Money and Banking
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Question No. 1
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Liquidity Coverage Ratio (LCR) under Basel III requires banks to hold:
A.
High quality liquid assets for 15 days
B.
High quality liquid assets for 30 days
C.
High quality liquid assets for 90 days
D.
High quality liquid assets for 60 days
Question No. 2
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Insolvency and Bankruptcy Code (IBC) aims to:
A.
Promote financial inclusion
B.
Expedite resolution of stressed assets
C.
Increase bank profits
D.
Reduce government stake
Question No. 3
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The 4Rs strategy for banking sector reforms includes:
A.
Revenue, Reserves, Regulations, Reporting
B.
Recognition, Resolution, Recapitalization, Reforms
C.
Risk management, Returns, Reserves, Ratios
D.
Regulation, Recovery, Restructuring, Reporting
Question No. 4
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Asset Reconstruction Company (ARC) primarily deals with:
A.
Foreign exchange
B.
Good performing assets
C.
Non-performing assets
D.
Government securities
Question No. 5
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Monetary Policy Committee (MPC) in India has:
A.
8 members
B.
7 members
C.
5 members
D.
6 members
Question No. 6
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The 'double coincidence of wants' problem is solved by money functioning as:
A.
Store of value
B.
Medium of exchange
C.
Unit of account
D.
Standard of deferred payment
Question No. 7
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Reverse repo rate is used by RBI to:
A.
Inject liquidity
B.
Absorb excess liquidity
C.
Control inflation directly
D.
Regulate bank licensing
Question No. 8
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NBFCs are regulated by:
A.
RBI
B.
SEBI
C.
IRDAI
D.
Ministry of Finance
Question No. 9
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Cost-push inflation is primarily caused by:
A.
Rise in production costs
B.
Increase in consumer demand
C.
Lower interest rates
D.
Decrease in taxes
Question No. 10
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Export-Import Bank of India (EXIM Bank) primarily provides:
A.
Trade financing
B.
Housing loans
C.
Agricultural credit
D.
Retail banking
Question No. 11
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Minimum Net Owned Fund (NOF) required for NBFC registration is:
A.
₹5 crores
B.
₹1 crore
C.
₹10 crores
D.
₹2 crores
Question No. 12
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Working capital financing by banks is typically:
A.
Short-term credit
B.
Long-term credit
C.
Medium-term credit
D.
Permanent financing
Question No. 13
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Which is NOT a type of NBFC?
A.
Foreign Trade Company
B.
Loan Company
C.
Asset Finance Company
D.
Investment Company
Question No. 14
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If money velocity increases while money supply remains constant, what happens to nominal GDP?
A.
Increases
B.
Becomes unpredictable
C.
Remains constant
D.
Decreases
Question No. 15
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Under which act are NBFCs incorporated?
A.
RBI Act, 1934
B.
Banking Regulation Act, 1949
C.
Companies Act, 2013
D.
NBFC Act, 1956
Question No. 16
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Which monetary policy tool is most effective during liquidity trap?
A.
Quantitative easing
B.
Open market operations
C.
Reserve requirements
D.
Changing interest rates
Question No. 17
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Which of the following is NOT a primary function of money?
A.
Transfer of wealth
B.
Unit of account
C.
Medium of exchange
D.
Store of value
Question No. 18
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Which group is most negatively affected by inflation?
A.
Real estate owners
B.
Fixed income earners
C.
Borrowers
D.
Equity investors
Question No. 19
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The Narasimham Committee was related to:
A.
Banking sector reforms
B.
Insurance reforms
C.
Capital market reforms
D.
NBFC regulations
Question No. 20
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Commercial banks create credit through:
A.
Maintaining 100% reserves
B.
Investing in government securities
C.
Accepting demand deposits only
D.
Fractional reserve banking system
Question No. 21
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Stagflation refers to:
A.
Deflation with recession
B.
Low inflation with high growth
C.
High inflation with low unemployment
D.
High inflation with high unemployment
Question No. 22
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Payment and Settlement Systems Act was enacted in:
A.
2005
B.
2011
C.
2009
D.
2007
Question No. 23
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Asset Finance Company (AFC) must have at least ___% of assets in financing physical assets:
A.
50%
B.
70%
C.
60%
D.
75%
Question No. 24
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Narrow banking concept refers to:
A.
Banks with limited branch network
B.
Banks focusing on specific sectors
C.
Banks investing only in safe securities
D.
Small finance banks
Question No. 25
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UPI transactions in India are processed through:
A.
IMPS
B.
RTGS
C.
NPCI
D.
NEFT
Question No. 26
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Financial Stability and Development Council (FSDC) is headed by:
A.
RBI Governor
B.
Prime Minister
C.
Finance Minister
D.
Finance Secretary
Question No. 27
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Which factor limits credit creation by commercial banks?
A.
Interest rates
B.
Reserve requirements
C.
Bank profits
D.
