The correct option is 1 only
Explanation
The evolution of the rural credit system in India has been characterized by a shift from traditional moneylenders to institutional sources. This transition was driven by major policy interventions such as the nationalization of banks and the establishment of specialized institutions like NABARD to ensure credit availability for agriculture and rural development.
- Statement 1 is Correct: The nationalization of commercial banks in 1969 marked the adoption of a social banking approach. This policy aimed to shift the focus from "class banking" to "mass banking," mandating banks to expand their branch networks into rural areas and lend to priority sectors, thereby significantly altering the landscape of rural credit.
- Statement 2 is Incorrect: The National Bank for Agriculture and Rural Development (NABARD), established in 1982, is an apex development financial institution. Its primary function is to provide refinance support to commercial banks, Regional Rural Banks (RRBs), and cooperative banks. It does not lend money directly to individual farmers or rural citizens.
- Statement 3 is Incorrect: The Green Revolution, which began in the mid-1960s, necessitated higher investments in inputs like high-yielding variety seeds, fertilizers, and machinery. Consequently, the demand for credit for production-oriented activities increased significantly. The credit system evolved to support these production needs rather than ceasing credit for such activities.
Key Takeaway: The 1969 bank nationalization introduced social banking to expand rural credit access, while NABARD serves as a refinancing agency for rural financial institutions rather than a direct lender to farmers.