Central Govt Exam Preparation — SSC, UPSC, Bank, Railway

Q.171 Medium

A bank's Loan-to-Deposit (LTD) ratio is 78%. If total deposits are ₹5,00,000 crore, what are the total loans and advances?

A ₹3,90,000 crore

B ₹3,50,000 crore

C ₹4,20,000 crore

D ₹4,50,000 crore

Correct Answer: A. ₹3,90,000 crore

Explanation:

LTD Ratio = (Total Loans / Total Deposits) × 100. Therefore, Total Loans = (78/100) × 5,00,000 = ₹3,90,000 crore

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Q.172 Hard

Which RBI tool is used to control inflation by reducing money supply in the economy?

A Open Market Operations (OMO) - sale of securities

B Reduction in Cash Reserve Ratio (CRR)

C Quantitative Easing (QE)

D Increase in Reserve Repo Rate

Correct Answer: A. Open Market Operations (OMO) - sale of securities

Explanation:

OMO sales of securities reduce liquidity and money supply. CRR reduction increases liquidity. QE and reverse repo rate cuts are expansionary measures.

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Q.173 Hard

A bank receives deposits of ₹10 lakh with a CRR of 4% and SLR of 18%. What is the maximum amount the bank can lend?

A ₹7.8 lakh

B ₹8.0 lakh

C ₹7.2 lakh

D ₹6.8 lakh

Correct Answer: A. ₹7.8 lakh

Explanation:

CRR requirement = 4% of ₹10 lakh = ₹0.4 lakh. SLR requirement = 18% of ₹10 lakh = ₹1.8 lakh. Maximum lending = ₹10 lakh - ₹0.4 lakh - ₹1.8 lakh = ₹7.8 lakh

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Q.174 Hard

A bank's Provision Coverage Ratio (PCR) is 65%. Which interpretation is accurate?

A The bank has recovered 65% of NPA

B 65% of Gross NPA is covered by provisions made by the bank

C The bank's profitability margin is 65%

D The bank maintains 65% capital adequacy

Correct Answer: B. 65% of Gross NPA is covered by provisions made by the bank

Explanation:

PCR = (Total Provisions / Gross NPA) × 100. A 65% PCR means the bank has made provisions equivalent to 65% of its gross NPA.

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Q.175 Hard

Under Basel III, what is the total Capital Conservation Buffer (CCB) and Countercyclical Buffer (CCyB) combined requirement for Indian banks?

A 2.5%

B 3.5%

C 4.5%

D 5.5%

Correct Answer: B. 3.5%

Explanation:

Basel III mandates CCB of 2.5% and CCyB up to 1% (currently 0%), making the combined requirement up to 3.5%. This is over and above the minimum CAR.

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Q.176 Hard

RBI's recent data shows that banks' Aggregate Deposits grew at 10.2% while Aggregate Advances grew at 14.8% in FY2024. What does this indicate?

A Banks are becoming less risky

B Credit growth is outpacing deposit growth, requiring banks to rely more on other funding sources

C Deposits are becoming more expensive relative to advances

D Both B and C are correct

Correct Answer: D. Both B and C are correct

Explanation:

Faster advance growth than deposit growth indicates banks must source funds from market borrowings, wholesale deposits, or other expensive channels, impacting profitability and liquidity management.

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Q.177 Easy General Awareness

Which of the following is NOT a function of the Reserve Bank of India?

A Issuing currency notes

B Managing foreign exchange reserves

C Direct lending to retail customers

D Implementing monetary policy

Correct Answer: C. Direct lending to retail customers

Explanation:

RBI does not directly lend to retail customers. Its primary functions include currency issuance, forex management, and monetary policy implementation through banking channels.

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Q.178 Easy General Awareness

What is the current repo rate set by RBI as of 2024?

A 5.5%

B 6.5%

C 4.5%

D 7.0%

Correct Answer: B. 6.5%

Explanation:

As per RBI's latest monetary policy in 2024, the repo rate stands at 6.5%. This is the rate at which RBI lends to commercial banks.

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Q.179 Easy General Awareness

Which bank is the 'Banker to the Government' of India?

A State Bank of India

B Reserve Bank of India

C HDFC Bank

D ICICI Bank

Correct Answer: B. Reserve Bank of India

Explanation:

RBI serves as the Banker to the Government of India, managing government accounts, treasury operations, and public debt.

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Q.180 Easy General Awareness

What does NEFT stand for in banking?

A National Electronic Funds Transfer

B New Electronic Financial Transaction

C National Exchange Financial Transaction

D National Electronic Financial Terminal

Correct Answer: A. National Electronic Funds Transfer

Explanation:

NEFT (National Electronic Funds Transfer) is an electronic fund transfer system in India for transferring funds between banks.

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