RBI & Policy — Set 5
Economics · RBI और नीति · Questions 41–50 of 120
Which committee recommended the setting up of the Monetary Policy Committee (MPC)?
Correct Answer: C. Urjit Patel Committee
The Urjit Patel Committee recommended the MPC in 2014 to bring more transparency and accountability to monetary decisions. Before this, the RBI Governor had the sole authority over interest rate changes. The MPC held its first meeting in October 2016.
The term 'Deer Monetary Policy' refers to a policy that is?
Correct Answer: D. Contractionary
The correct answer is 'Contractionary'. A Deer or 'Tight' Monetary Policy involves high interest rates to curb inflation. It makes credit expensive and reduces the demand for goods and services. It is the opposite of a 'Cheap' or expansionary monetary policy.
Which of the following is NOT a subsidiary of the RBI?
Correct Answer: A. NABARD
NABARD was formerly a subsidiary, but the Government of India now owns 100% of its stake. DICGC and BRBNMPL remain fully-owned subsidiaries of the central bank. The RBI has gradually divested its stakes in several financial institutions.
Which section of the Banking Regulation Act, 1949, gives RBI the power to license banks?
Correct Answer: C. Section 22
Section 22 of the Banking Regulation Act mandates that every banking company must obtain a license from the RBI to operate. This allows the RBI to ensure that only financially sound entities enter the banking sector. The RBI also has the power to cancel these licenses.
How many local boards does the Reserve Bank of India have?
Correct Answer: B. Four
The RBI has four local boards representing the Western, Eastern, Northern, and Southern regions. They are headquartered in Mumbai, Kolkata, New Delhi, and Chennai. These boards advise the Central Board on local matters and represent local interests.
The RBI's 'Clean Note Policy' was introduced to?
Correct Answer: C. Ensure availability of good quality notes to the public
Introduced in 1999, the policy aims to give citizens high-quality currency notes while withdrawing soiled ones from circulation. It also prohibits the stapling of note packets to prevent damage. Banks are required to provide exchange facilities for mutilated notes under this policy.
Which of the following is a quantitative credit control measure?
Correct Answer: B. Variable Reserve Ratios
The correct answer is 'Variable Reserve Ratios'. Quantitative tools like CRR, SLR, and Repo Rate affect the total volume of credit in the entire economy. They are non-discriminatory and apply to all sectors equally. Qualitative tools, on the other hand, target specific types of credit.
The Reserve Bank of India was based on the strategy of which famous personality's book?
Correct Answer: B. B.R. Ambedkar
Dr. B.R. Ambedkar's book 'The Problem of the Rupee - Its Origin and its Solution' provided the conceptual framework for the RBI. He also gave evidence before the Hilton Young Commission. His ideas on price stability and currency management were highly influential.
What is the maximum denomination of banknote that the RBI is authorized to print as per current law?
Correct Answer: D. ₹10,000
The RBI Act, 1934, permits the issuance of notes up to the denomination of ₹10,000. In the past, ₹5,000 and ₹10,000 notes were in circulation but were demonetized in 1978. Any change in this limit would require a legislative amendment.
Which of the following is the 'Central Board of Directors' of the RBI?
Correct Answer: C. Policy-making body
The Central Board is the highest decision-making body of the RBI and oversees its general affairs. It consists of the Governor, Deputy Governors, and directors nominated by the government. The board meets regularly to discuss policy and operational matters.