How does rbi play a crucial role in controlling the formal sector loans explain?
Answers
Role of RBI "to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth."
As Banker to Banks, the Reserve Bank focusses on:
Enabling smooth, swift and seamless clearing and settlement of inter-bank
Providing an efficient means of funds transfer for banks
Enabling banks to maintain their accounts with the Reserve Bank forstatutory reserve requirements and maintenance of transaction balances
Acting as a lender of last resort.
Answer:
HERE IS YOUR ANSWER DEAR....
Explanation:
A. The Reserve bank of India supervises the functioning of formal sources of credit of India.
B. The RBI monitors that the banks actually maintain a minimum cash balance out of the deposits they receive.
C. RBI ensures that the banks give loans not just to profit making business and traders but also to small cultivators, small-scale industries, small borrowers etc.
D. Periodically banks have to submit information to the RBI on how much they are lending to whom at what interest rates etc.
E. RBI is the central bank of India.