Meaning of formal sources of loan
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- they include banks and cooperatives.
- they charge low rate of interest.
- their functioning is supervised by RBI.
- for taking loans from this sector, borrowers require more documents and collateral.
- it is more systematic in its functioning than informal sources of loan.
- they charge low rate of interest.
- their functioning is supervised by RBI.
- for taking loans from this sector, borrowers require more documents and collateral.
- it is more systematic in its functioning than informal sources of loan.
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formal sources of loan means the loans which are provided by banks and cooperatives, they are under the working of RBI, these banks have to provide all the information to RBI. formal sector charge less rate of interest. Interest rate is fixed by RBI.
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