Social Science (087) — CBSE Class 10 board question

| Basis | Formal Sources | Informal Sources |
|-------|---------------|-----------------|
| Examples | Banks, cooperative societies | Moneylenders, traders, employers, relatives |
| Supervision | Supervised by Reserve Bank of India (RBI) | No supervising organisation |
| Interest Rate | Lower (e.g., 8.5% per annum) | Much higher (e.g., 36–60% per annum) |
| Borrowers | Mostly richer households | Mostly poor households |

Formal sources follow guidelines set by the RBI, while informal lenders can charge any interest rate and may use unfair means to recover money.

Source: Chapter 3 – Money and Credit, Formal Sector Credit in India

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• Examiners expect a comparison format — either a table or paired points. A table scores well here.
• Four differences are ideal for 3 marks (one point may carry ½ mark each, or the table as a whole scores).
• Key terms to include: RBI supervision, interest rate, examples of each, and who borrows from whom.
• Avoid writing long paragraphs — crisp distinctions impress examiners.