. RBI forms an integral part in the banking system. Explain.


Best Answer

The Reserve Bank of India (RBI)

            (i)      Supervises the functioning of formal sources of loans and monitors the banks in actually maintaining cash balance. 

            (ii)     Oversees 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.

            (iii)       Receive information from banks periodically, on how much they are lending, to whom, at what interest rate, etc. 

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