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

The key detail in this question is “villages having population of 2000”, a population-based rural coverage target, which is a classic marker of a financial inclusion drive.

1. Financial inclusion: This term covers exactly this kind of directive, expanding banking access to villages that previously had no formal bank presence.
2. Priority Sector Lending: This is about ensuring credit flows to specific sectors like agriculture and small businesses, not about setting up branches or banking points in villages.
3. Extension of Internet and branchless banking: This would apply only if the directive specifically mandated a technology channel, but the question does not mention a particular delivery method.

The directive is clearly about widening banking access geographically, which is the definition of financial inclusion.

So the correct answer is option A.