Class 10 Exam  >  Class 10 Questions  >  What are the functions of RBI?a)Supervises th... Start Learning for Free
What are the functions of RBI?
  • a)
    Supervises the formal sources of loan
  • b)
    Monitors whether banks actually maintain the cash balance or not
  • c)
    Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.
  • d)
    All of them
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
What are the functions of RBI?a)Supervises the formal sources of loanb...
Functions of RBI
The Reserve Bank of India (RBI) plays a crucial role in the Indian economy. Its functions are multifaceted, aimed at ensuring the financial stability and growth of the banking sector. Here’s a detailed explanation of its key functions:
Supervision of Loan Sources
- The RBI supervises formal sources of loans, ensuring that banks adhere to established regulations.
- This supervision helps maintain the integrity of financial institutions and protects consumers from unfair practices.
Monitoring Cash Balances
- The RBI monitors whether banks maintain the required cash balance, known as the Cash Reserve Ratio (CRR).
- By ensuring that banks hold a certain percentage of their deposits as reserves, the RBI promotes liquidity and stability in the banking system.
Promoting Inclusive Lending
- The RBI ensures that banks provide loans not just to profit-making businesses but also to small-scale industries and individual borrowers.
- This function is vital for promoting economic equality and supporting various sectors of the economy, fostering overall growth.
Conclusion
- The functions outlined above highlight the RBI’s role in supervising, monitoring, and promoting inclusive lending.
- Therefore, the correct answer is option 'D' as all the mentioned functions are integral to the RBI’s mandate in maintaining a balanced and robust financial ecosystem in India.
Free Test
Community Answer
What are the functions of RBI?a)Supervises the formal sources of loanb...
RBI also monitors how much the banks are lending, to whom and at what interest rate.
Attention Class 10 Students!
To make sure you are not studying endlessly, EduRev has designed Class 10 study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Class 10.
Explore Courses for Class 10 exam

Similar Class 10 Doubts

Read the source given below and answer the questions that follows:Banks use the major portion of the deposits to extend loans. There is a huge demand for loans for various economic activities. Banks make use of the deposits to meet the loan requirements of the people. In this way, banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks charge a higher interest rate on loans than what they offer on deposits. A large number of transactions in our day-to-day activities involve credit in some form or the other. Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment. In rural areas, the main demand for credit is for crop production. Crop production involves considerable costs on seeds, fertilisers, pesticides, water, electricity, repair of equipment, etc. The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. Among the former are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc. The Reserve Bank of India supervises the functioning of formal sources of loans. For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance. There is no organisation which supervises the credit activities of lenders in the informal sector. They can lend at whatever interest rate they choose. There is no one to stop them from using unfair means to get their money back. Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans. Thus, the cost to the borrower of informal loans is much higher. In recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organise rural poor, in particular women, into small Self-Help Groups (SHGs) and pool (collect) their savings.Answer the following MCQs by choosing the most appropriate optionQ. Banks use the major portion of the deposits to

Read the source given below and answer the questions that follows:Banks use the major portion of the deposits to extend loans. There is a huge demand for loans for various economic activities. Banks make use of the deposits to meet the loan requirements of the people. In this way, banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks charge a higher interest rate on loans than what they offer on deposits. A large number of transactions in our day-to-day activities involve credit in some form or the other. Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment. In rural areas, the main demand for credit is for crop production. Crop production involves considerable costs on seeds, fertilisers, pesticides, water, electricity, repair of equipment, etc. The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. Among the former are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc. The Reserve Bank of India supervises the functioning of formal sources of loans. For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance. There is no organisation which supervises the credit activities of lenders in the informal sector. They can lend at whatever interest rate they choose. There is no one to stop them from using unfair means to get their money back. Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans. Thus, the cost to the borrower of informal loans is much higher. In recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organise rural poor, in particular women, into small Self-Help Groups (SHGs) and pool (collect) their savings.Answer the following MCQs by choosing the most appropriate optionQ. Compared to the formal lenders, most of the informal lenders charge a much ................... interest on loans

Read the source given below and answer the questions that follows:Banks use the major portion of the deposits to extend loans. There is a huge demand for loans for various economic activities. Banks make use of the deposits to meet the loan requirements of the people. In this way, banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks charge a higher interest rate on loans than what they offer on deposits. A large number of transactions in our day-to-day activities involve credit in some form or the other. Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment. In rural areas, the main demand for credit is for crop production. Crop production involves considerable costs on seeds, fertilisers, pesticides, water, electricity, repair of equipment, etc. The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. Among the former are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc. The Reserve Bank of India supervises the functioning of formal sources of loans. For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance. There is no organisation which supervises the credit activities of lenders in the informal sector. They can lend at whatever interest rate they choose. There is no one to stop them from using unfair means to get their money back. Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans. Thus, the cost to the borrower of informal loans is much higher. In recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organise rural poor, in particular women, into small Self-Help Groups (SHGs) and pool (collect) their savings.Answer the following MCQs by choosing the most appropriate optionQ. An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.

Read the source given below and answer the questions that follows:Banks use the major portion of the deposits to extend loans. There is a huge demand for loans for various economic activities. Banks make use of the deposits to meet the loan requirements of the people. In this way, banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks charge a higher interest rate on loans than what they offer on deposits. A large number of transactions in our day-to-day activities involve credit in some form or the other. Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment. In rural areas, the main demand for credit is for crop production. Crop production involves considerable costs on seeds, fertilisers, pesticides, water, electricity, repair of equipment, etc. The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. Among the former are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc. The Reserve Bank of India supervises the functioning of formal sources of loans. For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance. There is no organisation which supervises the credit activities of lenders in the informal sector. They can lend at whatever interest rate they choose. There is no one to stop them from using unfair means to get their money back. Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans. Thus, the cost to the borrower of informal loans is much higher. In recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organise rural poor, in particular women, into small Self-Help Groups (SHGs) and pool (collect) their savings.Answer the following MCQs by choosing the most appropriate optionQ. Formal sector loans include loans from(i) Banks(ii) Moneylenders(iii) Cooperatives(iv) Traders

Top Courses for Class 10

What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer?
Question Description
What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer? for Class 10 2024 is part of Class 10 preparation. The Question and answers have been prepared according to the Class 10 exam syllabus. Information about What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer?.
Solutions for What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Class 10. Download more important topics, notes, lectures and mock test series for Class 10 Exam by signing up for free.
Here you can find the meaning of What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice What are the functions of RBI?a)Supervises the formal sources of loanb)Monitors whether banks actually maintain the cash balance or notc)Ensures that the ban ks give loan not just to profit making businesses and traders but also to small scale industries and borrowers too.d)All of themCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice Class 10 tests.
Explore Courses for Class 10 exam

Top Courses for Class 10

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev