With reference to Small Finance Banks (SFBs) consider the following statements:1.These are specialized banks that focus on providing basic banking services to small businesses, low-income individuals, micro and small enterprises, and other marginalized groups.2.SFBs are required to allocate a specified portion of their lending to priority sectors.3.SFBs offer investment banking services and stock trading.Which of the statements given above are correct?

Q. With reference to Small Finance Banks (SFBs) consider the following statements::
1.These are specialized banks that focus on providing basic banking services to small businesses, low-income individuals, micro and small enterprises, and other marginalized groups.
2.SFBs are required to allocate a specified portion of their lending to priority sectors.
3.SFBs offer investment banking services and stock trading.
Which of the statements given above are correct?:

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A

Notes:

Explanation –

Statements 1 and 2 are correct. SFBs are specialized banks that focus on providing basic banking services to small businesses, low-income individuals, micro and small enterprises, and other marginalized groups. SFBs are required to allocate a specified portion of their lending to priority sectors, including agriculture, micro and small enterprises (MSEs), and other sectors that contribute to economic development.

Statement 3 is incorrect. SFBs are focused on providing basic banking services to underserved and unbanked segments of the population. They are not authorized to offer investment banking services or stock trading.

Source: ForumIAS

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