Question

The credit activities for The informal sector should be discouraged support the statement and mention a few steps taken by RBI in recent past in the regard

Answer 1

Few Steps Taken By The RBI In The Recent Past:

• The RBI makes sure and has a look that banks provide loans not just to profit making businesses and traders but also to small scale cultivators and industries.

• The RBI has made banks to submit an information report on how much they are lending to whom and what rate of interest.

• On receiving these reports the RBI can see that whether the bank is actually providing loans to the poor people like small scale cultivators and farmers.

Answer 2

Hey mate♡

SOURCE OF QUESTION:

Class 10

Chapter-Money and credit

ANSWER:

♤Credit activities of the informal sector should be discouraged:

1. Most loans from informal lenders carry a very high interest rate and do little to increase income of borrowers.
2. The poor households have to pay a large amount for borrowing.
3. 85% of the loans taken by poor households in the urban areas are from informal sources.
4. Cheap and affordable credit is crucial for the country's development.

♤The steps taken by RBI are:

1. It monitors the balance kept by banks for day to day transaction.
2. It checks that the banks give loans not just to profit-making businesses and traders,but also to small borrowers.
3. Periodically,banks have to give the details about the lenders, borrowers and interest rate to RBI.

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 the credit facilities provided by the bank. RBI makes use that the loans from the banks are affordable and cheap.