Question

As per reports published in various newspapers, RBI has asked banks to make plans to provide banking services in villages having a population of 2000. This directive issued by the RBI will fall in which of the following categories?

• A. Plan for financial inclusion
• B. Efforts to meet Priority Sector Lending
• C. Extension of Internet and Branchless banking
• D. None of these

Hint:

Coverage targets for unbanked villages by population size point to financial inclusion, not sector-based lending.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept.
Financial inclusion means bringing banking services to people and areas that were previously excluded from the formal banking system, such as small villages.

Step 2: Check option A.
Asking banks to cover villages with a population of 2000 is exactly a step to extend banking to unbanked, under-served rural areas, which is the core meaning of financial inclusion.

Step 3: Check option B.
Priority Sector Lending is about which sectors (agriculture, small industry, etc.) get a minimum share of bank credit, not about geographic branch coverage, so B is wrong.

Step 4: Check option C.
The directive is about reaching unbanked villages in general, not specifically about internet or branchless banking technology, so C is a narrower, incorrect fit.

Step 5: Final Answer.
This directive is a financial inclusion measure, so option A is correct.