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All questions of Banking of India for UPSC CSE Exam
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.
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 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 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.
Who issues metallic coins in India?- a)RBI
- b)Government of India
- c)Banks and financial institutions
- d)Any of the above can issue it.
Correct answer is option 'B'. Can you explain this answer?
Who issues metallic coins in India?
a)
RBI
b)
Government of India
c)
Banks and financial institutions
d)
Any of the above can issue it.
|
Aravind Chatterjee answered |
The Government of India issues metallic coins in India. Coins, paper currency and deposits are the components of money supply in India.
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 is known as broad money?
- a)M1
- b)M2
- c)M3
- d)M5
Correct answer is option 'C'. Can you explain this answer?
Which of the following is known as broad money?
a)
M1
b)
M2
c)
M3
d)
M5
|
|
Raksha Khanna answered |
M3 is known as broad money as more items are included in this measure when compared to M1 which is known as narrow money.
Which of the following about money supply measure adopted in 1977 is correct?- a)M2= M1 +demand deposits with post offices
- b)M3= M1 +term deposits with banks
- c)M4= M3+total deposits with post offices
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following about money supply measure adopted in 1977 is correct?
a)
M2= M1 +demand deposits with post offices
b)
M3= M1 +term deposits with banks
c)
M4= M3+total deposits with post offices
d)
All the above
|
|
Akshat Jain answered |
These are the measures of money supply adopted by RBI in 1977.
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.
Consider the following statements and identify the right ones.i. For measuring overall inflation in the economy, CPI is used.ii. WPI was first published in 1942 for 23 commodities- 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. For measuring overall inflation in the economy, CPI is used.ii. WPI was first published in 1942 for 23 commodities
a)
i only
b)
ii only
c)
both
d)
none
|
|
Sagar Nair answered |
For measuring overall inflation in the economy, WPI is used. WPI was first published in 1942 for 23 commodities.
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 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.
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
|
|
Poulomi Chakraborty answered |
Regional Rural Banks (RRBs) work at the District level.
Explanation:
Regional Rural Banks (RRBs) are financial institutions that were established with the aim of providing banking services to rural areas and promoting agricultural and rural development. RRBs were set up under the provisions of the Regional Rural Banks Act, 1976.
RRBs are established as a partnership between the Central Government, the State Government, and the sponsoring bank. The sponsoring bank can be a nationalized bank or a public sector bank.
Structure of Regional Rural Banks:
RRBs are organized at multiple levels, including the District level. The structure of RRBs can be summarized as follows:
1. District Level: RRBs operate at the District level and have their headquarters in the respective Districts. Each RRB is assigned a specific area of operation, which usually corresponds to a District or a group of Districts.
2. Branches: RRBs have a network of branches within their operational area. These branches are responsible for providing banking services to the rural population, including farmers, agricultural laborers, and other rural residents.
3. State Level: RRBs are sponsored by a nationalized bank or a public sector bank, which operates at the State level. The sponsoring bank provides financial and managerial support to the RRBs.
4. Central Level: The Central Government, through the Ministry of Finance, provides overall supervision and control over RRBs. The National Bank for Agriculture and Rural Development (NABARD) is responsible for coordinating and regulating the activities of RRBs at the national level.
Conclusion:
In conclusion, Regional Rural Banks (RRBs) work at the District level. They have their headquarters in the respective Districts and operate through a network of branches within their operational area. RRBs play a crucial role in providing banking services to the rural population and promoting agricultural and rural development.
Explanation:
Regional Rural Banks (RRBs) are financial institutions that were established with the aim of providing banking services to rural areas and promoting agricultural and rural development. RRBs were set up under the provisions of the Regional Rural Banks Act, 1976.
RRBs are established as a partnership between the Central Government, the State Government, and the sponsoring bank. The sponsoring bank can be a nationalized bank or a public sector bank.
Structure of Regional Rural Banks:
RRBs are organized at multiple levels, including the District level. The structure of RRBs can be summarized as follows:
1. District Level: RRBs operate at the District level and have their headquarters in the respective Districts. Each RRB is assigned a specific area of operation, which usually corresponds to a District or a group of Districts.
2. Branches: RRBs have a network of branches within their operational area. These branches are responsible for providing banking services to the rural population, including farmers, agricultural laborers, and other rural residents.
