Question 1

What is the Cash Reserve Ratio (CRR) primarily used for by the RBI?

Accepted Answer

CRR is a monetary policy tool used by RBI to control money supply in the economy by requiring banks to maintain a certain percentage of deposits as cash reserves.

Question 2

What is the Cash Reserve Ratio (CRR) that commercial banks must maintain with the RBI?

Accepted Answer

CRR is the percentage of deposits that banks must hold as cash reserves with the RBI. As of 2024, the CRR stands at 4.5% of Net Demand and Time Liabilities (NDTL).

Question 3

Which of the following best describes the difference between a Bank and a Non-Banking Financial Company (NBFC)?

Accepted Answer

Banks are regulated entities that can accept deposits and provide credit; NBFCs provide financial services but cannot accept demand deposits and are regulated differently by RBI.

Question 4

What is the Pradhan Mantri Jan Dhan Yojana (PMJDY) primarily designed to achieve?

Accepted Answer

PMJDY, launched in 2014, is a financial inclusion scheme aimed at providing universal access to banking services, particularly for the unbanked and underbanked population.

Question 5

Which of the following is the primary function of the Reserve Bank of India (RBI)?

Accepted Answer

The RBI, established in 1935 and nationalized in 1951, serves as India's central bank with the primary function of monetary policy implementation, banking regulation, and currency management.

Question 6

Which of the following is the primary function of the Reserve Bank of India (RBI)?

Accepted Answer

The RBI, established in 1935 and nationalized in 1951, is the central bank of India responsible for monetary policy, currency management, and banking regulation.

Question 7

Under which ministry is the Pradhan Mantri MUDRA Yojana (PMMY) implemented?

Accepted Answer

PMMY, launched in 2015, is implemented by the Ministry of Micro, Small and Medium Enterprises (MSME) in collaboration with banks and financial institutions.

Question 8

What is the primary purpose of the Statutory Liquidity Ratio (SLR) requirement imposed by the RBI on banks?

Accepted Answer

SLR is the percentage of deposits that banks must invest in government securities and other approved securities. It ensures banks maintain adequate liquid assets and supports government borrowing.

Question 9

Which of the following is the primary objective of the Pradhan Mantri Jan Dhan Yojana (PMJDY)?

Accepted Answer

PMJDY was launched in 2014 to provide universal access to banking services, with a focus on financial inclusion of the unbanked population through zero-balance savings accounts.

Question 10

Under which ministry is the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme implemented?

Accepted Answer

PM-KISAN is a direct income support scheme for farmers launched in 2019. It is implemented under the Ministry of Agriculture & Farmers Welfare.

Question 11

Which ministry is responsible for the implementation of the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme?

Accepted Answer

PM-KISAN is a central sector scheme launched in 2019 to provide direct income support to farmers. It is implemented by the Ministry of Agriculture & Farmers Welfare.

Question 12

The Pradhan Mantri MUDRA Yojana was launched in which year?

Accepted Answer

PM MUDRA Yojana was launched on 8 April 2015 to provide collateral-free and documentation-light loans to non-corporate, non-farm small/micro enterprises.

Question 13

Which of the following is the primary function of the Reverse Repo Rate set by the RBI?

Accepted Answer

The Reverse Repo Rate is the rate at which the RBI borrows money from commercial banks. It is used as a tool to absorb liquidity from the banking system when there is excess money in circulation.

Question 14

Which of the following is NOT a function of Non-Banking Financial Companies (NBFCs) in India?

Accepted Answer

NBFCs are financial institutions that provide banking services but are not licensed as banks. They cannot accept demand deposits (current/savings accounts) or issue cheques.

Question 15

In the context of RBI's monetary policy, the Reverse Repo Rate is best described as:

Accepted Answer

The Reverse Repo Rate is the rate at which the RBI borrows money from commercial banks, typically lower than the Repo Rate.

Question 16

Which of the following is the primary function of the Statutory Liquidity Ratio (SLR) as mandated by the Reserve Bank of India?

Accepted Answer

The SLR is a monetary policy tool used by the RBI to control the money supply in the economy and ensure the solvency of commercial banks.

Question 17

Which of the following is the primary objective of the Pradhan Mantri Jan Dhan Yojana (PMJDY)?

Accepted Answer

PMJDY was launched in 2014 to provide universal access to banking services, with a focus on financial inclusion of the unbanked and underbanked population.

Question 18

The Pradhan Mantri MUDRA Yojana was launched to provide collateral-free loans to which sector?

Accepted Answer

MUDRA Yojana (2015) specifically targets micro, small, and medium enterprises (MSMEs) and self-employed individuals who lack collateral.

Question 19

As per RBI guidelines, the Cash Reserve Ratio (CRR) is the percentage of deposits that commercial banks must maintain as reserves with the RBI. Which of the following best describes the purpose of CRR?

Accepted Answer

CRR is a monetary policy tool used by RBI to control liquidity and inflation in the economy.

Question 20

The Statutory Liquidity Ratio (SLR) requires commercial banks to maintain a certain percentage of their net demand and time liabilities in which form?

Accepted Answer

SLR mandates banks to hold liquid assets in the form of government securities, cash, and gold—not just cash like CRR.

AFCAT RBI, Banks & NBFC

RBI, Banks & NBFC — Practice Questions