People receive loans from formal and informal sources. Which of the following is not a part of the informal source?

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Employers

Friends

Bank

Relatives

answer is C.

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Detailed Solution

The bank is not a part of the informal source.
There are several sources through which a loan can be obtained by an individual. They can be broadly divided into two categories:
1) Formal Sources: They are government registered and follow all rules and regulations. The RBI regulates its activities. Banks and cooperative societies fall under formal sources.
2) Informal Sources: These sources include all small and scattered units that are beyond the government's control. Thus, no rules and regulations are followed by them, and they exist as profit-making organizations. These sources include moneylenders, employers, traders, friends and relatives.

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