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All questions of Money and Banking for OPSC OCS (Odisha) Exam
Fiscal Policy in India is formulated by which of the following?- a)The Reserve Bank of India
- b)NITI Aayog
- c)Ministry of Finance
- d)The Finance Commission
Correct answer is option 'C'. Can you explain this answer?
Fiscal Policy in India is formulated by which of the following?
a)
The Reserve Bank of India
b)
NITI Aayog
c)
Ministry of Finance
d)
The Finance Commission
 | Ritika Choudhury answered |
Ministry of finance is the nodal agency for formulation of the fiscal policy
Consider the following statements:
1. White Label ATMs are owned and operated by the bank
2. Green Label ATMs are used for agricultural transactions
3. Brown Label ATMs are owned and operated by a non-banking entity
Which of the statements given above is/are correct?- a)1 and 2 only
- b)2 only
- c) 3 only
- d)2 and 3 only
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements:
1. White Label ATMs are owned and operated by the bank
2. Green Label ATMs are used for agricultural transactions
3. Brown Label ATMs are owned and operated by a non-banking entity
Which of the statements given above is/are correct?
1. White Label ATMs are owned and operated by the bank
2. Green Label ATMs are used for agricultural transactions
3. Brown Label ATMs are owned and operated by a non-banking entity
Which of the statements given above is/are correct?
a)
1 and 2 only
b)
2 only
c)
3 only
d)
2 and 3 only
 | Lekshmi Basak answered |
-On Site ATM - ATMs Inside the Bank
-Off site ATM - ATM outside the bank premises but is located at other places, such as shopping centres, airports, railways station and petrol stations.
-White Label ATM - ATM Provided by NBFC (Non Banking Financial Company)
-Green Label ATM - ATM Provided for Agricultural Transaction
-Orange Label ATM - ATM Provided for Share Transactions
-Yellow Label ATM - ATM provided for E-commerce
-Pink Label ATM - ATM for women banking
-Brown Label ATM - ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider but cash management and connectivity to banking networks is provided by a sponsor bank .
The base year used for WPI is- a)1993-94
- b)2001-02
- c)2004-05
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
The base year used for WPI is
a)
1993-94
b)
2001-02
c)
2004-05
d)
None of the above
| | Koko Singh answered |
Option C is correct that is 2004-05.
Consider the following statements about Statutory Liquidity Ratio (SLR):
1. It includes cash and gold.
2. Banks may earn returns on money parked as SLR
Which of the statements given above is/are correct?- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements about Statutory Liquidity Ratio (SLR):
1. It includes cash and gold.
2. Banks may earn returns on money parked as SLR
Which of the statements given above is/are correct?
1. It includes cash and gold.
2. Banks may earn returns on money parked as SLR
Which of the statements given above is/are correct?
a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 nor 2
 | Sneha Choudhary answered |
Statutory Liquidity Ratio (SLR)
The Statutory Liquidity Ratio (SLR) is the percentage of a bank's Net Demand and Time Liabilities (NDTL) that it needs to maintain in the form of liquid assets such as cash, gold, and approved securities. It is a prudential regulation imposed by the Reserve Bank of India (RBI) on banks to ensure the stability and solvency of the banking system.
Statement 1: It includes cash and gold.
The first statement is correct. The SLR includes cash, gold, and approved securities. Banks are required to maintain a certain proportion of their NDTL as liquid assets, and these assets can include cash, gold, and government securities. However, the SLR does not include all the assets held by a bank, but only those that meet the criteria specified by the RBI.
Statement 2: Banks may earn returns on money parked as SLR
The second statement is also correct. Banks are allowed to earn returns on the money parked as SLR. While maintaining the SLR, banks invest their excess funds in government securities, which are considered safe and provide a return on investment. This allows banks to earn income on the funds that they are required to hold as liquid assets. The returns earned on SLR investments help banks enhance their profitability and manage their liquidity position effectively.
Conclusion
Both statements 1 and 2 are correct. The SLR includes cash, gold, and approved securities, and banks are allowed to earn returns on the money parked as SLR. The SLR requirement serves as a prudential measure to ensure that banks maintain a certain level of liquidity and stability in their operations. It also helps the central bank in regulating the money supply and managing inflation in the economy.
The Statutory Liquidity Ratio (SLR) is the percentage of a bank's Net Demand and Time Liabilities (NDTL) that it needs to maintain in the form of liquid assets such as cash, gold, and approved securities. It is a prudential regulation imposed by the Reserve Bank of India (RBI) on banks to ensure the stability and solvency of the banking system.
Statement 1: It includes cash and gold.
The first statement is correct. The SLR includes cash, gold, and approved securities. Banks are required to maintain a certain proportion of their NDTL as liquid assets, and these assets can include cash, gold, and government securities. However, the SLR does not include all the assets held by a bank, but only those that meet the criteria specified by the RBI.
Statement 2: Banks may earn returns on money parked as SLR
The second statement is also correct. Banks are allowed to earn returns on the money parked as SLR. While maintaining the SLR, banks invest their excess funds in government securities, which are considered safe and provide a return on investment. This allows banks to earn income on the funds that they are required to hold as liquid assets. The returns earned on SLR investments help banks enhance their profitability and manage their liquidity position effectively.
Conclusion
Both statements 1 and 2 are correct. The SLR includes cash, gold, and approved securities, and banks are allowed to earn returns on the money parked as SLR. The SLR requirement serves as a prudential measure to ensure that banks maintain a certain level of liquidity and stability in their operations. It also helps the central bank in regulating the money supply and managing inflation in the economy.
Which of the following will be part of fiscal deficit?
1. Internal debt
2. Government’s external debt
3. Securities issued to food corporation of India
4. Liability to RBI
5. Liability of Central Government to states
Select the correct answer using the codes given below:- a)1, 2, 3 and 4
- b)1, 2, 4 and 5
- c)1, 3, 4 and 5
- d)1, 2 and 4 only
Correct answer is option 'D'. Can you explain this answer?
Which of the following will be part of fiscal deficit?
1. Internal debt
2. Government’s external debt
3. Securities issued to food corporation of India
4. Liability to RBI
5. Liability of Central Government to states
Select the correct answer using the codes given below:
1. Internal debt
2. Government’s external debt
3. Securities issued to food corporation of India
4. Liability to RBI
5. Liability of Central Government to states
Select the correct answer using the codes given below:
a)
1, 2, 3 and 4
b)
1, 2, 4 and 5
c)
1, 3, 4 and 5
d)
1, 2 and 4 only
| | Raksha Das answered |
3 is considered as central assistance and is not considered as part of fiscal deficit
Which of the following is a union tax?
- a)Corporation tax
- b)Taxes on agricultural income
- c)Capitation taxes
- d)Land revenues
Correct answer is option 'A'. Can you explain this answer?
Which of the following is a union tax?
a)
Corporation tax
b)
Taxes on agricultural income
c)
Capitation taxes
d)
Land revenues
 | Baishali Choudhury answered |
Union taxes are given in the list of 7th schedule in the constitution.
The establishment of payment banks is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context?
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of payment banks
2. Payment banks can issue both credit cards and debit cards
3. Payment banks cannot undertake lending activities
Select the correct answer using the code given below:- a)1 only
- b)1 and 3 only
- c)2 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
The establishment of payment banks is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context?
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of payment banks
2. Payment banks can issue both credit cards and debit cards
3. Payment banks cannot undertake lending activities
Select the correct answer using the code given below:
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of payment banks
2. Payment banks can issue both credit cards and debit cards
3. Payment banks cannot undertake lending activities
Select the correct answer using the code given below:
a)
1 only
b)
1 and 3 only
c)
2 only
d)
1, 2 and 3
| | Anshul Thakur answered |
Payment banks eg paytm
Consider the following pairs:1. Repo rate : Policy rate set by the central bank2. 91-day Treasury Bill yield : Long-term government security yield3. 182-day Treasury Bill yield : Short-term government security yield4. Basel III norms : Prudential regulatory framework for banksHow many pairs given above are correctly matched?- a)Only one pair
- b)Only two pairs
- c)Only three pairs
- d)All four pairs
Correct answer is option 'C'. Can you explain this answer?
Consider the following pairs:
1. Repo rate : Policy rate set by the central bank
2. 91-day Treasury Bill yield : Long-term government security yield
3. 182-day Treasury Bill yield : Short-term government security yield
4. Basel III norms : Prudential regulatory framework for banks
How many pairs given above are correctly matched?
a)
Only one pair
b)
Only two pairs
c)
Only three pairs
d)
All four pairs
 | Rashi Mukherjee answered |
Understanding the Pairs
Let’s evaluate each pair to determine how many are correctly matched.
1. Repo rate : Policy rate set by the central bank
- This pair is correctly matched.
- The repo rate is indeed the rate at which the central bank lends money to commercial banks, acting as a key tool for monetary policy.
2. 91-day Treasury Bill yield : Long-term government security yield
- This pair is incorrectly matched.
- A 91-day Treasury Bill is a short-term security, typically issued for 3 months, which means its yield is associated with short-term financing rather than long-term.
3. 182-day Treasury Bill yield : Short-term government security yield
- This pair is correctly matched.
- Similar to the 91-day Treasury Bill, a 182-day Treasury Bill is also a short-term security, making this pair accurate.
4. Basel III norms : Prudential regulatory framework for banks
- This pair is correctly matched.
