Consider the following statements 1 Domestic scheduled commercial banks having shortfall in lending ...........

Economic Affairs Types of Banks and Banking

Consider the following statements

1.Domestic scheduled commercial banks having shortfall in lending to “priority sector/agriculture” are allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established in NABARD

2.In the case of foreign banks operating in India which fail to achieve the “priority sector” lending target or sub-targets, an amount equivalent to the shortfall is required to be deposited with SIDBI for one year for the interest rate of 8 percent per annum.

Which of the above statements is/are correct?

Only 1

Only 2

Both 1 and 2

Neither 1 Nor 2

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Explanation:

Both the statements are correct.
1.Domestic scheduled commercial banks having shortfall in lending to “priority sector/agriculture” are allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established in NABARD
2.In the case of foreign banks operating in India which fail to achieve the “priority sector” lending target or sub-targets, an amount equivalent to the shortfall is required to be deposited with SIDBI for one year for the interest rate of 8 percent per annum.