Question

How does RBI supervises the function of formal loans?

Answer 1

The reserve bank of India supervises the functioning of formal sources of sector in the following way:
1. The RBI monitors the banks in actually maintaining cash balance.
2. The RBI sees that the banks give loans not just to profit making business and traders but also to small cultivators , small-scale industries to borrowers etc.
3. Periodically banks have to submit information to the RBI on how much they are lending, to whom,at what interest rate etc.