General Awareness · Banking Financial Awareness

Regulatory Thresholds and Caps in India

860 Questions

Regulatory Thresholds and Caps in India refer to the statutory limits imposed on finance, taxation, and corporate governance. It covers sectoral caps, expenditure limits, and penalty thresholds defined by law. These questions are crucial for banking, accounting, and civil services exams.

Financial limitsTax deductionsCorporate regulationsElectoral thresholdsPenalties and fines

Regulatory Thresholds and Caps in India Questions

Multiple choice

A Primary (Urban) Co-operative Bank can open its Extension Counter only if its NPA level is below………………….and it has earned Net Profit for last…………………years and more.

  1. 10%, 2 Years

  2. 9%, 2 Years

  3. 8%, 3 Years

  4. 7%, 3 Years
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to RBI norms for Urban Cooperative Banks, the criteria for opening an extension counter include an NPA level below 10% and a record of net profit for the last 2 years.

Multiple choice

As per Basel 2 recommendations, the Tier 3 is limited to ___ % of a bank’s Tier 1 capital that is required to support market risk.

  1. 500

  2. 250

  3. 100

  4. 50
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Banks may, at the discretion of the National Authority, employ 3rd tier of capital consisting of short term subordinate debts for the sole purpose of meeting a proportion of capital requirements for market risks. Tier III capital will be limited to 250% of bank’s Tier I capital (minimum of 28.5%) that is required to support market risks.

Multiple choice

The minimum capital to start a new insurance company in India is

  1. Rs. 100 cr

  2. Rs. 75 cr

  3. Rs. 50 cr

  4. Rs. 10 cr
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Any new life insurance company or non-life insurance company will not be registered unless the company has a paid-up equity capital of a minimum Rs. 100 crores. In the case of a re-insurance company, the minimum paid-up equity capital will have to be Rs. 200 crores (Sec 6 of the Insurance Act, 1938).

Multiple choice

You are an appellate authority in one of the government departments. Inter-alia the many functions it performs, the department examines the accounts of those super- specialty hospitals, which were granted land free of cost by the government in lieu of treating poor patients free. The hospital must treat 25% of its patients free as per the rules. In the previous year it treated only 18% free. As per rules an amount equivalent to the average treatment cost of the 7% patient was to be deposited in a fund. This fund was to be used in the next year to treat poor patients over and above 25%, free of cost. The hospital had a failed to do this also. During the scrutiny of accounts it had presented the plea that being in a posh area of the city, lesser number of poor patients had approached it. The non deposition of money (7% of treatment cost) was an oversight. Your junior authorities have levied a penalty of Rs.5 lakh as per rules for this failure. The hospital administration has approached you in appeal. The rules permit you to reduce/ waive/ enhance the penalty. You happen to know them personally and they have helped you in getting timely treatment of your relatives on a couple of occasions. In such a situation you would

  1. Confirm the levy of penalty and politely explain the provisions of rule

  2. Reduce the penalty to 50% as their failure is only technical in nature but issue a reprimand to them

  3. Waive the penalty as the hospital is providing treatment to at least 18% poor patients free of cost

  4. Enhance the penalty and personally admonish the administration for taking the obligation of treating the poor free, so lightly
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

2.5 marks for Option (a) 1.5 1marks for Option (b) 1 mark for Option (c) 0 marks for Option (d) Rationale/Reasoning In the circumstances given in the question, no option can be said to absolutely wrong, as the questions states that rules permit you to confirm, waive or enhance the penalty. What the question wants to asses is your administrative approach to a given problem. (a) Option ‘a’ is the best course as it shows you are firm in discharge of duties, but polite in your personal conduct. Levy of penalty is appropriate as per rules. Besides, a big super specialty hospital cannot take the plea of oversight in the discharge of its legal or rules-based obligations. (b) Reducing penalty shows that you are considerate and ready to give the hospital a second chance. However, bigger institutions and strong entities need to be more observant of rules as they are more capable of complying with them and have a far greater responsibility to do it. As such reducing penalty would not be appropriate. (c) & (d) While giving a complete waiver (Option c) would be incorrect for reasons mentioned above, Option (d) would be too harsh a punishment. Besides, admonishing would be an incorrect thing to do conduct-wise. Principles/Value Tested Firmness of official conduct and politeness of personal behavior Taking appropriate/ right administrative decisions   

Multiple choice

Failure to keep election accounts shall be punished with a fine of

  1. 100 rupees

  2. 500 rupees

  3. 1000 rupees

  4. 5000 rupees

  5. /
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Failure to keep election accounts - Whoever being required by any law for the time being in force or any rule having the force of law to keep accounts of expenses incurred at or in connection with an election fails to keep such accounts shall be punished with fine which may extend to five hundred rupees.

Multiple choice

The salary of an employee should not be greater than Rs. 2000. This is

  1. integrity constraint

  2. referential constraint

  3. over-defined constraint

  4. feasible constraint

  5. Any of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

One type of integrity constraint is domain constraint. It says that the value of attribute must be within the domain. Hence, domain is that the employee salary should not be greater than Rs. 2000.

Multiple choice

For submitting tax returns, all resident males with annual income below Rs. 10 lakh should fill up Form P and all resident females with income below Rs. 8 lakh should fill up Form Q. All people with incomes above Rs. 10 lakh should fill up Form R, except non residents with income above Rs. 15 lakhs, who should fill up Form S. All others should fill Form T. An example of a person who should fill For T is

  1. a resident make with annual income Rs. 9 lakh

  2. a resident female with annual income Rs. 9 lakh

  3. a non-resident male with annual income Rs. 16 lakh

  4. a non-resident female with annual income Rs. 16 lakh
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Correct option is (2)