Q1. As we all know, banks in India are required to maintain a portion of their demand and time liabilities with the Reserve Bank of India. This portion is called?
(a) statutory liquidity ratio
(b) cash reserve ratio
(c) bank deposit
(d) reverse repo
(e) government securities
Q2. Reserve Bank of India is the lender of the last resort to scheduled commercial banks because-
(a) the parties can approach RBI when their limits are exhausted
(b) they are not able to get loans from other banks
(c) RBI can come to the rescue of a bank that is solvent but faces temporary liquidity problems by supplying it with much-needed liquidity when no one else is willing to extend credit to that bank
(d) All of the above
(e) None of the given options is true
Q3. Banks without the prior approval of the RBI, cannot-
(a) one a new place of business in India or abroad
(b) shift otherwise that within the same centers (city/town/village) of the existing place of business
(c) shift their sole rural branch outside the centre/village is not permitted, as such shifting would render the centre unbanded
(d) All of the above
(e) None of the given options is true
Q4. The interest rate at which the RBI lends to commercial banks in the short term to maintain liquidity is known as-?
(a) interest rate
(b) repo rate
(c) reverse repo rate
(d) bank rate
(e) None of the given options is true
Q5. Who is the final authority for deciding the design, form and material of bank notes?
(a) Central Government
(b) Reserve Bank of India
(c) Indian Banks Association
(d) Note Issuing Authority of India
(e) None of the given options is true
Q6. The bank rate is-
(a) free to fluctuate according to the forces of demand and supply
(b) set by the RBI
(c) set by the RBI is directed by the Union Ministry of Finance
(d) set by the RBI as advised by the Indian Banks Association
(e) set by the Government of India on the recommendation of the Planning Commission
Q7. As per the reports in various newspapers many private companies are trying to obtain the licences to launch a banking company in India. Which of the following organisations /agencies issue the licence for the same?
(a) Securities and Exchange Board of India (SEBI)
(b) Indian Institute of Banking and Finance (IIBF)
(c) Indian Banks’ Association
(d) Registrar of Companies
(e) None of the given options is true
Q8. Many times we read a term ‘Hot Money’ in newspapers. What is/are the characteristics of Hot Money?
I. The term is used for fresh curr
