Which RBI initiative promotes cross-border payment transactions through blockchain technology?
Answer: C
RBI's e-Rupee (Digital Rupee) project explores Central Bank Digital Currency (CBDC) for domestic and cross-border transactions.
Q.342Hard
What is the reverse repo rate primarily used for in RBI's monetary policy operations?
Answer: A
The reverse repo rate is the interest rate at which RBI borrows from banks to absorb excess liquidity from the financial system.
Q.343Easy
Which regulatory body oversees the functioning of Non-Banking Financial Companies (NBFCs) in India?
Answer: B
The Reserve Bank of India (RBI) is responsible for regulating and supervising NBFCs. SEBI oversees capital markets, IRDA handles insurance, and PFRDA manages pension funds.
Q.344Medium
What does the Basel III framework primarily focus on?
Answer: B
Basel III is an international regulatory framework that aims to strengthen bank capital adequacy, stress testing, and market liquidity risk. It was developed post-2008 financial crisis to prevent systemic risks.
Q.345Medium
Under the RBI's regulatory framework, what is the minimum Statutory Liquidity Ratio (SLR) that banks must maintain?
Answer: B
As per RBI guidelines (2024-2025), the statutory minimum SLR is 18% of net demand and time liabilities. This ensures banks maintain sufficient liquid assets.
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Q.346Medium
Which of the following best describes a 'repo transaction' in banking?
Answer: A
A repo (repurchase agreement) is a short-term borrowing instrument where a seller sells securities with an agreement to repurchase them at a higher price. It's a key liquidity management tool for banks.
Q.347Easy
What is the primary purpose of Know Your Customer (KYC) norms in banking?
Answer: B
KYC norms are essential anti-money laundering (AML) measures that require banks to verify customer identity and monitor transactions to prevent financial crimes and terrorism financing.
Q.348Medium
Which RBI initiative aims to facilitate real-time, 724 interbank fund transfers?
Answer: C
UPI allows real-time, 724 peer-to-peer and peer-to-merchant fund transfers. While RTGS is real-time for bulk transfers and NEFT/IMPS have specific timings, UPI provides true round-the-clock service.
Q.349Hard
What does the term 'haircut' mean in the context of banking and securities?
Answer: A
A haircut is a percentage discount applied to the market value of collateral to account for potential market volatility and protect the lender. For example, if a security worth Rs. 100 has a 10% haircut, it's valued at Rs. 90.
Q.350Easy
Which of the following is a core function of the Deposit Insurance and Credit Guarantee Corporation (DICGC)?
Answer: B
DICGC protects depositors by insuring their bank deposits up to Rs. 5 lakh per depositor per bank. This encourages public confidence in the banking system.
Q.351Medium
What is the primary feature of a 'Floating Rate Savings Account' offered by banks?
Answer: B
Floating rate accounts have interest rates that fluctuate based on changes in the RBI's benchmark rates or market conditions, unlike fixed-rate accounts where the rate remains constant.
Q.352Medium
Under the Payment and Settlement Systems Act, 2007, which institution is authorized to regulate payment systems in India?
Answer: B
The RBI has been vested with authority under the Payment and Settlement Systems Act, 2007, to regulate and supervise all payment and settlement systems in India.
Q.353Hard
Which of the following ratios measures a bank's profitability relative to its total assets?
Answer: A
ROA (Return on Assets) measures net income as a percentage of total assets, indicating how efficiently a bank uses its assets to generate profits. Higher ROA indicates better profitability.
Q.354Hard
What is the significance of the 'Marginal Standing Facility (MSF)' in RBI's monetary policy?
Answer: B
MSF is an overnight borrowing facility for banks available at a penal rate (typically 100-200 bps above the repo rate) to manage temporary liquidity mismatches. It forms the upper end of the RBI's interest rate corridor.
Q.355Medium
Which digital payment system, launched by RBI and NPCI, is designed specifically for merchants?
Answer: B
BHIM (Bharat Interface for Money) is an RBI-NPCI initiative providing a simple, secure digital payment platform accessible to all, with merchant-specific QR code features for business transactions.
Q.356Hard
Under Pillar 2 of Basel III, what is primarily assessed?
Answer: B
Pillar 2 of Basel III involves supervisory review, where regulators assess banks' internal capital adequacy processes, stress testing mechanisms, and risk management frameworks.
Q.357Medium
What is the primary objective of a 'Priority Sector Lending' mandate for banks?
Answer: B
Priority Sector Lending (PSL) ensures banks allocate a certain percentage of advances to underserved sectors including agriculture, SMEs, and low-income housing, promoting inclusive growth.
Q.358Medium
Which of the following is a characteristic of 'Cryptocurrency' that distinguishes it from fiat currency?
Answer: B
Cryptocurrencies use blockchain technology for decentralized, peer-to-peer transactions without central bank control. They operate on distributed ledger technology ensuring transparency and security.
Q.359Hard
Under the RBI's Liquidity Coverage Ratio (LCR) requirement, what percentage of high-quality liquid assets must banks maintain?
Answer: D
As per Basel III, the LCR requirement mandates that banks maintain high-quality liquid assets at least equal to 100% of their net cash outflows over 30 days under stress scenarios.
Q.360Hard
What does the 'Net Interest Margin (NIM)' indicate in a bank's financial analysis?
Answer: A
NIM is calculated as (Interest Income - Interest Expenses) / Average Earning Assets. It measures the bank's core profitability from lending and borrowing operations, crucial for assessing operational efficiency.
