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What is the purpose of setting up of Small Finance Banks (SFBs) in India?

1. To supply credit to small business units.
2. To supply credit to small and marginal farmers.
3. To encourage young entrepreneurs to set up business particularly in rural areas.

Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3



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(a) 1 and 2 only

Statement 3 is incorrect as there is no explicit provision for Small Finance Banks (SFBs) to encourage the setting up of businesses in rural areas. The primary objectives of SFBs, as per the RBI guidelines, are to provide savings vehicles and supply credit to small business units, small and marginal farmers, micro and small industries, and other unorganized sector entities, through high technology-low-cost operations.


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