UPSC Exam > UPSC Questions > Consider the following statements:1. NBFCs a...
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Consider the following statements:
1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.
2. The Reserve Bank of India was initially set up under private ownership in 1935.
3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.
- a)1 Only
- b)1 and 2 Only
- c)1 and 3 Only
- d)1, 2 and 3
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Consider the following statements:1. NBFCs are not allowed to engage ...
- Statement 1: NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.- This statement is correct. NBFCs (Non-Banking Financial Companies) cannot have agricultural, industrial, or construction activities as their principal business. They perform financial intermediation by accepting deposits and providing loans and advances, among other financial activities.
- Statement 2: The Reserve Bank of India was initially set up under private ownership in 1935.- This statement is correct. The Reserve Bank of India (RBI) was established on April 1, 1935, in Calcutta under private ownership in accordance with the provisions of the RBI Act, 1934. It was later nationalized in 1949.
- Statement 3: The primary objective of monetary policy in India is to maintain price stability while promoting growth.- This statement is correct. The primary goal of India's monetary policy is to maintain price stability, which is essential for sustainable growth. The government sets inflation targets, and the RBI plays a significant role in ensuring these targets are met through its monetary policy framework.
All three statements are accurate, making Option D the correct answer.
Most Upvoted Answer
Consider the following statements:1. NBFCs are not allowed to engage ...
Analysis of Statements
To determine the correctness of the statements regarding NBFCs, RBI, and monetary policy, let's analyze each one:
1. NBFCs and Their Activities
- Non-Banking Financial Companies (NBFCs) are indeed restricted from engaging in agricultural, industrial, and construction activities as their principal business.
- This regulation is in place to ensure that they focus primarily on financial services like loans and investments.
2. Reserve Bank of India’s Origin
- The Reserve Bank of India (RBI) was established in 1935 under private ownership.
- It was created to respond to economic challenges and provide stability to the Indian currency and financial system before being nationalized in 1949.
3. Objective of Monetary Policy
- The primary objective of India's monetary policy is to maintain price stability while promoting economic growth.
- The RBI aims to control inflation and ensure that growth is sustainable, balancing these two critical aspects of the economy.
Conclusion
All three statements are accurate:
- Statement 1 correctly outlines the restrictions on NBFCs.
- Statement 2 accurately describes the initial establishment of the RBI.
- Statement 3 reflects the dual objectives of the monetary policy in India.
Thus, the correct answer is option 'D', as all statements (1, 2, and 3) are true.
To determine the correctness of the statements regarding NBFCs, RBI, and monetary policy, let's analyze each one:
1. NBFCs and Their Activities
- Non-Banking Financial Companies (NBFCs) are indeed restricted from engaging in agricultural, industrial, and construction activities as their principal business.
- This regulation is in place to ensure that they focus primarily on financial services like loans and investments.
2. Reserve Bank of India’s Origin
- The Reserve Bank of India (RBI) was established in 1935 under private ownership.
- It was created to respond to economic challenges and provide stability to the Indian currency and financial system before being nationalized in 1949.
3. Objective of Monetary Policy
- The primary objective of India's monetary policy is to maintain price stability while promoting economic growth.
- The RBI aims to control inflation and ensure that growth is sustainable, balancing these two critical aspects of the economy.
Conclusion
All three statements are accurate:
- Statement 1 correctly outlines the restrictions on NBFCs.
- Statement 2 accurately describes the initial establishment of the RBI.
- Statement 3 reflects the dual objectives of the monetary policy in India.
Thus, the correct answer is option 'D', as all statements (1, 2, and 3) are true.
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Consider the following statements:1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.2. The Reserve Bank of India was initially set up under private ownership in 1935.3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.a)1 Onlyb)1 and 2 Onlyc)1 and 3 Onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?
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Consider the following statements:1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.2. The Reserve Bank of India was initially set up under private ownership in 1935.3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.a)1 Onlyb)1 and 2 Onlyc)1 and 3 Onlyd)1, 2 and 3Correct answer is option 'D'. 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:1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.2. The Reserve Bank of India was initially set up under private ownership in 1935.3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.a)1 Onlyb)1 and 2 Onlyc)1 and 3 Onlyd)1, 2 and 3Correct answer is option 'D'. 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:1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.2. The Reserve Bank of India was initially set up under private ownership in 1935.3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.a)1 Onlyb)1 and 2 Onlyc)1 and 3 Onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
Consider the following statements:1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.2. The Reserve Bank of India was initially set up under private ownership in 1935.3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.a)1 Onlyb)1 and 2 Onlyc)1 and 3 Onlyd)1, 2 and 3Correct answer is option 'D'. 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:1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.2. The Reserve Bank of India was initially set up under private ownership in 1935.3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.a)1 Onlyb)1 and 2 Onlyc)1 and 3 Onlyd)1, 2 and 3Correct answer is option 'D'. 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:1. NBFCs are not allowed to engage in agricultural, industrial, and construction activities as their principal business.2. The Reserve Bank of India was initially set up under private ownership in 1935.3. The primary objective of monetary policy in India is to maintain price stability while promoting growth.a)1 Onlyb)1 and 2 Onlyc)1 and 3 Onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
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