Question

Why and how the rbi checks the formal sector of credit ?.

Answer 1

WHY=. RBI keeps a check on formal sector of credit in order to give everyone including rural people to gain the benefits of formal sectors of credit rather than informal sectors.

HOW. =. RBI checks that the formal sector maintain a sufficient balance of money.
RBI formalises that the bank's not only give credit to business and rich people to earn profit.
The formal sources of credit have to give details about how much they are lending and to whom.
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