Question

Explain some of the ways in which the RBI regulates the banks.

Answer 1

Instructions: Mention the role of the RBI in terms of management and overall responsibility in maintaining credit in the country.

Answer:

• The Reserve Bank of India monitors all the banks in India to check whether they are maintaining a minimum cash balance.
  
• Ensure banks do not just give loans to profit-making businesses or traders, but also provide loans to small cultivators, small-scale industries, and small borrowers.
  
• Seek data from banks such as information on how much money is being given off as loans, to whom the loans are being given and at what interest rates.