1. The Reserve Bank of India was established in
(a) 1935
(b) 1947
(c) 1950
(d) 1952
2. Which of the following statements regarding Regional Rural Banks (RRB) in India is/are correct? [UPSC CAPF 2011]
1. The basic aim of setting up the RRBs is to develop rural economy.
2. The area of RRBs is limited to a specific region comprising one or more districts.
3. RRBs are sponsored by Commercial Banks.
Select the correct answer using the codes given below.
(a) Only 1
(b) 1 and 2
(c) 2 and 3
(d) 1, 2 and 3
3. Consider the following statements
1. Repo Rate is the interest rate at which RBI lends to commercial banks for short period.
2. Reverse Repo Rate is the interest rate which RBI pays to commercial banks on short-term deposits.
3. Gap between Repo Rate and Reverse Repo Rate has been declining in India in the recent past.
Which of the statements above is/are not correct? [UPSC CAPF 2013]
(a) Only 1
(b) Only 2
(c) Only 3
(d) 2 and 3
4. What is the real interest rate on a Credit Card loan bearing 24% interest per year, if the rate of inflation is 10% ? [UPSC CAPF 2019]
(a) 240%
(b) 34%
(c) 14%
(d) 4%
5. Which of the following sectors contribute in recent years to the deterioration of assent quality of commercial banks by way of Non-Performing assets? [UPSC CAPF 2020]
1. Agriculture and allied sector
2. Industrial sector
3. Infrastructure sector
4. Information technology sector
Select the correct answer using the code given below : [UPSC CAPF 2020]
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 4 only
(d) 1, 2, 3 and 4
6. Which one of the following functions as an automatic stabilizer in the context of fiscal and monetary policies of an economy? [UPSC CAPF 2021]
(a) Personal income tax
(b) Reverse repo rate of bank
(c) Open market operation
(d) Bond price
7. Consider the following statements: [UPSC CSE 2017]
1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country.
2. NPCI has launched RuPay, a card payment scheme.
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
8. Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’? [UPSC CSE 2017]
(a) Mobile wallets will not be necessary for online payments.
(b) Digital currency will totally replace the physical currency in about two decades.
(c) FDI inflows will drastically increase.
(d) Direct transfer of subsidies to poor people will become very effective.
9. What is the purpose of setting up of Small Finance Banks (SFBs) in India? [UPSC CSE 2017]
1. To supply credit to small business units
2. To supply credit to small and marginal farmers
3. To encourage young entrepreneurs to set up business particularly in rural areas.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
10. Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? [UPSC CSE 2017]
1. It decides the RBI’s benchmark interest rates.
2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.
Select the correct answer using the code given below:
(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 2 and 3 only
11. Recognition of Prior Learning Scheme’ is sometimes mentioned in the news with reference to [UPSC CSE 2017]
(a) Certifying the skills acquired by construction workers through traditional channels.
(b) Enrolling the persons in Universities for distance learning programmes.
(c) Reserving some skilled jobs to rural and urban poor in some public sector undertakings.
(d) Certifying the skills acquired by trainees under the National Skill Development Programme.
12. With reference to ‘Financial Stability and Development Council’, consider the following statements : [UPSC CSE 2016]
1. It is an organ of NITI Aayog.
2. It is headed by the Union Finance Minister.
3. It monitors macroprudential supervision of the economy.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
13. What is/are the purpose/purposes of the `Marginal Cost of Funds based Lending Rate (MCLR)’ announced by RBI? [UPSC CSE 2016]
1. These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances.
2. These guidelines help ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
14. The term ‘Core Banking Solutions’ is sometimes seen in the news. Which of the following statements best describes/describe this term? [UPSC CSE 2016]
1. It is a networking of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts.
2. It is an effort to increase RBI’s control over commercial banks through computerization.
3. It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
15. Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR? [UPSC CSE 2016]
(a) Rouble
(b) Rand
(c) Indian Rupee
(d) Renminbi
16. 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? [UPSC CSE 2016]
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 and 2 only
(b) 1 and 3 only
(c) 2 only
(d) 1, 2 and 3
17. With reference to Indian economy, consider the following: [UPSC CSE 2015]
1. Bank rate
2. Open market operations
3. Public debt
4. Public revenue
Which of the above is/are component/components of Monetary Policy?
