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Single Answer MCQ
Q-00045484

What is one reason why formal sector lenders provide credit at comparatively lower interest rates?

1

Better market conditions

2

Higher risk of default

3

Regulatory supervision

4

Government subsidies

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Sandeep Chaturvedi

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Answer and Solution

Answer

C. Regulatory supervision

Solution:

Regulatory supervision by the RBI helps ensure that formal sector lenders can offer loans at lower interest rates, as they follow prescribed guidelines.

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