"Reserve Bank of India may give directions to banking companies either generally or to any banking company or group of banking company to decide the policy and control advances." Explain in the context of provisions of B

Section 21 of the Banking Regulation Act, 1949 gives RBI the power to decide policy in relation to advances to be followed by banking companies so that it may control facilities, and check any speculative activities and to give directions in this regard to the banking company/companies. Every banking company shall be bound to comply with any directions given to it under this section by the RBI. RBI may give following directions in this regard to the banking company/companies:- the purpose for which advances may or may not be made; the margins to be maintained in respect of secured advances; the maximum amount of advances or other financial accommodation which, having regard to the paid-up capital, reserves and deposits of a banking company and other relevant considerations, may be made by that banking company to any one company, firm, association of persons or individual; the maximum amount up to which having regard to the considerations referred to in clause (c), guarantees may be given by a banking company, on behalf of any one company, firm, association of persons or individual; and rate of interest and terms and conditions on which advances or other financial accommodation may be made or guarantees may be given.