Formal Sector Credit in India
Formal Sector Credit in India: Overview
In this topic, we will learn about formal sector credit in India. It also says that the RBI regulates the functioning of other banks, but there is no supervision in the informal sector.
Important Questions on Formal Sector Credit in India
Formal sources of credit does not include
Why do you think that the share of formal sector credit is higher for the richer households compared to the poorer households?
Should there be a supervisor, such as the Reserve Bank of India, that looks into the loan activities of informal lenders? Why would its task be quite difficult?
Why should credit at reasonable rates be available for all?
What are the differences between formal and informal sources of credit?
_____(High/Low) costs of borrowing increase the debt-burden.
Majority of the credit needs of the _____(poor/rich) households are met from informal sources.
Analyse the role of credit for development.
In what ways does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?
Why do we need to expand formal sources of credit in India?
