Subsidiaries — Set 4

Correct Answer: D. Printing of high-security banknotes

• **Printing of high-security banknotes** = BRBNMPL (Bharatiya Reserve Bank Note Mudran Private Limited) is the RBI's currency-printing arm, responsible for manufacturing banknotes embedded with anti-counterfeiting security features such as watermarks, security threads, and colour-shifting ink. • **Varnika ink unit** — BRBNMPL also operates the 'Varnika' ink-manufacturing facility in Mysuru so that it can source specialised security inks domestically rather than importing them. • BRBNMPL runs two currency presses — one in Mysuru (Karnataka) and one in Salboni (West Bengal) — distinct from the government-owned Nashik and Dewas presses operated by SPMCIL. • 💡 Option A (Designing the coins) is wrong because coin design and minting are handled by SPMCIL, not BRBNMPL; Option B (Regulating NBFCs) is wrong because NBFC regulation is a core RBI function carried out by its internal departments, not any subsidiary; Option C (Managing gold reserves) is wrong because gold-reserve management is done directly by the RBI's own departments.

Correct Answer: C. ₹5 lakh

• **₹5 lakh** = DICGC insures each depositor up to ₹5 lakh per bank, covering the combined total of principal and accrued interest across all accounts held in the same name and capacity in that bank. • **February 2020 amendment** — The limit was raised from ₹1 lakh to ₹5 lakh through an amendment to the DICGC Act, 1961 in February 2020 — the first revision in 27 years (previous revision was in 1993). • The DICGC Amendment Act 2021 further strengthened the framework by mandating payment within 90 days of a bank being placed under moratorium, rather than waiting until liquidation. • 💡 Option A (₹2 lakh) is wrong because ₹2 lakh was never the statutory DICGC ceiling; Option B (₹1 lakh) is wrong because that was the old limit before the 2020 revision; Option D (₹10 lakh) is wrong because no such ceiling exists under the DICGC Act.

Correct Answer: D. Reserve Bank of India

• **Reserve Bank of India** = IFTAS is a wholly owned subsidiary of the RBI, incorporated as a private limited company to deliver high-end technology infrastructure and allied services to the Indian banking ecosystem. • **INFINET management** — IFTAS manages the Indian Financial Network (INFINET), the closed user group communication backbone used for inter-bank and RBI-to-bank secure financial messaging across India. • IFTAS also runs the SFMS (Structured Financial Messaging Solution), the messaging standard used on INFINET for RTGS, NEFT, and other payment systems. • 💡 Option A (Government of India) is wrong because the GoI directly owns SPMCIL and other entities but not IFTAS; Option B (Ministry of Finance) is wrong because a ministry cannot itself be a shareholder in a company — it acts through the Government of India; Option C (State Bank of India) is wrong because SBI is a commercial bank, not the parent of IFTAS.

Correct Answer: A. 90 days

• **90 days** = Under the DICGC (Amendment) Act, 2021, DICGC must pay the insured amount — up to ₹5 lakh — to every depositor within 90 days from the date a bank is placed under moratorium or goes into liquidation. • **DICGC Amendment Act, 2021** — Before this amendment, depositors often waited years to receive their insured funds because payment was triggered only after the full resolution or winding-up process concluded; the 2021 law brought interim relief within a fixed 90-day window. • In the first 45 days DICGC collects claim data from the bank; in the next 45 days it processes and disburses payments to eligible depositors. • 💡 Option B (30 days) is wrong because 30 days is not the statutory timeline under any DICGC provision; Option C (180 days) is wrong because 180 days exceeds the legally mandated window; Option D (365 days) is wrong because one year would defeat the purpose of prompt relief that the 2021 amendment was specifically designed to achieve.

Correct Answer: D. ReBIT

• **ReBIT** = Reserve Bank Information Technology Private Limited (ReBIT) provides technical expertise and policy inputs to the RBI for formulating IT governance, cybersecurity, and technology-risk guidelines applicable to banks and regulated financial entities. • **Incorporated 2016** — ReBIT was set up in 2016 as a wholly owned subsidiary to serve as the RBI's dedicated technology arm, carrying out IT examinations of regulated entities, vulnerability assessments, and shared IT services for the central bank itself. • ReBIT also conducts IT audits of commercial banks on behalf of the RBI, making it unique among RBI subsidiaries for combining regulatory-support and operational-IT functions. • 💡 Option A (NHB) is wrong because NHB regulates housing-finance companies and has no IT-guideline mandate; Option B (BRBNMPL) is wrong because BRBNMPL's mandate is currency printing, not technology regulation; Option C (DICGC) is wrong because DICGC's sole mandate is deposit insurance and credit guarantee, with no role in drafting IT policies.

