Banking System, NPA & IBC — Set 14
Economy Advanced · बैंकिंग प्रणाली, NPA और IBC · Questions 131–140 of 160
The LIBOR (London Interbank Offered Rate) is being phased out globally. What is the replacement benchmark for LIBOR in India?
Correct Answer: A. MIBOR
MIBOR is India's domestic benchmark replacing LIBOR for financial contracts. It reflects overnight lending rates between Indian banks.
The Loan Against Securities (LAS) allows investors to borrow against their holdings. What is the typical LTV (Loan-to-Value) ratio for LAS?
Correct Answer: B. 50-60%
Loan Against Securities typically offers 50-60% LTV, allowing investors to borrow 50-60% of their security values while maintaining collateral cover for lenders.
The Trade Credit facilitates transactions between businesses without immediate cash payment. What is the typical trade credit period in India?
Correct Answer: C. 30-90 days
Trade credit typically ranges from 30-90 days in India, allowing businesses to purchase goods and pay later, improving cash flow management.
The Invoice Discounting allows businesses to get immediate cash against outstanding invoices. What is the typical discounting cost?
Correct Answer: A. 1-2% per month
Invoice discounting typically costs 1-2% per month, allowing businesses to convert outstanding receivables into immediate cash for operational needs.
The Supply Chain Finance optimizes working capital for businesses in supply chains. What is the main advantage of supply chain finance?
Correct Answer: B. Reduces financial stress on suppliers
Supply chain finance reduces financial stress on suppliers by providing them access to working capital financing, improving entire supply chain efficiency.
The Securitization of receivables converts illiquid receivables into liquid securities. What is the benefit of securitization for investors?
Correct Answer: B. Diversified portfolio with stable returns
Securitization provides investors with diversified portfolios of receivables and stable returns from recurring payments, offering better portfolio diversification.
The Blockchain Technology is transforming financial services with decentralized networks. What is the primary advantage of blockchain in banking?
Correct Answer: C. Enhanced transparency and security
Blockchain provides enhanced transparency and security through distributed ledger technology, eliminating intermediaries and reducing fraud risks in transactions.
The Green Finance supports environmentally sustainable projects. What is the primary goal of green finance in India?
Correct Answer: B. Fund sustainable energy and environmental projects
Green finance aims to fund renewable energy, energy efficiency, and environmental conservation projects, supporting India's climate goals and sustainable development.
The Sustainable Development Goals (SDGs) influence financial sector policies. How many SDGs has India committed to achieve?
Correct Answer: D. 17
India has committed to achieve all 17 SDGs by 2030, including poverty reduction, quality education, clean energy, and climate action through various financial mechanisms.
The India Ratings Agency rates Indian corporations and instruments. What is the primary purpose of credit ratings?
Correct Answer: B. Assess creditworthiness and default risk
Credit ratings assess the creditworthiness of borrowers and instruments, helping investors understand default risks and make informed investment decisions.