how dies RBI supervise the function of bank ?why it is necessary?
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The reserve bank of India supervises the function of banks in many ways:
1. RBI checks that the bank actually maintain a minimum cash balance out of the deposit they receive.
2. RBI observes that the banks give loans not just to profit making businesses and traders but also to small cultivators,small scale industries,small borrowers etc.
3. The commercial banks have to submit information to the RBI on how they are lending,to whom,at what interest rate etc.
1. RBI checks that the bank actually maintain a minimum cash balance out of the deposit they receive.
2. RBI observes that the banks give loans not just to profit making businesses and traders but also to small cultivators,small scale industries,small borrowers etc.
3. The commercial banks have to submit information to the RBI on how they are lending,to whom,at what interest rate etc.
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