Banking & Finance

Consider the following statements regarding the measures of supply of money:

1. M1 and M2 are called narrow money
2. M3 and M4 are called broad money
3. M1 is the least liquid

Which of the above statements is/are true?

Consider the following statements:

1. Under Cash Reserve Ratio, banks have to keep a certain part of their deposits with themselves
2. Under Statutory Liquid Ratio, banks have to hold a part of their total demand and term deposits with the RBI

Which of the above statements is/are true?

The Reserve Bank of India takes which of the following measures to maintain profitable Reserve Deposit Ratio (RDR)?

1. Cash Reserve Ratio
2. Statutory Liquid Ratio
3. Bank Rate

Choose the correct answer using the codes given below:

Consider the following statements:

1. RBI buys and sells shares under the ‘Open market transaction’
2. Bank Rate is the interest rate at which a commercial bank gets loan from RBI

Which of the above statements is/are true?

Which of the following is/are the part/s of RBI’s Quantitative Restriction instruments?

1. Bank Rate
2. Statutory Liquidity
3. Marginal requirements
4. Open market transactions

Choose the correct answer using the codes given below:

Which of the following statements regarding Indian banks is false?

Which of the following is the main source of Bank’s Income?

Which of the following statements is true with respect to Reserve Deposit Ratio?

To maintain Reserve Deposit Ratio with commercial banks, the RBI uses many policy measures and instruments. Which of the following is/are such instruments?

1. Cash Reserve Ratio
2. Statutory Liquidity Ratio
3. Bank Rate

Choose the correct answer using the codes given below:

Which of the following statements is/are true?

1. The total amount of currency stock in the economy is much higher than the total amount of high powered money
2. Commercial banks create this additional amount of currency by providing a portion of their deposit in the form of loans or investment credentials

Choose the correct answer using the codes given below:

Which of the following is the condition of Bank Run?

Consider the following statements regarding the RBI:

1. The most important role of the RBI is to supply currency and control monitory policy
2. RBI is an independent body for monetary policy operation
3. The RBI increases or reduces the flow of High Powered Money in the economy

Which of the above statements is/are true?

Which of the following is/are part of the ‘reserve money’ in India?

1. Net credit given by RBI to Banks and Government.
2. Government bonds held by RBI.
3. Forex reserve available with RBI.

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The Securities and Exchange Board of India has been set up to:

1. Protect the interests of investors.
2. To regulate the activities of brokers in the stock market.
3. To ensure transparency in operation in the stock market.
4. To encourage a healthy growth of the market.

Which of the statement(s) given above is/are correct?

Consider the following statements about Real time Gross settlement (RTGS) system.

1. It operates on an order by order basis settlement system.
2. It is primarily meant for large value transactions.
3. RTGS system is also known as National Electronic Fund Transfer (NEFT) system.

Which of the statement(s) given above is/are TRUE?

What is SLR?

Functions of the commercial bank includes

1. Accepting deposits
2. Providing loan
3. Building credit
4. Determining Cash Reserve Ratio (CRR)

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The banks invest their surplus funds in some securities. What constitutes these securities?

1. Cash
2. Gold
3. Treasury bills and National Savings Certificates
4. Securities of state sponsored bodies like electricity boards, housing boards, debentures of Land Development Banks, shares of RRBs etc.

Which of the following terms indicates a mechanism used by commercial banks for providing credit to the Government?

NPCI (National Payment Corporation of India) is usually in news and is the umbrella organisation for the retail payment. NPCIL is an initiative of:

Recently, Banks like SBI, ICICI have increased the Marginal Cost of Funds Based Lending Rate (MCLR). Consider the following statements with respect to MCLR:

1. This is the minimum rate below which banks can’t lend to anyone.
2. This has replaced the Bank rate from April 2016.

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Which of the following is not an All India Financial Institution regulated by RBI?

Consider the following statements about Financial Stability Development Council (FSDC):

1. FSDC is chaired by Finance Minister and Vice Chairman of Niti Aayog is its Deputy Chairman.
2. FSDC Sub Committee is headed by Chairman of Insolvency and Bankruptcy Board of India.
3. FSDC is a statutory body that looks into the overall financial stability of the India’s economy.

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Consider the following statements:

1. The repo rate is the rate at which the RBI borrows money from commercial banks.
2. Reverse Repo rate is the rate at which other banks borrow from the Reserve Bank of India.
3. In India, RBI uses repo and reverse repo techniques to increase or decrease the liquidity in the market.
4. Repo and reverse rates techniques can also be used to manage liquidity if there is an excessive capital flow from abroad.

Which of the statements given above is/are incorrect?

