4. Look at a 10 rupee note. Whal is wnter oT lOpWhy do we need to expa

1.	4. Look at a 10 rupee note. Whal is wnter oT lOpWhy do we need to expand formal sources of credit in India?note. Whal is menop
Answer» We need to expand the formal souces because of :-1.)Supervision : The formal sources work under the supervision of the RBI.The RBI monitors that the banks actually maintain cash balance and give loans to small cultivators and farmers too.On the other hand, there is no organisation which supervises the credit activities of lenders in the informal sector.They can lend at any interest rate. 2.)Lower rate of interest : The rate of interest if the formal sectors is decided by the RBI.So normally,the interest rates are very low.

4. Look at a 10 rupee note. Whal is wnter oT lOpWhy do we need to expand formal sources of credit in India?note. Whal is menop

Answer»

We need to expand the formal souces because of :-1.)Supervision : The formal sources work under the supervision of the RBI.The RBI monitors that the banks actually maintain cash balance and give loans to small cultivators and farmers too.On the other hand, there is no organisation which supervises the credit activities of lenders in the informal sector.They can lend at any interest rate.

2.)Lower rate of interest : The rate of interest if the formal sectors is decided by the RBI.So normally,the interest rates are very low.

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