RBI & Policy — Set 1
Economics · RBI और नीति · Questions 1–10 of 120
In which year was the Reserve Bank of India established?
Correct Answer: C. 1935
The Reserve Bank of India was established on April 1, 1935, under the provisions of the RBI Act, 1934. It initially started as a private shareholders' bank before its nationalization. This date marks the beginning of formal central banking in India.
Which commission recommended the establishment of a central bank for India?
Correct Answer: D. Hilton Young Commission
The Hilton Young Commission, also known as the Royal Commission on Indian Currency and Finance, made this recommendation in 1926. The commission's goal was to ensure stability in the Indian monetary system. Its report eventually led to the creation of the RBI.
Where was the first headquarters of the Reserve Bank of India located?
Correct Answer: D. Calcutta
The central office of the RBI was initially established in Calcutta (now Kolkata). It was permanently moved to Mumbai in 1937 to be closer to the financial hub. The Governor of the RBI sits in the central office.
When was the Reserve Bank of India nationalized?
Correct Answer: D. 1949
The Reserve Bank of India was nationalized on January 1, 1949, through the Transfer of Public Ownership Act. This transitioned the bank from a private entity to a government-owned central bank. Since then, the RBI has been the state's sole monetary authority.
Who was the first Governor of the Reserve Bank of India?
Correct Answer: A. Sir Osborne Smith
Sir Osborne Smith served as the first Governor of the RBI from its inception in 1935. He was a professional banker with experience from the Bank of New South Wales. He resigned before completing his full term due to policy differences.
Who was the first Indian to serve as the Governor of the Reserve Bank of India?
Correct Answer: D. C.D. Deshmukh
C.D. Deshmukh became the first Indian Governor of the RBI in 1943. He represented India at the Bretton Woods Conference during his tenure. He later served as India's Union Finance Minister.
Which of the following is NOT a function of the Reserve Bank of India?
Correct Answer: A. Accepting deposits from public
The RBI is a central bank and does not provide retail banking services like accepting deposits from the general public. It primarily interacts with the government and commercial banks. This ensures that the central bank remains an independent regulatory body.
Which rate is used by the RBI to lend money to commercial banks for short-term needs against securities?
Correct Answer: C. Repo Rate
The Repo Rate (Repurchase Option) is the interest rate at which the RBI lends money to commercial banks. It is a key tool for controlling inflation by influencing the liquidity in the banking system. An increase in this rate makes borrowing more expensive for banks.
What is the name of the rate at which the RBI borrows money from commercial banks?
Correct Answer: C. Reverse Repo Rate
The Reverse Repo Rate is the rate at which the RBI absorbs liquidity from commercial banks. Banks earn interest by parking their excess funds with the central bank. It helps in controlling the money supply during periods of excess liquidity.
Which ratio refers to the percentage of total deposits that banks must keep with the RBI in cash form?
Correct Answer: B. CRR
The Cash Reserve Ratio (CRR) is a mandatory requirement for banks to maintain a specific cash balance with the RBI. No interest is paid by the RBI on the money kept under CRR. It is used to regulate the lending capacity of commercial banks.