7 Questions
Why is the provision of timely and adequate finance important for the farm sector?
Timely and adequate finance is important for the farm sector as it enables farmers to invest in seeds, fertilizers, equipment, and other inputs necessary for agricultural production.
Why do Indian farmers have poor repayment capacity and how can it be improved?
Indian farmers often have poor repayment capacity due to factors like crop failure, market price fluctuations, and lack of financial literacy. It can be improved by offering crop insurance, financial literacy programs, and flexible repayment options.
What is the role of RBI in the sphere of rural credit?
The RBI plays a regulatory role in rural credit by setting policies, norms, and guidelines for banks and financial institutions involved in rural credit. It also monitors and supervises the functioning of rural credit institutions.
Explain the various principles of farm finance.
The various principles of farm finance include prudence (wise financial management), profitability (ensuring financial gains), liquidity (availability of cash for immediate needs), and stability (maintaining financial security and sustainability).
Write a note on the classification of loans based on liquidity, security, and purpose with examples.
Loans can be classified based on liquidity (ability to convert assets into cash), security (collateral provided), and purpose (intended use). For example, a crop loan is based on the purpose of farming, while a gold loan is based on the security of gold.
What are the salient features of the crop loan system?
The salient features of the crop loan system include short-term nature, specific purpose of crop production, collateral-free in some cases, and usually tied to the cropping cycle.
Which of the following is a qualitative credit control measure?
CBR
Study Notes
Agricultural Finance and Cooperation
Exam Details
- University of Agricultural Sciences, Bangalore, College of Agriculture, GKVK, Bengaluru
- Exam: Mid-Term, II Semester 2023-24
- Student: Meera Arakeri, ID No.: AMB1134
- Date: 27-05-2024, Time: 8.45-9.45 am
- Marks: 10 (Q.I: 5 x 2.50 = 12.50, Q.II: 10 x 0.50 = 5.00)
Questions for Revision
- Importance of timely and adequate finance for the farm sector
- Reasons for poor repayment capacity of Indian farmers and ways to improve it
- Role of RBI in rural credit sphere
- Principles of farm finance (various P's)
- Classification of loans based on liquidity, security, and purpose with examples
- Salient features of crop loan system
Qualitative Credit Control Measures
- Examples: alternatives to open market operations and CBR (not specified)
This quiz is for 3rd B.Sc. Agriculture students at the University of Agricultural Sciences, Bangalore. It covers topics related to agricultural finance, including the importance of timely finance, repayment capacity, and the role of RBI.
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