Question

Which one of the following is NOT an informal sector loans for poor rural household in India? (a) Commercial Bank (b) Moneylenders (c) Traders (d) Landlords

Answer 1

Answer:

option is a aright commercial bank

Answer 2

(a) Commercial Bank

Explanation:

Informal sources of credit are not regulated by the RBI. They are mainly given by the local money lenders, traders, landlords and pawn brokers where no proper records of the transaction is maintained. Also, they charge a high interest rate for the loan. Sometimes, they give loans without any collateral, which may lead to bonded labour. Informal credit is prevalent in rural areas and the poor are generally exploited by these lenders