Banking system and institutions — UPSC Prelims PYQs

Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India: 1. NBFCs cannot accept demand deposits. 2. All the NBFCs operating in India have to be registered with the RBI. 3. NBFCs form part of the payment and settlement system and can issue cheque drawn on itself. 4. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs. Which of the statements given above is/are correct?

With reference to different Committees in India, consider the following details: Sl. No. 1 - Committee: R.N. Malhotra Committee; Objective: Comprehensive reforms of Insurance sector in India; Organization under which it was formed: Insurance Regulatory and Development Authority of India Sl. No. 2 - Committee: L.C. Gupta Committee; Objective: Preparing a roadmap for the introduction of derivatives trading in India; Organization under which it was formed: Securities and Exchange Board of India Sl. No. 3 - Committee: Urjit R. Patel Committee; Objective: Preparing a roadmap for reforming bank lending to the Housing sector; Organization under which it was formed: Reserve Bank of India Sl. No. 4 - Committee: Y.H. Malegam Committee; Objective: Preparing a roadmap for reforms in Microfinance sector in India; Organization under which it was formed: Reserve Bank of India In which of the above rows are all the details correctly matched?

A country's fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating capital receipts. The country's interest liabilities are ₹1,500 crores. What is the gross primary deficit?

With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements: 1. There is no minimum capital requirement for wholly owned banking subsidiaries in India. 2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals. Which of the statements given above is/are correct?

Consider the following statements: 1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India. 2. In India, Foreign Institutional Investors can hold the Government Securities (G-Secs). 3. In India, Stock Exchanges can offer separate trading platforms for debts. Which of the statements given above is/are correct?

Consider the following statements with reference to India: 1. According to the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006’, the ‘medium enterprises’ are those with investments in plant and machinery between 15 crore and 25 crore. 2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector. Which of the statements given above is/are correct?

With reference to the Banks Board Bureau (BBB)’, which of the following statements are correct? 1. The Governor of RBI is the Chairman of BBB. 2. BBB recommends for the selection of heads for Public Sector Banks. 3. BBB helps the Public Sector Banks in developing strategies and capital raising plans. Select the correct answer using the code given below.

Consider the following statements: 1. In India, credit rating agencies are regulated by the Reserve Bank of India. 2. The rating agency popularly known as ICRA is a public limited company. 3. Brickwork Ratings is an Indian credit rating agency. Which of the statements given above are correct?

With reference to India, consider the following statements: 1. Retail investors through Demat account can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in the primary market. 2. The ‘Negotiated Dealing System-Order Matching’ is a government securities trading platform of the Reserve Bank of India. 3. ‘Central Depository Services Ltd’ is jointly promoted by the Reserve Bank of India and the Bombay Stock Exchange. Which of the statements given above is/are correct?

With reference to ‘Urban Cooperative banks’ in India consider the following statements: 1. They are supervised and regulated by local boards set up by the State Governments. 2. They can issue equity shares and preference shares. 3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966. Which of the statements given above is/are correct?

With reference to the Indian economy, consider the following statements: 1. ‘Commercial Paper’ is a short-term unsecured promissory note. 2. ‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation. 3. ‘Call Money’ is a short term finance used for interbank transactions. 4. ‘Zero-Coupon Bonds are the interest-bearing short term bonds issued by the Scheduled Commercial Banks to corporations. Which of the statements given above is/are correct?

If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India? 1. Not depending on short-term foreign borrowings 2. Opening up to more foreign banks 3. Maintaining full capital account convertibility Select the correct answer using the code given below:

Which of the following is not included in the assets of a commercial bank in India?

The Chairman of public sector banks are selected by the:

Consider the following statements: 1. Capital Adequacy Ratio (CAR) is the amount that banks have to maintain in the form of their own funds to offset any loss that banks incur if the account-holders fail to repay dues. 2. CAR is decided by each individual bank. Which of the statements given above is/are correct?

With reference to the governance of public sector banking in India, consider the following statements: 1. Capital infusion into public sector banks by the Government of India has steadily increased in the last decade. 2. To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected. Which of the statements given above is/are correct?

The establishment of ‘Payment Banks’ is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context? 1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks. 2. Payment Banks can issue both credit cards and debit cards. 3. Payment Banks cannot undertake lending activities. Select the correct answer using the code given below.

With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: 1. IMFC discusses matters of concern affecting the global economy, and advises the International Monetary Fund (IMF) on the direction of its work. 2. The World Bank participates as an observer in IMFC’s meetings. Which of the statements given above is/are correct?

The term ‘Core Banking Solution’ is sometimes seen in the news. Which of the following statements best describes/ describe this term? 1. It is a network of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts. 2. It is an effort to increase RBI’s control over commercial banks through computerization. 3. It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank. Select the correct answer using the code given below.

With reference to ‘Financial Stability and Development Council’, consider the following statements: 1. It is an organ of NITI Aayog. 2. It is headed by the Union Finance Minister. 3. It monitors macroprudential supervision of the economy. Which of the statements given above is/are correct?

‘Basel III Accord’ or simply ‘Basel III’ often seen in the new, seeks to:

Priority Sector Lending by banks in Indian constitutes the lending to:

Why is the offering of “teaser loans” by commercial banks a cause of economic concern? 1. The teaser loans are considered to be an aspect of subprime lending and banks may be exposed to the risk of defaulters in future. 2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units. Which of the statements given above is/are correct?