- Basel III is indeed a global regulatory framework established to strengthen bank capital requirements and promote financial stability.
Conclusion: Count of Correct Matches
- Correct matches: 1 (Repo rate) + 1 (182-day Treasury Bill yield) + 1 (Basel III norms) = 3 pairs.
- Incorrect match: 2 (91-day Treasury Bill yield).
Thus, the correct answer is that only three pairs are correctly matched, making option 'C' the right choice.
Let’s evaluate each pair to determine how many are correctly matched.
1. Repo rate : Policy rate set by the central bank
- This pair is correctly matched.
- The repo rate is indeed the rate at which the central bank lends money to commercial banks, acting as a key tool for monetary policy.
2. 91-day Treasury Bill yield : Long-term government security yield
- This pair is incorrectly matched.
- A 91-day Treasury Bill is a short-term security, typically issued for 3 months, which means its yield is associated with short-term financing rather than long-term.
3. 182-day Treasury Bill yield : Short-term government security yield
- This pair is correctly matched.
- Similar to the 91-day Treasury Bill, a 182-day Treasury Bill is also a short-term security, making this pair accurate.
4. Basel III norms : Prudential regulatory framework for banks
- This pair is correctly matched.
- Basel III is indeed a global regulatory framework established to strengthen bank capital requirements and promote financial stability.
Conclusion: Count of Correct Matches
- Correct matches: 1 (Repo rate) + 1 (182-day Treasury Bill yield) + 1 (Basel III norms) = 3 pairs.
- Incorrect match: 2 (91-day Treasury Bill yield).
Thus, the correct answer is that only three pairs are correctly matched, making option 'C' the right choice.
Consider the following statements and identify the right ones
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system- a)1 only
- b)2 only
- c)1 and 2 both
- d)None
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements and identify the right ones
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system
a)
1 only
b)
2 only
c)
1 and 2 both
d)
None
 | Kunal Mukherjee answered |
Statement 1 is true: Yes, the Reserve Bank of India (RBI) has the sole authority to issue currency notes in India, excluding one rupee notes and coins, which are issued by the Ministry of Finance. Section 22 of the Reserve Bank of India Act gives the RBI this authority.
Statement 2 is False: The Reserve Bank of India (RBI) replaced the proportional reserve system with the minimum reserve system (MRS) in 1956 to make note issuance more flexible and to meet the economy's growing currency needs.
Hence Statement 1 is correct.
Statement 2 is False: The Reserve Bank of India (RBI) replaced the proportional reserve system with the minimum reserve system (MRS) in 1956 to make note issuance more flexible and to meet the economy's growing currency needs.
Hence Statement 1 is correct.
Which of the following items come under ‘Current Account’ of the Balance of Payment?
1. Exports
2. Interest payments
3. Private remittance
4. FDI
5. External lending and borrowing
Select the correct answer using the code given below:- a)1, 2 and 3
- b)2, 3 and 4
- c)1, 2, 3 and 5
- d)1, 2, 3, 4 and 5
Correct answer is option 'A'. Can you explain this answer?
Which of the following items come under ‘Current Account’ of the Balance of Payment?
1. Exports
2. Interest payments
3. Private remittance
4. FDI
5. External lending and borrowing
Select the correct answer using the code given below:
1. Exports
2. Interest payments
3. Private remittance
4. FDI
5. External lending and borrowing
Select the correct answer using the code given below:
a)
1, 2 and 3
b)
2, 3 and 4
c)
1, 2, 3 and 5
d)
1, 2, 3, 4 and 5
| | Divyansh Singh answered |
The category of dairy products?
1. Milk
2. Cheese
3. Yogurt
4. Butter
5. Cream
6. Ice cream
7. Sour cream
8. Cottage cheese
9. Whey protein powder
10. Condensed milk.
1. Milk
2. Cheese
3. Yogurt
4. Butter
5. Cream
6. Ice cream
7. Sour cream
8. Cottage cheese
9. Whey protein powder
10. Condensed milk.
Consider the following statements regarding the Marginal Standing Facility (MSF) of RBI:
1. It is similar to the repo rate for the financial institutions.
2. It is on the lines of the liquidity adjustment facility and part of it.
3. Though it is a costlier route to fulfill overnight requirement of funds, it is not a penal rate.
4. Banks use this route once they exhaust all channels to raise short-term funds.
Which of the statements given above is/are not correct?- a)1, 3 and 4 only
- b)1, 2 and 3 only
- c)1, 2 and 4 only
- d)1, 2, 3 and 4
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements regarding the Marginal Standing Facility (MSF) of RBI:
1. It is similar to the repo rate for the financial institutions.
2. It is on the lines of the liquidity adjustment facility and part of it.
3. Though it is a costlier route to fulfill overnight requirement of funds, it is not a penal rate.
4. Banks use this route once they exhaust all channels to raise short-term funds.
Which of the statements given above is/are not correct?
1. It is similar to the repo rate for the financial institutions.
2. It is on the lines of the liquidity adjustment facility and part of it.
3. Though it is a costlier route to fulfill overnight requirement of funds, it is not a penal rate.
4. Banks use this route once they exhaust all channels to raise short-term funds.
Which of the statements given above is/are not correct?
a)
1, 3 and 4 only
b)
1, 2 and 3 only
c)
1, 2 and 4 only
d)
1, 2, 3 and 4
 | Vijay Kumar answered |
The correct answer is:
1. 1, 3 and 4 only
Explanation:
- Statement 1 is not correct: The Marginal Standing Facility (MSF) is not exactly the same as the repo rate; it is an emergency borrowing rate for banks above the repo rate. The MSF allows banks to borrow funds overnight from the RBI against government securities.
- Statement 2 is correct: The MSF is on the lines of the Liquidity Adjustment Facility (LAF) and is a part of it, designed to help banks manage overnight liquidity shortages.
- Statement 3 is not correct: While the MSF is a costlier route compared to the repo rate, it is considered a penal rate since it is higher than the repo rate to discourage excessive reliance on it.
- Statement 4 is not correct: Although banks typically use the MSF after exhausting other avenues for raising short-term funds, the nature of MSF being a penal rate and its higher cost is implied in the statement, making it misleading.
Therefore, statements 1, 3, and 4 are not correct.
Which of the following receipts are the revenue receipts of Government?
1. Recovery of loans given to the states and union territories
2. Interest received from telecommunication
3. Debt and profit received from RBI
4. Income by tax
Select the correct option:- a)1, 2, 4
- b)2, 3, 4
- c)1, 2, 3
- d)1, 2, 3, 4
Correct answer is option 'B'. Can you explain this answer?
Which of the following receipts are the revenue receipts of Government?
1. Recovery of loans given to the states and union territories
2. Interest received from telecommunication
3. Debt and profit received from RBI
4. Income by tax
Select the correct option:
1. Recovery of loans given to the states and union territories
2. Interest received from telecommunication
3. Debt and profit received from RBI
4. Income by tax
Select the correct option:
a)
1, 2, 4
b)
2, 3, 4
c)
1, 2, 3
d)
1, 2, 3, 4
 | Kiran Sharma answered |
Revenue Receipts of Government
Revenue receipts refer to the income received by the government through various sources. These receipts are non-debt receipts and do not create any liability for the government. They are used to meet the day-to-day expenses and operational costs of the government. Revenue receipts can be further classified into tax revenue and non-tax revenue.
Tax Revenue
Tax revenue consists of the income generated through various taxes levied by the government. It includes direct taxes such as income tax, corporate tax, and indirect taxes such as goods and services tax (GST), excise duty, customs duty, etc.
Non-Tax Revenue
Non-tax revenue includes all other sources of income for the government apart from taxes. It includes various receipts such as interest received on loans given, dividends from public sector undertakings, fees and fines, etc.
Analysis of Receipts
1. Recovery of loans given to the states and union territories: This is a non-tax revenue receipt. The government provides loans to the states and union territories for various purposes. When these loans are repaid, it is considered as a revenue receipt for the government. Therefore, option 1 is a revenue receipt.
2. Interest received from telecommunication: This is a non-tax revenue receipt. The government earns revenue through the licensing and spectrum fees charged to telecommunication companies. Additionally, the government may also earn interest on loans given to the telecommunication sector. Therefore, option 2 is a revenue receipt.
3. Debt and profit received from RBI: This is a non-tax revenue receipt. The government may earn revenue in the form of interest on loans given to the Reserve Bank of India (RBI) or profit shared by the RBI. Therefore, option 3 is a revenue receipt.
4. Income by tax: This is a tax revenue receipt. Taxes levied on individuals and businesses form a major part of the government's revenue. Therefore, option 4 is a revenue receipt.
Conclusion
Based on the analysis, options 2, 3, and 4 are revenue receipts of the government. Therefore, the correct option is b) 2, 3, 4.
Revenue receipts refer to the income received by the government through various sources. These receipts are non-debt receipts and do not create any liability for the government. They are used to meet the day-to-day expenses and operational costs of the government. Revenue receipts can be further classified into tax revenue and non-tax revenue.
Tax Revenue
Tax revenue consists of the income generated through various taxes levied by the government. It includes direct taxes such as income tax, corporate tax, and indirect taxes such as goods and services tax (GST), excise duty, customs duty, etc.
