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 are regulated by the RBI, while non-institutional sources (like moneylenders and relatives) are unregulated and often charge higher interest.

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 generally lack standardized rules and often charge higher interest rates.

Step 1: Analyze the options.
(A) Regional Rural Bank: These are formal financial institutions established under the RRB Act to provide credit to rural and agricultural sectors.
(B) Land Development Bank: These are institutional sources that provide long-term credit to farmers for land improvement and development.
(C) Moneylender: This is a non-institutional source. Moneylenders operate outside the formal banking system, usually providing loans based on personal contact rather than legal documentation.
(D) Cooperative Bank: These are organized financial institutions owned by members, operating under formal cooperative credit structures.

Step 2: Conclusion.
The correct answer is Moneylender, as it is an informal, non-institutional source of credit.
Final Answer: \[ \boxed{(C) \, \text{Moneylender}} \]