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Q.

Banks and cooperatives are part of the ____ sources of credit


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Detailed Solution

Banks and cooperatives are part of the formal sources of credit.
They are regulated by the Reserve Bank of India. Compared to informal institutions, they impose lower interest rates. Commercial banks, regional rural banks, cooperative credit organizations, and other institutions are formal providers of credit. Banks are required to periodically provide the RBI with information on who they are lending money to, how much they are lending, and other details. The main driving force behind formal sources is social welfare.
 
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