1

ABOUT ME
Akash Singh Yadav
MBA In Finance AND Marketing with 84%
Qualified Continuously 3 TIMES UGC NET AND JRF
Qualified FMS IIT BHU PhD interview 2019
Qualified IIM Kashipur Academic assistant in finance
Pursuing PhD in Finance and accounting , IIT Kharagpur
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“UGC NET AND JRF CLASSES BY
AKASH ”
 Question :-1 4

The central bank can significantly influence the savings,

investments and consumer spending in the economy
through which of the following policy?

(1) Fiscal Policy

(2) Monetary Policy
(3) Industrial Policy
(4) Foreign Exchange Policy
 Question :-2 5

Assertion (A): The Reserve Bank of India is entrusted with the management of the public
debt and issue of new loans and treasury bills on behalf of the central and state
Governments.
Reasoning (R): The Governor and the Deputy Governors of Reserve Bank of India are
appointed by the Central Government.
Code:
(1) (A) is correct but (R) is not correct.
(2) (A) and (R) both are correct but (R) is not the right explanation of (A).
(3) (A) and (R) both are correct and (R) is the right explanation of (A).
(4) (A) and (R) both are not correct

Reserve Bank of India (RBI): RBI was set up on the basis of the
Hilton Young Commission recommendation in April 1935, with
the enactment of the RBI Act, 1934.
It was nationalized on the basis of the Reserve Bank of India
(Transfer to Public Ownership) Act, 1948.
Its first Governor was C.D. Deshmukh.
The headquarters of RBI is in Mumbai.
Current governor of RBI is Shaktikanta Das.
 Question :-3 6

What does the so called capital to risk weighted assets ratio (CRAR)
denote with respect to the banks?
1.Balance sheet strength of the banks
2.Immunity of banks against capital loss
3.Day today Liquidity condition of the banks
Select the correct option from the codes given below:
[A] Only 1 & 2
[B] Only 2 & 3
[C] Only 1 & 3
[D] 1, 2 & 3

Notes:
CRAR is a standard metric to measure balance sheet strength of banks. Higher the
CRAR the lesser is the chance for bank to suffer capital loss. Third statement is
incorrect.
 Question :-4 7

Consider the following statements about Reserve Bank of India (RBI):

1.RBI manages the money market as well as capital market in India
2.Comptroller and Auditor General is responsible for the annual audit
of the balance sheet of RBI
Which of the above statements is/are correct?
[A] 1 Only
[B] 2 Only
[C] Both 1 & 2
[D] Neither 1 nor 2

First statement is incorrect because Securities Exchange Board of India (SEBI) is the
nodal organization to manage the capital business sector and other related issues in
India. Second statement is incorrect because In India, the CAG doesn’t audit the RBI. The
auditors are appointed by the central government under the provisions of the RBI Act.
 Question :-5 8

Which one of the following is not the function of NABARD?

(1) To provide refinance assistance by way of short term credit to state cooperative banks and sectoral
rural banks, etc., approved by the RBI for some specific purposes.
(2) To undertake inspection of cooperative societies other than primary cooperative societies and RRBs.
(3) To promote research in various aspects of the problems of urban development.
(4) To subscribe to share capital or invest in securities of any institution concerned with agricultural and
rural development.

NABARD(National Bank for Agriculture and Rural Development) was

established in 1982.
It is an Apex Financial Institution for Growth in India.
The recommendations of the B.Sivaramman Committee, (by Parliament Act 61,
1981).
It is the India's Agriculture and Rural Development Specialized Bank. The
headquarters is situated in Mumbai.
 Question :-6 9

In order to encourage investment in the economy, the

Central Bank may ________
(A) Reduce Cash Reserve Ratio
(B) Increase Cash Reserve Ratio
(C) Sell Government securities in
the open market
(D) Increase Bank Rate
 Question :-7 10

Cash Reserve Ratio (CRR) is calculated as a percentage of each bank's

_____.
1.savings of customers
2.rate of inflation
3.credit growth
4.net demand and time liabilities

Cash reserve ratio (CRR) is the mandatory deposit to be held by banks with Reserve Bank of India. It
is calculated daily on the basis of the bank’s net demand and time liabilities with the objective to
ensure the liquidity and solvency of the banks. The current rate of CRR is 4%
 Question :-8 11

RBI was set up on the basis of the recommendation of

1.Indian Central Bank Enquiry Committee
2.Royal Commission
3.Simon Commission
4.Nehru Report Answer

The Reserve Bank of India was set up on the basis of the recommendations of the Royal
Commission on Indian Currency and Finance also known as the Hilton-Young Commission.

The Reserve Bank of India was established following the Reserve Bank of India Act of 1934. After
that, RBI started its operations on 1 April 1935. Headquarters of RBI- Mumbai.

The nationalization of RBI took place in 1949 and from January 1, 1949, RBI started working as a
government-owned bank.
First Governor: Sir Osborne Smith First Indian Governor: C.D. Deshmukh Current Governor:
Shaktikanta Das

The main functions of RBI are: Note issuing organization and determine monetary policy, RBI
controls the credit operations of banks through quantitative and qualitative tools, Holds the cash
reserves of all the scheduled banks, Controls the banking system through the system of
licensing, Acts as the lender of the last resort
 Question :-9 12

Rupee sign '₹' is a

A. Devanagari letter
B. Roman letter
C. Sanskrit Script
D. A combination of Roman & Devanagari letters

The symbol of Indian Rupee (₹) typifies India's international identity for money transactions and
economic strength.
The symbol is an amalgam of Devanagari "Ra" and the Roman Capital "R" with two parallel
horizontal stripes running at the top representing the national flag and also the "equal to" sign.

