Question 1

Which of the following best describes the concept of 'Financial Inclusion'?

Accepted Answer

Financial inclusion refers to the process of ensuring that individuals and businesses have access to useful and affordable financial products and services that meet their needs — transactions, payments, savings, credit, and insurance — delivered in a responsible and sustainable manner. It is about bringing the unbanked and underbanked population into the formal financial system. Therefore, answer is A.

Question 2

The Pradhan Mantri Mudra Yojana (PMMY) is designed to provide collateral-free loans to which category of borrowers?

Accepted Answer

The Pradhan Mantri Mudra Yojana (PMMY), launched on April 8, 2015, is a scheme to provide collateral-free loans to micro and small business enterprises and entrepreneurs. It covers loans up to ₹10 lakh for non-farm businesses and is aimed at supporting self-employed individuals and small business owners. Therefore, answer is B.

Question 3

Under the Pradhan Mantri Suraksha Bima Yojana (PMSBY), what is the maximum annual premium payable by the insured person?

Accepted Answer

The Pradhan Mantri Suraksha Bima Yojana (PMSBY), launched on May 28, 2015, is a personal accident insurance scheme. The maximum annual premium is ₹12 per annum per insured person, making it one of the most affordable insurance products in India. This premium is deducted from the bank account of the insured person on a yearly basis. Therefore, answer is C.

Question 4

Which RBI initiative aims to promote digital payments and reduce cash circulation in the economy?

Accepted Answer

The RBI has promoted digital payments through multiple initiatives including the Pradhan Mantri Digital India Corporation (PMDI), National Payments Corporation of India (NPCI) oversight, and regulatory frameworks for digital payment systems. However, the most direct RBI initiative for promoting digital payments and financial inclusion is the regulatory framework for Unified Payments Interface (UPI), Real-Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), and Immediate Payment Service (IMPS). The RBI's 'Vision 2021' and subsequent policy statements emphasize digital payments as a pillar of financial inclusion. Therefore, answer is C.

Question 5

Under the Pradhan Mantri Mudra Yojana (PMMY), what is the maximum loan amount that can be sanctioned under the 'Shishu' category?

Accepted Answer

The Pradhan Mantri Mudra Yojana (PMMY), launched on 8 April 2015, provides collateral-free loans to micro and small enterprises. The scheme is divided into three categories: Shishu (up to ₹50,000), Kishor (₹50,001 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh). The Shishu category targets first-time entrepreneurs and those in the startup phase. Therefore, answer is A.

Question 6

Which RBI scheme aims to promote digital payments and reduce cash circulation in the economy?

Accepted Answer

The RBI has promoted digital payments through multiple initiatives, most notably the Pradhan Mantri Digital India Corporation (PMDI) framework and the National Payments Corporation of India (NPCI) ecosystem. However, the most direct RBI scheme for promoting digital payments and financial inclusion is the Bharat Interface for Money (BHIM) app and the broader push for cashless transactions via NEFT, RTGS, IMPS, and UPI. The RBI's regulatory framework under the Payment and Settlement Systems Act, 2007, governs these digital payment systems. Therefore, answer is C.

Question 7

Under the Pradhan Mantri Suraksha Bima Yojana (PMSBY), what is the maximum insurance coverage amount provided to a beneficiary?

Accepted Answer

The Pradhan Mantri Suraksha Bima Yojana (PMSBY), launched on 1 June 2015, is an accident insurance scheme that provides insurance coverage in case of death or permanent disability due to accident. The maximum insurance coverage under PMSBY is ₹2 lakh for accidental death and ₹1 lakh for permanent disability. The annual premium is ₹12, which is deducted from the beneficiary's bank account. Therefore, answer is A.

Question 8

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

Accepted Answer

The Pradhan Mantri Jan Dhan Yojana, launched on 28 August 2014, is a national mission for financial inclusion aimed at ensuring access to financial services, namely banking/savings accounts, remittance, credit, insurance, and pension, for all households in the country. The scheme prioritizes opening zero-balance bank accounts for the unbanked population, particularly in rural and underserved urban areas. Therefore, answer is B.

Question 9

The Pradhan Mantri Fasal Bima Yojana (PMFBY) is primarily designed to provide insurance coverage for which of the following?

