Question

Difference between formal source of credit and informal source of credit

Answer 1

RBI dominates the functions of formal sources of credit but in informal sources there is no organisation that dominates the credit activities. Formal sources usually charges lower rates of interest whereas in informal sources they charge much higher rates of interest.

Answer 2

ʜᴇʏᴀ ᴍᴀᴛᴇ!!

ʜᴇʀᴇ ɪs ᴜʀ ᴀɴsᴡᴇʀ ⏬⏬

ғᴏʀᴍᴀʟ sᴏᴜʀᴄᴇ ᴏғ ᴄʀᴇᴅɪᴛ:

ᴀ)    ʟᴏᴀɴs ᴛʜᴀᴛ ᴀʀᴇ ɢɪᴠᴇɴ ʙʏ ʙᴀɴᴋs ᴀɴᴅ ᴄᴏ-ᴏᴘᴇʀᴀᴛɪᴠᴇ ɪɴsᴛɪᴛᴜᴛɪᴏɴs ᴀʀᴇ ᴄᴀʟʟᴇᴅ ғᴏʀᴍᴀʟ sᴇᴄᴛᴏʀ ᴏғ ᴄʀᴇᴅɪᴛ.

ʙ)    ᴛʜᴇ ғᴜɴᴄᴛɪᴏɴɪɴɢ ᴏғ ᴛʜᴇsᴇ ʙᴀɴᴋs ᴀɴᴅ ᴄᴏ-ᴏᴘᴇʀᴀᴛɪᴠᴇ ɪɴsᴛɪᴛᴜᴛɪᴏɴs ᴀʀᴇ sᴜᴘᴇʀᴠɪsᴇᴅ ʙʏ ʀᴇsᴇʀᴠᴇ ʙᴀɴᴋ ᴏғ ɪɴᴅɪᴀ – ʀʙɪ.

ᴄ)    ᴛʜᴇsᴇ ɪɴsᴛɪᴛᴜᴛɪᴏɴs ᴀʀᴇ ʀᴇϙᴜɪʀᴇᴅ ᴛᴏ ʀᴇᴘᴏʀᴛ ᴛᴏ ᴛʜᴇ ʀʙɪ ᴛʜᴇ ʀᴀᴛᴇ ᴏғ ɪɴᴛᴇʀᴇsᴛ, ᴀᴍᴏᴜɴᴛ ʟᴇɴᴅɪɴɢ, ᴇᴛᴄ.

ᴅ)    ʙᴏʀʀᴏᴡᴇʀ ɪs ʀᴇϙᴜɪʀᴇᴅ ᴛᴏ sᴜʙᴍɪᴛ ᴄᴏʟʟᴀᴛᴇʀᴀʟs ᴀɴᴅ ᴅᴏᴄᴜᴍᴇɴᴛs.

ɪɴғᴏʀᴍᴀʟ sᴏᴜʀᴄᴇ ᴏғ ᴄʀᴇᴅɪᴛ:

ᴀ)    ʟᴏᴀɴs ᴛʜᴀᴛ ᴀʀᴇ ɢɪᴠᴇɴ ʙʏ ᴍᴏɴᴇʏ ʟᴇɴᴅᴇʀs, ғʀɪᴇɴᴅs ᴀɴᴅ ʀᴇʟᴀᴛɪᴠᴇs ᴀʀᴇ ᴄᴀʟʟᴇᴅ ɪɴғᴏʀᴍᴀʟ sᴏᴜʀᴄᴇ ᴏғ ᴄʀᴇᴅɪᴛ.

ʙ)    ᴛʜᴇʏ ᴀʀᴇ ɴᴏᴛ sᴜᴘᴇʀᴠɪsᴇᴅ ʙʏ ʀᴇsᴇʀᴠᴇ ʙᴀɴᴋ ᴏғ ɪɴᴅɪᴀ – ʀʙɪ.

ᴄ)    ᴛʜᴇʏ ᴄᴀɴ ʟᴇɴᴅ ᴍᴏɴᴇʏ ᴀᴛ ᴀɴʏ ɪɴᴛᴇʀᴇsᴛ ʀᴀᴛᴇ ᴀɴᴅ ᴜsᴇ ᴀɴʏ ᴍᴇᴀɴs ᴛᴏ ɢᴇᴛ ʙᴀᴄᴋ ᴛʜᴇɪʀ ᴍᴏɴᴇʏ.

ᴅ)    ʙᴏʀʀᴏᴡᴇʀ ɪs ɴᴏᴛ ʀᴇϙᴜɪʀᴇᴅ ᴛᴏ sᴜʙᴍɪᴛ ᴄᴏʟʟᴀᴛᴇʀᴀʟs ᴀɴᴅ ᴅᴏᴄᴜᴍᴇɴᴛs.