Non-Tax Revenue
Non-tax revenue includes all other sources of income for the government apart from taxes. It includes various receipts such as interest received on loans given, dividends from public sector undertakings, fees and fines, etc.
Analysis of Receipts
1. Recovery of loans given to the states and union territories: This is a non-tax revenue receipt. The government provides loans to the states and union territories for various purposes. When these loans are repaid, it is considered as a revenue receipt for the government. Therefore, option 1 is a revenue receipt.
2. Interest received from telecommunication: This is a non-tax revenue receipt. The government earns revenue through the licensing and spectrum fees charged to telecommunication companies. Additionally, the government may also earn interest on loans given to the telecommunication sector. Therefore, option 2 is a revenue receipt.
3. Debt and profit received from RBI: This is a non-tax revenue receipt. The government may earn revenue in the form of interest on loans given to the Reserve Bank of India (RBI) or profit shared by the RBI. Therefore, option 3 is a revenue receipt.
4. Income by tax: This is a tax revenue receipt. Taxes levied on individuals and businesses form a major part of the government's revenue. Therefore, option 4 is a revenue receipt.
Conclusion
Based on the analysis, options 2, 3, and 4 are revenue receipts of the government. Therefore, the correct option is b) 2, 3, 4.
Consider the following pairs:1. 90-day overdue norm - Loan considered NPA if not serviced for 90 days2. 5 / 25 Refinancing - Allows extension of loan tenure to 25 years with interest adjusted every 5 years3. SDR (Strategic Debt Restructuring) - Involves converting debt to 51% equity and selling to highest bidder4. S4A (Scheme for Sustainable Structuring of Stressed Assets) - Involves change in company ownershipHow many pairs given above are correctly matched?- a)Only one pair
- b)Only two pairs
- c)Only three pairs
- d)All four pairs
Correct answer is option 'C'. Can you explain this answer?
Consider the following pairs:
1. 90-day overdue norm - Loan considered NPA if not serviced for 90 days
2. 5 / 25 Refinancing - Allows extension of loan tenure to 25 years with interest adjusted every 5 years
3. SDR (Strategic Debt Restructuring) - Involves converting debt to 51% equity and selling to highest bidder
4. S4A (Scheme for Sustainable Structuring of Stressed Assets) - Involves change in company ownership
How many pairs given above are correctly matched?
a)
Only one pair
b)
Only two pairs
c)
Only three pairs
d)
All four pairs
 | K.L Institute answered |
1. 90-day overdue norm - Correctly matched. Under the current policy, a loan is considered NPA if it has not been serviced for 90 days.
2. 5 / 25 Refinancing - Correctly matched. This scheme offers a larger window for revival of stressed assets by allowing the extension of the tenure of loans to 25 years with interest rates adjusted every 5 years.
3. SDR (Strategic Debt Restructuring) - Correctly matched. This scheme allows banks to convert the debt of companies into 51% equity and sell it to the highest bidder.
4. S4A (Scheme for Sustainable Structuring of Stressed Assets) - Incorrectly matched. The S4A scheme does not involve a change in company ownership. Instead, it involves deciding how much of the stressed debt is sustainable, converting the rest into equity and preference shares.
Thus, only the first three pairs are correctly matched.
Consider the following statements:Statement-I:
The Regional Rural Banks (RRBs) were established in 1975 with the primary objectives of providing credit to weaker sections at concessional rates and mobilizing rural savings for productive activities in rural areas.Statement-II:
Co-operative banks in India predominantly cater to the needs of agriculture, rural-based industries, and to a lesser extent, trade and industry in urban centers, operating under dual regulatory control.Which one of the following is correct in respect of the above statements?- a)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
- b)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- c)Statement-I is correct, but Statement-II is incorrect
- d)Statement-I is incorrect, but Statement-II is correct
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements:
Statement-I:
The Regional Rural Banks (RRBs) were established in 1975 with the primary objectives of providing credit to weaker sections at concessional rates and mobilizing rural savings for productive activities in rural areas.
The Regional Rural Banks (RRBs) were established in 1975 with the primary objectives of providing credit to weaker sections at concessional rates and mobilizing rural savings for productive activities in rural areas.
Statement-II:
Co-operative banks in India predominantly cater to the needs of agriculture, rural-based industries, and to a lesser extent, trade and industry in urban centers, operating under dual regulatory control.
Co-operative banks in India predominantly cater to the needs of agriculture, rural-based industries, and to a lesser extent, trade and industry in urban centers, operating under dual regulatory control.
Which one of the following is correct in respect of the above statements?
a)
Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
b)
Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
c)
Statement-I is correct, but Statement-II is incorrect
d)
Statement-I is incorrect, but Statement-II is correct
 | Learnpro Institute answered |
Statement-I: The Regional Rural Banks (RRBs) were indeed established in 1975 with the objective of providing credit to weaker sections (such as farmers, small entrepreneurs, and rural laborers) at concessional rates and mobilizing rural savings for productive activities. This statement is correct.
Statement-II: Co-operative banks in India primarily serve the rural and agricultural sectors, including rural-based industries, and to a lesser extent, urban trade and industry. These banks are indeed regulated under dual control, with oversight by both the Reserve Bank of India (RBI) and the respective state governments. This statement is also correct.
However, Statement-II does not explain Statement-I, as the two are related to different types of financial institutions. RRBs and co-operative banks serve somewhat similar objectives in rural areas, but they operate differently and are distinct entities. Thus, while both statements are correct, Statement-II does not provide an explanation for Statement-I. Hence, Correct Answer - Option A
What was the primary objective behind the establishment of Regional Rural Banks (RRBs) in India?- a)To provide credit to urban industries at subsidized interest rates.
- b)To serve the banking needs of urban centers and metropolitan areas.
- c)To cater to the banking requirements of the rural population and weaker sections at concessional interest rates.
- d)To exclusively focus on mobilizing urban savings for industrial development.
Correct answer is option 'C'. Can you explain this answer?
What was the primary objective behind the establishment of Regional Rural Banks (RRBs) in India?
a)
To provide credit to urban industries at subsidized interest rates.
b)
To serve the banking needs of urban centers and metropolitan areas.
c)
To cater to the banking requirements of the rural population and weaker sections at concessional interest rates.
d)
To exclusively focus on mobilizing urban savings for industrial development.
 | Anoushka Reddy answered |
Introduction
Regional Rural Banks (RRBs) were established in India to address the specific banking needs of the rural population and to support weaker sections of society. The primary objective behind their formation is to foster inclusive financial development in the country.
Key Objectives of RRBs:
Conclusion
The establishment of Regional Rural Banks is a significant step towards bridging the gap between the urban and rural financial ecosystems. By focusing on the banking requirements of the rural population and weaker sections at concessional interest rates, RRBs play a crucial role in fostering economic development and ensuring financial inclusion in India.
Regional Rural Banks (RRBs) were established in India to address the specific banking needs of the rural population and to support weaker sections of society. The primary objective behind their formation is to foster inclusive financial development in the country.
Key Objectives of RRBs:
- Financial Inclusion: RRBs aim to provide banking services to the unbanked rural population, ensuring access to credit and financial products.
- Support for Weaker Sections: RRBs focus on catering to the needs of marginalized communities, ensuring they receive financial support at concessional interest rates.
- Development of Agriculture and Rural Economy: By providing loans for agricultural activities and rural development projects, RRBs contribute to the overall growth of the rural economy.
- Employment Generation: RRBs promote self-employment and entrepreneurship in rural areas by facilitating credit for small businesses and agricultural ventures.
- Localized Banking Services: With a presence in rural areas, RRBs understand local needs and can provide customized banking solutions, enhancing trust and reliability.
Conclusion
The establishment of Regional Rural Banks is a significant step towards bridging the gap between the urban and rural financial ecosystems. By focusing on the banking requirements of the rural population and weaker sections at concessional interest rates, RRBs play a crucial role in fostering economic development and ensuring financial inclusion in India.
The percentage of demand and time liabilities that banks have to keep with RBI is- a)SLR
- b)CRR
- c)OMO
- d)Bank rate
Correct answer is option 'B'. Can you explain this answer?
The percentage of demand and time liabilities that banks have to keep with RBI is
a)
SLR
b)
CRR
c)
OMO
d)
Bank rate
 | Anjana Sharma answered |
Explanation:
The percentage of demand and time liabilities that banks have to keep with the Reserve Bank of India (RBI) is known as the Cash Reserve Ratio (CRR).
Cash Reserve Ratio (CRR):
- The CRR is a monetary policy tool used by the RBI to control the liquidity in the economy.
- It refers to the portion of bank deposits that banks are required to keep with the RBI in the form of cash reserves.
- The CRR is determined as a percentage of the bank's net demand and time liabilities (NDTL).
- NDTL refers to the total demand and time liabilities of a bank, which includes the total deposits held by the bank.
- The CRR is applicable to both scheduled commercial banks and cooperative banks.
Impact of CRR:
- By increasing the CRR, the RBI reduces the liquidity in the banking system as banks have to keep a higher portion of their deposits with the RBI.
- On the other hand, by decreasing the CRR, the RBI increases the liquidity in the banking system as banks have more funds available for lending and investment.
Significance of CRR:
- The CRR serves as a tool for the RBI to control inflation and money supply in the economy.
- By increasing the CRR, the RBI reduces the excess liquidity in the economy, which helps in controlling inflation.