Consider the following statements:

1. Lower the currency deposit ratio, higher the money multiplier.
2. Lower the reserve deposit ratio, higher the money multiplier.
3. Larger the monetary base, higher is the money supply.
4. Larger the monetary base, lower is the money supply.

Which of the above statement(s) is/ are correct?

Consider the following statements about the Cooperative Banks in India?

1. They are required to assist the weaker sections and agricultural sector.
2. They are organized under the state government’s laws.
3. They have access to liberal financial assistance from NABARD
4. They are organized in a tiered structure. Of these statements

Which one of the following is the most important determinant of the price of shares of a company?

A derivative security issued against the backing of a homogeneous category of mortgaged assets is called:

NRE deposit is:

Consider the following statements about Real time Gross settlement (RTGS) system.

1. It operates on an order by order basis settlement system.
2. It is primarily meant for large value transactions.
3. RTGS system is also known as National Electronic Fund Transfer (NEFT) system.

Which of the statement(s) given above is/are TRUE?

Match the following:

Consider the following statements-

1. If RBI increases the Repo Rate then the inflation in the market will increase.
2. Inflation is generally caused by the excess supply of money in the market and subsequently reduction in the supply of commodity.

Which of the statement given above is/are correct?

Consider the following about Brown Label ATMs

1. They are owned by the bank while some key functions are managed by third party.
2. They carry the logo of bank.

Choose the correct code(s)

Misery Index is defined as:

1. Inflation plus rate of unemployment.
2. Inflation plus rate of unemployment plus rate of interest.
3. Inflation as measured by consumer Price Index only.
4. Inflation as measured by Wholesale Price Index only.

What is/are most likely the reasons for growing NPAs in the banks?

1. Global and domestic slowdown
2. Delayed clearances of various projects
3. Deteriorating asset quality
4. Economic policy of the government and politician-corporate nexus.

Choose the correct option:

Consider the following statements.

1. Core inflation is a measure of the total inflation which is affected by areas of market which may experience sudden inflation spiky such as food or energy.
2. Underlying inflation while measuring inflation excludes highly volatile products such as food and energy prices.

Which of the statement(s) given above is/are TRUE?

With which of the following the term ‘money illusion’ is associated with?

What are the functions of RBI?

1. Custodian of Cash Reserves of Commercial Banks
2. Central Clearance and Accounts Settlement
3. Controller of Credit
4. Government's Banker
5. Banker's Bank

Choose the correct option:

Consider the following statements-

1. Inflation causes by excess supply of money in the market.
2. To curtail the impact of inflation RBI raises Repo rate, Reverse Repo rate and Bank rate to control the flow of money in the market.

Which of the statement given above is /are correct?

Consider the following definitions of the terms associated with inflation:

1. Stagflation is a slowdown in the rate of increase of the general price level of goods and services in a nation’s gross domestic product over time.
2. Recession is a situation in which the inflation rate is high and the economic growth rate is low.
3. Reflation is the act of stimulating the economy by increasing the money supply or by reducing taxes.

Which of the above statements is/are not correct?

Depreciation of rupee has overall effect on the economy. which of the following can be considered as major impact of rupee depreciation on Indian economy?

1. Imports become costlier due to depreciation of rupee.
2. Overseas bank loans will become costlier to repay.
3. Current account deficit will widen.

Which of the above are correct?

Which of the following cannot be considered as a major reason for inflation in Indian economy?

Consider the following statements about inflation:

1. Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.
2. Money supply growing faster than the rate of economic growth causes a long sustained period of inflation.
3. The inflation rate is calculated in India by calculating the movement or change in the wholesale price Index.

Which of the above statements is/are correct?

Consider the following statements about Stagflation and select the correct answer:

1. Stagflation is a condition of slow economic growth and relatively high unemployment accompanied by a rise in prices, or inflation.
2. Stagflation can result from inappropriate macroeconomic policies.

Consider the following statements about Inflation Indexed Bonds. Which of the following is/are true?

1. The bonds will be indexed against retail price index.
2. Investing in inflation-indexed bonds will have tax benefits.
3. The income under the bonds would be taxable as in the case of any other government security.

Codes:

Which of the following are the reasons for demand-pull inflation?

1. Increase in forex reserve
2. Deficit financing
3. Increase in budgetary deficit
4. Increase in population

Select the answer from the codes given below:

Consider the following statements:

1. Rise in Inflation reflects loss of real value in the medium of exchange and unit of account within the economy.
2. Inflation leads to increase in the opportunity cost of holding money.
3. If the inflation rate is greater than that of other countries, domestic products become less competitive.