3. State Level: RRBs are sponsored by a nationalized bank or a public sector bank, which operates at the State level. The sponsoring bank provides financial and managerial support to the RRBs.
4. Central Level: The Central Government, through the Ministry of Finance, provides overall supervision and control over RRBs. The National Bank for Agriculture and Rural Development (NABARD) is responsible for coordinating and regulating the activities of RRBs at the national level.
Conclusion:
In conclusion, Regional Rural Banks (RRBs) work at the District level. They have their headquarters in the respective Districts and operate through a network of branches within their operational area. RRBs play a crucial role in providing banking services to the rural population and promoting agricultural and rural development.
The tax levied by the union government on income of individuals is known as- a)Personal income tax
- b)Interest tax
- c)Wealth tax
- d)Corporation tax
Correct answer is option 'A'. Can you explain this answer?
The tax levied by the union government on income of individuals is known as
a)
Personal income tax
b)
Interest tax
c)
Wealth tax
d)
Corporation tax
|
|
Kaavya Sarkar answered |
It is based on the principle of ability to pay. The tax levied by the union government on income of individuals is known as income tax.
Which of the following is a subsidiary of SBI?- a)State Bank of Hyderabad
- b)State Bank of Mysore
- c)State Bank of Patiala
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is a subsidiary of SBI?
a)
State Bank of Hyderabad
b)
State Bank of Mysore
c)
State Bank of Patiala
d)
All the above
|
|
Divyansh Ghosh answered |
SBI has 5 subsidiaries now. The other 2 are State Bank of Bikaner and Jaipur and State Bank of Travancore.
The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is- a)SLR
- b)CRR
- c)OMO
- d)Bank rate
Correct answer is option 'A'. Can you explain this answer?
The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is
a)
SLR
b)
CRR
c)
OMO
d)
Bank rate
|
|
Sandeep Nambiar answered |
The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is called SLR.
Which of the following banks was not nationalized in 1969?- a)Vijaya Bank
- b)Canara Bank
- c)Bank of India
- d)Central Bank of India
Correct answer is option 'A'. Can you explain this answer?
Which of the following banks was not nationalized in 1969?
a)
Vijaya Bank
b)
Canara Bank
c)
Bank of India
d)
Central Bank of India
|
|
Aravind Chatterjee answered |
Vijaya Bank was nationalized in 1980 with 5 other banks. In 1969, 14 banks were nationalized.
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.
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 statements about Monetary Policy Committee (MPC):
1. Its members are appointed by the President on the recommendations of the Central Government.
2. Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
3. It is headed by the Governor of RBI.
Which of the statements given above is/are correct?- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements about Monetary Policy Committee (MPC):
1. Its members are appointed by the President on the recommendations of the Central Government.
2. Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
3. It is headed by the Governor of RBI.
Which of the statements given above is/are correct?
1. Its members are appointed by the President on the recommendations of the Central Government.
2. Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
3. It is headed by the Governor of RBI.
Which of the statements given above is/are correct?
a)
1 and 2 only
b)
2 and 3 only
c)
1 and 3 only
d)
1, 2 and 3
|
|
Jay Pillai answered |
Explanation:
The Monetary Policy Committee (MPC) is a committee constituted by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934. The MPC is responsible for determining the policy interest rate and taking decisions related to monetary policy in India. Let's evaluate each statement given in the question:
Statement 1: Its members are appointed by the President on the recommendations of the Central Government.
- This statement is incorrect. The members of the MPC are not appointed by the President. They are appointed by the Central Government.
Statement 2: Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
- This statement is correct. The core mandate of the MPC is to maintain price stability and keep inflation within a target level. The benchmark policy interest rate, also known as the repo rate, is one of the tools used by the MPC to achieve this objective.
Statement 3: It is headed by the Governor of RBI.
- This statement is incorrect. The MPC is not headed by the Governor of RBI. The Governor of RBI is a member of the MPC, but the committee is actually headed by a Chairperson who is elected by the members of the committee.
Therefore, the correct answer is option 'B' - 2 and 3 only. The members of the MPC are appointed by the Central Government, not the President. The core mandate of the MPC is to fix the benchmark policy interest rate to contain inflation within the target level. And, the MPC is headed by a Chairperson, not the Governor of RBI.