- Additionally, the CRR helps in maintaining the stability of the banking system by ensuring that banks have a certain amount of funds readily available in the form of cash reserves.
Difference between CRR and SLR:
- SLR stands for Statutory Liquidity Ratio, which is the percentage of NDTL that banks have to maintain in the form of specified liquid assets such as cash, gold, and government securities.
- While both CRR and SLR are tools used by the RBI to control liquidity, the key difference is that the CRR is in the form of cash reserves held with the RBI, whereas the SLR is in the form of liquid assets held by the banks themselves.
In conclusion, the correct answer to the question is option 'B', CRR. The CRR refers to the percentage of demand and time liabilities that banks have to keep with the RBI in the form of cash reserves. It is an important tool used by the RBI to control liquidity in the banking system and maintain stability in the economy.
The percentage of demand and time liabilities that banks have to keep with the Reserve Bank of India (RBI) is known as the Cash Reserve Ratio (CRR).
Cash Reserve Ratio (CRR):
- The CRR is a monetary policy tool used by the RBI to control the liquidity in the economy.
- It refers to the portion of bank deposits that banks are required to keep with the RBI in the form of cash reserves.
- The CRR is determined as a percentage of the bank's net demand and time liabilities (NDTL).
- NDTL refers to the total demand and time liabilities of a bank, which includes the total deposits held by the bank.
- The CRR is applicable to both scheduled commercial banks and cooperative banks.
Impact of CRR:
- By increasing the CRR, the RBI reduces the liquidity in the banking system as banks have to keep a higher portion of their deposits with the RBI.
- On the other hand, by decreasing the CRR, the RBI increases the liquidity in the banking system as banks have more funds available for lending and investment.
Significance of CRR:
- The CRR serves as a tool for the RBI to control inflation and money supply in the economy.
- By increasing the CRR, the RBI reduces the excess liquidity in the economy, which helps in controlling inflation.
- Additionally, the CRR helps in maintaining the stability of the banking system by ensuring that banks have a certain amount of funds readily available in the form of cash reserves.
Difference between CRR and SLR:
- SLR stands for Statutory Liquidity Ratio, which is the percentage of NDTL that banks have to maintain in the form of specified liquid assets such as cash, gold, and government securities.
- While both CRR and SLR are tools used by the RBI to control liquidity, the key difference is that the CRR is in the form of cash reserves held with the RBI, whereas the SLR is in the form of liquid assets held by the banks themselves.
In conclusion, the correct answer to the question is option 'B', CRR. The CRR refers to the percentage of demand and time liabilities that banks have to keep with the RBI in the form of cash reserves. It is an important tool used by the RBI to control liquidity in the banking system and maintain stability in the economy.
The base year to calculate CPI-AL is- a)1980-81
- b)1986-87
- c)2001-02
- d)2003-04
Correct answer is option 'B'. Can you explain this answer?
The base year to calculate CPI-AL is
a)
1980-81
b)
1986-87
c)
2001-02
d)
2003-04
 | Nilanjan Banerjee answered |
The base year to calculate CPI-AL is 1986-87 and 260 items are included in the index.
Consider the following pairs:1. Cash Reserve Ratio (CRR) - Banks maintain a part of their total deposits with the RBI in cash form.
2. Statutory Liquidity Ratio (SLR) - Banks maintain a part of their total deposits in liquid assets with the RBI.
3. Bank Rate - The interest rate charged by the RBI on its short-term lendings.
4. Repo Rate - The rate of interest the RBI charges on long-term borrowings from banks.
How many pairs given above are correctly matched?- a)Only one pair
- b)Only two pairs
- c)Only three pairs
- d)All four pairs
Correct answer is option 'A'. Can you explain this answer?
Consider the following pairs:
1. Cash Reserve Ratio (CRR) - Banks maintain a part of their total deposits with the RBI in cash form.
2. Statutory Liquidity Ratio (SLR) - Banks maintain a part of their total deposits in liquid assets with the RBI.
3. Bank Rate - The interest rate charged by the RBI on its short-term lendings.
4. Repo Rate - The rate of interest the RBI charges on long-term borrowings from banks.
How many pairs given above are correctly matched?
2. Statutory Liquidity Ratio (SLR) - Banks maintain a part of their total deposits in liquid assets with the RBI.
3. Bank Rate - The interest rate charged by the RBI on its short-term lendings.
4. Repo Rate - The rate of interest the RBI charges on long-term borrowings from banks.
How many pairs given above are correctly matched?
a)
Only one pair
b)
Only two pairs
c)
Only three pairs
d)
All four pairs
 | Upsc Toppers answered |
1. Cash Reserve Ratio (CRR) - Correct. Banks are required to maintain a part of their total deposits with the RBI in cash form.
2. Statutory Liquidity Ratio (SLR) - Incorrect. Banks maintain a part of their total deposits in liquid assets with themselves, not with the RBI.
3. Bank Rate - Incorrect. The Bank Rate is the interest rate charged by the RBI on its long-term lending, not short-term.
4. Repo Rate - Incorrect. The Repo Rate is the rate of interest the RBI charges on short-term borrowings, not long-term.
Only the first pair is correctly matched.
2. Statutory Liquidity Ratio (SLR) - Incorrect. Banks maintain a part of their total deposits in liquid assets with themselves, not with the RBI.
3. Bank Rate - Incorrect. The Bank Rate is the interest rate charged by the RBI on its long-term lending, not short-term.
4. Repo Rate - Incorrect. The Repo Rate is the rate of interest the RBI charges on short-term borrowings, not long-term.
Only the first pair is correctly matched.
Consider the following statements and identify the right ones.
i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.
ii. The constitution also provides for transferring certain tax revenues from union list to states.- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.
ii. The constitution also provides for transferring certain tax revenues from union list to states.
i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.
ii. The constitution also provides for transferring certain tax revenues from union list to states.
a)
i only
b)
ii only
c)
both
d)
none
| | Nidhi Deshpande answered |
Central government has exclusive power to impose tax which is not mentioned in state or concurrent list.
For bank rate to be effective, which of the following conditions are to be fulfilled?- a)Banks should be ready to avail rediscounting facility from RBI
- b)Banks should have adequate quantity of credit instruments that can be rediscounted
- c)Banks do not have surplus cash and depend on RBI for extraordinary needs
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
For bank rate to be effective, which of the following conditions are to be fulfilled?
a)
Banks should be ready to avail rediscounting facility from RBI
b)
Banks should have adequate quantity of credit instruments that can be rediscounted
c)
Banks do not have surplus cash and depend on RBI for extraordinary needs
d)
All the above
| | Abhishek Saha answered |
Bank rate is the rate at which banks can borrow from RBI when in need of funds.
Which of the following is not a reason for inflation?- a)Increase in administered prices
- b)Increase in cost of capital
- c)More dependence on indirect taxes for revenue
- d)None of these
Correct answer is option 'D'. Can you explain this answer?
Which of the following is not a reason for inflation?
a)
Increase in administered prices
b)
Increase in cost of capital
c)
More dependence on indirect taxes for revenue
d)
None of these
| | Devansh Datta answered |
Inflation refers to rise in the general price level in the economy. Various demand and supply side factors cause inflation.
If we deduct grants for creation of capital assets from revenue deficit, we arrive at concept of- a)Budget Deficit
- b)Primary Deficit
- c)Effective Revenue Deficit
- d)Fiscal Deficit
Correct answer is option 'C'. Can you explain this answer?
If we deduct grants for creation of capital assets from revenue deficit, we arrive at concept of
a)
Budget Deficit
b)
Primary Deficit
c)
Effective Revenue Deficit
d)
Fiscal Deficit
| | Jaideep Verma answered |
Concept Explanation:
The concept of Effective Revenue Deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants that are used for capital expenditures.
Revenue Deficit:
Revenue deficit refers to the excess of revenue expenditure over revenue receipts. It indicates that the government is not able to meet its current expenses through its current revenue sources. Revenue deficit represents the borrowing by the government to finance its current expenses.
Grants for Creation of Capital Assets:
Grants for the creation of capital assets are funds provided by the government for the development of infrastructure and other capital projects. These grants are used for long-term investments and are not considered as revenue expenditure. They are used to create assets that will generate income or provide services in the future.
Effective Revenue Deficit:
Effective revenue deficit is calculated by deducting grants for the creation of capital assets from the revenue deficit. This helps in assessing the true revenue deficit of the government by excluding the capital expenditure component from the revenue deficit.
Example:
Let's consider an example to understand this concept better. Suppose the revenue deficit of the government is Rs. 100 crore and grants for the creation of capital assets are Rs. 50 crore. In this case, the effective revenue deficit would be Rs. 50 crore (Rs. 100 crore - Rs. 50 crore).
Significance:
The concept of effective revenue deficit is important as it provides a more accurate measure of the revenue deficit. It helps in identifying the extent to which the government is relying on borrowings to finance its current expenses, excluding the capital expenditure component. This measure is particularly useful for assessing the sustainability of the government's fiscal position and its impact on the economy.
Conclusion:
In conclusion, the concept of effective revenue deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants used for capital expenditures. This measure helps in assessing the true revenue deficit and the government's reliance on borrowings to finance its current expenses.
The concept of Effective Revenue Deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants that are used for capital expenditures.
Revenue Deficit:
Revenue deficit refers to the excess of revenue expenditure over revenue receipts. It indicates that the government is not able to meet its current expenses through its current revenue sources. Revenue deficit represents the borrowing by the government to finance its current expenses.
