UPSC Prelims Practice Questions — RBI Rolls Out Measures to Strengthen Cooperative Banks’ Financial Health, Governance and Digital Inclusion
Q1. The 2026 measure permitting bank loans to the National Cooperative Development Corporation (for on-lending to cooperative societies) to be classified as priority sector lending was notified by which authority?
- A. Reserve Bank of India
- B. National Bank for Agriculture and Rural Development
- C. Ministry of Cooperation
- D. Securities and Exchange Board of India
Q2. With reference to the 2026 priority sector lending facility for loans to NCDC, consider the following statements:
1. Such loans become eligible for priority sector classification with effect from 19 January 2026.
2. The facility is available to scheduled commercial banks but not to Regional Rural Banks, Urban Cooperative Banks, Small Finance Banks or Local Area Banks.
3. NCDC must furnish a half-yearly utilisation certificate from a CAG-empanelled chartered accountant firm confirming end-use.
Which of the statements given above is/are correct?
- Such loans become eligible for priority sector classification with effect from 19 January 2026.
- The facility is available to scheduled commercial banks but not to Regional Rural Banks, Urban Cooperative Banks, Small Finance Banks or Local Area Banks.
- NCDC must furnish a half-yearly utilisation certificate from a CAG-empanelled chartered accountant firm confirming end-use.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q3. With reference to the National Cooperative Development Corporation (NCDC), consider the following statements:
1. It is a statutory corporation established under the NCDC Act, 1962.
2. It functions under the administrative control of the Ministry of Cooperation.
3. Its General Council is headed ex officio by the Governor of the Reserve Bank of India.
4. Its mandate includes financing production, processing, marketing and storage of agricultural produce and notified commodities.
Which of the statements given above are correct?
- It is a statutory corporation established under the NCDC Act, 1962.
- It functions under the administrative control of the Ministry of Cooperation.
- Its General Council is headed ex officio by the Governor of the Reserve Bank of India.
- Its mandate includes financing production, processing, marketing and storage of agricultural produce and notified commodities.
- A. 1, 2 and 3
- B. 1 and 4 only
- C. 1, 2 and 4
- D. 2, 3 and 4
Q4. With reference to the National Cooperative Development Corporation and its parent ministry, consider the following statements:
1. The Ministry of Cooperation was carved out of the Ministry of Agriculture in July 2021.
2. NCDC provides financial assistance to cooperatives for agricultural and allied activities.
3. NCDC came under the Ministry of Cooperation following that ministry's creation.
4. NCDC is a constitutional body established under Article 243 of the Constitution.
Which of the statements given above is NOT correct?
- The Ministry of Cooperation was carved out of the Ministry of Agriculture in July 2021.
- NCDC provides financial assistance to cooperatives for agricultural and allied activities.
- NCDC came under the Ministry of Cooperation following that ministry's creation.
- NCDC is a constitutional body established under Article 243 of the Constitution.
- A. 1 and 3
- B. 2 only
- C. 3 and 4
- D. 4 only
Q5. Following the Banking Regulation (Amendment) Act, 2020, the banking-related regulation and supervision of cooperative banks vests principally with which authority?
- A. Reserve Bank of India
- B. Registrar of Cooperative Societies
- C. National Bank for Agriculture and Rural Development
- D. Ministry of Cooperation
Q6. Cooperative banks were first brought within the purview of the Banking Regulation Act, 1949 through the insertion of which section, later reinforced by the 2020 amendment?
- A. Section 56
- B. Section 35A
- C. Section 22
- D. Section 45
Q7. Under the 2026 priority sector norms, which entity acts as the intermediary that receives bank credit for on-lending to cooperative societies?
- A. National Cooperative Development Corporation
- B. National Bank for Agriculture and Rural Development
- C. National Cooperative Union of India
- D. Primary Agricultural Credit Societies
Q8. The facility of classifying loans to NCDC as priority sector lending is expressly NOT available to how many categories of banks (Regional Rural Banks, Urban Cooperative Banks, Small Finance Banks and Local Area Banks)?
- A. Two
- B. Three
- C. Four
- D. Five
Q9. Sahakar Sarathi, the shared services entity for Rural Cooperative Banks, was set up as an initiative led by which apex institution?
- A. National Bank for Agriculture and Rural Development
- B. Small Industries Development Bank of India
- C. Export-Import Bank of India
- D. National Housing Bank
Q10. In the context of Sahakar Sarathi, what does a 'Shared Services Entity (SSE)' for Rural Cooperative Banks most precisely denote?
- A. A common institution that pools and delivers technology and digital-banking infrastructure to multiple rural cooperative banks
- B. A deposit-insurance vehicle that guarantees the deposits held in rural cooperative banks
- C. A refinance window through which NABARD lends directly to individual farmers
- D. A statutory ombudsman for resolving customer grievances against cooperative banks
Q11. Which of the following is the overarching guiding vision under which the Ministry of Cooperation drives its cooperative-sector reforms?
- A. Sahakar se Samriddhi
- B. Sabka Saath, Sabka Vikas
- C. Antyodaya
- D. Atmanirbhar Krishi
Q12. The short-term rural cooperative credit structure in India (comprising PACS, District Central Cooperative Banks and State Cooperative Banks) is classically organised into how many tiers?
- A. Two
- B. Three
- C. Four
- D. Five