Question

what are the formal sources of credit? mention any two features of formal sources of credit

Answer 1

formal sources are credits which are given by the banks.
formal sources of credits do not have high interest compared to informal sources like landlords, zamindars.

people are not forced when they delay to pay the loan where as informal sources force a lot.
they also give severe punishment.

Answer 2

✯FORMAL SOURCE OF CREDIT: it includes banks and cooperatives.

►FEATURES :

➊. the Reserve Bank of India supervises the functioning of formal sources of loans.

➋. they provide loans at a fixed rate and terms.

➌. they give loans not just to profit making business and traders but also to small cultivators, small scale industries too small borrowers, etc.