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Suppose inflation over the next year is expected to be 5%, and assume there are no supply shocks. What rate of inflation will the short-run Phillips curve show at the natural rate of unemployment?

Suppose the Reserve Bank of India wishes to restrain inflation, so it increases Bank Rate. Which of the following events will not be part of the monetary policy transmission process?

What is inflation targeting?

Which of the following are the cost-push causes of inflation?

1. Deficit financing
2. Increase in administered prices
3. Increase in interest rate
4. Increase in population
5. Increase in oil prices
6. Mounting public expenditure

Select the correct answer from the codes given below:

Consider the following statements about Inflation Index Bond:

1. They are directly sold by Reserve Bank of India.
2. They provide new investment avenue with positive real interest rate in period of inflation.
3. Capital gain tax is not applicable for them.

Which of the above statement(s) is/are incorrect?

Repo and Reverse Repo rate form a part of liquidity adjustment facility used by RBI to control inflation. In this context consider the following statements if RBI decreases Repo rate then

1. It act as incentive for banks to lend more money
2. It acts as disincentive for banks to lend more money
3. There will be increase in money supply in economy
4. There will be decrease in money supply in economy

Which of the following statement(s) is/are correct?

Which macroeconomic variables in an economy are affected by changes effected through fiscal policy?

1. Aggregate demand and the level of economic activity.
2. Savings and Investment in the economy.
3. The distribution of income.

Choose the correct option:

Inflation is caused as a result of:

Stagflation refers to a situation of :

What do you mean by stagflation?

Which of the following is/are true for base rate?

1. It is the minimum interest rate of a bank below which it is not viable to lend.
2. All categories of domestic rupee loans are priced only with reference to the Base Rate.
3. It leads to more transparency but hampers monetary policy transmission.

What are the tools used by RBI to control inflation?

1. Preventing hoarding and cartelization by rationing of credit, thus addressing supply side constraints.
2. Increase in Cash Reserve Ratio.
3. Increase in repo rates.
4. Reduction in Bank rate.
5. Floating Market Stabilization Bonds in market.

Choose the correct statement/s:

Which factors are responsible for the sluggish growth of bank credit?

1. incomplete transmission of the monetary policy as banks have not passed on the entire benefit to borrowers
2. unwillingness of the banks to lend credit on account of rising Nonperforming Assets
3. worsening of corporate balance sheets, forcing them to put their investment decisions on hold
4. interest rates in the bond market being more attractive to borrowers

Code:

Paper currency is the main currency of the country consider these statements:

1. RBI has the sole right to issue all currency notes in the country.
2. The system governing the note issue in India is Indian Coinage Act.
3. Paper currency is inconvertible.

Which statement(s) is/are correct?

A: Headline inflation, based on the Consumer Price Index (CPI) (combined for rural and urban areas) series, dipped during April-January 2015-16.

R: For various subgroups of the CPI (combined), the decline in inflation was broad based and mainly driven by lower inflation of food articles and items under the non-food nonfuel category.

Code:

Which of the following are instruments of qualitative credit control employed by the Central bank?

1. The margin requirements on secured loans
2. Persuasion exercised through discussions, letters, speeches, and hints to the banks
3. Measures to channel credit to particular sectors.

Which of the following is/are true for Headline inflation?

1. It reflects the rate of change in prices of all goods and services in an economy over a period of time.
2. In India, headline inflation is measured through the WPI
3. It excludes transitory or temporary price volatility as in the case of some commodities such as food items, energy products etc

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Inflation is the general increase in prices and fall in the purchasing value of money. Which of the following are the reasons for inflation in the economy?

1. Rising imported raw materials costs
2. Higher indirect taxes imposed by the Government.
3. Increase in non-plan expenditure of Government.
4. Depletion of natural resources.

Select the correct code:

According to the statutory liquidity ratio, the commercial bank should get its liquid assets from:

Which of the following is/are true for Cash Credit?

1. The credit limit is determined by the bank's estimation of the borrower's creditworthiness.
2. The utilization of credit by the customer depends upon his withdrawing power.
3. The borrower has to pay the interest on the total amount of credit sanctioned.

Choose the correct statement:

1. Consumer Price Index(CPI)is released quarterly by Central Statistical Office(CSO)
2. Wholesale Price Index (WPI) is also called as Headline Inflation.
3. WPI caters to commodity inflation better.

Select the correct code.

If inflation remains high in an economy, which of the following situations can arise?

Which of the following is true about inflation?

1. Inflation is a measure of rise in the general price level or equivalently average level of prices of all the goods and services in an economy.
2. Inflation is often viewed as a reduction in the purchasing power of money. Inflation does not necessarily mean that the prices of all the goods and services in an economy rise.
3. In an inflationary situation, the average level of prices rise with some items showing excessive rise while others may not follow the suit.
4. A macro-economic policy measure mostly used by the countries across the world, to alleviate the adverse effects of inflation is indexation.

