Q160. What interest-rate reform was recommended in India’s financial-sector liberalisation?
[WBCS Mains 2020]
A. Strictly administered lending rates forever
B. Deregulated lending and deposit interest rates
C. Mandatory identical loan rates for every customer
D. Elimination of ordinary savings accounts
Answer: (B) Deregulated lending and deposit interest rates
Explanation: Market-oriented reform reduced direct administrative rate controls, permitting banks greater discretion in pricing loans and deposits. Prudential rules and monetary-policy benchmarks nevertheless continued to shape the operating environment.
Q159. How are RBI open-market securities transactions commonly classified among monetary-control techniques?
[WBCS Mains 2020]
A. Direct sector-specific credit rationing
B. Indirect liquidity control
C. An import quota
D. Government subsidy
Answer: (B) Indirect liquidity control
Explanation: Purchasing and selling government securities alters reserves and short-term rates through financial-market transactions. It influences system-wide conditions indirectly, rather than ordering particular banks to lend specified amounts to identified sectors.
Q158. When RBI undertakes a liquidity-injecting repurchase operation, what does it do?
[WBCS Mains 2020]
A. Lend rupees against securities
B. Permanently extinguish currency
C. Sell goods to commercial banks
D. Increase customs tariffs
Answer: (A) Lend rupees against securities
Explanation: In a repo, RBI provides secured short-term funds to eligible counterparties and receives collateral securities under a repurchase arrangement. The operation supplies cash to the banking system, subject to the policy rate and market framework.
Q157. What is the outcome when RBI purchases government bonds from the market?
[WBCS Mains 2020]
A. Bank liquidity is generally absorbed
B. Rupee liquidity is generally injected
C. Every bank deposit is cancelled
D. Money supply cannot be affected
Answer: (B) Rupee liquidity is generally injected
Explanation: A securities purchase pays rupees to the market, increasing balances available in the financial system. Open-market purchases tend to be expansionary, while sales drain liquidity. Other factors can alter the eventual change in broad-money aggregates.
Q156. Which institution manages the country’s official exchange reserves?
[WBCS Mains 2020]
A. Reserve Bank of India
B. Only the Finance Commission
C. All insurers jointly
D. National Stock Exchange
Answer: (A) Reserve Bank of India
Explanation: RBI manages India’s official foreign-currency assets and related reserve holdings. These reserves help meet external-payment needs and can be deployed to moderate disorderly currency movements without guaranteeing a fixed rupee value.
Q155. On which balances is RBI required to pay interest to commercial banks for their mandatory cash reserves?
[WBCS Mains 2020]
A. Full market interest automatically
B. A fixed 12 percent rate
C. No interest on required CRR balances
D. Equity dividends
Answer: (C) No interest on required CRR balances
Explanation: Mandatory CRR balances generally do not earn interest. This opportunity cost is one reason changes in reserve requirements influence the bank lending business and the amount of liquidity freely deployable by institutions.
Q154. Treasury bills are primarily issued by the Central Government for what duration of finance?
[WBCS Mains 2020]
A. Long-term
B. Perpetual
C. Short-term
D. Very long-term
Answer: (C) Short-term
Explanation: Treasury bills are short-maturity government borrowing instruments sold at a discount and redeemed at face value. They are important money-market securities, distinct from longer-maturity dated government bonds.
Q153. Which segment is primarily associated with obtaining longer-term funds for corporate enterprises?
[WBCS Mains 2020]
A. Overnight call-money market
B. Rural deposit counters
C. Trade bill rediscount market
D. Capital market
Answer: (D) Capital market
Explanation: The capital market brings together issuers and investors in long-term instruments such as equity and debentures. Call money and trade bills serve short-run liquidity and working-capital requirements rather than permanent enterprise financing.
Q152. In what year was the National Stock Exchange of India incorporated?
[SSC CHSL, 26 Oct, Shift 3 2020]
A. 1991
B. 1994
C. 1993
D. 1992
Answer: (D) 1992
Explanation: The National Stock Exchange was incorporated in 1992 and later began trading operations in 1994. The distinction between its incorporation and trading start is important for accurately answering date-based market-history questions.
Q151. Which three objectives were linked with PM Jan Dhan Yojana in the 2020 Rajyaseva paper?
[MPSC Rajyaseva GS I 2020]
A. Financial inclusion, financial literacy and insurance cover
B. Crop insurance alone
C. Issuing only commodity futures
D. Restricting savings accounts to government employees
Answer: (A) Financial inclusion, financial literacy and insurance cover
Explanation: PMJDY was designed to bring unbanked households into formal finance, complement account access with financial literacy and link eligible beneficiaries to specified insurance protections. Separate schemes address agricultural crop-insurance risks.
