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Question 1 of 10
1. Question
2 points
With reference to various reserve ratios of RBI, consider the following statements:
1. Cash Reserve Ratio is to be maintained on a daily basis whereas the Statutory Liquidity ratio is to be maintained on a fortnightly basis.
2. The Cash Reserve Ratio is to be maintained as per the Banking Regulation Act, 1949 whereas the Statutory Liquidity Ratio is to be maintained as per the Reserve Bank of India Act, 1934.
3. The Reserve Bank of India can decide CRR without any floor or ceiling rate as per the situational demands of the economy
Select the incorrect statements by using the codes given below:
Correct
Ans a
The amount of cash that the scheduled and non-scheduled commercial banks are required to maintain with RBI with respect to their Net Deposit and Time Liabilities (on a fortnightly basis) is called the Cash Reserve Ratio (CRR).
Incorrect
Ans a
The amount of cash that the scheduled and non-scheduled commercial banks are required to maintain with RBI with respect to their Net Deposit and Time Liabilities (on a fortnightly basis) is called the Cash Reserve Ratio (CRR).
Question 2 of 10
2. Question
2 points
In the context of Indian economy, which of the following events are likely to happen as a result of the surge in the Capital Inflows of the country?
1. Increase the levels of investment which will result in economic growth
2. Indian Rupee will depreciate
3. Increased competitiveness of exports
4. Rise in inflation
Select the correct answer using the codes given below:
Correct
Ans c
The surging capital inflows can also lead to destabilizing side effects, including a tendency of the local currency to appreciate. Hence, the Indian Rupee will appreciate instead of depreciating as a result of increasing capital inflows. This will have a negative impact on the exports of the country as it undermines the competitiveness of exports of the country.
Incorrect
Ans c
The surging capital inflows can also lead to destabilizing side effects, including a tendency of the local currency to appreciate. Hence, the Indian Rupee will appreciate instead of depreciating as a result of increasing capital inflows. This will have a negative impact on the exports of the country as it undermines the competitiveness of exports of the country.
Question 3 of 10
3. Question
2 points
The terms ‘Dovish’ and ‘Hawkish’ are often seen in news in the context of:
Correct
Ans a
Expansionary policy is also called ‘Dovish’ or ‘Accommodative’ or ‘Easy Money Policy’. Contractionary policy is also called ‘Hawkish’ or ‘Tight Money Policy’.
Incorrect
Ans a
Expansionary policy is also called ‘Dovish’ or ‘Accommodative’ or ‘Easy Money Policy’. Contractionary policy is also called ‘Hawkish’ or ‘Tight Money Policy’.
Question 4 of 10
4. Question
2 points
The Reserve Bank of India regulates the public sector banks (PSBs) in matters of
1. Revoking the Banking license
2. Merger of banks
3. Winding-up of banks
Select the correct answer using the codes given below:
Correct
Ans d
RBI cannot revoke the banking licence as well.
In case of Private sector banks, RBI regulates the merger of banks, however, it doesn’t have the same powers when it comes to public sector banks.
RBI cannot merge or wind up the public sector banks because they are under the dual regulation of RBI and Central Govt. Along with this, RBI also cannot supersede the board of public sector banks.
Incorrect
Ans d
RBI cannot revoke the banking licence as well.
In case of Private sector banks, RBI regulates the merger of banks, however, it doesn’t have the same powers when it comes to public sector banks.
RBI cannot merge or wind up the public sector banks because they are under the dual regulation of RBI and Central Govt. Along with this, RBI also cannot supersede the board of public sector banks.
Question 5 of 10
5. Question
2 points
Consider the following financial institutions:
1. Non-Banking Financial Institutions (NBFCs)
2. National Bank for Agriculture and Rural Development
3. Cooperative Banks
4. Export and Import Bank of India
Which of the given financial institutions come under full-fledged regulation and supervision of RBI?
Select the correct answer using the codes given below:
Correct
Ans d
Cooperative Banks however, are under dual regulation of RBI and Government. Banking related functions are regulated by RBI and management related functions are regulated by respective State governments or the Central Government, as the case may be.
