Which Government Body Supervises the Functioning of Formal Sources of Loans in India? Explain Its Functions.

RBI is the government body which supervises the functioning of formal sources of loans in India.

Functions of RBI:

  1. RBI sees that the banks maintain the minimum cash balance or not.
  2. RBI monitors that the loan is not just given to the profit-making businesses and traders but also to the small borrower.
  3. RBI asks the banks to submit information like how much they are lending, to whom they are lending and at what rate of interest etc.

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