Grants for Creation of Capital Assets:
Grants for the creation of capital assets are funds provided by the government for the development of infrastructure and other capital projects. These grants are used for long-term investments and are not considered as revenue expenditure. They are used to create assets that will generate income or provide services in the future.
Effective Revenue Deficit:
Effective revenue deficit is calculated by deducting grants for the creation of capital assets from the revenue deficit. This helps in assessing the true revenue deficit of the government by excluding the capital expenditure component from the revenue deficit.
Example:
Let's consider an example to understand this concept better. Suppose the revenue deficit of the government is Rs. 100 crore and grants for the creation of capital assets are Rs. 50 crore. In this case, the effective revenue deficit would be Rs. 50 crore (Rs. 100 crore - Rs. 50 crore).
Significance:
The concept of effective revenue deficit is important as it provides a more accurate measure of the revenue deficit. It helps in identifying the extent to which the government is relying on borrowings to finance its current expenses, excluding the capital expenditure component. This measure is particularly useful for assessing the sustainability of the government's fiscal position and its impact on the economy.
Conclusion:
In conclusion, the concept of effective revenue deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants used for capital expenditures. This measure helps in assessing the true revenue deficit and the government's reliance on borrowings to finance its current expenses.
Which of the following is a Fiscal Policy tool in India?
1. Goods and Services Tax
2. Repo rate
3. Corporate tax
4. Public infrastructure spending
Select the correct option using the code given below:- a)1, 2 and 3 only
- b)1, 3 and 4 only
- c)2 and 4 only
- d)1, 2, 3 and 4
Correct answer is option 'B'. Can you explain this answer?
Which of the following is a Fiscal Policy tool in India?
1. Goods and Services Tax
2. Repo rate
3. Corporate tax
4. Public infrastructure spending
Select the correct option using the code given below:
1. Goods and Services Tax
2. Repo rate
3. Corporate tax
4. Public infrastructure spending
Select the correct option using the code given below:
a)
1, 2 and 3 only
b)
1, 3 and 4 only
c)
2 and 4 only
d)
1, 2, 3 and 4
| | Charvi Choudhary answered |
Explanation:
Fiscal policy refers to the use of government spending and taxation to influence the economy. In India, there are several fiscal policy tools that are used to manage the economy. Among the options given, the correct ones are:
1. Goods and Services Tax (GST):
The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It is a fiscal policy tool because it affects both government revenue and consumer spending. By adjusting the GST rates, the government can influence the prices of goods and services, which in turn affects consumption and investment.
3. Corporate tax:
Corporate tax refers to the tax levied on the profits of companies. By adjusting the corporate tax rate, the government can influence the profitability of businesses and their investment decisions. Lowering corporate taxes can incentivize companies to invest more, stimulate economic growth, and create job opportunities.
4. Public infrastructure spending:
Public infrastructure spending refers to government expenditure on infrastructure projects such as roads, bridges, railways, and airports. This form of spending is a fiscal policy tool because it directly impacts economic activity. Increased public infrastructure spending can stimulate aggregate demand, create jobs, and boost economic growth.
2. Repo rate:
The repo rate is not a fiscal policy tool but a monetary policy tool. It is the rate at which the central bank lends money to commercial banks. Changes in the repo rate influence interest rates in the economy, which in turn affects borrowing costs and investment decisions. The repo rate is set by the Reserve Bank of India (RBI) and is used to manage inflation and economic growth.
Therefore, the correct option is b) 1, 3, and 4 only.
Fiscal policy refers to the use of government spending and taxation to influence the economy. In India, there are several fiscal policy tools that are used to manage the economy. Among the options given, the correct ones are:
1. Goods and Services Tax (GST):
The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It is a fiscal policy tool because it affects both government revenue and consumer spending. By adjusting the GST rates, the government can influence the prices of goods and services, which in turn affects consumption and investment.
3. Corporate tax:
Corporate tax refers to the tax levied on the profits of companies. By adjusting the corporate tax rate, the government can influence the profitability of businesses and their investment decisions. Lowering corporate taxes can incentivize companies to invest more, stimulate economic growth, and create job opportunities.
4. Public infrastructure spending:
Public infrastructure spending refers to government expenditure on infrastructure projects such as roads, bridges, railways, and airports. This form of spending is a fiscal policy tool because it directly impacts economic activity. Increased public infrastructure spending can stimulate aggregate demand, create jobs, and boost economic growth.
2. Repo rate:
The repo rate is not a fiscal policy tool but a monetary policy tool. It is the rate at which the central bank lends money to commercial banks. Changes in the repo rate influence interest rates in the economy, which in turn affects borrowing costs and investment decisions. The repo rate is set by the Reserve Bank of India (RBI) and is used to manage inflation and economic growth.
Therefore, the correct option is b) 1, 3, and 4 only.
which of the following is a debt creating capital receipt?- a)Disinvestment proceed from psu
- b)Interest received
- c)Loan recovery
- d)Market borrowing
Correct answer is option 'D'. Can you explain this answer?
which of the following is a debt creating capital receipt?
a)
Disinvestment proceed from psu
b)
Interest received
c)
Loan recovery
d)
Market borrowing
| | Sarthak Mukherjee answered |
Market Borrowing:
Market borrowing is a debt creating capital receipt because it involves borrowing money from the financial markets by issuing bonds or securities. This type of borrowing creates a liability for the government as it has to repay the borrowed amount along with interest in the future.
Disinvestment Proceed from PSU:
Disinvestment proceeds from PSU are not considered a debt creating capital receipt. It is a non-debt capital receipt as it involves selling the government's stake in public sector undertakings (PSUs) to raise funds. This does not create any additional debt for the government.
Interest Received:
Interest received is not a capital receipt, it is a revenue receipt. It represents income earned by the government on its investments or loans given to other entities. It does not involve borrowing or creating any debt.
Loan Recovery:
Loan recovery is also not a debt creating capital receipt. It involves the repayment of loans given by the government to other entities. It is a recovery of funds previously lent out by the government and does not create any new debt.
Market borrowing is a debt creating capital receipt because it involves borrowing money from the financial markets by issuing bonds or securities. This type of borrowing creates a liability for the government as it has to repay the borrowed amount along with interest in the future.
Disinvestment Proceed from PSU:
Disinvestment proceeds from PSU are not considered a debt creating capital receipt. It is a non-debt capital receipt as it involves selling the government's stake in public sector undertakings (PSUs) to raise funds. This does not create any additional debt for the government.
Interest Received:
Interest received is not a capital receipt, it is a revenue receipt. It represents income earned by the government on its investments or loans given to other entities. It does not involve borrowing or creating any debt.
Loan Recovery:
Loan recovery is also not a debt creating capital receipt. It involves the repayment of loans given by the government to other entities. It is a recovery of funds previously lent out by the government and does not create any new debt.
The most important source of revenue to the states is- a)Sales tax
- b)Service tax
- c)Excise duty
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
The most important source of revenue to the states is
a)
Sales tax
b)
Service tax
c)
Excise duty
d)
None of the above
| | Anirudh Joshi answered |
Sales tax is the tax on sale of goods and is influenced by the value added tax system.
Which of the following taxes is/are withdrawn or abolished?- a)Interest tax
- b)Estate duty
- c)Gift tax
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following taxes is/are withdrawn or abolished?
a)
Interest tax
b)
Estate duty
c)
Gift tax
d)
All the above
| | Sreemoyee Shah answered |
Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99.
What is the primary purpose of the Market Stabilisation Scheme (MSS) introduced by the RBI in 2004?- a)To regulate the functioning of the call money market
- b)To absorb surplus liquidity arising from large capital inflows
- c)To manage interest rate signals in the market
- d)To facilitate daily lending and borrowing operations between the RBI and banks
Correct answer is option 'B'. Can you explain this answer?
What is the primary purpose of the Market Stabilisation Scheme (MSS) introduced by the RBI in 2004?
a)
To regulate the functioning of the call money market
b)
To absorb surplus liquidity arising from large capital inflows
c)
To manage interest rate signals in the market
d)
To facilitate daily lending and borrowing operations between the RBI and banks
| | Debolina Yadav answered |
Overview of the Market Stabilisation Scheme (MSS)
The Market Stabilisation Scheme (MSS) was introduced by the Reserve Bank of India (RBI) in 2004 to address the challenges posed by excessive liquidity in the financial system, particularly due to large capital inflows.
Primary Purpose
- The primary objective of the MSS is to absorb surplus liquidity that arises from significant capital inflows into the Indian economy. This helps in maintaining liquidity at optimal levels and stabilizes the financial system.
Mechanism of the MSS
- Under the MSS, the RBI issues government securities to absorb excess liquidity. This is a key mechanism to counterbalance the inflow of foreign funds that can lead to inflationary pressures.
Importance of Liquidity Management
- Effective liquidity management is crucial for:
- Controlling inflation: Excess liquidity can lead to increased spending, pushing up prices.
- Stabilizing interest rates: By absorbing liquidity, the RBI can influence short-term interest rates, helping to maintain economic stability.
Conclusion
- Overall, the MSS is a vital tool for the RBI to ensure that the capital inflows do not destabilize the economy, making option 'B' the correct answer. By absorbing surplus liquidity, the RBI aims to maintain balance in the financial markets and promote sustainable economic growth.
The Market Stabilisation Scheme (MSS) was introduced by the Reserve Bank of India (RBI) in 2004 to address the challenges posed by excessive liquidity in the financial system, particularly due to large capital inflows.
Primary Purpose
- The primary objective of the MSS is to absorb surplus liquidity that arises from significant capital inflows into the Indian economy. This helps in maintaining liquidity at optimal levels and stabilizes the financial system.
Mechanism of the MSS
- Under the MSS, the RBI issues government securities to absorb excess liquidity. This is a key mechanism to counterbalance the inflow of foreign funds that can lead to inflationary pressures.
Importance of Liquidity Management
- Effective liquidity management is crucial for:
- Controlling inflation: Excess liquidity can lead to increased spending, pushing up prices.
- Stabilizing interest rates: By absorbing liquidity, the RBI can influence short-term interest rates, helping to maintain economic stability.
Conclusion
- Overall, the MSS is a vital tool for the RBI to ensure that the capital inflows do not destabilize the economy, making option 'B' the correct answer. By absorbing surplus liquidity, the RBI aims to maintain balance in the financial markets and promote sustainable economic growth.
Regional Rural Banks work at- a)Hobli level
- b)Taluk level
- c)District level
- d)All levels
Correct answer is option 'C'. Can you explain this answer?
Regional Rural Banks work at
a)
Hobli level
b)
Taluk level
c)
District level
d)
All levels
| | Anshika Singh answered |
The SBI and its subsidiaries, 14 nationalised banks as well as 3 private banks were given the responsibility of development of districts.
Which of the following is a reason for inflation?- a)Deficit financing
- b)Growth in per capita income
- c)Structural deficiencies
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is a reason for inflation?
a)
Deficit financing
b)
Growth in per capita income
c)
Structural deficiencies
d)
All the above
| | Madhurima Khanna answered |
Inflation refers to rise in the general price level in the economy. Various demand and supply side factors cause inflation.
Which of the following banks were nationalized in 1980?- a)Andhra Bank
- b)Vijaya Bank
- c)Corporation Bank
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following banks were nationalized in 1980?
a)
Andhra Bank
b)
Vijaya Bank
c)
Corporation Bank
d)
All the above
| | Deepak Verma answered |
The other 3 banks are Punjab and Sind Bank, New bank of India and Oriental Bank of Commerce.
Consider the following statements:
1. Repo rate and Reverse repo rate as an instrument of money market were introduced post economic reforms of 1991.
2. In reverse repo, RBI is the lender whereas Banks and Financial Institutions are borrowers.
Which of the statements given above is/are correct?- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements:
1. Repo rate and Reverse repo rate as an instrument of money market were introduced post economic reforms of 1991.
2. In reverse repo, RBI is the lender whereas Banks and Financial Institutions are borrowers.
Which of the statements given above is/are correct?
1. Repo rate and Reverse repo rate as an instrument of money market were introduced post economic reforms of 1991.
2. In reverse repo, RBI is the lender whereas Banks and Financial Institutions are borrowers.
Which of the statements given above is/are correct?
a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 nor 2
| | Srishti Gupta answered |
In reverse repo RBI absorbs excess liquidity and acts a borrower. IN Repo rate transaction the RBI acts as a lender as it infuses more money in the system.
Which of the following tools are used by RBI to maintain money supply in the economy?
1. Statutory liquidity ratio
2. Repo Rate
3. Bank Rate
Select the correct answer using the code given below:- a)1 and 2 only
- b)2 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'D'. Can you explain this answer?
Which of the following tools are used by RBI to maintain money supply in the economy?
1. Statutory liquidity ratio
2. Repo Rate
3. Bank Rate
Select the correct answer using the code given below:
1. Statutory liquidity ratio
2. Repo Rate
3. Bank Rate
Select the correct answer using the code given below:
a)
1 and 2 only
b)
2 only
c)
1 and 3 only
d)
1, 2 and 3
| | Abhijeet Shah answered |
Tools used by RBI to maintain money supply in the economy:
Statutory Liquidity Ratio:
- Statutory Liquidity Ratio (SLR) is the percentage of Net Demand and Time Liabilities (NDTL) that banks are required to maintain in the form of liquid assets like cash, gold, or securities.
- By changing the SLR, RBI can control the liquidity in the banking system. If the SLR is increased, banks have to hold more reserves, reducing the amount available for lending and vice versa.
Repo Rate:
- Repo Rate is the rate at which the central bank (RBI) lends money to commercial banks in case of any shortfall of funds.
- By changing the repo rate, RBI can influence the lending capacity of banks. A decrease in the repo rate encourages banks to borrow more from RBI, increasing liquidity in the system.
Bank Rate:
- Bank Rate is the rate at which the central bank (RBI) lends money to commercial banks for long-term funds.
- By changing the bank rate, RBI can control the cost of borrowing for banks, affecting their lending rates and ultimately impacting the money supply in the economy.
Conclusion:
- All three tools, namely Statutory Liquidity Ratio, Repo Rate, and Bank Rate, are used by RBI to maintain money supply in the economy. Each tool plays a crucial role in regulating liquidity and credit flow in the financial system, thereby influencing economic growth and stability.
Statutory Liquidity Ratio:
- Statutory Liquidity Ratio (SLR) is the percentage of Net Demand and Time Liabilities (NDTL) that banks are required to maintain in the form of liquid assets like cash, gold, or securities.
- By changing the SLR, RBI can control the liquidity in the banking system. If the SLR is increased, banks have to hold more reserves, reducing the amount available for lending and vice versa.
Repo Rate:
- Repo Rate is the rate at which the central bank (RBI) lends money to commercial banks in case of any shortfall of funds.
- By changing the repo rate, RBI can influence the lending capacity of banks. A decrease in the repo rate encourages banks to borrow more from RBI, increasing liquidity in the system.
Bank Rate:
- Bank Rate is the rate at which the central bank (RBI) lends money to commercial banks for long-term funds.
- By changing the bank rate, RBI can control the cost of borrowing for banks, affecting their lending rates and ultimately impacting the money supply in the economy.
Conclusion:
- All three tools, namely Statutory Liquidity Ratio, Repo Rate, and Bank Rate, are used by RBI to maintain money supply in the economy. Each tool plays a crucial role in regulating liquidity and credit flow in the financial system, thereby influencing economic growth and stability.
Consider the following statements and identify the right ones.
1. RBI acts as clearing house for commercial banks.
2. It also grants license for setting up banking operations- a)1 only
- b)2 only
- c)Both
- d)None
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements and identify the right ones.
1. RBI acts as clearing house for commercial banks.
2. It also grants license for setting up banking operations
1. RBI acts as clearing house for commercial banks.
2. It also grants license for setting up banking operations
a)
1 only
b)
2 only
c)
Both
d)
None
| | Ayush Desai answered |
Statement 1: RBI acts as clearing house for commercial banks.
- Explanation: The statement is correct. The Reserve Bank of India (RBI) acts as a clearinghouse for commercial banks. A clearinghouse is a financial institution that facilitates the exchange of funds between banks by clearing and settling transactions. In India, the RBI acts as the central clearinghouse for all interbank transactions.
Statement 2: It also grants a license for setting up banking operations.
- Explanation: The statement is correct. The RBI is responsible for granting licenses to banks for setting up banking operations in India. It regulates and supervises the banking sector in the country and ensures that banks meet certain criteria and requirements before granting them a license to operate.
Conclusion:
- Both statements 1 and 2 are correct. The RBI acts as a clearinghouse for commercial banks and also grants licenses for setting up banking operations.
- Explanation: The statement is correct. The Reserve Bank of India (RBI) acts as a clearinghouse for commercial banks. A clearinghouse is a financial institution that facilitates the exchange of funds between banks by clearing and settling transactions. In India, the RBI acts as the central clearinghouse for all interbank transactions.
Statement 2: It also grants a license for setting up banking operations.
- Explanation: The statement is correct. The RBI is responsible for granting licenses to banks for setting up banking operations in India. It regulates and supervises the banking sector in the country and ensures that banks meet certain criteria and requirements before granting them a license to operate.
Conclusion:
- Both statements 1 and 2 are correct. The RBI acts as a clearinghouse for commercial banks and also grants licenses for setting up banking operations.
Consider the following statements and identify the right ones.
i. The lead bank scheme owes its origin to Nariman Committee
ii. Under this scheme, SBI and its subsidiaries only were given the responsibility of development of districts- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. The lead bank scheme owes its origin to Nariman Committee
ii. Under this scheme, SBI and its subsidiaries only were given the responsibility of development of districts
i. The lead bank scheme owes its origin to Nariman Committee
ii. Under this scheme, SBI and its subsidiaries only were given the responsibility of development of districts
a)
i only
b)
ii only
c)
both
d)
none
| | Amar Menon answered |
Under this scheme, SBI and its subsidiaries, 14 nationalised banks as well as 3 private banks were given the responsibility of development of districts.
The base year to calculate CPI-UNME is- a)1980-81
- b)2001-02
- c)2003-04
- d)1984-85
Correct answer is option 'D'. Can you explain this answer?
The base year to calculate CPI-UNME is
a)
1980-81
b)
2001-02
c)
2003-04
d)
1984-85
| | Anmol Jain answered |
The base year to calculate CPI-UNME is 1984-85. 180 items are included in the index.
