Banking System, NPA & IBC — Set 4
Economy Advanced · बैंकिंग प्रणाली, NPA और IBC · Questions 31–40 of 160
Repo and Reverse Repo transactions are crucial for RBI's monetary policy operations. In a Repo transaction, what does the bank do?
Correct Answer: A. Sells securities and agrees to buy them back
The correct answer is Sells securities and agrees to buy them back. In a Repo, a bank sells securities to RBI with an agreement to repurchase them at a higher price. The difference represents the interest cost. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The Basel III norms are internationally agreed standards for bank capital adequacy. What is the minimum Common Equity Tier 1 (CET1) ratio required?
Correct Answer: A. 4.5%
Basel III requires a minimum CET1 ratio of 4.5%. This strengthens bank capital standards and resilience against financial crises.
The Pradhan Mantri Mudra Yojana (PMMY) provides loans to micro and small enterprises without collateral. What is the maximum loan amount under PMMY?
Correct Answer: C. Rs. 25 lakh
PMMY provides loans up to Rs. 25 lakh without collateral for micro and small enterprises. It has been instrumental in supporting entrepreneurship in India.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) protects depositors' funds in case of bank failure. What is the maximum coverage per depositor per bank?
Correct Answer: B. Rs. 5 lakh
DICGC provides deposit insurance coverage up to Rs. 5 lakh per depositor per bank. This ensures protection of small depositors' savings.
The Pradhan Mantri Suraksha Bima Yojana (PMSBY) provides life insurance coverage to workers. What is the annual premium for PMSBY?
Correct Answer: B. Rs. 12
PMSBY provides accidental death and disability coverage for an annual premium of just Rs. 12. It's a highly affordable social security scheme.
The National Small Savings Scheme provides various investment options like NSC, KVP, and SSA. Which scheme offers the highest interest rate?
Correct Answer: C. Senior Citizen Savings Scheme (SCSS)
The correct answer is Senior Citizen Savings Scheme (SCSS). The Senior Citizen Savings Scheme (SCSS) offers the highest interest rate, designed specifically for senior citizens aged 60 years and above. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The RBI's Open Market Operations (OMO) are conducted to manage liquidity in the banking system. Which securities are used in OMO?
Correct Answer: B. Government securities
The correct answer is Government securities. RBI uses government securities in OMO to inject or absorb liquidity. This is one of the primary tools for monetary policy implementation. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The Currency Chest system in India is used for the distribution of currency notes and coins. Who manages these Currency Chests?
Correct Answer: B. Commercial banks authorized by RBI
The correct answer is Commercial banks authorized by RBI. Currency Chests are managed by commercial banks authorized by the RBI. Banks distribute currency to the public through these facilities. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The Know Your Customer (KYC) norms are implemented by financial institutions to prevent money laundering. Which regulatory body mandates KYC compliance?
Correct Answer: C. RBI and FIU-IND
The correct answer is RBI and FIU-IND. RBI and the Financial Intelligence Unit (FIU-IND) mandate KYC compliance. These norms are essential for preventing financial crimes and ensuring transparency. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.
The Anti-Money Laundering (AML) framework in India is based on international standards. Which law forms the basis of AML compliance?
Correct Answer: B. Prevention of Money Laundering Act (PMLA) 2002
The correct answer is Prevention of Money Laundering Act (PMLA) 2002. The Prevention of Money Laundering Act (PMLA) 2002 forms the basis of AML compliance in India. It provides the legal framework for combating money laundering. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.