The Monetary Policy Committee (MPC) is a committee constituted by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934. The MPC is responsible for determining the policy interest rate and taking decisions related to monetary policy in India. Let's evaluate each statement given in the question:
Statement 1: Its members are appointed by the President on the recommendations of the Central Government.
- This statement is incorrect. The members of the MPC are not appointed by the President. They are appointed by the Central Government.
Statement 2: Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
- This statement is correct. The core mandate of the MPC is to maintain price stability and keep inflation within a target level. The benchmark policy interest rate, also known as the repo rate, is one of the tools used by the MPC to achieve this objective.
Statement 3: It is headed by the Governor of RBI.
- This statement is incorrect. The MPC is not headed by the Governor of RBI. The Governor of RBI is a member of the MPC, but the committee is actually headed by a Chairperson who is elected by the members of the committee.
Therefore, the correct answer is option 'B' - 2 and 3 only. The members of the MPC are appointed by the Central Government, not the President. The core mandate of the MPC is to fix the benchmark policy interest rate to contain inflation within the target level. And, the MPC is headed by a Chairperson, not the Governor of RBI.
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. 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.
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 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 and identify the right ones.
i. Government can reduce indirect taxes to control inflation
ii. There is trade-off between growth and inflation in India- 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. Government can reduce indirect taxes to control inflation
ii. There is trade-off between growth and inflation in India
i. Government can reduce indirect taxes to control inflation
ii. There is trade-off between growth and inflation in India
a)
i only
b)
ii only
c)
both
d)
none
|
|
Pankaj Kumar answered |
Growth cannot be sustained in inflationary situation for a long time and inflation is bound to be high with high growth rates.
Consider the following statements:1. Money supply is a flow variable and is measured for a certain period.2. Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.3. M1 and M2 are called broad money and re-least liquid of all.Which of the above statements is/are correct?- a)1 and 2 only
- b)2 and 3 only
- c)2 only
- d)1, 2 and 3
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements:
1. Money supply is a flow variable and is measured for a certain period.
2. Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.
3. M1 and M2 are called broad money and re-least liquid of all.
Which of the above statements is/are correct?
a)
1 and 2 only
b)
2 and 3 only
c)
2 only
d)
1, 2 and 3
|
Sneha Mishra answered |
Statement 1: Money supply is a flow variable and is measured for a certain period.
Money supply refers to the total amount of money available in the economy at a given point in time. It is measured over a specific period, usually a year, and is considered a flow variable. This means that it represents the rate at which money is being supplied to the economy. Therefore, statement 1 is correct.
Statement 2: Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.
Interbank deposits are funds that one commercial bank deposits in another bank. These deposits are not considered part of the money supply because they do not directly affect the money available to the general public. Interbank deposits represent liabilities of commercial banks and are primarily used for settlement purposes between banks. Therefore, statement 2 is correct.
Statement 3: M1 and M2 are called broad money and are the least liquid of all.
M1 and M2 are measures of money supply used by central banks to track and analyze the money available in the economy. M1 includes currency in circulation, demand deposits, and other liquid assets. M2, on the other hand, includes M1 plus time deposits, savings deposits, and money market mutual funds.
While both M1 and M2 can be considered "broad money" as they include a wider range of assets than just currency, M2 is generally considered to be less liquid than M1. This is because M2 includes assets such as time deposits and money market mutual funds, which have longer maturities and may have restrictions on immediate withdrawal. Therefore, statement 3 is correct.
Conclusion:
From the analysis above, we can conclude that statements 1, 2, and 3 are all correct. Therefore, the correct option is C) 2 only.
Money supply refers to the total amount of money available in the economy at a given point in time. It is measured over a specific period, usually a year, and is considered a flow variable. This means that it represents the rate at which money is being supplied to the economy. Therefore, statement 1 is correct.
Statement 2: Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.
Interbank deposits are funds that one commercial bank deposits in another bank. These deposits are not considered part of the money supply because they do not directly affect the money available to the general public. Interbank deposits represent liabilities of commercial banks and are primarily used for settlement purposes between banks. Therefore, statement 2 is correct.
Statement 3: M1 and M2 are called broad money and are the least liquid of all.
