Question

Write two measures used by the reserve bank of india to supervise the banks
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Answer 1

The two measures used by the reserve bank of india to supervise the banks are:

1.The Banking Regulation Act, 1949 empowers the Reserve Bank of India to inspect and supervise commercial banks.These powers are exercised through on-site inspection and off site surveillance.

2.On site inspection of banks is carried out on an annual basis. Besides the head office and controlling offices, certain specified branches are covered under inspection so as to ensure a minimum coverage of advances.

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Answer 2

The Reserve Bank of India is the central bank responsible for controlling and supervising the activities of commercial banks.

Explanation:

1. The reserve bank of India is the authority that can supervise the functioning of banks in India.
2. The reserve bank controls the other banks in the country by setting up particular rules and regulations. Any bank that violates these rules and regulations is strictly penalized or not allowed to carry further their operations.
3. The reserve bank also uses credit control measures such as reserve ratio, repo rate, bank rate, etc which are helpful in controlling the money supply of bank in the nation.