Incorrect
Ans d
Cooperative Banks however, are under dual regulation of RBI and Government. Banking related functions are regulated by RBI and management related functions are regulated by respective State governments or the Central Government, as the case may be.
Question 6 of 10
6. Question
2 points
With reference to the banking system in India, a Bank Run can be said to have occurred in which of the following circumstances?
Correct
Ans d
A bank run occurs when a large number of customers of a bank or other financial institution withdraw their deposits simultaneously over concerns of the bank’s solvency.
Incorrect
Ans d
A bank run occurs when a large number of customers of a bank or other financial institution withdraw their deposits simultaneously over concerns of the bank’s solvency.
Question 7 of 10
7. Question
2 points
In context of the payment’s ecosystem in India, consider the following statements:
1. Only payment systems authorized by the RBI can be operated in the country
2. National Payments Corporation of India is a wholly owned subsidiary of RBI
3. Only Banking entities are allowed as the payment systems operators in India
Select the incorrect statements using the codes given below:
Correct
Ans b
National Payments Corporation of India (NPCI), is a non-bank payment system operator authorized by RBI to operate the following payment systems under the PSS Act 2007.
NPCI is a ‘Not for Profit’ company where 51% stake is owned by public sector banks.
The non-bank entities have also been permitted access to the payment space, given the demand for varied payment services and in keeping with the fast pace of technological change.
Incorrect
Ans b
National Payments Corporation of India (NPCI), is a non-bank payment system operator authorized by RBI to operate the following payment systems under the PSS Act 2007.
NPCI is a ‘Not for Profit’ company where 51% stake is owned by public sector banks.
The non-bank entities have also been permitted access to the payment space, given the demand for varied payment services and in keeping with the fast pace of technological change.
Question 8 of 10
8. Question
2 points
In the context of banking in India, which of the following agricultural and allied activities can be granted loans under the scheme of Priority Sector Lending?
1. Setting up Compressed Biogas Plant
2. Installation of solar plants
3. Agricultural Machinery
4. Loans to Farmer Producing Organizations
5. Food Processing
Select the correct answer using the codes given below:
Correct
Ans d
All the options are correct
Incorrect
Ans d
All the options are correct
Question 9 of 10
9. Question
2 points
The term ‘On-Lending Model’ is often seen in the news in the context of
Correct
Ans d
On-lending means loans sanctioned by banks to eligible intermediaries for onward lending only for the creation of priority sector assets.
Incorrect
Ans d
On-lending means loans sanctioned by banks to eligible intermediaries for onward lending only for the creation of priority sector assets.
Question 10 of 10
10. Question
2 points
In context of the Priority Sector Lending in India, consider the following statements:
1. Priority sector guidelines give preferential rate of interest for priority sector loans
2. As per recent RBI’s norms, incremental priority sector credit will be given to the identified districts to address the regional disparities in the flow of credit on a district level
3. The districts for incremental credit flow will be identified using the aspirational district criteria
Select the incorrect statements using the codes given below:
Correct
Ans b
Priority sector guidelines do not lay down any preferential rate of interest for priority sector loans.
As per RBI, from FY 2021-22 onwards, a higher weight (125%) would be assigned to the incremental priority sector credit in the identified districts where the credit flow is comparatively lower (per capita PSL less than ₹6000), and a lower weight (90%) would be assigned for incremental priority sector credit in the identified districts where the credit flow is comparatively higher (per capita PSL greater than ₹25,000).”
Incorrect
Ans b
Priority sector guidelines do not lay down any preferential rate of interest for priority sector loans.
As per RBI, from FY 2021-22 onwards, a higher weight (125%) would be assigned to the incremental priority sector credit in the identified districts where the credit flow is comparatively lower (per capita PSL less than ₹6000), and a lower weight (90%) would be assigned for incremental priority sector credit in the identified districts where the credit flow is comparatively higher (per capita PSL greater than ₹25,000).”
