[[1]] formulates policies for the banking sector in India.

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Detailed Solution

1)      The Reserve Bank Of India supervises the functioning of the formal sector of loans through its monetary policies.
2)      The RBI monitors the banks to maintain the cash balance.
3)      RBI formulates policies for the Banks.
4)      Banks have to give loans to small borrowers and traders at fewer interest rates and on priority before the other sectors.
5)      Periodically, banks must give all the information about lending, borrowing or interest rates to the RBI.
6)      This monitoring done by the RBI is necessary for the nation's development.
7)      It ensures the safety of the bank deposits of people.
8)      Helps in the collection of economic data all over the country.

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