Banking Financial Awareness · Economics

Banking Regulation and Monetary Policy

1,219 Questions

Banking regulation and monetary policy questions test your understanding of the Reserve Bank of India functions, regulatory frameworks, and monetary tools. Topics include KYC guidelines, repo rates, and foreign exchange reserves management. This section is crucial for candidates preparing for banking and financial awareness exams.

RBI monetary toolsKYC guidelinesInterest rate regulationsCurrency issuanceBanking business acts

Banking Regulation and Monetary Policy Questions

Multiple choice

The one rupee note bears the signature of the

  1. Secretary, Ministry of Finance

  2. Governor, RBI

  3. Finance Minister

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In India, currency notes of denominations of two rupees and above are signed by the Governor of the Reserve Bank of India. The one-rupee note is issued by the Ministry of Finance and bears the signature of the Finance Secretary.

Multiple choice

A pragmatist with a close knowledge of monetary policies, he, as finance secretary, was the pointperson between the Reserve Bank of India and the government. An IIT-Kanpur alumnus, he topped the civil services exam in 1972 and was assigned the Andhra Pradesh cadre. He is also a MS in Economics from Ohio State University (1978) and a Humphrey Fellow at MIT during 1982-83. Name the person.

  1. Duvvuri Subbarao

  2. MS Krishnaswamy

  3. OP Bhatt

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Duvvuri Subbarao is an Indian economist and civil servant who served as the 22nd Governor of the Reserve Bank of India. His background matches the description provided.

Multiple choice

Reserve Bank of India is a ----

  1. Commercial Bank

  2. Central Bank

  3. Financial Institute

  4. Lending Bank
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Reserve Bank of India (RBI) is the central banking institution of India. It regulates the monetary policy and the banking system of the country.

Multiple choice

The Reserve Bank of India (RBI) issues

  1. all the currency notes except the hundred rupee note

  2. all the currency notes

  3. only notes of Rs. 10 and above

  4. all the currency notes except the one rupee note
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Reserve Bank of India issues all currency notes in India except for the one-rupee note, which is issued by the Ministry of Finance, Government of India.

Multiple choice

Consider the following assets:

  1. Cash held by public
  2. Equity shares of banks
  3. Deposits of banks
  4. RBI bonds

Which of the above assets are considered as part of money supply?

  1. 1 and 2

  2. 1 and 3

  3. 2 and 3

  4. 1, 3 and 4
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Shares having a claim to participate in the whole range of annual profits remaining to a company after it has satisfied all charges and met any fixed preferential dividends, and having a right to participate in surplus assets in a winding up.

Multiple choice

Repo rate is the rate at which

  1. the Reserve Bank of India lends to state of government

  2. the Reserve Bank of India lends to banks

  3. the banks lend to the Reserve Bank of India

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Multiple choice

SEBI is formed in?

  1. 1992

  2. 1993

  3. 1988

  4. 1989

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Securities and Exchange Board of India (SEBI) was established as a non-statutory body in 1988. It later received statutory powers through the SEBI Act of 1992.

Multiple choice

One rupee currency notes bear the signature of

  1. Finance Minister of India

  2. Finance Secretary of India

  3. President of India

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under the Reserve Bank of India Act, one-rupee notes are issued by the Government of India and bear the signature of the Finance Secretary, while other notes are issued by the RBI.

Multiple choice

The Reserve Bank of India issues

  1. all the currency notes, except the one rupee note

  2. all the currency notes, except the hundred rupee note

  3. all the currency notes

  4. none of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Reserve Bank of India has the sole authority to issue all currency notes in India, except for the one-rupee note, which is issued by the Ministry of Finance.

Multiple choice

Devaluation of rupee means

  1. Converting gold with the RBI into rupees;

  2. Converting Rupees with Gold;

  3. Lowering the value of Rupee in comparison of some foreign currency

  4. Making rupee dealer in comparison to a foreign currency
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Devaluation is the deliberate downward adjustment of a country's currency value relative to a foreign currency or standard.

Multiple choice

Which of the following is not a function of the Reserve Bank of India?

  1. Bank to the public;

  2. Bankers' Bank;

  3. Bank of Issue;

  4. Custodian of forex
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Reserve Bank of India (RBI) acts as the central bank and does not provide direct banking services to the general public. It manages currency, acts as a banker to the government, and regulates other banks.