. Discuss the role of Reserve Bank of India in providing credit


Best Answer

Ans: i. The Reserve Banks of India supervises the functioning of formal sources of loans.

ii. RBI also ensures that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance.

iii. RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators small scale industries, to small borrowers etc. Periodically, banks have to submit information to the RBI on how much they are lending, to whom, at what interest rate, etc.

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