Questions and answers for exam Preparation

MCQs

Total Questions : 131 | Page 9 of 14 pages

Question 81. Bank rate means

Rate of Profit of banking institution
Interest rate charged by Scheduled Banks
Interest rate charged by money lenders
Official rate of interest charged by Central Bank

Discuss Question

Answer: Option D. -> Official rate of interest charged by Central Bank
Answer: (d)Bank rate is the rate charged by the central bank for lending funds to commercial banks.

Question 82. When the RBI wants to inject liquidity into the economy, it may adopt the following :

Buy the government securities from the banks.

Enter into reverse repo operations

Raise cash Reserve Ratio

Reduce SLR.

Select the correct answer using the codes given below:

1, 2 and 4 only
1 and 4 only
1 only
1, 2, 3 and 4

Discuss Question

Answer: Option B. -> 1 and 4 only
Answer: (b)
By buying the government securities from the banks and reducing SLR may inject money into the system.
However, Raising the cash Reserve Ratio may take away liquidity from the market as the banks will have to deposit more money with the RBI and similarly entering the reverse repo operations may also take away liquidity from the market.

Question 83. Paper currency first started in India in

1601
1542
1861
1880

Discuss Question

Answer: Option C. -> 1861
Answer: (c)

Question 84. Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?

It decides the RBI’s benchmark interest rates.

It is a 12-member body including the Governor of RBI and is reconstituted every year.

It functions under the chairmanship of the Union Finance Minister.

Select the correct answer using the code given below:

3 only
1 and 2 only
1 only
2 and 3 only

Discuss Question

Answer: Option C. -> 1 only
Answer: (c)
MPC has 6 members, not 12; and it’s headed by the RBI governor and not Finance Minister.
So statements 2 and 3 are wrong, hence by elimination, we reach answer (a) only 1 correct.

Question 85. According to the Reserve Bank of India’s guidelines to banks, customers can change up to 20 pieces of soiled currency notes over the counter, free of charge up to a maximum value of

Rs.25,000
Rs.5,000
Rs.28,000
Rs.15,000

Discuss Question

Answer: Option B. -> Rs.5,000
Answer: (b)
According to the RBI’s guidelines to banks, a person can change up to 20 pieces of notes with a maximum value of Rs.5000 per day, banks should exchange them over the counter, free of charge.

Question 86. The one rupee note bears the signature of the

Finance Minister
Governor, RBI
Secretary, Ministry of Finance
None of these

Discuss Question

Answer: Option C. -> Secretary, Ministry of Finance
Answer: (c)
The one rupee note is issued by the Ministry of Finance and it bears the signature of the Finance Secretary, while other notes bear the signature of Governor RBI.
However, only RBI is the only source of legal tender money because the distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as an agent of the Government.

Question 87. A cheque which has been written by the maker and dated at some point in the past is known as

Pre-paid cheque
Post-dated cheque
Out-of-date cheque
Antedated cheque

Discuss Question

Answer: Option D. -> Antedated cheque
Answer: (d)In banking, antedated refers to cheques which have been written by the drawer, and dated at some point in the past.

Question 88. Which of the following was established in 1928 as the first printing press for bank notes in India?

Bharatiya Reserve Bank Notes Mudran Private Limited (BRBNMPL), Mysore
Currency Notes Press (CNP), Nasik
Indian Security Press (ISP), Nasik
Bharatiya Reserve Bank Notes Mudran Private Limited (BRBNMPL), Salboni

Discuss Question

Answer: Option B. -> Currency Notes Press (CNP), Nasik
Answer: (b)
Currency Note Press (CNP), Nasik, Maharashtra was established in 1928. It was the first printing press for banknotes in India.

Question 89. Which of the following is /are example (s) of ‘Near Money’?

Treasury Bill
Credit Card
Saving accounts and small time deposits
Retail money market mutual funds

Select the correct answer using the code given below:

1, 2 and 3
2 only
1 only
1, 3 and 4

Discuss Question

Answer: Option D. -> 1, 3 and 4
Answer: (d)Near Money is a term used in economics to describe highly liquid assets that can easily be converted into cash.

Question 90. ‘Basel III’ norms target at which of the following?

Improve the banking sector’s ability to absorb shocks arising from financial and economic stress.
Improve risk management and governance.
Strengthen banks’ transparency.

Choose the correct answer using the codes given below:

1 and 3 only
1 and 2 only
1 only
1, 2 and 3

Discuss Question

Answer: Option D. -> 1, 2 and 3
Answer: (d)Basel III is basically a regulatory accord designed specifically for the banking sector. It aims to improve the supervision, regulation and risk management within the sector. It also targets at strengthening the transparency of the banks.