Question

How does Reserve Bank of India supervise the functioning of the formal sources of loan?​

Answer 1

Reserve bank of India is the central bank of India which performs various functions.

Explanation:

1. One of the most common functions of the reserve bank of India is the supervisory function where it supervises and controls the financial source of credit such as banks and their lending powers.
2. The reserve bank of India has a monetary policy under which it has certain requirements which have to be fulfilled by the banks.
3. The banks are also required to maintain a certain amount of cash ratio and deposit with the reserve bank of India.
4. Reserve bank of India has also provided certain guidelines and made some rules regarding the lending function of the banks. All the banks have to follow the rules.