Q.State whether the following statement is TRUE or FALSE, and justify your answer:
"The Maharashtra State Co-operative Bank deals directly with the individual farmer in the village."

An apex bank normally works at 'one remove', through the tiers below it, not face-to-face with the farmer.

The MSC Bank finances the district banks, which finance the village societies, which finance the farmer.

The statement is FALSE.

The Maharashtra State Co-operative Bank is the apex bank of the three-tier structure. It ordinarily does not deal directly with the individual farmer. Instead, it channels its funds downward through the tiers:

• The apex bank finances the District Central Co-operative Banks (DCCBs).
• The DCCBs finance the Primary Agricultural Credit Societies (PACS) in the villages.
• The primary societies lend directly to the individual farmer.

In other words, the apex bank works at 'one remove': it is the bank of the district banks, not the farmer's own lender. It is the primary village society, at the base of the pyramid, that deals face-to-face with the cultivator.

A common error is to think that because the apex bank finances agriculture, it lends to farmers directly. It finances the structure; the farmer is reached only at the base, through the primary society.