Banking & Financial Sector

Which of the following statements about M1xchange’s role in Micro, Small & Medium Enterprises (MSMEs) financing is/are correct ? 1. M1xchange provides collateral based loans to MSMEs. 2. M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs. 3. M1xchange functions as a credit rating agency for MSMEs. Select the answer using the code given below :

1. (a)1, 2 and 3
2. (b)2 only
3. (c)2 and 3 only
4. (d)1 only

Which of the following statements about insurance in aviation sector is/are correct ? 1. ‘Aviation Hull Insurance’ covers the physical aircraft, including the body, engine, and on-board equipment. 2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault. Select the answer using the code given below :

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

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

1. (a)2 only
2. (b)2 and 3
3. (c)1, 3 and 4
4. (d)2 and 4

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 ?

1. (a)1 and 4
2. (b)1, 2 and 3
3. (c)4 only
4. (d)2, 3 and 4

Which of the following are the sources of income for the Reserve Bank of India? I. Buying and selling Government bonds II. Buying and selling foreign currency III. Pension fund management IV. Lending to private companies V. Printing and distributing currency notes Select the correct answer using the code given below.

1. (a)I and II only
2. (b)II, III and IV
3. (c)I, III, IV and V
4. (d)I, II and V

Consider the following statements : Statement-I : Syndicated lending spreads the risk of borrower default across multiple lenders. Statement-II : The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line. Which one of the following is correct in respect of the above statements ?

1. (a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
2. (b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
3. (c)Statement-I is correct, but Statement-II is incorrect
4. (d)Statement-I is incorrect, but Statement-II is correct

No answer is recorded for this question: cancelled by UPSC — marks awarded to all candidates

Consider the following statements : 1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government. 2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest. 3. The Governor of the RBI draws his power from the RBI Act. Which of the above statements are correct?

1. (a)1 and 2 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

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?

1. (a)1 only
2. (b)2 and 3 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?

1. (a)Diversion of resources to the purchase of real estate and investment in luxury housing
2. (b)Investment in unproductive activities and purchase of precious stones, jewellery, gold, etc.
3. (c)Large donations to political parties and growth of regionalism
4. (d)Loss of revenue to the State Exchequer due to tax evasion

Consider the following statements : 1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks. 2. One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies. Which of the statements given above is/are correct ?

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

What is the importance of the term “Interest Coverage Ratio” of a firm in India ? 1. It helps in understanding the present risk of a firm that a bank is going to give loan to. 2. It helps in evaluating the emerging risk of a firm that a bank is going to give loan to. 3. The higher a borrowing firm’s level of Interest Coverage Ratio, the worse is its ability to service its debt. Select the correct answer using the code given below :

1. (a)1 and 2 only
2. (b)2 only
3. (c)1 and 3 only
4. (d)1, 2 and 3

The Service Area Approach was implemented under the purview of

1. (a)Integrated Rural Development Programme
2. (b)Lead Bank Scheme
3. (c)Mahatma Gandhi National Rural Employment Guarantee Scheme
4. (d)National Skill Development Mission

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

1. (a)Advances
2. (b)Deposits
3. (c)Investments
4. (d)Money at call and short notice

What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

1. (a)To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit
2. (b)To support the infrastructure projects of Central and State Governments
3. (c)To act as independent regulator in case of applications for loans of ₹ 50 crore or more
4. (d)To aim at faster resolution of stressed assets of ₹ 50 crore or more which are under consortium lending

The Chairmen of public sector banks are selected by the

1. (a)Banks Board Bureau
2. (b)Reserve Bank of India
3. (c)Union Ministry of Finance
4. (d)Management of concerned bank

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 ?

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

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 ?

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

Which of the following statements best describes the term 'Scheme for Sustainable Structuring of Stressed Assets (S4A)', recently seen in the news ?

1. (a)It is a procedure for considering ecological costs of developmental schemes formulated by the Government.
2. (b)It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.
3. (c)It is a disinvestment plan of the Government regarding Central Public Sector Undertakings.
4. (d)It is an important provision in 'The Insolvency and Bankruptcy Code' recently implemented by the Government.

What is/are the purpose/purposes of the 'Marginal Cost of Funds based Lending Rate (MCLR)' announced by RBI? 1. These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances. 2. These guidelines help ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks. Select the correct answer using the code given below.

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

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?

1. (a)1 and 2 only
2. (b)3 only
3. (c)2 and 3 only
4. (d)1, 2 and 3

'Basel III Accord' or simply 'Basel III', often seen in the news, seeks to

1. (a)develop national strategies for the conservation and sustainable use of biological diversity
2. (b)improve banking sector's ability to deal with financial and economic stress and improve risk management
3. (c)reduce the greenhouse gas emissions but places a heavier burden on developed countries
4. (d)transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals

With reference to the Indian Renewable Energy Development Agency Limited (IREDA), which of the following statements is/are correct? 1. It is a Public Limited Government Company. 2. It is a Non-Banking Financial Company. Select the correct answer using the code given below.

1. (a)1 only
2. (b)2 only
3. (c)Both 1 and 2
4. (d)Neither 1 nor 2

The Reserve Bank of India regulates the commercial banks in matters of 1. Liquidity of assets 2. Branch expansion 3. Merger of banks 4. Winding-up of banks Select the correct answer using the codes given below.

1. (a)1 and 4 only
2. (b)2, 3 and 4 only
3. (c)1, 2 and 3 only
4. (d)1, 2, 3 and 4

Priority Sector Lending by banks in India constitutes the lending to

1. (a)agriculture
2. (b)micro and small enterprises
3. (c)weaker sections
4. (d)All of the above

The Reserve Bank of India (RBI) acts as a bankers' bank. This would imply which of the following? 1. Other banks retain their deposits with the RBI. 2. The RBI lends funds to the commercial banks in times of need. 3. The RBI advises the commercial banks on monetary matters. Select the correct answer using the codes given below :

1. (a)2 and 3 only
2. (b)1 and 2 only
3. (c)1 and 3 only
4. (d)1, 2 and 3