To motivate your team members, should you keep work environment as informal as possible, or this will lead to bad results?

I think as a manager you should be real with people which means you don’t have to be superhuman or untouchable. Be the real human being that you are. Let people at work know about your life and find out about others. If you let people know the “real you” it is much easier than having different personalities for your work and home life.

But at the end of the day you are the maestro!

Setting ethical rules and working towards a healthy culture in an organisation have a great effect on the motivation of the team members.

It should be blend of both, informal & formal. When it comes to professionalism, you should be formal. when it comes to personal problems, you should be a friend. There is no had & fast rule.

Informal working environments works just fine.
Tri Steven Sultanoff claims that employees reach the better results the funnier the working environment is.
He says: 'Humorists are better employees because they just are more successful'.
I believe that100%!

Hi - we should always strike a balance between formal and informal, afterall it is our office, certain limitations should be there, too much informal attitude sometimes craete fights arguments among employees, at the same time we should enjoy too, coz most of the time we spend in office, a place where we are learning, enjoying too.....

I think you need to strike a balance between formal and informal.
You need to have some rules in the company while also not turning it into an army-like organization.
A company with too-loose structure is also not efficient.
The main thing is that employees should understand what the company's goals are and what their position and responsibilities are.
Then employees can be given freedom to reach those goals in their own way.
Empowerment is definitely the way to go.
Also, employee needs have to be respected.
Healthy and happy employees are always more productive than unhappy ones.
And underpaid employees tend to be both unhappy and unhealthy!

To motivate the team member they must feel valued in an organization.
They should also see that their goals are reachable and superiors care.
Everyone has to know their limits when it comes to work.
Everything in excess is bad.

A predetermined mindset to such questions can be very damaging.
Each employee, or set of employees having samilar traits, ought to be treated in accordance with how they react to different ways of encouragement, or formal/informal attitudes in varying situations.
  Employees from a highly educated background can cope with informal treatment and remain within their limitations, whereas others not used to interaction with high officials can faulter.
  The decission must vary according to the personality of the employed.

it will not work but rather make a bad impact on targeted market.
respecting team members and owing problems would be a better motivator.

The environment should persue formal with paternalistic approach and a touch of friendly humor at times.

To keep motivated people need to feel that what they do is important for the organization.
Evidently this does not mean just a "pad in the back" and saying "well done" Courtesy, a smile, friendliness, clear career paths and other factors will make people comfortable.
Informality is a good tool (among the other mentioned), nevertheless it has to be very well managed or it may lead to chaos.