(a) 1 only
(b) 2, 3 and 4
(c) 1 and 2
(d) 1, 3 and 4
18. ‘Basel III Accord’ or simply ‘Basel III’, often seen in the news, seeks to [UPSC CSE 2015]
(a) develop national strategies for the conservation and sustainable use of biological diversity
(b) improve banking sector’s ability to deal with financial and economic stress and improve risk management
(c) reduce the greenhouse gas emissions but places a heavier burden on developed countries
(d) transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals
19. When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen? [UPSC CSE 2015]
(a) India’s GDP growth rate increases drastically
(b) Foreign Institutional Investors may bring more capital into our country
(c) Scheduled Commercial Banks may cut their lending rates
(d) It may drastically reduce the liquidity to the banking, system
20. If the interest rate is decreased in an economy, it will [UPSC CSE 2014]
(a) decrease the consumption expenditure in the economy
(b) increase the tax collection of the Government
(c) increase the investment expenditure in the economy
(d) increase the total savings in the economy
21. The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time Liabilities’, sometimes appearing in news, are used in relation to [UPSC CSE 2014]
(a) banking operations
(b) communication networking
(e) military strategies
(d) supply and demand of agricultural products
22. What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas? [UPSC CSE 2014]
1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2. It enables the beneficiaries in the rural areas to make deposits and withdrawals.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
23. In the context of Indian economy; which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’? [UPSC CSE 2014]
1. To enable the Central Bank to control the amount of advances the banks can create
2. To make the people’s deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements
Select the correct answer using the code given below.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
24. Which of the following grants/ grant direct credit assistance to rural households ? [UPSC CSE 2013]
1. Regional Rural Banks
2. National Bank for Agriculture and Rural Development
3. Land Development Banks
Select the correct answer using the codes given below:
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
25. Priority Sector Lending by banks in India constitutes the lending to [UPSC CSE 2013]
(a) agriculture
(b) micro and small enterprises
(c) weaker sections
(d) All of the above
26. In the context of Indian economy, Open Market Operations refers to [UPSC CSE 2013]
(a) borrowing by scheduled banks from the RBI
(b) lending by commercial banks to industry and trade
(c) purchase and sale of government securities by the RBI
(d) None of the above
27. An increase in the Bank Rate generally indicates that the [UPSC CSE 2013]
(a) market rate of interest is likely to fall
(b) Central Bank is no longer making loans to commercial banks
(c) Central Bank is following an easy money policy
(d) Central Bank is following a tight money policy
28. The Reserve Bank of India regulates the commercial banks in matters of [UPSC CSE 2013]
1. liquidity of assets
2. branch expansion
3. merger of banks
4. winding-up of banks
Select the correct answer using the codes given below.
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) 1, 2, 3 and 4
29. The basic aim of Lead Bank Scheme is that [UPSC CSE 2012]
(a) big banks should try to open offices in each district
(b) there should be stiff competition among the various nationalized banks
(c) individual banks should adopt particular districts for intensive development
(d) all the banks should make intensive efforts to mobilize deposits
30. The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following? [UPSC CSE 2012]
1. Other banks retain their deposits with the RBI.
2. The RBI lends funds to the commercial banks in times of need.
3. The RBI advises the commercial banks on monetary matters.
Select the correct answer using the codes given below :
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
31. The lowering of Bank Rate by the Reserve Bank of India leads to [UPSC CSE 2011]
(a) More liquidity in the market
(b) Less liquidity in the market
(c) No change in the liquidity in the market
(d) Mobilization of more deposits by commercial banks
32. Why is the offering of “teaser loans” by commercial banks a cause of economic concern? [UPSC CSE 2011]
1. The teaser loans are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future.
2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units.
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
