10TH CBSE SST Which government body supervises the functioning of formal sources of loans in India? Explain its functioning.

 

Ans:
The Reserve Bank of India supervises the functioning of formal sources of loans.
Functions of Reserve Bank of India:
1. The Reserve Bank of India monitors the banks in actually maintaining cash balance out of the deposits
they receive.
2. The RBI sees that banks give loans not just to profit making businesses and traders but also to small
cultivators, small scale industries, small borrowers etc.
3. Periodically, banks have to submit information to the RBI on how much they are lending to whom, at
what interest rate etc.
4. The Reserve Bank of India issues currency notes on behalf of the central government.