Which committee was constituted to review the regulation of shadow banking in India?
Answer: D
The Nayak Committee (2013) examined shadow banking entities and recommended a regulatory framework for NBFCs engaged in banking activities.
Q.42Hard
Which act governs the regulation of microfinance institutions in India?
Answer: A
The Microfinance Institutions (Development and Regulation) Act, 2006 specifically regulates MFIs, focusing on transparency and consumer protection.
Q.43Hard
What is the primary role of the Financial Stability and Development Council (FSDC)?
Answer: B
FSDC, chaired by the Finance Minister, coordinates between RBI, SEBI, IRDA, and other financial regulators to ensure financial stability.
Q.44Hard
Which framework governs Systemically Important Non-Banking Financial Companies (Si-NBFCs)?
Answer: C
RBI has a dedicated regulatory framework for NBFCs, with stricter norms for Si-NBFCs to maintain systemic stability.
Q.45Hard
Which of the following is a Tier 1 capital component for banks?
Answer: B
Common Equity Tier 1 (CET1), consisting of paid-up capital and retained earnings, is the highest quality Tier 1 capital.
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Q.46Hard
Which international agreement sets standards for combating financial crime and terrorism financing?
Answer: B
FATF recommendations are international standards for combating money laundering and terrorism financing.
Q.47Hard
Which of the following banks is the oldest operating bank in India?
Answer: A
Bank of India, established in 1906, is one of the oldest operating banks. State Bank of India traces back to 1806 through Imperial Bank.
Q.48Hard
Which of the following is a characteristic of Tier-2 capital for banks?
Answer: B
Tier-2 capital includes subordinated debt, revaluation reserves, and general loan loss provisions. It supplements Tier-1 capital for meeting capital requirements.
Q.49Hard
Which international standard governs anti-money laundering and counter-terrorist financing?
Answer: B
The Financial Action Task Force (FATF) establishes international standards for combating money laundering and terrorist financing. India complies with FATF recommendations.
Q.50Hard
Under Basel III norms, what is the minimum Common Equity Tier-1 (CET-1) ratio requirement for banks?
Answer: A
Basel III prescribes a minimum CET-1 ratio of 4.5% of risk-weighted assets. India has implemented Basel III norms with additional conservation buffers.
Q.51Hard
What does the term 'Liquidity Coverage Ratio (LCR)' measure?
Answer: A
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.52Hard
Which act governs the functioning of cooperative banks in India?
Answer: D
Cooperative banks are governed by the Banking Regulation Act 1949, State Cooperative Societies Acts, and the Multi-State Cooperative Societies Act 2002.
Q.53Hard
What is the maximum tenure for which RBI issues Treasury Bills?
Answer: C
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.54Hard
Which international regulatory framework prescribes capital adequacy standards for banks?
Answer: D
Basel I, II, and III are progressive international regulatory frameworks for capital adequacy. Currently, Basel III is the most advanced framework.
Q.55Hard
What is the significance of the Marginal Standing Facility (MSF) rate in RBI's monetary policy?
Answer: B
MSF is the rate at which scheduled commercial banks can borrow from RBI against approved securities for short-term liquidity needs.
Q.56Hard
Under Basel III norms, what is the additional capital buffer (Countercyclical Buffer) requirement during periods of excessive credit growth?
Answer: A
Basel III prescribes a Countercyclical Buffer ranging from 0.625% to 2.5% of risk-weighted assets during credit booms.
Q.57Hard
Which RBI scheme allows banks to lend against government securities as collateral?
Answer: C
Securities borrowing and lending allows banks to manage their security portfolios by borrowing/lending government securities.
Q.58Hard
Which of the following banks is NOT part of the RBI's core supervisory framework as a Systemically Important Bank (SIB)?
Answer: C
Regional Rural Banks are not classified as SIBs; only major private and public banks meeting size criteria are designated as SIBs.
Q.59Hard
Which regulatory framework governs cross-border rupee transactions in India?
Answer: C
Cross-border rupee transactions are regulated under FEMA and specific RBI guidelines for internationalization of rupee.
Q.60Hard
In terms of banking operations, what does 'Clean Demand Draft' mean?
Answer: B
A clean demand draft is one that is not drawn against any trade documents or merchandise, issued purely as credit.
