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Which of the following is a FORMAL source of credit?
AThe village moneylender who lends to neighbours
BAn employer giving an advance to a labourer
CCommercial banks regulated by the RBI
DA trader giving credit at his own shop counter
Answer & Solution
Correct answer: C. Commercial banks regulated by the RBI
Formal sources of credit are regulated by RBI: commercial banks, cooperative banks. Moneylenders, traders, employers, and family/friends are INFORMAL sources, unregulated.
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