Which government body supervises the functioning of formal sources of loans in India? Explain its functioning.
The Reserve Bank of India (Reserve Bank of India) supervises the functioning of formal sources of loans in India. For instance, banks maintain a minimum cash balance out of the deposits they receive.
Functions of Reserve Bank of India The Reserve Bank of India monitors that the banks actually maintain this cash balance. Similarly, the Reserve Bank of India ensures that the banks give loans not just to profit-making businesses and traders, but also to small cultivators, small scale industries, small , borrowers, etc.
Periodically, banks have to submit information to the Reserve Bank of India on how much they are lending, to whom, at what interest rate, etc.