NABARD Assistant Manager Grade A (RDBS) · India · National Bank for Agriculture and Rural Development
Original practice questions written to the published syllabus · not past papersHow farmers and rural enterprises borrow, how lenders judge them, and the institutions that make up rural credit. The single highest cross-exam topic in this track.
In the exams: agricultural master's entrance examinations, agricultural economics (heavy); agricultural economics PhD entrance and fellowship examinations, agricultural finance (heavy); agricultural development bank officer recruitment (heavy); agricultural field officer recruitment in banking, agricultural finance (heavy); central bank officer recruitment economic and social issues papers (reported)
How our questions for NABARD Assistant Manager Grade A spread across the units of Agricultural Finance, Credit & Rural Banking. Difficulty: 15 easy, 32 medium, 11 hard.
| Area-based lead-bank arrangements | 7 | |
| Rural and community banks | 7 | |
| Central banks and development finance institutions | 7 | |
| Interest subsidies for farm credit | 6 | |
| Priority-sector lending | 6 | |
| History of agricultural finance | 5 | |
| Seasonal crop-credit products | 5 | |
| Microfinance, self-help and savings groups, and MFIs | 5 | |
| Multi-agency approach and the credit gap | 3 | |
| Classification of credit: short, medium and long term; production and investment | 2 | |
| Bank nationalisation | 2 | |
| Scale of finance | 2 | |
| Estimating credit needs | 1 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
Which classification of agricultural credit is based on the economic purpose of the loan rather than on its term, security or lender?
D. Production, investment, consumption and marketing credit
Purpose-based classes describe what the loan finances: current operations, fixed capital, household needs or holding produce for sale. Term classes follow the length of the loan, secured/unsecured follows collateral, and institutional/non-institutional follows the type of lender.
Which statement about the spread of the Raiffeisen cooperative credit model is correct?
A. It spread through Europe and, via colonial laws, Asia and Africa
From Germany the model spread to France, the Netherlands, Quebec and elsewhere in Europe and North America, and colonial administrations copied it in cooperative laws in Asia and Africa. It predates the World Bank by eighty years.
Which pair of countries both nationalised their large commercial banks in 1982?
B. France and Mexico
France nationalised its remaining large banks in 1982 (after an earlier round in 1945) and Mexico nationalised its banks in September 1982 during the debt crisis. India's nationalisations were in 1969 and 1980.
The main purpose of an area approach to rural credit is to
A. Make one body accountable for each district's credit plan
An area approach assigns responsibility for assessing needs and coordinating lenders in a territory; it does not create a lending monopoly, set rates or abolish cooperatives.
Which is the main risk of area-based credit planning?
C. Planning that becomes target-chasing
When plan targets become the goal, lenders may book loans to meet them without regard to quality. Area planning does not create a monopoly, set rates or replace appraisal.
Which is the standard working-capital product of commercial farm lenders in North America, Europe and Australia?
B. An operating line secured on crops, stock and receivables
Operating lines are revolving short-term facilities that finance seasonal costs and are repaid from sales. Mortgages and warehouse loans are long-term investment credit, and a rotating savings association is an informal group, not a lender's product.
A government pays lenders a subvention of 1.5 per cent a year on 2,000 million currency units of eligible crop loans outstanding for a full year. The budget cost is
D. 30 million
1.5% x 2,000 million = 30 million. 40 million uses 2%, 60 million uses 3% and 140 million uses the full 7% lending rate.
Which remedy targets the credit gap faced specifically by tenant farmers without land titles?
D. Financing them through joint liability groups
JLGs replace land collateral with mutual guarantee, which suits tenants and oral lessees. Higher collateral, lower scales and fewer branches would widen the gap.
A bank must lend 12 per cent of its adjusted net credit of 5,000 million currency units to weaker sections and has lent 450 million to them. Its shortfall is
A. 150 million
Target = 12% x 5,000 million = 600 million; shortfall = 600 - 450 = 150 million. 600 million is the target, 450 million the achievement, and 1,050 million wrongly adds them.
A microfinance regulation caps a household's total loan repayments at 50 per cent of its monthly income. Which problem is it mainly designed to prevent?
C. Over-indebtedness from multiple borrowing
Debt-service caps respond to crises in which households borrowed from several lenders at once and could not repay. They do not address margins, competition or savings.
Ten here, 58 in the app. The Laisha app has every practice question we have written to NABARD Assistant Manager Grade A in this subject, marked as you go, with timed papers, a jump-to-unanswered list and a certificate when you pass at 70 per cent.
Free for ten days, then one subscription of US$10 a month. We would rather say so here than have you find it later.
An AI operating system for agriculture: free guides, manuals and tools written for every country.