M1 and M2 are measures of money supply used by central banks to track and analyze the money available in the economy. M1 includes currency in circulation, demand deposits, and other liquid assets. M2, on the other hand, includes M1 plus time deposits, savings deposits, and money market mutual funds.
While both M1 and M2 can be considered "broad money" as they include a wider range of assets than just currency, M2 is generally considered to be less liquid than M1. This is because M2 includes assets such as time deposits and money market mutual funds, which have longer maturities and may have restrictions on immediate withdrawal. Therefore, statement 3 is correct.
Conclusion:
From the analysis above, we can conclude that statements 1, 2, and 3 are all correct. Therefore, the correct option is C) 2 only.
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.
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
Consider the following statements and identify the right ones.
i. Data on liquidity aggregates L1 and L2 are published weekly
ii. Data on L3 are published once in a quarter.- 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. Data on liquidity aggregates L1 and L2 are published weekly
ii. Data on L3 are published once in a quarter.
i. Data on liquidity aggregates L1 and L2 are published weekly
ii. Data on L3 are published once in a quarter.
a)
i only
b)
ii only
c)
both
d)
none
|
|
Aarya Choudhary answered |
Data on liquidity aggregates L1 and L2 are published on a monthly basis.
With reference to Open Market Operations (OMO), consider the following statements:
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?- a)1 and 2 only
- b)1 and 3 only
- c)2 only
- d)1, 2 and 3
Correct answer is option 'A'. Can you explain this answer?
With reference to Open Market Operations (OMO), consider the following statements:
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?
a)
1 and 2 only
b)
1 and 3 only
c)
2 only
d)
1, 2 and 3
|
Mira Sharma answered |
RBI deals with banks and other financial institutions for open market operations. RBI does not deal with the public directly.
Consider the following statements:Statement-I:
The new Insolvency and Bankruptcy Code, 2016 (IBC) was amended and enforced by the Government in November 2017.Statement-II:
A major factor behind the effectiveness of the new Code has been the adjudication by the Judiciary—it prescribes strict time limits for various procedures under it.Which one of the following is correct in respect of the above statements?- a)a. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- b)b. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
- c)c. Statement-I is correct, but Statement-II is incorrect
- d)d. Statement-I is incorrect, but Statement-II is correct
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements:
Statement-I:
The new Insolvency and Bankruptcy Code, 2016 (IBC) was amended and enforced by the Government in November 2017.
The new Insolvency and Bankruptcy Code, 2016 (IBC) was amended and enforced by the Government in November 2017.
Statement-II:
A major factor behind the effectiveness of the new Code has been the adjudication by the Judiciary—it prescribes strict time limits for various procedures under it.
A major factor behind the effectiveness of the new Code has been the adjudication by the Judiciary—it prescribes strict time limits for various procedures under it.
Which one of the following is correct in respect of the above statements?
a)
a. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
b)
b. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
c)
c. Statement-I is correct, but Statement-II is incorrect
d)
d. Statement-I is incorrect, but Statement-II is correct
|
Mihir Mehta answered |
Explanation of Statements
In analyzing the two statements regarding the Insolvency and Bankruptcy Code (IBC) 2016, we find that both are indeed factual, but they address different aspects of the IBC.
Statement-I: Accuracy
- The IBC was indeed amended and enforced by the Government in November 2017.
- This amendment aimed to improve the insolvency resolution process and enhance the overall framework of the code.
Statement-II: Importance of Judiciary
- The effectiveness of the IBC has been significantly attributed to judicial adjudication.
- The code imposes strict time limits for various procedures, ensuring timely resolution of insolvency cases.
- The judiciary plays a crucial role in upholding these timeframes, thus fostering a more efficient process.
Relationship Between the Statements
- Both statements are correct, but neither one directly explains the other.
- While Statement-I provides the context of the IBC's enactment and amendments, Statement-II highlights the operational effectiveness attributed to judicial processes.
- Therefore, Statement-II does not serve as an explanation for Statement-I.
Conclusion
- The correct answer is option 'B': "Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I."
- This illustrates that while both statements hold truth, they operate independently regarding the context and implications of the IBC.
In analyzing the two statements regarding the Insolvency and Bankruptcy Code (IBC) 2016, we find that both are indeed factual, but they address different aspects of the IBC.
Statement-I: Accuracy
- The IBC was indeed amended and enforced by the Government in November 2017.
- This amendment aimed to improve the insolvency resolution process and enhance the overall framework of the code.
Statement-II: Importance of Judiciary
- The effectiveness of the IBC has been significantly attributed to judicial adjudication.
- The code imposes strict time limits for various procedures, ensuring timely resolution of insolvency cases.
- The judiciary plays a crucial role in upholding these timeframes, thus fostering a more efficient process.
Relationship Between the Statements
- Both statements are correct, but neither one directly explains the other.
- While Statement-I provides the context of the IBC's enactment and amendments, Statement-II highlights the operational effectiveness attributed to judicial processes.
- Therefore, Statement-II does not serve as an explanation for Statement-I.
Conclusion
- The correct answer is option 'B': "Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I."
- This illustrates that while both statements hold truth, they operate independently regarding the context and implications of the IBC.
Which of the following is an effect of inflation?- a)Erosion in purchasing power
- b)Affects relative price of goods
- c)Increase in inequalities of income
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is an effect of inflation?
a)
Erosion in purchasing power
b)
Affects relative price of goods
c)
Increase in inequalities of income
d)
All the above
|
|
Amar Menon answered |
As a result of inflation, some sections like producers or big landlords gain due to the ownership of assets, income inequality increases.
Consider the following statements and identify the right ones.
i. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system
- 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. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system
i. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system
a)
i only
b)
ii only
c)
both
d)
none
|
|
Baishali Choudhury answered |
Proportional reserve system has been replaced by minimum reserve system.
Which of the following is not a function of RBI?- a)Banker to government
- b)Regulation of foreign exchange
- c)Collection and publication of data
- d)None of the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is not a function of RBI?
a)
Banker to government
b)
Regulation of foreign exchange
c)
Collection and publication of data
d)
None of the above
|
|
Swati Das answered |
RBI performs central banking functions as well as development and promotional functions.
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.
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
|
|
Shanaya Bajaj answered |
The other 3 banks are Punjab and Sind Bank, New bank of India and Oriental Bank of Commerce.
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
|
|
Bijoy Kumar answered |
RBI is also responsible for regulating banks, directs their credit policies and provides advice to them.
Consider the following statements and identify the right ones.
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments excluding J&K
- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'D'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments excluding J&K
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments excluding J&K
a)
i only
b)
ii only
c)
both
d)
none
|
|
Rahul Menon answered |
RBI provides advice in all monetary matters including agriculture and industrial finance. RBI is obliged to transact business of central government and state governments including J&K.
Which of the following is most liquid measure of money supply in India?
- a)M1
- b)M2
- c)M3
- d)M4
Correct answer is option 'A'. Can you explain this answer?
Which of the following is most liquid measure of money supply in India?
a)
M1
b)
M2
c)
M3
d)
M4
|
|
Palak Nambiar answered |
M1 is most liquid and easiest for transactions whereas M4 is least liquid of all. M3 is the most commonly used measure of money supply.
In 2001, RBI issued a set of guidelines for private sector. Which of the following is true?- a)NBFCs with minimum CAR of 12% and with good track record will be allowed to open private banks
- b)New banks have to open minimum 25% of branches in rural and semi-urban areas
- c)They have to provide minimum 40%of loans to priority sector
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
In 2001, RBI issued a set of guidelines for private sector. Which of the following is true?
a)
NBFCs with minimum CAR of 12% and with good track record will be allowed to open private banks
b)
New banks have to open minimum 25% of branches in rural and semi-urban areas
c)
They have to provide minimum 40%of loans to priority sector
d)
All the above
|
|
Akanksha Joshi answered |
New banks are supposed to keep minimum 10% of CAR from the beginning.
In 2001, RBI issued a set of guidelines for private sector. Which of the following is true?- a)Intial paid-up capital should be 200 crore rupees
- b)Share of the promoters in paid-uo should not be less than 40%
- c)Big corporate houses are not allowed to promote any bank
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
In 2001, RBI issued a set of guidelines for private sector. Which of the following is true?
a)
Intial paid-up capital should be 200 crore rupees
b)
Share of the promoters in paid-uo should not be less than 40%
c)
Big corporate houses are not allowed to promote any bank
d)
All the above
|
Hrishikesh Nair answered |
Explanation:
The correct answer is option 'D' - all of the above statements are true. The Reserve Bank of India (RBI) issued a set of guidelines for the private sector in 2001. Let's break down each statement and explain it in detail.
Statement a) Initial paid-up capital should be 200 crore rupees:
According to the guidelines issued by RBI, the initial paid-up capital for setting up a private sector bank should be a minimum of 200 crore rupees. Paid-up capital refers to the amount of money that shareholders have invested in a company. This requirement ensures that the bank has adequate financial resources to carry out its operations and meet regulatory requirements.
Statement b) Share of the promoters in paid-up capital should not be less than 40%:
Another guideline mentioned by RBI is that the share of the promoters (the individuals or entities promoting the bank) in the paid-up capital should not be less than 40%. This requirement ensures that the promoters have a significant stake in the bank's ownership, which aligns their interests with the long-term growth and stability of the bank.
Statement c) Big corporate houses are not allowed to promote any bank:
The third guideline stated in the question is that big corporate houses are not allowed to promote any bank. This means that large companies or corporate groups cannot be the promoters of a bank. This guideline aims to prevent concentration of economic power and potential conflicts of interest that may arise when corporate entities have control over banking institutions.
Conclusion:
To summarize, the RBI issued guidelines for the private sector in 2001, which included requirements such as a minimum initial paid-up capital of 200 crore rupees, a minimum promoter share of 40% in the paid-up capital, and a prohibition on big corporate houses promoting banks. Therefore, option 'D' - all of the above statements are true.
The correct answer is option 'D' - all of the above statements are true. The Reserve Bank of India (RBI) issued a set of guidelines for the private sector in 2001. Let's break down each statement and explain it in detail.
Statement a) Initial paid-up capital should be 200 crore rupees:
According to the guidelines issued by RBI, the initial paid-up capital for setting up a private sector bank should be a minimum of 200 crore rupees. Paid-up capital refers to the amount of money that shareholders have invested in a company. This requirement ensures that the bank has adequate financial resources to carry out its operations and meet regulatory requirements.
Statement b) Share of the promoters in paid-up capital should not be less than 40%:
Another guideline mentioned by RBI is that the share of the promoters (the individuals or entities promoting the bank) in the paid-up capital should not be less than 40%. This requirement ensures that the promoters have a significant stake in the bank's ownership, which aligns their interests with the long-term growth and stability of the bank.
Statement c) Big corporate houses are not allowed to promote any bank:
The third guideline stated in the question is that big corporate houses are not allowed to promote any bank. This means that large companies or corporate groups cannot be the promoters of a bank. This guideline aims to prevent concentration of economic power and potential conflicts of interest that may arise when corporate entities have control over banking institutions.
Conclusion:
To summarize, the RBI issued guidelines for the private sector in 2001, which included requirements such as a minimum initial paid-up capital of 200 crore rupees, a minimum promoter share of 40% in the paid-up capital, and a prohibition on big corporate houses promoting banks. Therefore, option 'D' - all of the above statements are true.
Consider the following statements and identify the right ones.
i. Data on Mo are published on monthly basis
ii. Data on M1 and M3 are available on weekly basis- a)I only
- b)ii only
- c)both
- d)none
Correct answer is option 'D'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Data on Mo are published on monthly basis
ii. Data on M1 and M3 are available on weekly basis
i. Data on Mo are published on monthly basis
ii. Data on M1 and M3 are available on weekly basis
a)
I only
b)
ii only
c)
both
d)
none
|
|
Pranab Majumdar answered |
Data on Mo are published by the RBI on weekly basis and Data on M1 and M3 are available on fortnightly basis.
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.
Which of the following is an effect of inflation?- a)Erosion in purchasing power
- b)Affects relative price of goods
- c)Increase in inequalities of income
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is an effect of inflation?
a)
Erosion in purchasing power
b)
Affects relative price of goods
c)
Increase in inequalities of income
d)
All the above
|
|
Palak Nambiar answered |
As a result of inflation, some sections like producers or big landlords gain due to the ownership of assets, income inequality increases.
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
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.
Chapter doubts & questions for Banking of India - Lucent for GK 2025 is part of UPSC CSE exam preparation. The chapters have been prepared according to the UPSC CSE exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for UPSC CSE 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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