Social Sciences, asked by Galvatron1, 1 year ago

why is it necessary for Reserve Bank of India supervise The functioning of banks

Answers

Answered by anubhav73
2
This supervision is necessary to ensure that small businesses also grow, besides others. Further, this monitoringensures that banks do not loan more money than they are supposed to, as such an action can create a crisis situation.

anubhav73: i think this answer will be helpful for you
Answered by Vinu4141
0
The Reserve Bank ofIndia supervises the functioning of hanks as follows
(i) The Reserve Bank of India checks that the banks actually maintain a minimum cash balance out of the deposits they receive (currently this is 15%).
(ii) The banks have to periodically submit information to the Reserve Bank of India on how much they are lending, to whom, at what interest rate, etc.
Thus, the Reserve Bank of India ensures that the banks give loans not just to profit-making businesses and traders, but also to small cultivators and other small borrowers.
This supervision is necessary to ensure that small businesses also grow, besides others. Further, this monitoringensures that banks do not loan more money than they are supposed to, as such an action can create a crisis situation.


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