Formal sources of credit generally charge ____ rates of interest.

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Formal sources of credit generally charge low rates of interest.
Commercial banks, regional rural banks, cooperative credit societies, and other institutions are traditional sources of credit. Compared to informal institutions, they levy lower interest rates. The operation of conventional sources of loans is under the Reserve Bank of India's supervision. Because they include collateral security and a lower interest rate, traditional sources of credit are always preferred over informal sources. They must abide by the RBI rules. For instance, the deposits they receive show that the banks maintain a minimum cash balance. Compared to informal institutions, they levy lower interest rates. The operation of traditional sources of loans is under the Reserve Bank of India's supervision.

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