The Indian Rupee sign was adopted by the Government of India on 15th July 2010.

The symbol conceptualized and designed by Udaya Kumar, a post-graduate in Design from the
Indian Institute of Technology Bombay.

Devanagari script is written from left to right. Sanskrit is the oldest language known to humans.
Sanskrit is declared as a classical language in the year 2005
 Question :-10 13

Which is the most liquid measure of the

money supply?
(A) M4
(B) M3
(C) M2
(D) M1
 Question :-11 14

Which among the following bodies regulated the cooperative banks in

India?

[A] Reserve Bank of India

[B] Small Industries Development Bank of India
[C] National Bank for Agriculture and Rural Development
[D] National Cooperative Union of India

As per the Cooperative Societies Act, Reserve Bank of India (RBI) regulates the
cooperative banks and these are governed by the Banking Regulations Act, 1949
and the Banking Laws (Cooperative Societies) Act, 1965.
 Question :-12 15

What is the other name for Reserve Money?

[A] High Money
[B] Monetary Base
[C] Monetary money
[D] Low power Money

The other name of the Reserve Money is “High

Powered Money” and also “Monetary
Base”. Reserve Money is all the Cash in the
economy and denoted by M0.
 Question :-13 16

Which government institution regulates SIDBI?

[A] RBI
[B] NABARD
[C] Department of Finance
[D] NHB

SIDBI is the principal development financial institution for promotion, financing, and development of
Micro, Small, and Medium Enterprises (MSME) sector in India.
It was established on April 2, 1990, through an Act of Parliament.
The headquarters of the SIDBI is located in Lucknow, Uttar Pradesh.
It aims to facilitate and strengthen credit flow to MSMEs and address both financial and
developmental gaps in the MSME eco-system across the country.
It coordinates the functions of institutions engaged in similar activities.
 Question :-14 17

__________ refers to the process of removing or

stripping the legal status of a currency.

(1) Digitization
(2) Financial Inclusion
(3) Demonetization
(4) Micro finance
 Question :-15 18

The National Stock Exchange Index is ___________

1.Sensex
2.Bankex
3.Rolex
4.Nifty

The National Stock Exchange is a government-owned stock exchange in India.

It is located in Mumbai, Maharashtra. It was established in 1992.
It uses NIFTY 50 as its index. Nifty was introduced by NSE on April 21, 1996.
It represents the weighted average of 50 Indian Company Stocks across 24 sectors, which account
for around 60% of the market capitalization.

Sensex was introduced by BSE on January 1, 1986. It represents the weighted average of 30 Indian
Company Stocks across 13 sectors.

Bombay Stock Exchange (BSE): It is Asia's oldest stock exchange. It was established in the year
1875. It is the world's 7th largest stock exchange.
 Question :-16 19

What is the new inflation target band fixed for the next five years (2021-
26)?
[A] 2.0 to 6.0 per cent
[B] 1.5 to 5.5 per cent
[C] 2.5 to 6.5 per cent
[D] 3.0 to 7.0 per cent

The Economic Affairs Secretary announced that the inflation target for the period April 1,
2021 to March 31, 2026 under the Reserve Bank of India Act 1934 has been kept at 4 per
cent with a margin of 2 per cent on either side.
This is the same target mandated to the RBI by the Government in the previous five years
(2016-21). RBI was to maintain annual inflation at 4 per cent until March 31, 2021 with an
upper tolerance of 6 per cent and a lower tolerance of 2 per cent.
 Question :-17 20

Which one of the following is the main objective of IFCI?

(1) To offer both small and large investors the means of acquiring shares in the widening
prosperity resulting from the steady industrial growth of the country.
(2) To upgrade technology, modernization and to promote marketing of products of small scale
sector.
(3) To serve as the apex institution for term finance for industry with coordination, regulation
and supervision of the working of other financial institution.
(4) To provide medium and long term financial assistance to industrial undertakings,
particularly in those circumstances in which banking accommodation is in appropriate or
resource to capital market is impracticable.
 Question :-18 21

National Housing bank is a fully owned

subsidiary of___________.
a) HDFC
b) HSBC
c) RBI
d) HUDCO
 Question :-19 22

The Reserve Bank of India works as a lender of the last resort (LOLR). Which
among the following is the correct statement in this context?
[A] RBI meets all the demands of the commercial banks in times of
difficulties
[B] RBI meets all the reasonable demands of the commercial banks in
times of difficulties
[C] RBI is the last lender to the Government at the centre and the states
[D] RBI grants loans to the banks and also the Governments in states

[RBI meets all the reasonable demands of the commercial banks in times of
difficulties]
The banks can borrow from the RBI on the basis of eligible securities or any other
arrangement and at the time of need or crisis, they approach RBI for financial help.
Thus RBI works as Lender of the Last Resort (LORL) for banks.
 Question :-20 23

In context with the macroeconomics , Philips Curve is a relationship

between the rates of ___?
[A] Unemployment & Exim trade
[B] Unemployment and Inflation
[C] Unemployment and Demand
[D] Unemployment and Poverty

Phillips curve developed by A. W. Phillips says that the inflation and

unemployment have a stable and inverse relationship; which means that higher
inflation is associated with lower unemployment and vice versa. However, later it
was proved that this curve is applicable only in the short-run, and in long-run,
inflationary policies would not decrease unemployment.
 Question :-21 24

