Q.State whether the following statement is TRUE or FALSE, and justify your answer:
"The District Central Co-operative Bank deals directly with individual farmers for their crop loans and does not finance the primary societies."

The DCCB works through the societies below it rather than reaching each farmer itself.

In the three-tier structure the farmer borrows from the village society, and the village society borrows from the DCCB.

The statement is FALSE.

In the three-tier co-operative credit structure, credit flows through the tiers, not around them. The District Central Co-operative Bank's chief function is to finance the primary societies of the district — it lends to the village credit societies, and those societies in turn lend the money to their individual farmer-members for seed, fertiliser and cultivation.

So the DCCB's normal relationship with the farmer is indirect: the farmer borrows from the primary society, and the primary society borrows from the DCCB. (A DCCB may deal directly with a few individual borrowers or with the public in ordinary banking, but its defining function is financing the societies, not replacing them.) To say it deals directly with each farmer and does not finance the societies reverses its whole purpose.

Remember the chain of lending: DCCB → primary society → farmer. The DCCB finances the societies; the societies finance the members. Do not collapse these two steps into one.