Banking sector - Inflation and RBI - MCQs with answers - Part 2
1. The base year to calculate CPI-AL isa. 1980-81
b. 1986-87
c. 2001-02
d. 2003-04
View Answer / Hide AnswerANSWER: b. 1986-87
The base year to calculate CPI-AL is 1986-87 and 260 items are included in the index.
a. 1980-81
b. 2001-02
c. 2003-04
d. 1984-85
View Answer / Hide AnswerANSWER: d. 1984-85
The base year to calculate CPI-UNME is 1984-85. 180 items are included in the index.
i. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: a. i only
Proportional reserve system has been replaced by minimum reserve system.
a. Banker to government
b. Regulation of foreign exchange
c. Collection and publication of data
d. None of the above
View Answer / Hide AnswerANSWER: d. None of the above
RBI performs central banking functions as well as development and promotional functions.
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments including J&K
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: d. none
RBI provides advice in all monetary matters including agriculture and industrial finance. RBI is obliged to transact business of central government and state governments excluding J&K.
i. RBI acts as clearing house for commercial banks.
ii. It also grants license for setting up banking operations
a. I only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: c. both
RBI is also responsible for regulating banks, directs their credit policies and provides advice to them.
a. SLR
b. CRR
c. OMO
d. Bank rate
View Answer / Hide AnswerANSWER: a. SLR
The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is called SLR.
a. SLR
b. CRR
c. OMO
d. Bank rate
View Answer / Hide AnswerANSWER: b. CRR
The percentage of demand and time liabilities that banks have to keep with RBI is called cash reserve ratio.
i. RBI is the custodian of foreign exchange reserves of the country.
ii. It also keeps the exchange rate of domestic currency at stable level.
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: c. both
RBI is responsible for transaction of the currencies of IMF countries.
a. Branch licenses and expansion
b. Supervision of assets and liabilities
c. Reconstruction and liquidity
d. None of the above
View Answer / Hide AnswerANSWER: d. None of the above
RBI has a set of supervisory functions too.
a. Banks should be ready to avail rediscounting facility from RBI
b. Banks should have adequate quantity of credit instruments that can be rediscounted
c. Banks do not have surplus cash and depend on RBI for extraordinary needs
d. All the above
View Answer / Hide AnswerANSWER: d. All the above
Bank rate is the rate at which banks can borrow from RBI when in need of funds.
a. Cash reserve ratio
b. Statutory liquidity ratio
c. Open market operations
d. None of the above
View Answer / Hide AnswerANSWER: c. Open market operations
CRR, SLR and OMO are various tools in the hands of RBI to influence money supply in the economy.