Consider the following statements regarding Small Finance Banks:
1. They shall primarily undertake basic banking activities of accepting deposits and lending to small farmers and small businesses.
2. They are not subjected to the prudential norms and RBI regulations that apply to existing commercial banks, including maintenance of CRR and SLR.
Which of the statements given above is/are correct?- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 and 2
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements regarding Small Finance Banks:
1. They shall primarily undertake basic banking activities of accepting deposits and lending to small farmers and small businesses.
2. They are not subjected to the prudential norms and RBI regulations that apply to existing commercial banks, including maintenance of CRR and SLR.
Which of the statements given above is/are correct?
1. They shall primarily undertake basic banking activities of accepting deposits and lending to small farmers and small businesses.
2. They are not subjected to the prudential norms and RBI regulations that apply to existing commercial banks, including maintenance of CRR and SLR.
Which of the statements given above is/are correct?
a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 and 2
| | Prasad Yadav answered |
They are subjected to the rbi regulations and prudential norms. CRR and SLR limits both apply to these banks
Which of the following sources form part of the Revenue Receipts of the government?
1. Interests received by the government on loans
2. Interests paid by the government on loans
3. Penalties & fines received by the government
4. Borrowings by the government
Select the correct answer using the code given below:- a)1, 3 and 4 only
- b)1 and 3 only
- c)1, 2 and 3
- d)1 only
Correct answer is option 'B'. Can you explain this answer?
Which of the following sources form part of the Revenue Receipts of the government?
1. Interests received by the government on loans
2. Interests paid by the government on loans
3. Penalties & fines received by the government
4. Borrowings by the government
Select the correct answer using the code given below:
1. Interests received by the government on loans
2. Interests paid by the government on loans
3. Penalties & fines received by the government
4. Borrowings by the government
Select the correct answer using the code given below:
a)
1, 3 and 4 only
b)
1 and 3 only
c)
1, 2 and 3
d)
1 only
| | Sagnik Shah answered |
Received by the government for violation of laws
4. Dividends received by the government from public sector enterprises
1, 3, and 4 are sources that form part of the Revenue Receipts of the government.
4. Dividends received by the government from public sector enterprises
1, 3, and 4 are sources that form part of the Revenue Receipts of the government.
With reference to the Government of India, which of the following is a Non Debt Capital Receipt?
1. Recovery of loans.
2. Securities against Public Provident Fund.
3. Disinvestment receipts.
Which of the statements given above is/are Correct?- a)1 and 2 only
- b)2 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'C'. Can you explain this answer?
With reference to the Government of India, which of the following is a Non Debt Capital Receipt?
1. Recovery of loans.
2. Securities against Public Provident Fund.
3. Disinvestment receipts.
Which of the statements given above is/are Correct?
1. Recovery of loans.
2. Securities against Public Provident Fund.
3. Disinvestment receipts.
Which of the statements given above is/are Correct?
a)
1 and 2 only
b)
2 only
c)
1 and 3 only
d)
1, 2 and 3
| | Pranavi Desai answered |
Non-Debt Capital Receipts in the Government of India
Non-debt capital receipts refer to the funds received by the government that do not result in an increase in its debt burden. These receipts are crucial for the government as they help in reducing fiscal deficits and financing development projects. Let's analyze the given options to identify the non-debt capital receipts:
1. Recovery of loans
Recovery of loans refers to the repayment of loans given by the government to various entities. When these loans are repaid, they do not result in an increase in the government's debt as the principal amount is returned. Hence, recovery of loans is considered a non-debt capital receipt.
2. Securities against Public Provident Fund
Securities against Public Provident Fund refer to the investments made by the government in securities on behalf of individuals who have invested in the Public Provident Fund. When the government receives interest or dividends on these securities, it is considered a non-debt capital receipt.
3. Disinvestment receipts
Disinvestment receipts refer to the funds raised by the government through the sale of its equity holdings in public sector enterprises. These receipts do not lead to an increase in the government's debt and are considered non-debt capital receipts.
Therefore, options 1 and 3 (Recovery of loans and Disinvestment receipts) are correct as they represent non-debt capital receipts for the Government of India. Option 2, Securities against Public Provident Fund, may not always result in non-debt capital receipts depending on the specific transaction.
Non-debt capital receipts refer to the funds received by the government that do not result in an increase in its debt burden. These receipts are crucial for the government as they help in reducing fiscal deficits and financing development projects. Let's analyze the given options to identify the non-debt capital receipts:
1. Recovery of loans
Recovery of loans refers to the repayment of loans given by the government to various entities. When these loans are repaid, they do not result in an increase in the government's debt as the principal amount is returned. Hence, recovery of loans is considered a non-debt capital receipt.
2. Securities against Public Provident Fund
Securities against Public Provident Fund refer to the investments made by the government in securities on behalf of individuals who have invested in the Public Provident Fund. When the government receives interest or dividends on these securities, it is considered a non-debt capital receipt.
3. Disinvestment receipts
Disinvestment receipts refer to the funds raised by the government through the sale of its equity holdings in public sector enterprises. These receipts do not lead to an increase in the government's debt and are considered non-debt capital receipts.
Therefore, options 1 and 3 (Recovery of loans and Disinvestment receipts) are correct as they represent non-debt capital receipts for the Government of India. Option 2, Securities against Public Provident Fund, may not always result in non-debt capital receipts depending on the specific transaction.
Which of the following will most accurately show the fiscal condition of an economy for current year?- a)Fiscal deficit
- b)Revenue deficit
- c)Primary deficit
- d)Effective revenue deficit
Correct answer is option 'A'. Can you explain this answer?
Which of the following will most accurately show the fiscal condition of an economy for current year?
a)
Fiscal deficit
b)
Revenue deficit
c)
Primary deficit
d)
Effective revenue deficit
| | Ritika Choudhury answered |
Fiscal deficit is the best representation of government deficit condition as it shows the revenue and expenditure of government in a broader sense amd estimate
Consider the following pairs:1. Call Money Market: Borrowing and lending of funds on an overnight basis2. Open Market Operations: Sale/purchase of private securities to modulate liquidity3. Liquidity Adjustment Facility: Daily lending or borrowing by the RBI at fixed interest rates4. Market Stabilisation Scheme: Absorption of surplus liquidity via sale of short-dated government securitiesHow many pairs given above are correctly matched?- a)Only one pair
- b)Only two pairs
- c)Only three pairs
- d)All four pairs
Correct answer is option 'C'. Can you explain this answer?
Consider the following pairs:
1. Call Money Market: Borrowing and lending of funds on an overnight basis
2. Open Market Operations: Sale/purchase of private securities to modulate liquidity
3. Liquidity Adjustment Facility: Daily lending or borrowing by the RBI at fixed interest rates
4. Market Stabilisation Scheme: Absorption of surplus liquidity via sale of short-dated government securities
How many pairs given above are correctly matched?
a)
Only one pair
b)
Only two pairs
c)
Only three pairs
d)
All four pairs
 | Future Foundation Institute answered |
1. Call Money Market: Borrowing and lending of funds on an overnight basis - Correct. The call money market is indeed where borrowing and lending of funds take place on an overnight basis.
2. Open Market Operations: Sale/purchase of private securities to modulate liquidity - Incorrect. Open Market Operations (OMOs) involve the sale/purchase of government securities, not private securities.
3. Liquidity Adjustment Facility: Daily lending or borrowing by the RBI at fixed interest rates - Correct. The Liquidity Adjustment Facility (LAF) allows the RBI to lend or borrow money from the banking system on a daily basis at fixed interest rates.
4. Market Stabilisation Scheme: Absorption of surplus liquidity via sale of short-dated government securities - Correct. The Market Stabilisation Scheme (MSS) absorbs surplus liquidity through the sale of short-dated government securities and treasury bills.
Thus, three out of the four pairs are correctly matched.
Consider the following statements:Statement-I:
Base Rate is the interest rate below which Scheduled Commercial Banks (SCBs) can not lend no loans to its customers.Statement-II:
MCLR (Marginal Cost of Funds-Based Lending Rate) is the maximum interest rate that a bank or a lender can offer.Which one of the following is correct in respect of the above statements?- a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
- c)Statement-I is correct, but Statement-II is incorrect
- d)Statement-I is incorrect, but Statement-II is correct
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements:
Statement-I:
Base Rate is the interest rate below which Scheduled Commercial Banks (SCBs) can not lend no loans to its customers.
Base Rate is the interest rate below which Scheduled Commercial Banks (SCBs) can not lend no loans to its customers.
Statement-II:
MCLR (Marginal Cost of Funds-Based Lending Rate) is the maximum interest rate that a bank or a lender can offer.
MCLR (Marginal Cost of Funds-Based Lending Rate) is the maximum interest rate that a bank or a lender can offer.
Which one of the following is correct in respect of the above statements?
a)
Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
b)
Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
c)
Statement-I is correct, but Statement-II is incorrect
d)
Statement-I is incorrect, but Statement-II is correct
 | Goel UPSC Coaching Center answered |
Statement-I is correct:
Base Rate is the minimum interest rate set by the Reserve Bank of India (RBI) below which Scheduled Commercial Banks cannot lend to their customers, ensuring transparency and fairness in lending.
Statement-II is incorrect:
MCLR is the minimum lending rate a bank can offer, not the maximum. It reflects the marginal cost of funds and is used to determine the interest rate for various loans.
