How does rbi supervise banks function and why it is necessary?
Answers
It supervises the functioning of formal sources of loans
The bank maintains a minimum cash balance out of the deposits they receive.The RBI monitors that the bank actually maintain the cash balance
this is necessary to prevent the exploitation of the debtors or any kind of mismanagement by the banks
Answer:
The Reserve Bank of India supervises the functioning of formal sources of loans. Banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance. The RBI sees that banks give loans not just to profit- making businessmen and traders but also to small cultivators, small scale industries, to small borrowers etc. Periodically banks have to submit information to the RBI on how much they are lending, to whom, at what interest rate etc.
It is necessary to make the activities of all banks uniform in the country. It also helps to prevent unfair practices in banking
Explanation: