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 commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

A bank can open a branch only at the permission of the _______.

  1. SBI

  2. RBI

  3. Government

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

Ans :-

Banks have to apply to RBI for set-up of new branches. 
RBI has strict guidelines about the same keeping multiple factors in mind - type of bank, financial inclusion being done, location, density of banking needed etc

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

The practice of RBI lending to government through ad hoc treasury bills is _______.

  1. currently is vogue

  2. abolished

  3. will soon be abolished

  4. none of above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The practice of the RBI lending to the government through ad hoc treasury bills was abolished in 1997 to ensure greater fiscal discipline and central bank independence.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

CRR refers to the share of_____________ that rural banks have to maintain with RBI of their net demand and time liabilities?

  1. Liquid cash

  2. Gold

  3. Forex reserves

  4. Illiquid cash
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Cash Reserve Ratio (CRR) is the portion of deposits that banks must hold as liquid cash with the Reserve Bank of India. It is a tool used to control liquidity in the banking system.

Multiple choice history economic system and economic policies american dominance, neo-imperialism and new economic policy insights on lpg changing economic policies

The full form for BIFR, in the context of the Indian Industry is _________.

  1. Board for Investment and Financial Redevelopment

  2. Bureau for Industrial and Financial Revolution

  3. Board for Investment and Formal Reconstruction

  4. Board for Industrial and Financial Reconstruction
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Board for Industrial and Financial Reconstruction (BIFR): BIFR was established under the Sick Industrial Companies (Special Pro-visions) Act 1985 (SICA). It is an agency of Government of India, part of the Department of Financial services of the Ministry of Finance. Its objective is to determine sickness of industrial companies and to assist in reviewing those that may be viable and shutting down the others.

Multiple choice history economic system and economic policies american dominance, neo-imperialism and new economic policy insights on lpg changing economic policies

Many a time we read about Special Drawing Right (SDR) in newspapers. As per its definition, SDR is a monetary unit of the reserve assets of which of the following organisations/agencies?

  1. World Bank

  2. International Monetary Fund (IMF)

  3. Asian Development Bank

  4. Reserve Bank of India
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Many a time we read about Special Drawing Right (SDR) in newspapers. As per its definition, SDR is a monetary unit of the reserve assets of International Monetary Fund(IMF). Special Drawing Right is a type of foreign-exchange reserve. It is introduced in 1969.

Multiple choice commercial applications accounting procedures - rules of debit and credit golden rules of debit and credit (traditional approach) types of account meaning and classification of accounts

Bank of India Account ___________.

  1. Real

  2. Personal

  3. Nominal

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

Accounts recording transactions with a person or group of persons are known as personal accounts. These accounts are  necessary, in  particular, to record credit transactions. Personal accounts are of the following types:

1. Natural persons: An account recording transactions with an individual is termed as natural persons' personal account. For e.g., Kamal's account, Mala's account. Both male and females are included in it.
2. Artificial or legal persons: An account recording financial transaction with an artificial person created by law  or otherwise is termed as an artificial persons' personal account. For e.g., Firms' account, limited companies' account.
3. Representative personal account: An account indirectly representing a person or persons is known as representative personal account. When accounts are of similar nature and their number is large, it is better to group them under  one head and open a representative personal account. For e.g., prepaid rent, outstanding wages, etc.
  • Bank of India is a personal account as it is related to a banking firm which is an artificial persons. All those accounts which are related to a person, whether artificial or natural, are termed as personal account.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Paper notes and coins are accepted as a medium of exchange because they are _____.

  1. Light in weight

  2. Easy to carry

  3. Authorised by the government

  4. Issued by the Resrve Bank of India
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • In Modern times paper notes and coins are used as medium of exchange.
  • Paper notes and coins are printed and circulated by RBI in India except One Rupee notes and coins.
  • One Rupee coins are printed by the Finance Ministry.
  • Only paper notes and coins printed by Government are authorised to use.
Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

In a SHG, important decisions in regard to loan and savings are taken by _____.

  1. Government organization

  2. Bank

  3. Non-government organisation

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

In a SHG (Self Help Group) important decisions in regard to loan and savings are taken by group members. Self Help Groups issue loans at reasonable rate of interest

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The _____ supervises the functioning of formal sources of loans.

  1. State Bank of India

  2. Central Bank of India

  3. Reserve Bank of India

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

The Reserve Bank of India supervises the functioning of formal sources of loans.
RBI is also the Central Bank of India.
RBI doesn't supervise the informal sources of credit institutions.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Base Rate is the rate below which no Bank can allow their lending to anyone. Who sets up this 'Base Rate' for Banks?

  1. Individual Bank Board

  2. Ministry of Commerce

  3. Ministry of Finance

  4. Reserve Bank of India
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Reserve Bank of India (RBI) mandates the Base Rate system to ensure transparency in lending rates and to prevent banks from lending below a certain threshold.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

At the time of independence India had ___________________.

  1. no banking system

  2. had very few banks

  3. well developed banking system

  4. fairly developed banking system
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

At the time of independence in 1947, India possessed a banking system that was already established, though it was largely concentrated in urban areas and served specific interests. It was not non-existent, but it was not fully developed or inclusive of the rural population.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

In Self Help Groups, _____ decide the savings and loan activity option.

  1. RBI

  2. Co-operatives

  3. Banks

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

In Self Help Groups, group members decide the savings and loan activity options.
SHG is a mutual help group.
They come together to solve their economic issues and earn income.

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

To control high rate interest rates, coercive collections and illegal insurance practices by the Micro Finance Institutes, Andhra Pradesh Government passed Andhra Pradesh Microfinance Institutions (Regulations of Money Lending) Act in?

  1. 2014

  2. 2013

  3. 2005

  4. 2011
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Act was enacted in 2011 to regulate the activities of microfinance institutions following concerns about their lending practices.