At which of the following places, printing press of Reserve Bank of India

is not present?
[A] Nashik
[B] Dewas
[C] Salboni
[D] Mumbai

For printing of notes, the Security Printing and Minting Corporation of India
Limited (SPMCIL), has set up printing presses at Nashik, Maharashtra and Dewas,
Madhya Pradesh. The Bharatiya Reserve Bank Note Mudran Private
Limited (BRBNMPL) has set up printing presses in Mysuru in Karnataka and
Salboni in West Bengal. In all, there are four printing presses.
 Question :-22 25

Giving permission to withdraw money by an amount more than deposited to is

known as _________
(A) Advance
(B) Overdraft
(C) Loan
(D) None of these

Overdrafts: Overdraft means allowing the customer to draw cheques over and above the credit balance
in his account. Overdraft is normally allowed to Current Account Customers and in exceptional cases,
SB A/c holders are also allowed to overdraw their account. The high rate of interest is charged but only
on the daily debit balance. An overdraft is repayable on demand.
 Question :-23 26

Banking Ombudsman Scheme is applicable to the business of_______.

a) All scheduled commercial banks excluding RRBs
b) All scheduled commercial banks including RRBs
c) Only Public Sector Banks
d) Only Private Sector Banks
e) All scheduled banks except private banks
 Question :-24 27

Which of the following functions are not being performed

by the Reserve Bank of India?
a) Regulation of Banks in India
b) Regulation of Foreign Direct Investment in India
c) Foreign Currency Management in India
d) Currency Management in India
e) Control and Supervision of Money Suppl
 Question :-25 28

List - I List - II
(a) Term (i) Providing finance to new or existing
finance industrial units for encouraging commercial
(b) Refinance application of technology/expansion.
(c) Financial (ii) Delivering of banking services at affordable \Match the items of List - II with the items
of List - I and indicate the correct code:
inclusion cost to the vast sections of disadvantaged and
Code:
(d) Venture low income groups. (a) (b) (c) (d)
capital (iii) Providing replenishment finance to eligible (1) (i) (ii) (iii) (iv)
institutions for their loans to industrial (2) (i) (ii) (iv) (iii)
concerns. (3) (iv) (iii) (ii) (i)
(iv) Providing finance to the borrowers for (4) (iv) (iii) (i) (ii)
expansion and modernization of plant and
equipment.
 Question :26 29

Match the following:

1. Public issue i. When capital funds are raised through the issue of prospects.
2. Rights issue ii. When shares are issued to the existing shareholders of company
3. Private placement iii. When the issuing company sells securities directly to the
investors

a. 1-I, 2-ii, 3-iii

b. 1-iii, 2-ii, 3-I
c. 1-ii, 2-iii, 3-I
d. 1-iii, 2-I, 3-ii
 Question :-27 30

______ is regarded as the fourth element

of the financial system.
a.Financial services
b. Financial markets
c. Financial instruments
d. Financial institutions
 Question :-28 31

The certificate which evidences an unsecured

corporate debt of short-term maturity, is known as:
(1) Certificate of Deposit
(2) Short-term loan certificate
(3) Treasury Bill
(4) Commercial paper
 Question :-29 32

‐‐‐‐‐‐‐‐‐‐‐‐‐ is a long term risk capital to finance

high technology projects which involve risk but
at same time has strong potential for growth.

(a)Venture capital
(b) hedge finance
(c) Merchant banker
(d) hire purchaser.
 Question :-30 33

Which one of the following is an example for Non-Banking Financial institution?

1.RBI
2.SBI
3.IOB
4.LIC

A Non-banking financial organization (NBFI) is a financial organization that doesn't have a full
banking license .A Non-Banking Financial Company (NBFC) is a company registered under the
Companies Act, 1956.
It engaged within the business of loans and advances, acquisition of shares, stocks, bonds,
debentures, securities issued by the Government, or local authority.
Some of the NBFC in India are LIC, Power Finance Corporation Limited, Muthoot Finance Ltd, Tata
Capital Financial Services Ltd,
1.Banks It accepts the demand deposit. 1.It does not accept the demand deposit.
2.It can issue cheques. 2. It cannot issue cheques.
3.The deposit insurance facility of Deposit
Insurance and Credit Guarantee Corporation is available 3.The deposit insurance facility of
Deposit Insurance and Credit Guarantee Corporation is not available
 Question :-31 34

Who circulates all mint and one rupee not in

India?

(A) Ministry of Finance

(B) RBI
(C) Ministry of External Affairs
(D) State Government
 Question :-32 35

Which year is known for BOP

crisis in Indian Economy?
[A] 1990
[B] 1991
[C] 1995
[D] 1999
 Question :-33 36

Who among the following issues commercial papers?

1. All India Financial Insitutions
2. Corporate companies
3. Satellite dealers
4. Government of India
Choose the correct option from the choices given below:
[A] 1,2 and 3 only
[B] 1 and 3 only
[C] 1,2,3 and 4
[D] 1 and 2 only

The commercial papers are short term unsecured promissory notes issued by top
rated corporated, primary dealers, satellite dealers and All India Financial
Insitutions. They can be issued for maturities between a minimum of 7 days and
maximum of 1 year
 Question :-34 37

Which of the following committees/ Task Forces was set up to suggest reforms in Banking
Sector?

