"RBI plays a crucial role in controllingformal sector loans ".Explain
Answers
The Reserve Bank of India supervises the functioning of formal sources of loans. It does that in the following ways:
# 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.
# Periodically banks have to submit information to the RBI on how much they are lending to whom at what interest rates.
# RBI can pull up any banks if it is flouting the norms and regulations related to lending of loans.
Answer:
Explanation:
*The RBI (Reserve Bank Of India) ensures that the banks give loans not just to profit-making businesses and traders,but also to small scale industries,small borrowers.
*Bank has to submit information to the RBI on how much they are lending , to whom and what interest rate they are lending to borrowers & etc.
* The bank maintain a minimum cash balance out of the deposits they receive.
*The RBI monitors the banks in actually maintaining cash balance.