Codes:

In an imaginary situation where India has open trade only with the U.S. Which of the following conditions would NOT lead to depreciation in the value of Rupee vis-a-vis Dollar?

In order to control inflation, foreign inflow needs to be sterilized. Here sterilization is meant for:

What do you understand by a GDP Deflator?

1. It is a comprehensive measure of inflation.
2. It is a less comprehensive measure of inflation than price indices.
3. It is available on a quarterly basis.
4. It is used to convert data compiled over a period into prices prevailing at an earlier point in time.

Choose the correct option:

Which of the following statements is False?

What is private placement of securities?

What does the effectiveness of a bank rate policy depend upon?

1. The degree of bank's dependence on borrowed reserves
2. The extent to which other rates of interest in the market change.
3. The state of supply of and demand for funds from other sources.

Which of the following is/are true for Open Market Operations?

1. It does not matter whether the securities are brought from or sold to the public or banks.
2. In developed countries like US, banks are not affected by the OMO.

Consider the following statements:

1. Increased supply of currency is always good for the health of the economy
2. If goods and services produced by an economy remain unchanged, then supply of additional currency causes inflation

Which of the above statements is/are true?

What are the owned funds of the banks?

1. Paid-up capital
2. Capital and reserves
3. Borrowings from RBI
4. Capital raised through public, financial institutions and OMOs

Which of the following statements is/are true regarding the Currency?

How does the Central bank determine the quantity of reserves with itself?

1. Central bank lending to the other banks.
2. Open Market Operations.
3. Marginal Standing Facility.
4. CRR and SLR.

What are the effects of inflation on following entities?

1. Salaried people and wage earners with fixed income lose.
2. Borrowers lose and creditors gain.
3. Bond and debenture holders lose.
4. Profit-earners, speculators and black marketers gain

Choose the correct option:

How does a budget impact the economy?

1. Fiscal discipline.
2. Proper microeconomic performance.
3. Allocation of resources.
4. Provision of programmes and delivery of services.

Which of the following is/are true for Official Reserve Transaction?

1. They are entered into with some independent motive by two private parties.
2. They are carried out by the government and the central banks in pursuit of some international economic policy objective.

Growth of rural economy depends on availability of adequate financing and credit. What have been the impediments in proper functioning of rural banking?

1. Chronic underperformance of formal credit institutions
2. High incidence of overdue installments by the farmers.
3. Barring commercial banks, other formal institutions have failed to develop a culture of deposit mobilization

Which factor is considered for comparing countries in terms of development of the country?

What constitutes terms of credit?

1. Interest rate
2. Collateral
3. documentation requirement
4. mode of repayment

In which of the following places are currency printing presses found in India?

1. Dewas
2. Nasik
3. Mysore
4. Salboni

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Which of the given factors can have a major impact on inflation in the country?

1. Lower oil prices
2. Slowing Chinese economy
3. Monsoons
4. Large pay awards

Code:

Who issues the coins in India?

Consider the given statements:

1. Disinflation is a slowing in the rate of price inflation.
2. Deflation is a general decline in prices, often caused by a reduction in the supply of money or credit.

Which of the above is/are true?

Which of the following are time deposits?

1. Fixed deposits
2. Balance in saving accounts
3. Current account deposits
4. Loans and advances

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How is bank rate different from repo rate?

1. It usually deals with loans.
2. No collateral is involved in a bank rate.
3. Repo rate is generally comparatively lower than a bank rate.
4. It is usually used to cater the short term fund requirements of businesses.
5. It usually deals with securities.

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Which of the following are the cost push factors of inflation?

1. Increase in income of workers i.e. salary increase
2. High Fiscal Deficit
3. Uncertain weather conditions
4. Increase in population

Select the correct code

Which of the following does not constitute lending by banks?

Suppose a central bank is concerned about inflation and wishes to raise interest rates. Which of the following instruments would it be inappropriate to use?

How can we increase money supply in Indian economy?

1. Decreasing CRR
2. Increasing SLR
3. Selling securities through OMO
4. Market sterilization

Select the correct code:

The effect of decrease in the interest rate in an economy is:

BASEL norms often in news are related to

Consider the given statements:

1. Quantitative Easing refers to a gradual reduction in the monthly purchase of assets by the Central Bank of USA.
2. Federal Tapering is mainly an asset purchase or asset swap policy to increase money supply to the banks.

Which of the above is/are correct?

Which of the following is not an instrument of Selective Credit Control?

