How does the RBI control banks?

The RBI supervises banks since they are in the formal sector of loans. Itdoes this

Through manyways:

a. It monitors banks so that they maintain cash balance

b. It also ensures that banks give out loans not only to big profit making businesses, but also to small-scale borrowers, cultivators, industries, etc.

c. Banks also have to periodically submit details toRBI on how much they are lending, whom they are lending to, at what interest rate etc.