CBSE · Class 10 · Social Science · Economics: Money and CreditWhat are the formal sources of credit in India?

The formal sources of credit in India include banks and cooperative societies. These institutions function under the strict supervision, rules, and regulations of the Reserve Bank of India. They generally charge lower rates of interest compared to informal lenders, require proper documentation and collateral, and aim to promote developmental activities and financial inclusion rather than just maximizing profit through exploitation of vulnerable and poor borrowers across the country.