Can SFBs convert into Universal Banks?

Answer 24

Yes, when net worth reaches Rs 500 crore

This conversion allows successful SFBs to expand their services.

Question 25

Are SFBs allowed to become Business Correspondents (BC)?

Answer 25

No, but they can create their own BCs ## Footnote This regulation helps maintain the integrity of SFB operations while allowing them to expand outreach.

Question 26

Name a limitation of SFBs related to market competition.

Answer 26

Competition from private sector banks and NBFCs ## Footnote This competition can challenge the growth and sustainability of SFBs.

Question 27

What role does MUDRA Bank play related to SFBs?

Answer 27

Provides refinancing support ## Footnote MUDRA Bank helps SFBs enhance their lending capabilities, especially for small loans.