Question

In what ways does the RBI supervise the function of banks ? why is it necessary ?

Give Four points

Answer 1

hy frnd your answer


The banks maintain a minimum cashbalance out of the deposits they receive. The RBI monitors that the banks actually maintain the cashbalance. Similarly the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries, to small borrowers etc.

I hope help you

Answer 2

Answer:

Reserve Bank of India (RBI) supervised the banks in the following ways :

(i) It monitors the balance kept by banks for day-to-day transactions.

(ii) It checks that the banks give loans not just to profit-making businesses and traders but also to small borrowers.

(iii) Periodically banks have to give details about lending, borrowers and interest rate to RBI.

(iv) It is necessary for securing public welfare. It avoids the bank to run the business with profit motive only. It also keeps a check on interest rate of credit facilities provided by bank. RBI makes sure that the loans from the banks are affordable and cheap.