Correct Option
Statement 2 is correct. District Central Cooperative Banks (DCCBs) constitute the intermediate tier in the short-term cooperative credit structure in India. Their fundamental role involves mobilizing resources and channeling funds to Primary Agricultural Credit Societies (PACS) at the grassroots level. PACS, in turn, are responsible for directly disbursing credit to individual farmers. This hierarchical arrangement facilitates the flow of credit from State Cooperative Banks (apex level) through DCCBs to the ultimate beneficiaries.
Incorrect Options
Statement 1 is incorrect. In the context of short-term credit delivery to the agriculture sector, Scheduled Commercial Banks (SCBs) are the predominant institutions, not District Central Cooperative Banks (DCCBs). SCBs possess a significantly larger branch network, a more extensive deposit base, and are mandated to allocate a substantial portion of their credit to the agricultural sector under Priority Sector Lending (PSL) norms (currently 18% of Adjusted Net Bank Credit or Credit Equivalent of Off-Balance Sheet Exposure, whichever is higher). While cooperative banks play a vital role, SCBs consistently account for the major share of agricultural credit disbursal. Regional Rural Banks (RRBs) also contribute to agricultural credit, but their overall share is typically lower than that of SCBs.