Question

Why is it important to have a control over the formal sector loans by the government of India

Answer 1

Reserve Bank of India supervises the functioning of formal sources of loans for cash maintaining balance and to check that the bank gives loans not just to profit making businessman and traders but also to small cultivators ,small scale industries,to small borrowers.

Answer 2

Answer:

The formal sector loans need to be supervised and controlled by the government to make sure that they lend not only to big businesses but also to marginalised sections such as women and farmers. They also need to ensure that the terms of credit are favourable to these sections of the society.

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