MP Board · Class 10 · Social Science · Economics: Money and CreditVSA

The Reserve Bank of India acts as the central bank of the country and supervises the functioning of formal sources of loans. It monitors that banks actually maintain a minimum cash balance out of the deposits they receive. RBI ensures that banks give loans not just to profit-making businesses and rich traders, but also to small cultivators, small-scale industries, and borrowers with limited means, thereby maintaining financial stability and protecting public interests.