- Read the passage given below and answer the following questions In 2014, the Reserve Bank of India introduced a new category of banks specifically designed to address the financial needs of underse…

Question

- Read the passage given below and answer the following questions In 2014, the Reserve Bank of India introduced a new category of banks specifically designed to address the financial needs of underserved sections of society. These institutions were established to improve access to financial services in rural and semi-urban areas where traditional banking infrastructure is limited. They are focused on providing support to small and marginalized sections, including micro and small enterprises, unorganized sector workers, and lower-income households, who often struggle to access formal banking channels. These banks are required to provide credit and savings options tailored to the needs of individuals and small businesses with limited resources. The primary goal of these institutions is to bridge the gap in financial access for communities that are typically excluded from mainstream banking services. Despite being smaller in scale compared to commercial banks, the objective of these banks is, however, not small. They play a vital role in connecting underserved regions to basic banking services and aim to make a significant impact on the financial landscape. Additionally, these institutions emphasize building strong relationships within local communities, contributing to reduced income disparity and fostering economic growth in areas lacking established financial networks. Through this model, they also support literacy, empowering clients to manage their savings effectively and access affordable credit for personal or business use. (This is a recreated passage and not the exact one asked in the exam) Identify the type of bank described in the passage.

PYQPulse · Accepted Answer

D. Small Finance Bank

Answer: D. D. Small Finance Bank