Question

Why is supervision of the functioning of formal sectors of loans necessary?​

Answer 1

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Supervision of the functioning of formal sectors of loan is necessary because banks have to submit information to the RBI on how much they are lending, to when they are lending and what interest rate etc.

Answer 2

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The supervision of the functioning of the formal sources of credit is necessary because the banks should not only provide loans to rich sections of society but also to poor people. Also, the banks should follow the right procedures of borrowing and lending money.

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