Directions: Study the following information carefully and answer the question given below.
Read the following passage carefully and answer the questions that follow:
Over the past decade, Indiaโs digital public infrastructure (DPI)โoften epitomised by the unified trifecta of Aadhaar, Unified Payments Interface (UPI), and the Open Network for Digital Commerce (ONDC)โhas fundamentally democratised financial inclusion. Historically, conventional banking institutions bypassed rural agrarian demographics due to exorbitant transactional costs and the absence of formal credit histories. Micro-enterprises and smallholders were consequently relegated to usurious informal moneylenders whose predatory interest rates perpetuated systemic intergenerational indebtedness.
The proliferation of interoperable, low-cost digital architecture has reversed this systemic exclusion. Direct Benefit Transfers (DBTs) channeled through Aadhaar-seeded accounts have eliminated leakage, ghost beneficiaries, and administrative rent-seeking in welfare disbursements. Concurrently, transaction footprints generated through digital payments now provide cash-flow proof, enabling non-banking financial companies (NBFCs) and fintech lenders to underwrite microloans without collateral. Nevertheless, substantial structural impediments persist. Algorithmic bias in credit scoring, escalating digital fraud targeting neo-literate users, and the persisting rural digital gender divide demonstrate that expanding digital rails without robust digital literacy and stringent consumer grievance redressal frameworks cannot achieve true socio-economic equity.
According to the passage, why did traditional commercial banks historically neglect rural agrarian borrowers?
๐ก Solution & Explanation:
Correct Answer: (B)
Core Concept: Reading Comprehension โ Factual Retrieval
Step-by-Step Solution:
1. The passage explicitly states: 'conventional banking institutions bypassed rural agrarian demographics due to exorbitant transactional costs and the absence of formal credit histories.'
2. This matches option (B) directly.
3. Options A, C, and D are factually inaccurate.
Key Shortcut / Exam Tip: Locate 'conventional banking institutions bypassed...' in the first paragraph.