Question

Formal sources follow the sources
of credit that are registered by the
govt. and have to follow its rules and
regulations whereas in informal sources
include those small and scattered units
which are largely outside the control of
the government.
• 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.
• The main motive of formal sources is
social welfare whereas the main motive
of informal sources is profit-making.
Banks and cooperatives are the
example of formal sources and
moneylenders, traders, employees,
friends and relatives etc are the
example of informal sources.​

Answer 1

Answer:

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