Question

What are formal source of credit mention in its feature

Answer 1

Answer:

(i) They follow those sources of credit, which are registered by the government and have to follow its rules and regulations. (ii) RBI supervises the functioning of formal sources of credit.

Features of formal sources of credit are :

(a) Formal sources of credit are provided by banks and cooperative societies to the borrowers.

(b) Reserve Bank of India (RBI) governs the functioning of formal source of credit. RBI periodically checks the interest rate and other details of these sources.

(c) They follow proper terms of credit which includes collateral, documentation, rate of interest and mode of repayment.

(d) They provide cheap and affordable credits with common terms of credit for all.

l hope you like this answer.

please mark it brainliest