Question

in what ways does RBI supervise the functioning of banks

Answer 1

RBI determines the rate of interest for banks
It ensure that loan is provided to poor people also and not only rich people
It check whether Tue banks are maintaining the cash reserve or not

Answer 2

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.

Hope it helps!