a)Swaminathan Committee
b) Narasimha Committee
c) Rajinder Sachar Committee
d) Task Force on Infrastructure
e) None of these
Recommendations of Narasimhan Committee
1.Establishment of 4 tier hierarchy for banking structure with 3 to 4 large banks (including SBI) at
the top and at bottom rural banks engaged in agricultural activities.
2.The supervisory functions over banks and financial institutions can be assigned to a quasi-
autonomous body sponsored by RBI.
3.A phased reduction in statutory liquidity ratio.
4. Phased achievement of 8% capital adequacy ratio.
5.Abolition of branch licensing policy.
6.Proper classification of assets and full disclosure of accounts of banks and financial institutions.
Deregulation of Interest rates. Delegation of direct lending activity of IDBI to a separate corporate
body. Competition among financial institutions on participating approach. Setting up Asset
Reconstruction fund to take over a portion of the loan portfolio of banks whose recovery has
become difficult.
 Question :-35 38

Which of the following is not an organized

sector in India?
a) Nationalized Banks
b) Regional Rural Banks
c) Cooperative Banks
d) Chits and Money lenders
 Question :-36 39

Which among the following is a money market instrument of

shortest tenure?
[A] Notice money
[B] Call money
[C] Near Money
[D] Term Money

The call money is the short-term money market instrument where money
is borrowed or lent on demand for a day. It is also known as overnight
money market instrument. Intervening holidays and/or Sunday are
excluded for this purpose. Thus, it is money borrowed on a day and repaid
on the next working day (irrespective of the number of intervening
holidays).
 Question :-37 40

The ratio of total deposits that a commercial bank

has to keep with RBI is called:

(A) Statutory liquidity ratio

(B) Deposit ratio
(C) Cash reserve ratio
(D) Legal reserve ratio
 Question :-38 41

Which of the following sector comes under priority sector lending?

1. Agriculture
2. MSME
3. Education
4. Housing
5. Social Infrastructure
Choose the correct option from the choices given below:
[A] 1,2,3 and 5 only
[B] 1,2,3 and 4 only
[C] 1,2 and 3 only
[D] 1,2,3,4 and 5

The following sector comes under priority sector lending:

1. Agriculture 2. MSME 3. Education 4. Housing 5. Social Infrastructure 6.
Renewable energy 7. Export credit
 Question :-39 42

Scheduled bank” in India means a bank _____.

“

a) Incorporated under the Companies Act, 1956

b) Authorized to the Banking business
c) Governed by the Banking Regulation Act, 1949
d) Included in the Second schedule to the Reserve Bank
of India Act 1934
 Question :-40 43

The organization incorporated for retail payment and settlement systems in India is
1.SEBI
2.MUDRA Bank
3.NPCI
4.LIC
National Payments Corporation of India (NPCI) is an umbrella organization for operating retail
payments and settlement systems in India.
It is an initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the
provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment &
Settlement Infrastructure in India.
NPCI was incorporated in December 2008 and was centrally promoted by the Reserve Bank of India. It
has been incorporated as a not-for-profit company under section 8 of the Companies Act 2013. CEO
and Managing Director: Dilip Asbe Headquarters: Mumbai
Micro Units Development and Refinance Agency Bank (MUDRA Bank) is a public sector financial
institution in India. It provides loans at low rates to micro-finance institutions and non-banking
financial institutions which then provide credit to MSMEs. It was launched by Prime Minister
Narendra Modi on 8 April 2015. The MUDRA banks were set up under the Pradhan Mantri MUDRA
Yojana scheme. The loans are provided into three categories: ​Shishu: Allowed loans up to Rs. 50
Thousand. Kishor: Allowed loans up to Rs. 5 Lakh. Tarun: Allowed loans up to Rs. 10 Lakh.
 Question :-41 44

Chalapathi Rao Committee was constituted for restructuring of

1.State Financial Corporation in India
2.Commercial Banks in India
3.Co-operative Banks in India
4Regional Rural Banks in Ind//ia

The Regional Rural Banks (RRBs) are the newest form of banks that came into
existence since the middle of the 1970s. It was sponsored by individual nationalized
commercial banks with the objective of developing the rural economy by providing
crediting and depositing facilities for agriculture and other productive activities of all
kinds in rural areas.
Regional Rural Banks (RRBs) were set up under the terms of the 26 September 1975
ordinance and the RRB Act of 1976. First Regional Rural Bank was established on 2
October 1975.
The Prathama Bank of Moradabad, Uttar Pradesh was the first RRB. Currently, there
are 43 RRBs in India
 Question :-42 45

What is Rationing of credit?

[A] Limits loans to customers
[B] Limits loans given to a sector
[C] Limits loans to banks by RBI
[D] None

Rationing of credit is limiting of credit given to different

sectors by RBI. This is to ensure all the sectors get
enough credit.
 Question :-43 46

What is an Alternate investment fund?

[A] Fund set up by government for long term
investment
[B] Pooled investment of investors for lending to big
projects
[C] Pooled investment of investors for short term
lending
[D] Pooled investment of investing in stock market

The Alternate Investment scheme is pooled in investment vehicles for

real estate, private equity, and hedge funds. It is established to bring in
investments from Indian and foreign investors.
 Question :-44 47

Which of the following are the reasons for the economic crisis in 1991?
1.Huge fiscal imbalances
2.High level of borrowing
3.High Exports
4.High Imports
Choose the correct option from the codes given below:
[A] 1,2 and 3 only
[B] 1 and 2 only
[C] 1,2 and 4 only
[D] All the above
India experienced its worst economic crisis in 1991. A high fiscal deficit combined
with a high level of borrowing lead to a crisis. The exports were low and imports
were high. India liberalized its economy to deal with the situation.
 Question :-45 48

Which among the following are the types of shares?

1. Common stock
2. Preferred stock
3. Open stock
Choose the correct option from the choices given below:
[A] 1 and 2 only
[B] 3 only
[C] 1 and 3 only
[D] 2 only
 Question :-46 49

Which one of the following financial institutions co-ordinates the functions and operations of all the
financial institutions into a single integrated financial structure so that each may contribute to the
growth of the economy?
1.IFCI
2.UTI
3.IDBI
4.SIDBI
IDBI (Industrial Development Bank of India) was established by an Act of Parliament as a wholly-owned subsidiary of the
RBI to give credit and other financial facilities for the development of Indian industry on 1st July 1964. In 1964, the
ownership of IDBI was transferred to the Government Of India and was made a principal financial institution for
coordinating the functions and operations of all the financial institutions into a single integrated financial structure so
that each may contribute to the growth of the economy.
IFCI (Industrial Finance Corporation of India) is the first most developmental financial institution set up by the
Government of India on July 1, 1948. IFCI is a Non-Banking Financial Company in the public sector. The main aim of IFCI
was to provide long-term finance to the manufacturing and industrial sector of the country.
UTI: UTI (Unit Trust of India) is a statutory public sector investment institution that was set up in February 1964 under the
Unit Trust of India Act, 1963. It provides an opportunity for small-savers to invest from their income in areas where their
risk is diversified.
SIDBI: SIDBI (Small Industries Development Bank of India) was set up on 2nd April 1990 under the Act of Parliament as
the principal financial institution for promotion, financing, development (MSME) sector. LIC of India acquired a 51%
controlling stake of IDBI Bank on 21st January 2019 and RBI has re-categorized it as a Private Sector Bank with effect
from 21st January 2019.
 Question :-47 50

Which of the following is /are not regulatory

institutions

A. RBI
B. SEBI
C. IRDA
D. IFCI
 Question :-48 51

Who insures banks in India?

a) IRDA
b) EXIM
c) DICGC
d) ECGC
 Question :-49 52

What is Notice Money?

a) It is an overnight loan in the Money Market
b) It is loan of above1 day to 14 days in the
money market
c) It is loan of above14 day to 364 days in the
money market
d) It is an amount charged on ISD
 Question :-50 53

Which of the following statement is true about Commercial Paper?

A) It is traded in the money market
B) It is a promissory note
C) It was introduced in 1990
D) It is a secure Instrument

a) Option A & B are correct b) Option C & D are correct

c) Option A,B & C are correct d) All the options are correct
 Question :-51 54

India’s foreign exchange rate

system is?
a) Free float
b) Managed float
c) Fixed
d) Fixed target of band
 Question :-52 55

Consider the following statements regarding Nidhi Companies:

1. The Nidhi companies borrow from and lend to the members only.
2. They are included under NBFCs and are also regulated by RBI
A.1 only B.2 only C. Both 1 and 2 D. Neither 1 nor 2

The companies doing Nidhi business, viz. borrowing from members and lending to members only, are
known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds, and
Mutual Benefit Company.

The loans are given to the members at relatively reasonable rates for purposes such as house
construction or repairs and are generally secured. The deposits mobilized by Nidhis are not much when
compared to the organized banking sector.

Nidhi's are companies registered under section 620A of the Companies Act, 1956 (Section 406 of the new
Companies Bill 2012, as passed by Lok Sabha) and is regulated by the Ministry of Corporate Affairs
(MCA). Nidhis are also included in the definition of Non-Banking Financial companies or (NBFCs) which
operate mainly in the unorganized money market. Nidhi Companies are regulated by RBI also but not
directly.
 Question :-53 56

Which of the following is NOT a reason to invest in mutual funds?

a) Professional management of your investment
b) Invest low amounts (as low as Rs. 500) in a diversified portfolio
c) Flexibility to buy and sell your investments as and when you want
d) Personal customized portfolio
 Question :-54 57

What is the minimum amount at which commercial

paper can be issued?
a) The minimum amount for Commercial Papers is 5
lakhs.
b) The minimum amount for Commercial Papers is 5
Crores.
c) The minimum amount for Commercial Papers is 1
lakh.
d) The minimum amount for Commercial Papers is 1
Crore.
 Question :-55 58

In India, the interest rate on saving accounts in all, the nationalized commercial banks is fixed by
1.Union Ministry of Finance
2.Union Finance Commission Indian
3.Bank's Associated
4.None of the above Answer

The following rates are fixed by banks

themselves and are not considered to be
key policy rates Base Rate
Interest Rates on Saving Accounts
Interest Rates on Current Accounts
 Question :-56 59

Which of the following statement is true about Certificates of Deposits?

A) It is secure instrument in comparison of Commercial Paper
B) It is a promissory note
C) It is traded in Capital Market
D) It was introduced in 1990

a) Option C & D are false b) Option A & B are false

c) Option A,C & D are correct d) All the options are
correct
 Question :-57 60

SEBI has proposed a merger of listing rules pertaining to debt securities and non-convertible
redeemable preference shares into a single regulation and maintains consistency with the
SEBI's LODR. What does 'L' stand for in LODR?
A. Listing
B. Loan
C. Liquid
D. Lending

SEBI has proposed a merger of listing rules pertaining to debt securities

and non-convertible redeemable preference shares into a single
regulation. The proposal is aimed at harmonising with the Companies Act,
2013, and maintaining consistency with the SEBI's LODR (Listing
Obligations and Disclosure Requirements) rules It has invited public
comments on the proposal, open for 21 days.
 Question :-58 61

Which of these DFI was primarily set up for the

development of the Micro, Small and Medium
Enterprise (MSME) sector?
a) NABARD
b) IDBI
c) SIDBI
d) IFCI
 Question :-59 62

The market in which new Securities are issued by

the Corporations to raise funds are called:

a) Primary Markets
b) Secondary Markets
c) Gross Markets
d) Proceeds Markets
 Question :-60 63

What is the maximum duration for which term

money can be lent/borrowed in money market?
a)1 day
b) 15 days
c) 30 days
d) 1 year
 Question :-61 64

Which among the following is/are correct regarding Money Market?

A) Money Market is a market for short-term funds.
B) Maturity in this market ranging from overnight to one year.
C) The basic function of money market is to provide efficient liquidity
position for commercial banks, financial institution, Mutual funds,
insurance companies, corporate etc.
D) Maturity in this market is above one year.

a) Only a and b b) a, b and c

c) b, c and d d) All are correct
 Question :-62 65

Which one of the following is the main objective of Unit

Trust of India?
a) To mobilize the savings of high income groups.
b) To mobilize the savings to low and high income
groups.
c) To mobilize the savings of corporates.
d) To mobilize the savings of low and middle income
groups
 Question :-63 66

"Skimming" in e-banking refers to

1. Identifying fraudsters copying vital
information from credit cards
2. Multiple transactions by one credit card
3. Conversion of a debit card into credit
card
4. Excessive charge for online services
 Question :-64 67

Reverse Repo Rate is a tool used by the Reserve

Bank of India primarily to

1. Inject liquidity
2. Absorb liquidity
3. Protect bank credit
4. Build reserve
 Question :-65 68

The exchange markets and over the counter

markets are considered as two types of:

a) Floating market
b) Risky market
c) Secondary market
d) Primary market
 Question :-66 69

In order to calculate capital adequacy ratio, the banks are required to

take into consideration, which of the following risks?
A. Credit risk
B. Market risk
C. Operational risk
Choose the most appropriate answer from the options given below:
1. A and C only
2. A and B only
3. B and C only
4. A,B and C only
 Question :-67 70

identify on which of the three mutually reinforcing pillars Basel-Ill capital regulations are based?
Minimum capital standards
A. Supervisory review of capital adequacy
B. Credit risk management
D. Market discipline
E. Management control
Choose the most appropriate answer from the options given below:
1.A, B and C only
2. A. B and D only
3. C, D and E only
4. A, Cand D only
 Question :-68 71

Which one is NOT true regarding the Market Stabilization Scheme (MSS)?
1.It absorbs surplus liquidity of enduring nature arising out of large capital flows
2. It absorbs surplus liquidity through sale of short-dated government securities and
treasury bills
3.Mobilised surplus liquidity is held in the MSS account with the Reserve Bank of
India
4.MSS account liquidity can be used for normal government expenditure of capital
nature
 Question :-69 72

Assertion (A) Reserve Bank of India is an important regulatory and

administrative authority to execute FEMA provisions.
Reason (R) Being monetary authority and custodian of foreign exchange,
Reserve bank of India enjoys requisite expertise of FEMA administration
In the context of the above two statements, which one of the following
option is Correct ?
1.Both (A) and (R) are correct and (R) is the right explanation of (A)
2.Both (A) and (R) are correct but (R) is not the right explanation of (A)
3.Both (A) and (R) are incorrect
4. (A) is correct and (R) is not correct
 Question :-70 73

Which of the following are included in digital payment system?

(a) RTGS
(b) Demand draft
(c) NEFT
(d) Cheque
Choose the correct option from the following:
1.(a), (c) and (d)
2 (b) and (d) only
3 (a) and (C) only
4 (b), (c) and (d)

The real-time gross settlement (RTGS) system is meant for large-value

instantaneous fund transfers, while the national electronic funds
transfer (NEFT) system is used for fund transfers of up to Rs 2 lakh.
Currently, the RBI "levies minimum charges" on banks for transactions
routed through its RTGS and NEFT system.
 Question :-71 74

SIDBI was set up as a subsidiary of IDBI to

1.takeover the functions of small business
financing of IDBI
2.takeover the venture capital operation of IDBI
3.reconstruct and rehabilitate the sick and
closed industrial units financed by IDBI
4. facilitate, finance and promote India's foreign
trade
 Question :-72 75

Match List-I with List-II

List-I List-II
(a) Interbank call market 1) Money Market
(b)Commercial bills 2) Promissory note
(c)Commercial papers 3) Short-term maturity
(d)Treasury bills 4) Government papers
Choose the correct option from those given below:
1.(a)-3 (b)-1; C)-4; (d)-2
2 (a)-3(b)-1(c)-2 (d-4
3 (a)-1(b)-3 (c-4, (d)-2
4.(a)-4 (b)-3 (C)-2; (D)-1
 Question :-73 76

Which among the following is NOT true about BASEL?

1.Initially it was named as Committee of Banking
Regulations and Supervisory Practices (CBRS)
2 BASEL was established by the Central Bank
Governors of fifteen countries
3. It was established by the end of 1974
4. Disturbances in international currency and banking
markets were responsible for its establishment
 Question :-74 77

Which among the following is NOT a correct statement?

1.Hedge funds are not mutual funds.

