Question

[tex]The Reserve Bank of India supervises the functioning of formal sources of loans. For instance,we have seen
\ \textless \ br /\ \textgreater \ that the banks maintain a minimum cash balance out of the deposit they receive. The RBI monitors the banks in
\ \textless \ br /\ \textgreater \ actually maintaining cash balance.Similarly, the RBI sees that the banks give loans not just to profit- making
\ \textless \ br /\ \textgreater \ businesses and traders but also to small cultivators, small scale industries, to small borrowers etc. Periodically,
\ \textless \ br /\ \textgreater \ banks have to submit information to the RBI on how much they are lending, to whom, at what interest rate,
\ \textless \ br /\ \textgreater \ etc.There is no organisation which supervises the credit activities of the lenders in the informal sector.They
\ \textless \ br /\ \textgreater \ can lend at whatever interest rate they choose. There is no one to stop them from using unfair means to get
\ \textless \ br /\ \textgreater \ their money back .Compared to formal lenders, most of the informal lenders charge a much higher interest on
\ \textless \ br /\ \textgreater \ loans.[/tex]
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Answer 1

Answer:

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