Why do banks need to promote lending activities in rural India?

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They exploit people

Cheap and safe

No collateral is required

None of the above

answer is B.

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Detailed Solution

Banks need to promote lending activities in rural India because it is Cheap and Safe.
Banks are cheap and safe sources of credit as compared to informal sources of credit. It is also seen that rural areas are more in need of loan facilities as compared to urban areas. There are not many banks in the rural areas as well and sometimes no bank reaches the interior of the rural areas. It is imperative for people to reduce dependency on informal sources of credit. Additionally, due to a lack of education and knowledge, people living in rural areas are more used to informal sources of credit, which often results in exploitation by moneylenders and debt traps. As such, increasing the lending activities will help to improve the livelihood of people living in rural areas and help in their overall development.

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