Question

Which of the following is the source of non-institutional finance?

• A. Regional Rural Bank
• B. Land Development Bank
• C. Moneylender
• D. Cooperative Bank

Hint:

Institutional sources (like Commercial Banks and Cooperatives) are regulated by the RBI, while Non-institutional sources (like Moneylenders and Relatives) are unregulated.

Answer 1

The Correct Option is C

Non-institutional finance refers to credit provided by informal sources that are not regulated by the government or central banking authorities. These sources often rely on personal relationships and typically charge much higher interest rates than formal institutions.

Step 1: Analyze the options.
(A) Regional Rural Bank: These are formal financial institutions established under the RRB Act to provide credit specifically to rural and agricultural sectors under government oversight.
(B) Land Development Bank: These are institutional sources that provide long-term credit to farmers for land improvement and permanent assets.
(C) Moneylender: This is a non-institutional source. Moneylenders operate outside the formal banking system, offering quick loans without legal documentation, but usually at exploitative interest rates.
(D) Cooperative Bank: These are organized financial institutions owned and operated by their members, forming part of the formal institutional credit structure.

Step 2: Conclusion.
The correct answer is Moneylender, as it is the only informal, non-regulated source among the given choices.
Final Answer: \[ \boxed{(C) \, \text{Moneylender}} \]