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Why poor households are dependent on informal sector while rich households are dependent on formal sector loans?
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Why poor households are dependent on informal sector while rich househ...
Formal and Informal Sectors of Credit in India 
People can borrow money from different sources such as banks, cooperatives, money lenders, relatives and friends etc. These can be classified into formal sectors and informal sectors. The loan extended by banks and co-operative institutions constitutes 'formal sector' of credit. The functioning of these financial institutions is supervised by the Reserve Bank of India. The Reserve Bank of India ensures that the commercial banks maintain a cash reserve ve with it and maintains a minimum cash balance from the depositsl_Google Moreover, RBI ensures that the commercial banks lend money not only to profit making enterprises and business, but also to small cultivators and entrepreneurs. This is very necessary to maintain equality in the economy and protect and encourage the economically weaker sections. The commercial banks are also required to report to RBI about its amount of lending, late of interest, etc. at per iodic intervals. 
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Why poor households are dependent on informal sector while rich households are dependent on formal sector loans?
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Why poor households are dependent on informal sector while rich households are dependent on formal sector loans? 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 Why poor households are dependent on informal sector while rich households are dependent on formal sector loans? covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Why poor households are dependent on informal sector while rich households are dependent on formal sector loans?.
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