The ____ supervises the functioning of banks.

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Detailed Solution

The Reserve Bank of India supervises the functioning of banks.
It is the RBI that supervises the banks in several ways. Some of them are:
1)      Banks must maintain a balance for day-to-day transactions, which the RBI regularly monitors.
2)      RBI also checks whether banks lend loans to small borrowers instead of focusing entirely on profit-making businesses.
3)      Banks periodically give details about the lending, borrowers and interest rate to the RBI.
4)      RBI keeps a check on the interest rates charged by the banks and also makes sure that loans are affordable.
Such supervision is necessary to secure the public's welfare as it prevents the banks from running their business with a sole profit motive.

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