Banking System, NPA & IBC — Set 1
Economy Advanced · बैंकिंग प्रणाली, NPA और IBC · Questions 1–10 of 160
The Reserve Bank of India was established in 1935 under the RBI Act. Which act was later amended to make RBI a wholly-owned subsidiary of the Government of India?
Correct Answer: B. Reserve Bank of India Act 1934
The correct answer is Reserve Bank of India Act 1934. The RBI Act 1934 was amended to formalize RBI's status as a central bank. The RBI took over the role of currency issuer from the Currency Department in 1935. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The Monetary Policy Committee of the RBI has 6 members including the Governor. How many external members are appointed to this committee?
Correct Answer: C. 3
The correct answer is 3. The MPC has 6 members: RBI Governor (Chair), Deputy Governor in charge of monetary policy, RBI staff member, and 3 external members appointed by the Central Government for 4 years. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
Under the Liquidity Adjustment Facility (LAF), the RBI conducts open market operations. What are the two rates under LAF?
Correct Answer: A. Repo and Reverse Repo
The correct answer is Repo and Reverse Repo. LAF consists of Repo rate (lending rate) and Reverse Repo rate (deposit rate). These are the primary tools RBI uses to inject or absorb liquidity from the banking system. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The Cash Reserve Ratio (CRR) is the percentage of Net Demand and Time Liabilities that banks must keep as reserves with the RBI. What is the current CRR as of 2024?
Correct Answer: B. 4%
The correct answer is 4%. The CRR was maintained at 4% by the RBI as of 2024. Banks must hold this percentage in cash reserves with the central bank to ensure liquidity and financial stability. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The Statutory Liquidity Ratio (SLR) requires banks to maintain a percentage of their Net Demand and Time Liabilities in government securities and cash. What is the SLR rate?
Correct Answer: B. 18%
The correct answer is 18%. The SLR is maintained at 18% of NDTL. Banks must invest this amount in approved securities including government bonds and treasury bills to ensure stability. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
NEFT (National Electronic Funds Transfer) is used for electronic fund transfers in India. What is the settlement cycle for NEFT transactions?
Correct Answer: B. Half-hourly
The correct answer is Half-hourly. NEFT operates on a half-hourly settlement cycle, meaning transactions are processed and settled every 30 minutes. It is suitable for non-urgent transfer requirements. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
RTGS (Real Time Gross Settlement) is used for large value fund transfers. What is the minimum amount for RTGS transactions?
Correct Answer: C. Rs. 5 lakh
RTGS is used for high-value transactions with a minimum of Rs. 5 lakh. There is no upper limit, making it suitable for large interbank and international transfers.
UPI (Unified Payments Interface) is a real-time payment system in India. Which organization developed and manages UPI?
Correct Answer: B. NPCI
The correct answer is NPCI. UPI was developed and is managed by NPCI (National Payments Corporation of India), a non-profit organization promoted by RBI and banks. It has revolutionized digital payments in India. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
In the Indian banking system, which ratio indicates the proportion of assets that banks maintain as liquid assets to meet their short-term obligations?
Correct Answer: A. Liquidity Ratio
The correct answer is Liquidity Ratio. The Liquidity Ratio shows the proportion of liquid assets (cash, marketable securities) relative to current liabilities. It ensures banks can meet their immediate obligations. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
Government securities in India include Treasury Bills and Government Bonds. What is the maximum maturity period for Treasury Bills?
Correct Answer: B. 1 year
The correct answer is 1 year. Treasury Bills have a maximum maturity of 1 year (365 days). They are short-term debt instruments issued by the RBI on behalf of the Government of India. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.