Concept:Developing the banking habit of rural dwellers requires making financial services easier and cheaper for them.
Subsidizing the traditional money lenders is one way to achieve this.
Explanation:Rural people often use traditional money lenders because they are close and convenient.
The government can encourage the spread of banking habits by supporting these local lenders financially.
When traditional money lenders are subsidized, government or financial institutions can share part of their operating costs.
The lenders may also be given credit facilities at little or no interest.
This lowers their operating expenses.
The reduced cost can then be passed on to the rural dwellers in the form of cheaper and more accessible financial services.
As a result, rural dwellers are gradually drawn into using proper banking services.
Therefore, the money lenders should not be banned, heavily taxed, or merely legalized.
They should be subsidized.
Answer:C. Subsidized.