Question

how does the RBI supervise banks

Answer 1

Answer:

Explanation:

 The RBI monitors that the banks actually maintain a minimum cash balance out of the deposits they receive.  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.

Answer 2

Answer:

The Reserve Bank of India monitors the amount of money that banks loan out, and also the amount of cash balance maintained by them. It also ensures that banks give out loans not just to profiteering businesses but also to small cultivators, small-scale industries and small borrowers. Periodically, banks are supposed to submit information to the RBI on the amounts lent to whom and at what rates of interest.

This monitoring is necessary to ensure that equality is preserved in the financial sector, and that small industries are also given an outlet to grow. This is also done to make sure that banks do not loan out more money than they are supposed to, as this can lead to situations like the Great Depression of the 1930s in the USA, which greatly affected the world economy as well.

Explanation: