Q150. Which RBI measures tend to counter inflation:
1. Higher bank rate,
2. Higher CRR,
3. Higher SLR,
4. Purchasing government securities?
[UPPSC RO/ARO, 20 Sep 2020]
A. 1 and 2 only
B. 1, 2 and 3 only
C. 2, 3 and 4 only
D. 1, 3 and 4 only
Answer: (B) 1, 2 and 3 only
Explanation: Higher reserve ratios or bank rates tend to restrain credit and liquidity, all else equal. RBI purchases of government securities normally inject liquidity, so they do not belong among the contractionary measures in this combination.
Q149. The Service Area Approach in rural banking was introduced under which programme?
[UPSC CSE Prelims 2019]
A. Integrated Rural Development Programme
B. Lead Bank Scheme
C. MGNREGA
D. National Skill Development Mission
Answer: (B) Lead Bank Scheme
Explanation: The Service Area Approach operated within the Lead Bank Scheme, assigning rural branches defined local service areas. This encouraged coordinated credit planning, better knowledge of village needs and accountability for extending loans into inadequately banked places.
Q148. Under the RBI directions on storage of payment-system data, which requirement was made?
[UPSC CSE Prelims 2019]
A. Relevant payment data must be stored in India
B. All systems must be operated by public companies
C. Audit reports must go only to the CAG
D. Foreign providers were exempt
Answer: (A) Relevant payment data must be stored in India
Explanation: The RBI required payment-system providers to store complete relevant payment data in India. The direction concerned data localisation, not mandatory public ownership. Compliance audits were to be reported through prescribed RBI processes, rather than solely to the CAG.
Q147. Why was an Inter-Creditor Agreement promoted among Indian lenders?
[UPSC CSE Prelims 2019]
A. To fund state welfare budgets
B. To regulate small consumer deposits
C. To abolish commercial-bank lending
D. To speed resolution of large stressed consortium loans
Answer: (D) To speed resolution of large stressed consortium loans
Explanation: Banks and financial institutions used the Inter-Creditor Agreement to coordinate decisions on stressed assets involving multiple lenders. A shared framework limits delays from individual creditors and encourages timely resolution rather than leaving each lender to act independently.
Q146. Which institution recommended appointments of chairpersons and heads of public-sector banks at that time?
[UPSC CSE Prelims 2019]
A. Banks Board Bureau
B. RBI alone
C. Union Cabinet Secretariat alone
D. Concerned bank customers
Answer: (A) Banks Board Bureau
Explanation: The Banks Board Bureau was entrusted with recommending leadership appointments in public-sector banks and supporting governance improvements. The body was part of the Indradhanush bank-reform initiative, and a successor institution subsequently assumed its responsibilities.
Q145. A Participatory Note is most closely associated with what?
[UPSC CSE Prelims 2019]
A. Buying bank fixed deposits
B. Indirect investment in Indian securities via registered foreign investors
C. RBI currency printing
D. Direct sovereign borrowing by individuals
Answer: (B) Indirect investment in Indian securities via registered foreign investors
Explanation: Participatory Notes are offshore derivative instruments linked to Indian securities and issued by registered foreign portfolio investors to eligible overseas clients. They provide market exposure without the client necessarily registering as a direct foreign investor in India.
Q144. Which policy would be least likely to arrest sharp rupee depreciation?
[UPSC CSE Prelims 2019]
A. Reducing unnecessary imports and promoting exports
B. Encouraging rupee-denominated overseas bonds
C. Easing selected external borrowing arrangements
D. Following an expansionary monetary policy
Answer: (D) Following an expansionary monetary policy
Explanation: Expansionary monetary policy can weaken interest-rate support for the rupee and potentially intensify capital outflows or inflation. The other measures seek to reduce demand for foreign currency or support its availability, which can moderate depreciation pressure.
Q143. Why is the Banks Board Bureau different from the RBI?
[UPSC CSE Prelims 2019]
A. It recommends leadership and strategy for public banks
B. It issues the national currency
C. It fixes the monetary-policy rate
D. It sets nationwide cash reserve ratios
Answer: (A) It recommends leadership and strategy for public banks
Explanation: The Bureau’s remit concerned public-sector bank appointments and strategic governance. Currency issuance, monetary-policy decisions and cash-reserve rules are RBI responsibilities. Separating the institutional functions prevents confusing bank ownership and management with prudential supervision.
Q142. What was the name of the NSE electronic, screen-based trading system?
[WBCS Mains 2019]
A. BOLT
B. NEAT
C. ALBM
D. BLISS
Answer: (B) NEAT
Explanation: NEAT stands for National Exchange for Automated Trading, the electronic order-matching system introduced by NSE. Its automated trading represented a major advance over traditional floor-based stock-trading practices.
Q141. What financing label is associated with venture support after a project begins earning but has not yet matured fully?
[WBCS Mains 2019]
A. Start-up capital
B. Bridge capital
C. Mezzanine capital
D. Seed capital
Answer: (C) Mezzanine capital
Explanation: Mezzanine finance commonly supports firms that have progressed beyond the earliest stages but still need growth capital. It often mixes debt-like and equity-like features, with terms reflecting greater risk than senior lending.
