Which of the following is the main source of credit for the rich household?

Informal Sector

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Formal Sector

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Both formal and informal

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Neither formal or informal

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Solution

The correct option is D Formal Sector
Formal Sector : It includes loans from banks and cooperatives. RBI supervises their functions of giving loans. Rich urban households depend largely on formal sources of credit. Lower rate of interest on loans is charged as compared to informal sources of credit.

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