Accepted Answer

The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched on 13 January 2016, is a crop insurance scheme designed to provide insurance coverage to farmers against crop loss due to natural calamities, pests, and diseases. The scheme aims to stabilize farm income and promote agricultural sustainability. It is implemented through insurance companies and administered by the Ministry of Agriculture & Farmers Welfare in coordination with state governments. Therefore, answer is B.

Question 10

The Priority Sector Lending (PSL) target for Scheduled Commercial Banks (SCBs) is 40% of Adjusted Net Bank Credit (ANBC). Which of the following categories does NOT fall within the mandatory PSL definition as per RBI guidelines?

Accepted Answer

Priority Sector Lending under RBI guidelines includes: (1) Agriculture (18% sub-target), (2) Micro, Small & Medium Enterprises (MSME) (7.5% sub-target), (3) Education, (4) Housing (for low-income groups), (5) Export Credit, (6) Renewable Energy, and (7) Social Infrastructure. However, lending to large manufacturing enterprises for capital equipment purchase does NOT qualify as PSL unless they fall within the MSME definition (turnover-based). Large manufacturing is considered general commercial lending, not priority sector. Therefore, answer is D.

Question 11

Under the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the annual life insurance premium is ₹330. For which age group is PMSBY available, and what is the maximum sum assured?

Accepted Answer

The Pradhan Mantri Suraksha Bima Yojana (PMSBY), launched in May 2015, provides life insurance coverage of ₹2 lakh (sum assured). The annual premium is ₹330 per annum, deducted on May 1st every year (or the next working day). PMSBY is available to bank account holders aged 18–50 years. This is a companion scheme to PMJDY and is designed to provide life insurance coverage to economically vulnerable sections. Therefore, answer is C.

Question 12

Under the Pradhan Mantri Mudra Yojana (PMMY), the maximum loan amount for a 'Shishu' category loan is ₹50,000. Which of the following statements about PMMY loan categories is INCORRECT?

Accepted Answer

PMMY, launched in April 2015, has three loan categories: (1) Shishu: up to ₹50,000, (2) Kishore: ₹50,001 to ₹5 lakh, and (3) Tarun: ₹5 lakh to ₹10 lakh. All three categories are designed for non-farm small businesses and micro-enterprises. Shishu loans do NOT require collateral or third-party guarantee — this is a key feature to promote financial inclusion. However, the statement that 'Tarun loans are available only to existing MSME borrowers with a 3-year track record' is INCORRECT. Tarun loans are available to new entrepreneurs as well, though existing borrowers with good repayment history may have easier access. Therefore, answer is C.

Question 13

The Pradhan Mantri Jan Suraksha Bima Yojana (PMJSBY) provides accidental death and disability insurance. What is the annual premium for PMJSBY coverage, and on which date must the premium be deducted from the beneficiary's account?

Accepted Answer

The Pradhan Mantri Jan Suraksha Bima Yojana (PMJSBY), launched in May 2015, provides accidental death and disability insurance coverage of ₹2 lakh (₹1 lakh for accidental death, ₹1 lakh for permanent disability). The annual premium is ₹12 per annum, which is deducted on the 1st of June every year (or the next working day if June 1st is a holiday). This is a companion scheme to PMJDY and is available to all bank account holders aged 18–70 years. Therefore, answer is B.

Question 14

Under the Pradhan Mantri Jan Dhan Yojana (PMJDY), which of the following is NOT a mandatory feature of the basic savings bank deposit account opened under the scheme?

Accepted Answer

PMJDY, launched in August 2014, mandates that basic savings bank deposit accounts must offer: (1) zero balance requirement, (2) no minimum balance, (3) RuPay debit card with built-in accident insurance cover of ₹1 lakh, and (4) overdraft facility up to ₹10,000 after 6 months of satisfactory operation. However, life insurance cover is NOT mandatory under PMJDY — it is an optional add-on feature. Life insurance of ₹30,000 was offered under the Pradhan Mantri Suraksha Bima Yojana (PMSBY), a separate companion scheme. Therefore, answer is C.

RBI Assistant Financial Inclusion & Schemes

Financial Inclusion & Schemes— Rules & Concept

Key Points to Remember

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Financial Inclusion & Schemes — Practice Questions

60-Second Revision — Financial Inclusion & Schemes