The correct answer is C: Statement-I is correct, but Statement-II is incorrect.
Base Rate is the minimum interest rate set by the Reserve Bank of India (RBI) below which Scheduled Commercial Banks cannot lend to their customers, ensuring transparency and fairness in lending.
Statement-II is incorrect:
MCLR is the minimum lending rate a bank can offer, not the maximum. It reflects the marginal cost of funds and is used to determine the interest rate for various loans.
The correct answer is C: Statement-I is correct, but Statement-II is incorrect.
Consider the following statements:Statement-I: The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.Statement-II: Price stability is a necessary precondition for sustainable growth.Which one of the following is correct in respect of the above statements?- a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
- c)Statement-I is correct, but Statement-II is incorrect
- d)Statement-I is incorrect, but Statement-II is correct
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements:
Statement-I: The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.
Statement-II: Price stability is a necessary precondition for sustainable growth.
Which one of the following is correct in respect of the above statements?
a)
Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
b)
Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
c)
Statement-I is correct, but Statement-II is incorrect
d)
Statement-I is incorrect, but Statement-II is correct
| | Shivam Mehta answered |
Understanding the Statements
The two statements presented discuss the relationship between monetary policy, price stability, and economic growth.
Statement-I Explained:
- The primary objective of monetary policy is indeed to maintain price stability, which refers to controlling inflation and ensuring stable prices in the economy.
- Additionally, monetary policy considers economic growth, aiming to foster a conducive environment for sustainable economic expansion.
Statement-II Explained:
- Price stability serves as a necessary precondition for sustainable growth. Without stable prices, businesses and consumers face uncertainty, which can hinder investment and spending.
- Stable prices contribute to a predictable economic environment, allowing for better long-term planning and investment decisions.
Why Both Statements are Correct:
- Both statements highlight critical aspects of monetary policy's role in the economy.
- Statement-I outlines the dual focus of monetary policy on price stability and growth.
- Statement-II emphasizes that achieving price stability is essential for fostering sustainable growth, thus providing an explanation for the objectives mentioned in Statement-I.
Conclusion:
- Since both statements are correct and Statement-II provides a rationale for the objectives stated in Statement-I, the correct answer is option 'A': Both Statement-I and Statement-II are correct, and Statement-II explains Statement-I.
This interconnection reinforces the importance of a balanced approach to monetary policy for achieving both stability and growth in the economy.
The two statements presented discuss the relationship between monetary policy, price stability, and economic growth.
Statement-I Explained:
- The primary objective of monetary policy is indeed to maintain price stability, which refers to controlling inflation and ensuring stable prices in the economy.
- Additionally, monetary policy considers economic growth, aiming to foster a conducive environment for sustainable economic expansion.
Statement-II Explained:
- Price stability serves as a necessary precondition for sustainable growth. Without stable prices, businesses and consumers face uncertainty, which can hinder investment and spending.
- Stable prices contribute to a predictable economic environment, allowing for better long-term planning and investment decisions.
Why Both Statements are Correct:
- Both statements highlight critical aspects of monetary policy's role in the economy.
- Statement-I outlines the dual focus of monetary policy on price stability and growth.
- Statement-II emphasizes that achieving price stability is essential for fostering sustainable growth, thus providing an explanation for the objectives mentioned in Statement-I.
Conclusion:
- Since both statements are correct and Statement-II provides a rationale for the objectives stated in Statement-I, the correct answer is option 'A': Both Statement-I and Statement-II are correct, and Statement-II explains Statement-I.
This interconnection reinforces the importance of a balanced approach to monetary policy for achieving both stability and growth in the economy.
Consider the following statements and identify the right ones.
i. Post nationalization, banks were supposed to open more branches in rural and semi-urban areas
ii. Banks had to provide credit facilities to areas that come under priority sector.- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Post nationalization, banks were supposed to open more branches in rural and semi-urban areas
ii. Banks had to provide credit facilities to areas that come under priority sector.
i. Post nationalization, banks were supposed to open more branches in rural and semi-urban areas
ii. Banks had to provide credit facilities to areas that come under priority sector.
a)
i only
b)
ii only
c)
both
d)
none
| | Anmol Jain answered |
Post nationalization, banks were supposed to open more branches in rural and semi-urban areas in order to collect savings from these areas.
The base year to calculate CPI-AL is- a)1980-81
- b)1986-87
- c)2001-02
- d)2003-04
Correct answer is option 'B'. Can you explain this answer?
The base year to calculate CPI-AL is
a)
1980-81
b)
1986-87
c)
2001-02
d)
2003-04
| | Devansh Datta answered |
The base year to calculate CPI-AL is 1986-87 and 260 items are included in the index.
The base year to calculate CPI-IW is- a)2001
- b)1994
- c)1991
- d)None of the above
Correct answer is option 'D'. Can you explain this answer?
The base year to calculate CPI-IW is
a)
2001
b)
1994
c)
1991
d)
None of the above
 | Ananya Basu answered |
The Current series of CPI(IW) on base 1982=100 replacing the old series of 1960 base with effect from October, 1988, covers industrial workers employed in any one of the seven sectors namely factories, mines, plantation, railways, public motor transport undertakings, electricity generation and distribution
The buying, selling of treasury bills, government and other securities by RBI is called- a)Cash reserve ratio
- b)Statutory liquidity ratio
- c)Open market operations
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
The buying, selling of treasury bills, government and other securities by RBI is called
a)
Cash reserve ratio
b)
Statutory liquidity ratio
c)
Open market operations
d)
None of the above
| | Srestha Bajaj answered |
CRR, SLR and OMO are various tools in the hands of RBI to influence money supply in the economy.
The base year to calculate CPI-UNME is- a)1980-81
- b)2001-02
- c)2003-04
- d)1984-85
Correct answer is option 'D'. Can you explain this answer?
The base year to calculate CPI-UNME is
a)
1980-81
b)
2001-02
c)
2003-04
d)
1984-85
| | Srestha Bajaj answered |
The base year to calculate CPI-UNME is 1984-85. 180 items are included in the index.
Consider the following statements and identify the right ones.
i. Wealth tax is collected from productive as well as unproductive assets
ii. Estate duty was a type of inheritance tax of large estates- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Wealth tax is collected from productive as well as unproductive assets
ii. Estate duty was a type of inheritance tax of large estates
i. Wealth tax is collected from productive as well as unproductive assets
ii. Estate duty was a type of inheritance tax of large estates
a)
i only
b)
ii only
c)
both
d)
none
| | Nilanjan Singh answered |
Statement i: Wealth tax is collected from productive as well as unproductive assets.
Statement ii: Estate duty was a type of inheritance tax of large estates.
Explanation:
Statement i: Wealth tax is collected from productive as well as unproductive assets.
This statement is incorrect. Wealth tax is a tax levied on the net wealth or assets of an individual or entity. It is typically based on the market value of the assets owned by the individual. However, wealth tax is usually levied only on certain types of assets, such as real estate, investments, cash, and jewelry. It is not collected from productive assets like factories, businesses, or other income-generating assets. The purpose of wealth tax is to redistribute wealth and reduce income inequality.
Statement ii: Estate duty was a type of inheritance tax of large estates.
This statement is correct. Estate duty, also known as inheritance tax or estate tax, is a tax imposed on the transfer of the estate of a deceased person. It is typically levied on the total value of the estate and is paid by the beneficiaries or heirs of the deceased. Estate duty is usually imposed on larger estates and is designed to prevent the concentration of wealth in the hands of a few individuals. It helps to ensure a fair distribution of assets and can also contribute to revenue generation for the government.
Conclusion:
Based on the explanation above, the correct answer is option B, which states that only statement ii is correct.
Statement ii: Estate duty was a type of inheritance tax of large estates.
Explanation:
Statement i: Wealth tax is collected from productive as well as unproductive assets.
This statement is incorrect. Wealth tax is a tax levied on the net wealth or assets of an individual or entity. It is typically based on the market value of the assets owned by the individual. However, wealth tax is usually levied only on certain types of assets, such as real estate, investments, cash, and jewelry. It is not collected from productive assets like factories, businesses, or other income-generating assets. The purpose of wealth tax is to redistribute wealth and reduce income inequality.
Statement ii: Estate duty was a type of inheritance tax of large estates.
This statement is correct. Estate duty, also known as inheritance tax or estate tax, is a tax imposed on the transfer of the estate of a deceased person. It is typically levied on the total value of the estate and is paid by the beneficiaries or heirs of the deceased. Estate duty is usually imposed on larger estates and is designed to prevent the concentration of wealth in the hands of a few individuals. It helps to ensure a fair distribution of assets and can also contribute to revenue generation for the government.
Conclusion:
Based on the explanation above, the correct answer is option B, which states that only statement ii is correct.
Consider the following statements and identify the right ones.
i. RBI acts as clearing house for commercial banks.
ii. It also grants license for setting up banking operations- a)I only
- b)ii only
- c)both
- d)none
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. RBI acts as clearing house for commercial banks.
ii. It also grants license for setting up banking operations
i. RBI acts as clearing house for commercial banks.
ii. It also grants license for setting up banking operations
a)
I only
b)
ii only
c)
both
d)
none
| | Madhurima Chauhan answered |
RBI is also responsible for regulating banks, directs their credit policies and provides advice to them.
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