Which of the following is/are true for small finance banks?

1. They can lend money to people.
2. They will provide banking products small and marginal farmers, micro and small industries, and other organized sector entities.
3. At least 50% of its loans should constitute loans and advances of up to 25 lakh.
4. They can undertake financial services like distribution of mutual fund units, insurance products, pension products, and so on.

What is/are the scope of activities of Business Correspondents?

1. No cash transaction/cash handling is permissible for BCs.
2. Collection of small value deposits.
3. They are responsible for ensuring KYC and AML compliance.
4. Aadhaar seeding.

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Consider the following statements regarding Systemically Important Banks (SIBs):

1. Identification of global SIBs is done by Basel Committee on Banking Supervision.
2. SBI and ICICI are considered global SIBs in India.

Which of the above statements is/are correct?

Which of the following is/are Indian credit rating agency/agencies?

1. CARE
2. ONICRA
3. ICRA
4. S & P

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What is Unified Payment Interface?

1. It envisages a payments architecture that is directly linked to achieving the goals of universal electronic payments, a less-cash society.
2. It is implemented by largest public sector bank SBI.
3. A UPI-enabled platform bank account can transfer up to Rs.1 lakh instantaneously.

Choose the correct option:

NPCI (National Payment Corporation of India) is usually in news and is the umbrella organisation for the retail payment. NPCIL is an initiative of :

What is fiat money?

Which of the following is/are true for Cooperative Banking in India?

1. Primary Cooperative Agriculture and Rural Development Banks (PCARDBS) operate at district/block level.
2. They are not subject to CRR and SLR requirements as other banks are.
3. The source of their funds include deposits, central and state government, RBI, NABARD and other cooperative institutions.

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Recently, ‘White Label ATM’ is in news; choose the correct statement/s with respect to White Label ATM:

1. RBI is directly involved in White Label ATMs but is not the case with the Brown Label ATMs.
2. White Label ATMS are not owned by the bank but are the properties of non-banking entities.

Choose the correct statement/ from the code given below:

Recently, UPI 2.0 (Unified Payment Interface) was launched. This is regulated by:

Recently, “Bondi Bond” is in news; this is related to:

What does the term “Seigniorage” mean?

Consider the following statements about Prompt Corrective Action (PCA) which is in news:

1. PCA framework is applicable to all Commercial Banks and Cooperative Banks.
2. The PCA framework specifies the trigger points or the level in which the RBI will intervene with corrective action.
3. Under PCA, RBI can change the Bank Board too.

Choose the correct code

Consider the following statements about “Prevention of Money Laundering Act (PMLA):

1. The Enforcement Directorate (ED) has power to claim possession only after the verdict of “Appellate Tribunal”.
2. The accused can challenge the order of Adjudicating Authority to the “Appellate Tribunal” only after 180 days.

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Which of the following is the tool of RBI for the Liquidity Adjustment Facility (LAF)?

1. CRR
2. SLR
3. Repo Rate
4. Reverse Repo

Choose the correct code :

Which of the following is correct about “Soft Currency”?

Cash reserve ratio (CRR) is commonly used monetary instrument to affect monetary policy. Increase in CRR leads to

1. Reduction in the number of loans being made by banks.
2. Reduction in liquidity.
3. Reduction in interest rates.
4. Reduction in consumer spending.

Select the correct code:

Which of the following committees was assigned to recommend reforms in the insurance sector?

Which of the following institutions are fully owned subsidiaries of RBI?

1. National Housing Bank.
2. NABARD.
3. Deposit Insurance & Credit Guarantee Corporation of India.
4. SIDBI.

Choose the correct statements regarding NABARD:

1. It acts as the regulatory authority for cooperative banks and regional rural banks
2. NABARD operates the Rural Infrastructure Development Fund (RIFD)
3. It is the National Implementing Entity (NIE) of Adaptation Fund under UNFCCC

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Which of the following is/are true for microfinance institutions?

1. The first example of an organized microcredit institution is generally accepted as being the Grameen Bank in Bangladesh in 1976.
2. It refers to an array of financial services, including loans, savings and insurance, available to poor entrepreneurs and small business owners who have no collateral and wouldn't otherwise qualify for a standard bank loan.

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Who releases WPI?

Which of the following is not a first generation reform in the economic front?

Consider the following statements:

1. Wholesale Price Index excludes both goods and services.
2. Consumer Price Index includes both goods and services.

Which of the above statements regarding the indicators of price rise is/are correct?

Select the correct code

Consider the following:

1. GDP growth rate
2. Foreign investment
3. Political stability
4. Literacy rate

Which of these can affect the value of sensex?