Customer preferences
Question No. 28
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SARFAESI Act empowers banks to:
A.
Accept foreign deposits
B.
Issue credit cards
C.
Recover secured loans
D.
Merge with other banks
Question No. 29
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Prompt Corrective Action (PCA) framework applies to banks with:
A.
High NPAs
B.
Poor asset quality
C.
All of the above
D.
Low capital adequacy
Question No. 30
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Net Stable Funding Ratio (NSFR) under Basel III focuses on:
A.
Long-term funding stability
B.
Asset quality
C.
Short-term liquidity
D.
Capital adequacy
Question No. 31
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Financial inclusion index is measured on a scale of:
A.
0 to 10
B.
1 to 10
C.
0 to 100
D.
0 to 1
Question No. 32
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Inflation targeting framework in India targets CPI inflation at:
A.
5%
B.
2%
C.
3%
D.
4%
Question No. 33
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Basel III norms prescribe minimum Capital Adequacy Ratio of:
A.
6%
B.
12%
C.
8%
D.
10.5%
Question No. 34
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Demand-pull inflation occurs when:
A.
Government spending falls
B.
Aggregate demand exceeds aggregate supply
C.
Cost of production increases
D.
Money supply decreases
Question No. 35
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Priority Sector Lending target for domestic banks in India is:
A.
42%
B.
38%
C.
40%
D.
36%
Question No. 36
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NEFT system processes transactions:
A.
In real-time
B.
Once daily
C.
Twice daily
D.
In batches at hourly intervals
Question No. 37
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Central bank acts as 'lender of last resort' means:
A.
It regulates interest rates
B.
It lends to public directly
C.
It provides emergency funding to banks
D.
It controls money supply
Question No. 38
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Phillips Curve shows relationship between:
A.
Interest rates and investment
B.
Inflation and unemployment
C.
Growth and inflation
D.
Inflation and money supply
Question No. 39
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Under Basel III, Tier 1 capital requirement is:
A.
4.5%
B.
10.5%
C.
6%
D.
8%
Question No. 40
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Credit Information Companies in India are regulated by:
A.
IRDAI
B.
SEBI
C.
RBI
D.
NABARD
Question No. 41
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In the Indian money supply classification, M1 includes:
A.
Currency + Time deposits + Savings deposits
B.
Currency + Demand deposits + Other deposits with RBI
C.
Currency + Post office deposits
D.
Currency + Demand deposits + Time deposits
Question No. 42
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Financial Resolution and Deposit Insurance Bill aims to:
A.
Increase deposit insurance
B.
Resolve failing financial institutions
C.
Reduce banking competition
D.
Control interest rates
Question No. 43
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The primary objective of RBI's monetary policy is:
A.
Maximizing employment
B.
Exchange rate management
C.
Price stability
D.
Credit expansion
Question No. 44
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Bad Bank concept involves:
A.
Reducing bank branches
B.
Transferring bad assets to separate entity
C.
Closing failed banks
D.
Limiting bank licenses
Question No. 45
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RTGS system in India processes transactions above:
A.
₹1 lakh
B.
₹10 lakhs
C.
₹5 lakhs
D.
₹2 lakhs
Question No. 46
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Money multiplier is calculated as:
A.
Credit created ÷ Initial deposit
B.
1 ÷ Cash reserve ratio
C.
Total deposits ÷ Primary deposits
D.
Reserve ratio ÷ 1
Question No. 47
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Which component represents the 'narrow money' in India's monetary aggregates?
A.
M2
B.
M3
C.
M1
D.
M4
Question No. 48
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Headline inflation in India is measured by:
A.
Core inflation
B.
GDP deflator
C.
WPI
D.
CPI
Question No. 49
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Which is NOT included in Core inflation?
A.
Education
B.
Housing
C.
Clothing
D.
Food and beverages
Question No. 50
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The largest component of M3 money supply in India is:
A.
Demand deposits
B.
Time deposits
C.
Other deposits
D.
Currency with public
Question No. 51
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NBFCs cannot:
A.
Invest in securities
B.
Issue cheques
C.
Accept deposits
D.
Provide loans
Question No. 52
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Liquidity Adjustment Facility (LAF) corridor consists of:
A.
Repo and reverse repo rates
B.
Deposit and lending rates
C.
Bank rate and MSF
D.
CRR and SLR
Question No. 53
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Systemically Important NBFCs (NBFC-SI) have asset size of:
A.
₹1000 crores and above
B.
₹500 crores and above
C.
₹100 crores and above
D.
₹5000 crores and above
Question No. 54
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Repo rate is the rate at which:
A.
Banks lend to customers
B.
Banks lend to RBI
C.
RBI lends to banks
D.
Government borrows
Question No. 55
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Small Industries Development Bank of India (SIDBI) focuses on:
A.
Service sector
B.
Large industries
C.
Agricultural sector
D.
Micro, Small and Medium Enterprises
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