2.Hedge funds can be sold to public.
3.Investors in mutual funds must pay various fees and
expenses
4.Mutual funds provide economies of scale to investment
decisions.
 Question :-75 78

Credit worthiness score in India ranges between

1.300 to 600
2 300 to 900
3 500 to 1000
4. 900 to 1600

2
 Question :-76 79

A/an _______ stock is the stock of a large, well-established and financially sound company that
has operated for many years.
1.Blue-Chip
2.Cyclical
3.Income
4.Defensive

Blue chips stocks are shares of very large companies which has sound
financial performance. These stocks have capabilities to endure tough
market conditions and give high returns in good market conditions. These
stocks have High Costs. They have a good reputation and are often
market leaders in their respective industries. These companies have
widely accepted goods and services. Eg State Bank of India, ONGC, Coca-
Cola, GAIL.
 Question :-77 80

The words 'Bulls and Bears' are associated with

1.Import and Export
2.Banking
3.Marketing
4.Speculator

A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks
(also called shares), which represent ownership claims on businesses; these may include securities
listed on a public stock exchange, as well as stock that is only traded privately, such as shares of
private companies.
A bull market is a market that is on the rise and is economically sound, while a bear market is a
market that is receding, where most stocks are declining in value. Speculators are sophisticated
investors or traders who purchase assets for short periods of time and employ strategies in order to
profit from changes in their price. Speculators are important to markets because they bring liquidity
and assume market risk. A Bear is a speculator, who anticipates a fall in the price of securities. He
sells- securities for future delivery. He sells securities which he does not possess with the hope to
buy the securities at a lower price before the date of delivery. In India, a bear is also known as
mandiwala. A bull is a stock market speculator who buys a holding in stock in the expectation that in
the very short term it will rise in value whereupon they will sell the stock to make a quick profit on
the transaction. Therefore, Bulls and bears are associated with speculators.
 Question :-80 81

Devaluation of money means Decrease in

1.internal value of money

2.Decrease in the external value of money
3.Both A and B
4.None of the
 Question :-82 82

Which one of the following is the main objective of IFCI ?

(1) To offer both small and large investors the means of acquiring shares in
the widening prosperity resulting from the steady industrial growth of the
country.
(2) To upgrade technology, modernization and to promote marketing of
products of small scale sector.
(3) To serve as the apex institution for term finance for industry with
coordination, regulation and supervision of the working of other financial
institution
(4 To provide medium and long term financial assistance to industrial
undertakings, particularly in those circumstances in which banking
accommodation is in appropriate or resource to capital market is
impracticable.
 Question :-83 83

List I List II
(Name of organization) (Year of establishment)
(a) IDBI 1.1956
(b)ICICI 2) 1955
(c)LIC of India (3) 1990
(d) SIDBI 4) 1964
Code:

1.3,1,2,4
2.3,1,4,2
3.4,2,1,3
4.1,2,3,4
 Question :-84 84

Statement (1): Capital adequacy norms help banks in strengthening

their capital base.
Statement (2) Capital adequacy norms help banks in sanctioning
more loans.
Code:
(1)Both the Statements (1) and (2) are correct.
(2)Both the Statements (1) and (Il) are incorrect.
3.Statement (1) is correct but (Il) is incorrect
(4)Statement (1) is incorrect but (II) is correct.
 Question :-85 85

Read the following events :

1.Capital adequacy norms for commercial banks
2.Establishment of IDBI
3.Alowing convertibility of rupee at the market rate in
the current account
4) Nationalization of general insurance business.

1.1,2,3,4
2.4,3,2,1
3.4,2,1,3
4.1,2,4,3
 Question :-87 86

Assertion (A): The future will see mostly the electronic money
clearance through satellite networking.
Reasoning (R) : RBI is encouraging e-banking.
Code:
(1)(A) is true but (R) is false.
(2)(A) is false but (R) is true.
(3)Both (A) and (R) are true and (R) is the correct explanation of (A)
(4) Both (A) and (R) are true but (R) does not support (A).
 Question :-88 87

Which of the following statements are False ? Indicate the correct code.
(a)RBI has prescribed guidelines for the operations of credit rating
agencies in India.
b)All venture capital funds in India have been promoted by Government
(c) A mutual fund can operate as venture capital fund.
(d)Credit rating is an authoritative guarantee regarding the credit
position of a person
Code
(1) (a), (b), (c) and (d)
(2) (a), (b) and (d)
(3) (a), (b) and (c)
4) (a) and (c)
 Question :-89 88

Which combination of the following methods indicates quantitative

methods of control of
credit creation practiced by the Reserve Bank of India ?
(a) Bank Rate
(b) Open Market Operations
(c) Variable Reserve Ratios
(d) Credit Rationing
Codes:
(1) (a), (b) and (c)
(2) (a). (b) and (d)
3) (b). (C) and (d)
4 (a). (C) and (d)
 Question :-90 89

Read the following statements and choose the correct code

Statement I .Small Industry Development Bank of India (SIDBI) was set
up as a wholly owned subsidiary of RBI
Statement -II: SIDBI has taken over the responsibility of administering
small industry development fund managed by IDBI
Codes:
1.Only (I) is correct.
2.only (2) is correct.
3.Both (1) and (11) are wrong.
4.Both (I) and (II) are correct.
 Question :-91 90

Which of the following are the instruments of money

market ?
(1) Call money market
ii) Commercial bill market
(iii) Industrial securities market
(iv) Short-term loans market
(V)Treasury bill market
1.1,2,4,5
2.1,2,4
3.1,2,3,4,5
4.1,2,3,4
 Question :-92 91

How many banks were nationalized in India on 15th April 1980 ?

4 5 6 8

Six Indian banks were nationalized on 15th April 1980. Nationalization is the transfer of
ownership and management of an undertaking from private hands to the states. Banks
were nationalized in India through an ordinance passed in the year 1969. Indira Gandhi
was the prime minister who nationalized banks in India.

The first nationalization of banks took place on 19th July 1969. 14 banks were
nationalized in 1969. It was based on the banks whose deposit exceeds Rs. 50 crores.

The second time government nationalized banks on 15th April 1980. 6 banks were
nationalized in 1980. It was based on the banks whose deposit exceeds Rs. 200 crores.

