how does RBI control credits
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Hallo dear!!!
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Have a nice day ahead!!!
RBI issues currency notes on behalf of the central govt.
RBI supervises the functioning of formal source of loans.
RBI monitors the banks in actually maintaining cash balance.
It also sees that banks give loans not just for profit making and traders but also to small borrowers, small cultivators etc..
Periodically banks have to submit information to RBI on how much they are lending, to whom, at what interest rate, etc.
"RBI controls credit and money supply in the country by increasing the REPO RATE."
Hope it helps u.
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