Social Sciences, asked by sreemen63, 11 months ago

Trace the important of rbi on formal sector credit​

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Answered by bipin6145
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Answered by agrippa
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RBI( Reserve bank of India)

Explanation:

  • RBI is India's central bank. It control the supply of money and regulates the banking sector in India.
  • RBI has the supervisory authority in the functioning of formal sources of loan/credit in India.  

It supervises the functioning of banks in the following ways.

  • Commercial bank have to maintain a minimum cash  out of the total deposit they receive and deposit a part of their cash reserves with RBI.
  • RBI oversees if the bank is only giving loans to profit making traders and businesses but also to small borrowers. They also have to submit the lending information details with the RBI to ensure that they distribute loans to all kinds of customers.

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