After the merger of many banks, currently there are a total of 12 public sector banks in
India including the State Bank of India (based on the RBI official website).
 Question :-93 92

At present how many stock exchanges are listed in Securities and Exchange Board of India (SEBI)?
20
10
9
15

At present, there are 9 SEBI listed stock exchanges. Name of all 9 Stock Exchanges listed with
SEBI:
1.Calcutta Stock Exchange Ltd.
2.India International Exchange (India INX)
3.Indian Commodity Exchange Limited
4.Metropolitan Stock Exchange of India Ltd.
5.Multi Commodity Exchange of India Ltd.
6.National Commodity & Derivatives Exchange Ltd.
7.National Stock Exchange of India Ltd.
8.NSE IFSC Ltd.
9.BSE Ltd.
SEBI is the regulator for the security market in India. It was established in 1988 and was given
statutory powers in 1992 through SEBI Act, 1992. SEBI’s present chairman is Ajay Tyagi.
 Question :-94 93

Which agency acts as a regulator for Mutual Funds?

1.IRDA
2.SEBI
3.RBI
4.DRI

Securities and Exchange Board of India is the regulatory authority of Mutual Funds
in India.

It has introduced several measures and policies to protect the interest of

investors.

SEBI (Mutual Funds) Regulations, 1996 have been issues to set the uniform
standards for mutual funds in India. All the mutual funds have to be registered with
SEBI.

SEBI was established on 12 April 1988 and provided statutory status on 30 January
1992 through SEBI Act 1992. Headquarters: Mumbai Chairperson: Ajay Tyagi
 Question :-95 94

Which institution regulates the insurance sector in India?

1.DFHI
2.SEBI
3.IRDA
4.LIC

“The Insurance Regulatory and Development Authority” (IRDA) regulates the

insurance sector in India.

It is a national agency and was formed in 1999.

It is situated in Hyderabad.

Subash Chandra Khuntia is the Chairman of IRDA.

 Question :-96 95

External drains leave which type of impact on commercial bank ?

1.Lowers the reserves of bank

2.Increases further deposits
3.Increases credit creation
4.Creates demand deposits

External drains refer to the withdrawal of cash from

the banking system by the public. It lowers the reserve
of the banks and limits credit creation. This is one of
the limitations of credit creation that the banks face.
 Question :-97 96

Which of the following is considered as a Non-Banking Financial Company (NBFC)?

1.Equipment Leasing Company
2.Hire purchase company
3.Loan company
4.All of Above

NBFCs provide a range of financial services to their clients. Types of services under Non-Banking
Financial services include the following :
1.Hire purchase services
2.Leasing services
3.Housing finance services
4.Asset management services
5.Venture capital services
6.Mutual benefit finance services (Nidhi) banks.
They are not incorporated as a bank and are not governed by provisions of the Banking Regulation
Act, 1949. The Reserve Bank of India is responsible for controlling the functioning of NBFCs. It is
mandatory for an NBFC to get itself registered with the RBI as a deposit-taking company. For
registration, they need to be a company (incorporated under the Companies Act, 1956) and should
have a minimum NOF (Net Owned Fund) of rupees 2 crores.
 Question :-98 97

The regulatory authority for Regional Rural Banks is_____________

1.NABARD
2.Sponsoring bank
3.State government, Central government and Sponsoring bank in the ratio of 15 : 50 : 35
4.All of the above

The regulatory authority for Regional Rural Bank in India is NABARD.

Under the provisions of an Ordinance passed on 26 September 1975 and the RRB Act
1976.
About RRB On the recommendations of the Narsimha Committee on Rural Credit, the
Regional Rural Banks were created.

In consultation with NABARD and the sponsor banks, the central government decides on
the functioning of the RRBs. A Public Sector Bank sponsors each Regional Rural Bank.

NABARD- Headquarter- Mumbai Formed- 12 July 1982

Chairman- Govind Rajulu Chintala

 Question :-99 98

Which among the following is the oldest public sector bank in India?
1.Bank of India
2.Bank of Baroda
3.Allahabad Bank
4.UCO Bank Answer

(Allahabad Bank (nationalized bank) is the oldest joint stock bank in India. It was founded
in Allahabad in 1865 and its headquarters in Kolkata, India.

Bank of India Mumbai 7 September 1906

Bank of Baroda Vadodara, Gujarat 20 July 1908
UCO Bank Kolkata 6 January 1943
Punjab National Bank New Delhi 12 April 1894
Union Bank of India Mumbai 11 November 1919
 Question :-100 99

Which of the following is NOT a nationalized bank?

1.Punjab and Sind Bank
2.Punjab National Bank
3.United Bank of India
4.State Bank of India

The nationalization of banks began on July 19, 1969, during the tenure of Indira Gandhi. The whole
process took place in two phases. In 1969, 14 Private Sector Banks were nationalized that
accounted for around 80% of the money deposited in banks.

Then in 1980, another 6 banks were nationalized.

State Bank of India: The merger of Bank of Calcutta, Bank of Madras and Bank of Bombay in 1921
laid the foundation of Imperial Bank of India. In 1955 after the enactment of the State Bank of India
Act Imperial Bank was renamed as State Bank of India (SBI). Its 60% stake was bought by RBI and
SBI came under the control of the Government as Public Sector Undertaking. In 1969, SBI was
already under the control of the government hence there was no need to nationalize it. Therefore,
although SBI is a Public Sector Bank but is not included in the list of nationalized banks. Currently,
SBI is headquartered in Mumbai. *Industrial Development Bank of India (IDBI) is another Public
Sector Bank that is not nationalized.
 100

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