Reserve Bank of India (RBI) Functions
Which of the following statements about the Reserve Bank of India (RBI) are correct?
- It acts as the banker to the Central Government.
- It formulates and implements monetary policy.
- It serves as an agent of the Government of India in financial matters.
- It manages the borrowing program of the Government of India.
Options:
a) 1 and 2
b) 3 and 4
c) 2, 3, and 4
d) 1, 2, 3, and 4
✅ Answer: d) 1, 2, 3, and 4
2. India’s First Indian-Managed Bank (1881)
Which was the first bank in India, founded in 1881, that was managed by Indians with limited liability?
Options:
a) Hindustan Commercial Bank
b) Oudh Commercial Bank
c) Punjab National Bank
d) Punjab and Sind Bank
✅ Answer: b) Oudh Commercial Bank
3. Long-Term Loans for Agriculture
Which type of bank primarily provides long-term loans to the agricultural sector in India?
Options:
a) State Co-operative Bank
b) Commercial Bank
c) Primary Credit Society
d) Land Development Bank
✅ Answer: d) Land Development Bank
4. Non-Apex Financial Institution
Which of the following is not an apex financial institution in India?
Options:
a) State Bank of India
b) NABARD
c) SIDBI
d) State Co-operative Bank
✅ Answer: d) State Co-operative Bank
5. Non-Performing Assets (NPA)
In the context of commercial banks, what does “Non-Performing Assets (NPA)” refer to?
Options:
a) Bank deposits that are not invested
b) Capital assets not in use
c) Loans where interest or principal repayment is overdue
d) Loans with high-interest rates
✅ Answer: c) Loans where interest or principal repayment is overdue
6. Open Market Operations (OMO)
What do Open Market Operations (OMO) of the Reserve Bank of India refer to?
Options:
a) Trading in government securities
b) Foreign exchange auctions
c) Gold transactions
d) None of the above
✅ Answer: a) Trading in government securities
7. Effect of CRR Increase by RBI
What is the impact of an increase in the Cash Reserve Ratio (CRR) by the Reserve Bank of India?
Options:
a) Reduction in government debt
b) Decrease in liquidity in the economy
c) Increase in Foreign Direct Investment (FDI)
d) Increased credit flow to priority sectors
✅ Answer: b) Decrease in liquidity in the economy
8. RBI Headquarters
Where is the headquarters of the Reserve Bank of India (RBI) located?
Options:
a) Delhi
b) Kolkata
c) Chennai
d) Mumbai
✅ Answer: d) Mumbai
9. Narasimhan Committee
The Narasimhan Committee is associated with reforms in which sector?
Options:
a) Banking sector
b) Heavy industries
c) Insurance sector
d) Both (a) and (c)
✅ Answer: a) Banking sector
10. First Regional Rural Bank (RRB) Formation
In which year was the first Regional Rural Bank (RRB) established in India?
Options:
a) 1974
b) 1975
c) 1976
d) 1977
✅ Answer: b) 1975
11. NABARD Formation
In which year was the National Bank for Agriculture and Rural Development (NABARD) established?
Options:
a) 1952
b) 1962
c) 1982
d) 1992
✅ Answer: c) 1982
12. Cash Reserve Ratio (CRR)
What is the proportion of total deposits that commercial banks must maintain with the Reserve Bank of India called?
Options:
a) Balance of Payment
b) Bank Guarantee
c) Caution Money
d) Cash Reserve Ratio
✅ Answer: d) Cash Reserve Ratio
13. Year of RBI Establishment
In which year was the Reserve Bank of India (RBI) established?
Options:
a) 1935
b) 1940
c) 1947
d) 1949
✅ Answer: a) 1935
14. National Housing Bank (NHB) Parent Organization
The National Housing Bank (NHB) was set up as a wholly owned subsidiary of which institution?
Options:
a) State Bank of India
b) Reserve Bank of India
c) ICICI Bank
d) Life Insurance Corporation of India
✅ Answer: b) Reserve Bank of India
15. Incorrect Statement About Banking Ombudsman
Which of the following statements about the Banking Ombudsman in India is incorrect?
Options:
a) It is appointed by the Reserve Bank of India.
b) It can handle complaints from Non-Resident Indians (NRIs) with accounts in India.
c) Its services are provided free of charge.
d) Its decisions are final and binding on all parties.
✅ Answer: d) Its decisions are final and binding on all parties.
16. Leading Lenders to Agriculture
Which type of financial institution provides the largest share of credit to agriculture and allied activities in India?
Options:
a) Commercial Banks
b) Co-operative Banks
c) Regional Rural Banks
d) Microfinance Institutions
✅ Answer: a) Commercial Banks
17. Impact of Lowering Bank Rate by RBI
What happens when the Reserve Bank of India lowers the Bank Rate?
Options:
a) Increased liquidity in the market
b) Decreased liquidity in the market
c) No impact on liquidity
d) Increased deposits in commercial banks
✅ Answer: a) Increased liquidity in the market
18. Objective of the Lead Bank Scheme
What is the primary objective of the Lead Bank Scheme in India?
Options:
a) Encouraging big banks to open branches in every district
b) Promoting stiff competition among national banks
c) Assigning specific districts to individual banks for intensive development
d) Strengthening bank mobilization efforts
✅ Answer: c) Assigning specific districts to individual banks for intensive development
19. Definition of Bank Rate
The “Bank Rate” refers to:
Options:
a) The rate at which banks lend money to depositors
b) The rate at which the RBI lends money to commercial banks
c) The rate at which banks lend to industrial financial institutions
d) None of the above
✅ Answer: b) The rate at which the RBI lends money to commercial banks
20. Rate Not Determined by RBI
Which of the following interest rates is not determined by the Reserve Bank of India?
Options:
a) CRR (Cash Reserve Ratio)
b) SLR (Statutory Liquidity Ratio)
c) Repo Rate
d) Prime Lending Rate
✅ Answer: d) Prime Lending Rate