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 world bank institutes supporting business facilitators of international business organisation of commerce and management commerce nabard and kvic funding and assistance to small businesses

The Foreign Exchange Management Act (FEMA) was implemented in the year _______.

  1. 1996

  2. 1997

  3. 1998

  4. 1999
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Foreign Exchange Management Act (FEMA) was implemented in the year 1999, it is an Act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

The Reserve Bank of India has decided to help banks, as a temporary measure, by providing additional liquidity support under LAF. What is the full form of LAF?

  1. Loan Adjustment Fund

  2. Liquidity Adjustment Facility

  3. Long Awaited Funds

  4. Loan Against Funds
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

LAF stands for Liquidity Adjustment Facility, which is a tool used by the Reserve Bank of India to manage liquidity in the banking system.

Multiple choice economics government budget and economy trade deficits, savings and investment public finance and budget public finance, taxes and budget

What are official reserve transaction balance?

  1. International reserves owned by Government or other Government agencies.

  2. International reserves owned by star trading houses

  3. GDR of blue chip companies

  4. Balance held in Swiss Bank A/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Official reserve transaction balance refers to the international reserves held by a government or its central bank to manage exchange rates and balance of payments. Other options like trading houses or blue chip companies do not hold official government reserves.

Multiple choice economics the state of the indian economy on the eve of independence agricultural market system policy of agriculture, industry and foreign trade under british rule rural development

 In pursuance with the recommendations of Narasimha Committee-$1$, select the correct one/ones, using the code given below:
1. Priority sector lending compulsions of the banks operating in India has been revised by making many items out of it.
2. The Government of India continues to borrow the SLR money from the banks but pays market-based interest rates on them. 

  1. Only 1

  2. Only 2

  3. 1 and 2

  4. Neither 1 or 2
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Government has not followed the concerned adv ices of the Commission though the priority sector has been redefined some new items have been added to it in place of making some out. Similarly. the Government still borrows bank money at non-market-based interest rates. It is believed that the purpose of social banking is still required for the proper levels of socio-economic development in India.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

The Reserve Bank of India changes the cash reserve ratio from time.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Reserve Bank of India changes the cash reserve ratio from time- this is a true statement. Cash reserve ration is one of the quantitative methods of controlling credit creation capacity of the commercial bank. During inflation, Cash reserve ration is raise in order to reduce the money supply in an economy to check inflation and vice-versa.

Multiple choice business organisation capital market money markets participants in money market types of markets

A _________ is basically an instrument of short-term borrowing by the Government of India maturing in less than one year.

  1. call money

  2. treasury bill

  3. commercial paper

  4. certificate of deposit
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A treasury bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year.  Treasury bills enable government to get short term borrowings as these bills are sold to banks and general public. Maturity of Treasury bills varies from 14 to 364 days.

Multiple choice book keeping and accountancy reserve and fund meaning and characteristics of reserves reserves provisions and reserves

Which of the following is statutory reserve?

  1. Development Allowance Reserve

  2. Capital Reserve

  3. Workmen's Compensation Fund

  4. CRR
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
A statutory reserve is an amount of money set aside by a financial institution, such as bank or insurance firm, in order to meet unmatured obligations.
Followig are the examples of statutory reserves:
Development Rebate Reserve, Investment Allowance Reserve, Export Profit Reserve, etc.
Multiple choice organisation of commerce and management sources of business finance - 2 debentures / bonds debentures non-institutional sources - long-term

Public issue of debentures requires that the issue be rated by a credit rating agency like _____.

  1. SBI

  2. RBI

  3. SEBI

  4. CRISIL
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Public issue of debentures requires that the issue be rated by a credit rating agency like CRISIL. CRISIL is a global company which mainly provdes ratings to the companies.

Multiple choice organisation of commerce and management micro, medium and small enterprises (msmes) nabard and kvic funding and assistance to small businesses privileges and other promotional measures for msmes world bank

NABARD provides refinance assistance to ___________.

  1. state land development banks

  2. scheduled commercial banks

  3. regional rural banks and state co-operative banks

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

National Bank for Agriculture and Development  is the apex bank which is concerned with the planning, policy and operations for development of rural areas of India.  Above mentioned banks help the rural communities to undertake agricultural and farming activities by providing loans, hence NABARD provides refinance assistance to such banks  for better economical development.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

The bank rate means ____________________________________.

  1. Rate of Interest charged by commercial banks from borrowers

  2. Rate of Interest at which commercial banks discounted bills of their borrowers

  3. Rate of interest allowed by commercial banks on their deposits

  4. Rate at which RBI purchases or re-discounts bills of exchange of commercial banks
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The bank rate is the official interest rate at which the central bank (RBI in India) provides loans or rediscounts bills of exchange to commercial banks.

Multiple choice civics scope and significance of political science introduction to political science meaning and importance of political science study of political science

Which committee was formulated to look into the matter of capital account convertibility in India?

  1. Narsimham commitee

  2. Tarapore commitee

  3. Tandon commitee

  4. Chore commitee

  5. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Tarapore Committee was specifically constituted by the Reserve Bank of India to suggest a roadmap for capital account convertibility in India.

Multiple choice civics subordinate courts lok adalats lok adalats and tribunals the judiciary-subordinate courts and lok adalats

Which of the following cases suited for Lok Adalat?

  1. Arrears of retirement benefits cases

  2. Banks unpaid loan cases

  3. Motor accident cases

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Lok Adalat is a court designed to shorten the time taken for settling disputes especially in the cases like the partition of property and matrimonial cases. It also settles disputes like arrears of retirement benefits cases, banks unpaid loan cases, motor accident cases etc.

Multiple choice economics public finance and budget black money and tax evasion meaning of tax direct taxes

The term money held by public excludes money held by ________.

  1. RBI

  2. Commercial banks

  3. Central Government

  4. All the three
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Money held by the public is a measure of money supply in an economy. It excludes money held by the central bank (RBI), commercial banks, and the government, as these are considered money creators or issuers rather than the public.