Banking Regulation and Monetary Policy

The account can be operated by his widow, being guardian of the eldest male member to be called karta.

The FRBM Act originally targeted revenue deficit elimination by 2007-08 (not 2010-11), though this was later relaxed. The prohibition on direct RBI borrowing from April 1, 2006 (not 2008) was indeed a requirement, but there were exceptions like temporary ways and means advances. Given the specific dates and provisions mentioned, neither statement is entirely accurate as written.

SEBI (Securities and Exchange Board of India) is the primary regulator for mutual funds in India. Established in 1988 and given statutory powers in 1992, SEBI protects investor interests and regulates the securities market. All mutual funds must register with SEBI and comply with its regulations regarding fund management, disclosure, and investor protection. RBI regulates banks, IRDA handles insurance, and CRISIL is a credit rating agency.

The Marginal Standing Facility (MSF) allows banks to borrow overnight funds from RBI against approved government securities, making statement A correct. It was indeed introduced in May 2011, making statement B correct. However, statement C is incorrect because MSF borrowing is available even after banks have exhausted their SLR holdings - it's a marginal facility above normal SLR requirements. Therefore, only A and B are correct.

Raghuram Rajan served as the 23rd Governor of the Reserve Bank of India from 2013 to 2016. He was appointed by the UPA government and was known for his advocacy of inflation targeting. The other options (24th, 25th, 27th) do not correspond to his position in the RBI's gubernatorial sequence.

The Marginal Standing Facility was introduced by the Reserve Bank of India in 2011-12 as part of the monetary policy framework. MSF allows scheduled commercial banks to borrow funds from the RBI at a penal rate (usually 1% above the repo rate) against their excess statutory liquidity ratio (SLR) holdings. This provides banks with an additional borrowing window beyond the Liquidity Adjustment Facility (LAF).

Correct Answer: All of these

The Protected Disclosure scheme (also known as whistleblowing policy) was introduced for private banks and foreign banks, making 'Both (2) and (3)' the correct answer. This scheme allows employees to report unethical or fraudulent practices without fear of retaliation.

In the post-reform period (after 1991), the CRR (Cash Reserve Ratio) has been reduced in stages by the RBI as part of financial liberalization and to increase lendable resources for banks. This was done to improve monetary policy flexibility and banking sector efficiency. Option A is incorrect as bank rate hasn't been fixed at 10%. Option B is incorrect as CRR has been reduced, not increased to 8%. Option D is incorrect as banks can raise funds from multiple sources, not just private resources.

M1 in India's money stock refers to currency (notes and coins in circulation) plus demand deposits (current account balances) plus other deposits with the RBI. This is the narrow measure of money supply. Option A (post office savings) is incorrect as these are not part of M1. Option B (total post office deposits) is incorrect as they're not included in M1. Option D (time deposits) is part of broader money measures like M3 but not M1.

DFIAS (Duty Free Import Authorization Scheme) allows duty-free import of inputs for export production, helping exporters compete internationally by reducing their production costs. The question has a spelling discrepancy - the acronym is written as 'DFIAS' in the question but 'DFAS' in option A.

Option (2) is the correct answer.

The Kelkar Committee (1987) reviewed the Regional Rural Banks (RRBs) structure and recommended that no new RRBs be established. Following this recommendation, the government stopped establishing new RRBs from April 1987 onwards, focusing instead on strengthening the existing ones.

The Rekhi Committee (1990) focused on the SIMPLIFICATION of export-import procedures and documentation in India, NOT the broader scope implied by 'Simplification of Export and Import'. Its mandate was reducing procedural hurdles for traders. The Rangarajan Committee dealt with Balance of Payments, the A.C. Shah Committee with NBFCs, and Goiporia Committee with banking services - all correctly matched.

In October 2012, RBI reduced the Cash Reserve Ratio (CRR) by 25 basis points to inject liquidity into the banking system. The repo rate was left unchanged at that time. CRR is the portion of deposits banks must maintain with RBI, and reducing it increases funds available for lending.