why there is a need to supervise the banking system by RBI .
Answers
Answer:
The supervision of RBI is necessary for the following reasons :
(i)It ensures safety to the bank deposits of people.
(ii)It helps in collection of economic data all over the country.
(iii)It contains corrupt practices from creeping within banks.
Explanation:
The Reserve Bank of India supervises the functioning of formal sources of loans.
The Reserve Bank of India supervises the functioning of formal sources of loans.For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors that the banks actually maintain the cash balance. Similarly, the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries and small borrowers etc. Periodically, banks have to submit information to the RBI on how much they are lending, to whom and at what interest rate etc.
The Reserve Bank of India supervises the functioning of formal sources of loans.For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors that the banks actually maintain the cash balance. Similarly, the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries and small borrowers etc. Periodically, banks have to submit information to the RBI on how much they are lending, to whom and at what interest rate etc.The supervision of RBI is necessary for the following reasons :
The Reserve Bank of India supervises the functioning of formal sources of loans.For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors that the banks actually maintain the cash balance. Similarly, the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries and small borrowers etc. Periodically, banks have to submit information to the RBI on how much they are lending, to whom and at what interest rate etc.The supervision of RBI is necessary for the following reasons :(i)It ensures safety to the bank deposits of people.
The Reserve Bank of India supervises the functioning of formal sources of loans.For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors that the banks actually maintain the cash balance. Similarly, the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries and small borrowers etc. Periodically, banks have to submit information to the RBI on how much they are lending, to whom and at what interest rate etc.The supervision of RBI is necessary for the following reasons :(i)It ensures safety to the bank deposits of people.(ii)It helps in collection of economic data all over the country.
The Reserve Bank of India supervises the functioning of formal sources of loans.For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors that the banks actually maintain the cash balance. Similarly, the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries and small borrowers etc. Periodically, banks have to submit information to the RBI on how much they are lending, to whom and at what interest rate etc.The supervision of RBI is necessary for the following reasons :(i)It ensures safety to the bank deposits of people.(ii)It helps in collection of economic data all over the country.(iii)It contains corrupt practices from creeping within banks.
The Reserve Bank of India supervises the functioning of formal sources of loans.For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors that the banks actually maintain the cash balance. Similarly, the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries and small borrowers etc. Periodically, banks have to submit information to the RBI on how much they are lending, to whom and at what interest rate etc.The supervision of RBI is necessary for the following reasons :(i)It ensures safety to the bank deposits of people.(ii)It helps in collection of economic data all over the country.(iii)It contains corrupt practices from creeping within banks.(iv)Information forwarded by banks to RBI helps Ministry of Finance in drafting and presentation of National Budget every year.
Answer:
The Reserve Bank of India monitors the amount of money that banks loan out, and also the amount of cash balance maintained by them. It also ensures that banks give out loans not just to profiteering businesses but also to small cultivators, small-scale industries and small borrowers. Periodically, banks are supposed to submit information to the RBI on the amounts lent to whom and at what rates of interest.
This monitoring is necessary to ensure that equality is preserved in the financial sector, and that small industries are also given an outlet to grow. This is also done to make sure that banks do not loan out more money than they are supposed to, as this can lead to situations like the Great Depression of the 1930s in the USA, which greatly affected the world economy as well.
Explanation: