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Consider the following statements.
- The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency.
- The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met.
- The RBI cannot bank on the Contingency Fund in case of any emergency requirement.
Which of the above statements is/are correct?
- a)1 only
- b)1, 2
- c)1, 3
- d)1, 2, 3
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements. The Reserve Bank of India (RBI) nor...
The correct answer is option 'B' - 1, 2.
Explanation:
1. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency.
- This statement is correct. The RBI earns income from various sources such as investments, valuation changes on its foreign currency holdings, and fees from printing currency. It pays a dividend to the Central Government from the surplus income it generates.
2. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met.
- This statement is correct. The RBI has developed an Economic Capital Framework (ECF) which helps in determining the allocation of funds to its capital reserves. This framework ensures that the RBI maintains adequate capital reserves to meet any risk contingency that may arise.
3. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.
- This statement is incorrect. The RBI can indeed bank on the Contingency Fund in case of any emergency requirement. The Contingency Fund is a fund set up by the RBI to meet any unforeseen financial exigencies or systemic risks. It acts as a buffer to ensure financial stability and provide liquidity support when needed.
Therefore, both statements 1 and 2 are correct.
Explanation:
1. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency.
- This statement is correct. The RBI earns income from various sources such as investments, valuation changes on its foreign currency holdings, and fees from printing currency. It pays a dividend to the Central Government from the surplus income it generates.
2. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met.
- This statement is correct. The RBI has developed an Economic Capital Framework (ECF) which helps in determining the allocation of funds to its capital reserves. This framework ensures that the RBI maintains adequate capital reserves to meet any risk contingency that may arise.
3. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.
- This statement is incorrect. The RBI can indeed bank on the Contingency Fund in case of any emergency requirement. The Contingency Fund is a fund set up by the RBI to meet any unforeseen financial exigencies or systemic risks. It acts as a buffer to ensure financial stability and provide liquidity support when needed.
Therefore, both statements 1 and 2 are correct.
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Consider the following statements. The Reserve Bank of India (RBI) nor...
- THE SURPLUS available with the Reserve Bank of India for transfer or the RBI dividend to the Union government is likely to remain low in the current financial year ending March 2023 because of higher expenditure incurred by the central bank due to rising interest rates and higher costs in managing surplus liquidity in the system.
- The lower dividend could be due to higher interest paymeznts to banks which parked their surplus liquidity in the reverse repo window.
- Under reverse repo, the RBI borrows from banks, while under the repo window, RBI lends to banks.
- The RBI can bank on the Contingency Fund which was at Rs 3,10,986.94 crore as of March 2022 in the case of any emergency requirement.
- The RBI normally pays the dividend from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency, among others. The rupee depreciation against the dollar in recent months is also likely to weigh on the surplus transfer.
- In the Investment Revaluation Account-Foreign Securities (IRA-FS), the foreign dated securities are marked-to market on the last business day of each week ending Friday and the last business day of each month and the unrealised gains or losses are transferred to the IRAFS.
- The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met and as well as to transfer the profit of the RBI to the government.
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Consider the following statements. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer?.
Consider the following statements. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. The Reserve Bank of India (RBI) normally pays the dividend to the Central Government from the surplus income it earns on investments and valuation changes on its dollar holdings and the fees it gets from printing currency. The Reserve Bank of India (RBI) has developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met. The RBI cannot bank on the Contingency Fund in case of any emergency requirement.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer?.
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