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What is formal sector and informal sector loans? |
| Answer» Formal sector loans:\tThese loans are supervised by the RBI.\tThe terms of credit are fixed and the rate of interest is not very high.\tIt follows the rules and regulations set by the government.\tIt comprises 52% of the total loans given in the country.Informal sector loans:\tThese consists of loans from moneylenders, landlords, friends, relatives, etc.\tThese are not under the control of RBI.\tThe rate of interests are very high.\tIt doesn\'t follow any rules and regulations.\tIt comprises 48% of the total loans given in the country. | |