Question

how does RBI play a crucial role in controlling the formal sector of loans explain​

Answer 1

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Answer 2

Answer:

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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.