Formal source of credit for an individual does not include:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → RBI
Formal sources of credit are lenders registered with the government and supervised under its rules, such as banks and cooperatives. Moneylenders, traders, landlords, relatives and friends make up the informal sector.
The Reserve Bank of India (RBI) is India’s central bank. It does not lend to individuals; it issues currency, lends to banks and the government, and supervises how the formal lenders work. So the RBI is not a source of credit for an individual.
Why the other options are incorrect
Option (1) Cooperatives — Incorrect. Cooperative societies and banks lend to their members and are a formal source, important in villages.
Option (2) Banks — Incorrect. Commercial banks are the main formal source of loans for individuals.
Option (3) MUDRA Bank — Incorrect. MUDRA is a government body that funds small-business loans to individuals through banks and other lenders, so it is part of formal credit.