Correct Answer: C. BRBNMPL

• **BRBNMPL** = Varnika is a specialised security-ink manufacturing unit established and operated by BRBNMPL at its Mysuru campus, producing the high-security inks used in printing Indian currency banknotes. • **Import substitution goal** — Varnika was created to make India self-reliant in security-ink production, eliminating dependence on foreign suppliers for the complex multi-colour and optically variable inks required for anti-counterfeiting features on banknotes. • The facility produces various ink types — including intaglio, letterpress, and colour-shifting inks — tailored to the specific design and security requirements of different denominations. • 💡 Option A (SPMCIL) is wrong because SPMCIL owns the government's Nashik and Dewas note-printing presses and mints but has no link to the Varnika ink unit; Option B (IFTAS) is wrong because IFTAS handles financial-technology infrastructure, not physical manufacturing; Option D (ReBIT) is wrong because ReBIT is an IT services company, entirely unconnected to ink or currency production.

Correct Answer: D. Yes, all RRBs are insured

• **Yes, all RRBs are insured** = All Regional Rural Banks operating in India are mandatorily insured by DICGC irrespective of their sponsoring bank, ownership, or financial performance, giving rural depositors the same ₹5 lakh protection as urban bank customers. • **Broad coverage under DICGC Act** — The DICGC Act covers commercial banks, cooperative banks, local area banks, small finance banks, payments banks, and all RRBs; coverage is automatic on registration and cannot be opted out of by an eligible bank. • DICGC insurance covers savings, fixed, current, and recurring deposits; only certain items like inter-bank deposits and government deposits are excluded. • 💡 Option A (Only if sponsored by SBI) is wrong because coverage is not conditioned on the identity of the sponsoring commercial bank — all 43 RRBs are covered regardless; Option B (Only if profit for 3 years) is wrong because profitability is not a criterion for DICGC coverage; Option C (Only commercial banks) is wrong because the DICGC Act explicitly extends coverage to RRBs, cooperative banks, and several other bank categories.

Correct Answer: B. ReBIT

• **ReBIT** = ReBIT acts as the shared-IT-services hub for the RBI, centralising functions such as data-centre operations, network management, application maintenance, cybersecurity monitoring, and IT procurement to reduce duplication and cost for the central bank. • **Captive subsidiary model** — By routing technology functions through a dedicated captive subsidiary rather than outsourcing to private vendors, the RBI maintains tighter control over sensitive financial data while benefiting from specialised expertise and economies of scale. • ReBIT's mandate spans three areas: IT services to the RBI, cybersecurity services to the financial sector, and IT examinations/audits of regulated entities. • 💡 Option A (RBIH) is wrong because RBIH focuses on financial innovation and product development, not shared operational IT services; Option C (DICGC) is wrong because DICGC's function is deposit insurance, with no IT-services role; Option D (BRBNMPL) is wrong because BRBNMPL is a printing company that does not provide IT or back-office shared services.

Correct Answer: D. Section 8 Company

• **Section 8 Company** = RBIH is registered as a Section 8 company under the Companies Act, 2013 — a legal form reserved for not-for-profit entities that apply their income toward promoting commerce, science, education, or public interest, rather than distributing profits to shareholders. • **Incorporated 2022** — RBIH was incorporated in 2022 with a paid-up capital contributed entirely by the RBI; it operates with its own board of directors but remains under the RBI's overall supervision. • As a Section 8 company, RBIH can receive grants, collaborate with start-ups and research institutions, and pilot financial-inclusion products without profit-distribution obligations. • 💡 Option A (Partnership Firm) is wrong because a partnership firm has individual partners sharing liability, incompatible with the RBI's requirement for a structured subsidiary; Option B (Statutory Body) is wrong because RBIH was not created by an Act of Parliament — it is incorporated under the Companies Act; Option C (Trust) is wrong because RBIH is not governed by the Indian Trusts Act and does not have a trustee structure.

Correct Answer: D. RBIH

• **RBIH** = The Reserve Bank Innovation Hub has built and operates the Public Tech Platform for Frictionless Credit (PTPFC), an open API-based digital infrastructure that enables end-to-end seamless, paperless loan delivery by connecting lenders to borrowers' data in real time. • **Pilot launched August 2023** — The PTPFC pilot was announced by the RBI Governor in August 2023; it integrates data from land records, Aadhaar, PAN, bank account statements (AA framework), and satellite data to allow lenders to assess creditworthiness and disburse loans within minutes. • The platform targets Kisan Credit Card loans, dairy loans, and MSME credit as priority use-cases, aiming to dramatically cut processing time from weeks to minutes for underserved borrowers. • 💡 Option A (IFTAS) is wrong because IFTAS operates INFINET and SFMS for inter-bank messaging, not credit delivery platforms; Option B (ReBIT) is wrong because ReBIT provides IT and cybersecurity infrastructure to the RBI, not consumer-facing fintech platforms; Option C (BRBNMPL) is wrong because BRBNMPL is a currency-printing company with no digital-lending mandate.