What is the purpose of setting up of Small Finance Banks (SFBs) in India?1.To supply credit to small business units2.To supply credit to small and marginal farmers3.To encourage young entrepreneurs to set up business particularly in rural areas.Select the correct answer using the code given below:

1. A

   1 and 2 only

   (a) 1 and 2 only. Small Finance Banks exist to supply credit to unserved and underserved units, including small businesses and small and marginal farmers. Encouraging young rural entrepreneurs as a separate, stated purpose is not part of the RBI design in the way statement 3 puts it. This is the official key.

2. B

   2 and 3 only

   (b) 2 and 3 only. Dropping small-business credit and keeping the entrepreneur-promotion line is wrong.

3. C

   1 and 3 only

   (c) 1 and 3 only. Farmers are a core SFB target; statement 3 is the extra. Not the key.

4. D

   1, 2 and 3

   (d) 1, 2 and 3. Statement 3 is not an official SFB purpose as framed. All three is not the key.

Summary. Official key is (a) 1 and 2 only. RBI’s Small Finance Bank guidelines aim to further financial inclusion by providing savings and credit to small business units, small and marginal farmers, micro and small industries, and other unorganised-sector entities. A general youth-entrepreneurship mission is not a distinct, listed SFB objective. Payments Banks are the neighbouring differentiated-bank type (they do not lend). Honour 1 and 2 only.