Banking Financial Awareness · Economics

Banking Regulation and Monetary Policy

1,180 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 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 geography no place for us? migration and its effects migration : factors, types and consequences migration

The ______ gives the details of the loan taken by each family.

  1. Zamindar

  2. Mansabdar

  3. Mukadam

  4. Tehsildar
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Mukadam is a person who lends money as a loan for the expenses of villagers and explains to the villagers in which areas they would go for the next six months and people just earn enough money to keep them going through these months. To manage the remaining six months, when there is no rain, and no work in the fields everyone borrows money from the mukadam. To pay back this money people work for Mukadam. Mukadam is an agent for sugarcane factories. He helps them to find work in sugarcane fields.

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 social science rural development in india credit and banking in rural areas rural activities credit

The NABARD (National Bank of Agricultural and Rural Development) is __________.

  1. an apex body to looking into the credit needs of the rural sector

  2. the only body looking after all the credit needs of farmers

  3. the main source of finance for the regional rural banks

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

NABARD (National Bank for Agriculture and Rural Development) was set up in 19821892 to function as an apex bank in the area of rural credit. This bank does not directly extend any loans to the rural people. It extends financial assistance to cooperatives and regional rural banks, who in turn make available loans to the farmers.

Multiple choice social science rural development in india credit and banking in rural areas rural activities credit

Which of the following is not one of the major functions of the National Bank for Agricultural and Rural Development (NABARD)?

  1. Acting as a regulator for cooperative banks and RRBs.

  2. Extending assistance to the government and others in matters related to rural development

  3. Providing refinance to lending institutions in rural areas

  4. Review of monetary and credit policy
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

NABARD is a development bank and a regulator for rural financial institutions, but it does not review the monetary and credit policy of the country. That is the primary responsibility of the Reserve Bank of India (RBI).

Multiple choice social science rural development in india credit and banking in rural areas rural activities credit

Which of the following is one of the major activities of the National Bank for Agriculture and Rural Development (NABARD)?

  1. On-site inspection of Cooperative Banks and Regional Rural Banks (RRBs)

  2. Helping Govt of India in preparing Union Budget and presenting it in the cabinet meeting

  3. Acting as custodian of the foreign exchange reserves of the country

  4. Deciding rate of interest on Savings Bank Accounts in Public Sector Banks
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

NABARD is responsible for the supervision and on-site inspection of Regional Rural Banks (RRBs) and Cooperative Banks to ensure their financial health. The other options describe functions belonging to the Ministry of Finance or the RBI.

Multiple choice social science rural development in india credit and banking in rural areas rural activities credit

Which of the following is exclusively concerned with the credit needs of all types of agriculture and rural development in India?

  1. RBI

  2. SBI

  3. IBRD

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

NABARD is the apex institution specifically mandated to handle the credit needs of the agricultural and rural development sectors in India. The other options are either general commercial banks or international organizations.

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 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

Khusro Committee is associated with _______.

  1. RRBs

  2. RBI

  3. NABARD

  4. SBI
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Khusro Committee is also known as Agricultural Review Committee which was established in 1989. The function of Khusro committee under the chairmanship of Prof. A.M. Khusro was to examine the problems of agricultural and rural credits, measure the structural and operational deficiencies and recommend major systematic improvements.

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 has taken over the entire functions of________.

  1. ARDC

  2. ACD of RBI

  3. RPCD of RBI

  4. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Reserve Bank of India (RBI) set up the Agricultural Refinance Corporation (ARC) in 1963 to work as a refinancing agency in providing medium term and long term agricultural credit to support investment credit needs for agricultural development. In 1975, ARC was renamed as Agriculture Refinance and Development Corporation (ARDC) to give focussed attention to credit offtake, development and promotion of the agricultural sector.
 Upon its formation in 1982, NABARD took over the functions of the erstwhile Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of RBI and ARDC.