Question

in what ways does the reserve Bank of India supervisor the functioning of banks why is this necessary

Answer 1

Dear Student, Answer to your question is as follows : The RBI supervises the functioning of banks in the following ways: 1. It monitors that the banks actually maintain the cash balance i.e. CRR also known as Cash Reserve Ratio. 2. RBI also sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries, and to small borrowers etc. i.e. in other words it means that people from all backgrounds receive loans and not only the rich, powerful businessman and traders. 3. The above point is made sure by the periodical statements that needs to be given by all the banks to the RBI which contains information about to whom the bank has given loan, at what interest rate the loan was given etc. Regards