Q.51
Hard
What does the term 'Liquidity Coverage Ratio (LCR)' measure?
A
The ability of a bank to meet its short-term obligations
B
The ratio of total assets to total liabilities
C
The percentage of non-performing assets
D
The profitability of a bank
Correct Answer:
A. The ability of a bank to meet its short-term obligations
Explanation:
LCR under Basel III measures a bank's ability to survive a severe liquidity stress scenario lasting 30 days by maintaining sufficient high-quality liquid assets.
Q.52
Hard
Which act governs the functioning of cooperative banks in India?
A
Banking Regulation Act, 1949
B
State Cooperative Societies Act
C
Multi-State Cooperative Societies Act, 2002
D
All of the above
Correct Answer:
D. All of the above
Explanation:
Cooperative banks are governed by the Banking Regulation Act 1949, State Cooperative Societies Acts, and the Multi-State Cooperative Societies Act 2002.
Q.53
Hard
What is the maximum tenure for which RBI issues Treasury Bills?
A
30 days to 90 days
B
90 days to 180 days
C
30 days to 364 days
D
180 days to 1 year
Correct Answer:
C. 30 days to 364 days
Explanation:
RBI issues Treasury Bills with a maximum tenure of 364 days. T-Bills are issued at 14-day, 91-day, 182-day, and 364-day intervals.
Q.54
Hard
Which international regulatory framework prescribes capital adequacy standards for banks?
A
Basel I
B
Basel II
C
Basel III
D
All of the above
Correct Answer:
D. All of the above
Explanation:
Basel I, II, and III are progressive international regulatory frameworks for capital adequacy. Currently, Basel III is the most advanced framework.
Q.55
Hard
What is the significance of the Marginal Standing Facility (MSF) rate in RBI's monetary policy?
A
It is the minimum lending rate for banks
B
It is the rate at which banks can borrow from RBI against approved securities
C
It is the rate paid on savings accounts
D
It is the maximum deposit interest rate
Correct Answer:
B. It is the rate at which banks can borrow from RBI against approved securities
Explanation:
MSF is the rate at which scheduled commercial banks can borrow from RBI against approved securities for short-term liquidity needs.
Q.56
Hard
Under Basel III norms, what is the additional capital buffer (Countercyclical Buffer) requirement during periods of excessive credit growth?
A
0.625% to 2.5%
B
1% to 3%
C
0.5% to 1.5%
D
2% to 4%
Correct Answer:
A. 0.625% to 2.5%
Explanation:
Basel III prescribes a Countercyclical Buffer ranging from 0.625% to 2.5% of risk-weighted assets during credit booms.
Q.57
Hard
Which RBI scheme allows banks to lend against government securities as collateral?
A
Liquidity Coverage Ratio (LCR)
B
Marginal Standing Facility (MSF)
C
Securities borrowing and lending scheme
D
Open Market Operations (OMO)
Correct Answer:
C. Securities borrowing and lending scheme
Explanation:
Securities borrowing and lending allows banks to manage their security portfolios by borrowing/lending government securities.
Q.58
Hard
Which of the following banks is NOT part of the RBI's core supervisory framework as a Systemically Important Bank (SIB)?
A
ICICI Bank
B
HDFC Bank
C
Regional Rural Bank
D
Axis Bank
Correct Answer:
C. Regional Rural Bank
Explanation:
Regional Rural Banks are not classified as SIBs; only major private and public banks meeting size criteria are designated as SIBs.
Q.59
Hard
Which regulatory framework governs cross-border rupee transactions in India?
A
LIBOR Framework
B
Liberalized Remittance Scheme (LRS)
C
Foreign Exchange Management Act (FEMA) and RBI guidelines
D
International Monetary Fund (IMF) protocols
Correct Answer:
C. Foreign Exchange Management Act (FEMA) and RBI guidelines
Explanation:
Cross-border rupee transactions are regulated under FEMA and specific RBI guidelines for internationalization of rupee.
Q.60
Hard
In terms of banking operations, what does 'Clean Demand Draft' mean?
A
A demand draft issued without any encumbrances
B
A demand draft not backed by merchandise or documents
C
A demand draft issued in clean currency notes
D
A demand draft with no crossing marks
Correct Answer:
B. A demand draft not backed by merchandise or documents
Explanation:
A clean demand draft is one that is not drawn against any trade documents or merchandise, issued purely as credit.
