Under Priority Sector Lending (PSL) norms, what is the minimum percentage of credit that Scheduled Commercial Banks must allocate to agriculture?
Answer: C
RBI's PSL guidelines mandate a minimum 18% of Adjusted Net Bank Credit (ANBC) to agriculture, with 8% to small and marginal farmers.
Q.169Medium
A bank's Cost-to-Income ratio decreased from 48% to 43%. Which statement is correct?
Answer: B
A lower Cost-to-Income ratio indicates better operational efficiency. The bank generates more income per unit of cost, suggesting improved profitability.
Q.170Medium
Under RBI's Asset Classification framework, a loan becomes NPA if it remains overdue for how many days?
Answer: C
As per RBI's 2015 norms, any loan with outstanding principal or interest remaining unpaid for 90 days (3 months) is classified as NPA.
Q.171Medium
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?
Answer: A
LTD Ratio = (Total Loans / Total Deposits) × 100. Therefore, Total Loans = (10078) × 5,00,000 = ₹3,90,000 crore
Q.172Hard
Which RBI tool is used to control inflation by reducing money supply in the economy?
Answer: A
OMO sales of securities reduce liquidity and money supply. CRR reduction increases liquidity. QE and reverse repo rate cuts are expansionary measures.
Q.173Hard
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 bank's Provision Coverage Ratio (PCR) is 65%. Which interpretation is accurate?
Answer: B
PCR = (Total Provisions / Gross NPA) × 100. A 65% PCR means the bank has made provisions equivalent to 65% of its gross NPA.
Q.175Hard
Under Basel III, what is the total Capital Conservation Buffer (CCB) and Countercyclical Buffer (CCyB) combined requirement for Indian banks?
Answer: B
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.
Q.176Hard
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?
Answer: D
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.
Q.177Easy
Which of the following is NOT a function of the Reserve Bank of India?
Answer: C
RBI does not directly lend to retail customers. Its primary functions include currency issuance, forex management, and monetary policy implementation through banking channels.
Q.178Easy
What is the current repo rate set by RBI as of 2024?
Answer: B
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.
Q.179Easy
Which bank is the 'Banker to the Government' of India?
Answer: B
RBI serves as the Banker to the Government of India, managing government accounts, treasury operations, and public debt.
Q.180Easy
What does NEFT stand for in banking?
Answer: A
NEFT (National Electronic Funds Transfer) is an electronic fund transfer system in India for transferring funds between banks.
