Banking System, NPA & IBC — Set 11
Economy Advanced · बैंकिंग प्रणाली, NPA और IBC · Questions 101–110 of 160
The Credit Derivatives protect against credit risk in bonds and loans. What is the most common credit derivative?
Correct Answer: A. Credit Default Swap
Credit Default Swaps (CDS) are the most common credit derivative. They transfer credit risk from one party to another for a periodic fee.
The Collateral Management reduces credit risk in over-the-counter derivatives. What is considered acceptable collateral for derivatives?
Correct Answer: B. Cash, government securities, and AAA bonds
Acceptable collateral for derivatives typically includes cash, government securities, and AAA-rated bonds. This ensures creditworthiness of collateral.
The Structured Finance instruments combine various assets to create complex securities. Which structured product was widely blamed for 2008 financial crisis?
Correct Answer: A. Mortgage-Backed Securities
Mortgage-Backed Securities (MBS) and their derivatives were central to the 2008 financial crisis as their quality deteriorated with subprime mortgages.
The Commodity Futures Exchange in India (MCX) allows trading in commodities. What is the largest commodity exchange in India by trading volume?
Correct Answer: A. MCX
MCX (Multi Commodity Exchange) is the largest commodity exchange in India by trading volume, operating in metals, energy, and agricultural commodities.
The Agricultural Commodity Markets in India are regulated to ensure farmer protection. Which organization regulates forward markets in commodities?
Correct Answer: B. FMC
The Forward Markets Commission (FMC) regulates commodity forward and futures markets in India. It ensures transparency and investor protection.
The Bank Lending to Agriculture is an important policy priority in India. What is the minimum percentage of bank credit for agriculture?
Correct Answer: C. 18%
Banks must allocate at least 18% of their net bank credit to agriculture. This supports agricultural development and farmer welfare.
The Kisan Credit Card (KCC) scheme provides credit to farmers for agriculture and related activities. Who administers the KCC scheme?
Correct Answer: C. Banks under RBI guidelines
Banks administer the KCC scheme under RBI guidelines. It provides revolving credit up to Rs. 1 lakh for farmers to finance agricultural inputs.
The Rural Banking Infrastructure is essential for financial inclusion. How many scheduled commercial branches operate in rural areas of India?
Correct Answer: C. 50,000
Approximately 50,000 scheduled commercial bank branches operate in rural areas of India. This network supports agricultural financing and rural development.
The Regional Rural Banks (RRBs) serve primarily agricultural and rural populations. What is the minimum capital for RRB establishment?
Correct Answer: B. Rs. 10 crore
RRBs were established with a minimum capital of Rs. 10 crore to serve rural and agricultural communities with cheaper credit and financial services.
The Cooperative Credit Structure in India provides agriculture credit through cooperative banks. What is the three-tier cooperative credit structure?
Correct Answer: C. Primary, District, and State
The three-tier cooperative credit structure consists of Primary Agricultural Credit Societies (PACS), District Banks, and State Cooperative Banks, providing credit at grassroots.