Choose the given statement as true/false:

The Reserve Bank of India supervises the functioning of formal sources of loans.

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True

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Detailed Solution

The above statement is true.
The Reserve Bank of India, abbreviated as RBI, is India's central bank and the regulatory body managing the country's banking industry. The following are some ways that the RBI monitors how banks are operating:

Commercial banks must keep a minimum cash balance with the RBI out of the deposits they receive.

RBI oversees how banks operate to ensure that they provide loans to small farmers, small-scale businesses, malcontents, and other borrowers, in addition to profit-making enterprises and dealers.

Banks must regularly report to the RBI how much money they are lending and to whom at what interest rates, etc.

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