Q80. Which monetary aggregate is commonly called broad money in India?
[WBCS Mains 2017]
A. M0
B. M1
C. M2
D. M3
Answer: (D) M3
Explanation: Broad money in the conventional Indian monetary-aggregate classification is M3. It consists of M1 plus net time deposits with the banking system, capturing a much larger share of deposit-based purchasing power than narrow money alone.
Q79. Which institution had proposed the option of Islamic windows at conventional banks as a financial-inclusion idea?
[MPSC Rajyaseva GS I 2017]
A. World Bank
B. Reserve Bank of India
C. International Monetary Fund
D. NABARD
Answer: (B) Reserve Bank of India
Explanation: RBI examined a proposal to permit interest-free banking arrangements through conventional banks to broaden inclusion. This dated question concerns a discussion or recommendation, not a claim that a comprehensive Islamic banking framework was ultimately introduced.
Q78. Which institution announces the Indian repo policy rate?
[WBCS Prelims 2017]
A. Finance Ministry directly
B. Prime Minister’s Office
C. Reserve Bank of India
D. The President’s Secretariat
Answer: (C) Reserve Bank of India
Explanation: The RBI announces monetary policy decisions, including the policy repo rate; within the statutory framework the Monetary Policy Committee sets that key rate. The rate affects short-term funding costs and monetary transmission.
Q77. Which statements about payments banks are correct?
(1) Eligible resident-controlled telecom firms may promote them.
(2) They may issue credit cards.
(3) They cannot lend.
[UPSC CSE Prelims 2016]
A. 1 and 2 only
B. 1 and 3 only
C. 2 only
D. All three
Answer: (B) 1 and 3 only
Explanation: Payments banks were designed for deposits and remittances, with eligible promoters including certain telecom operators. They cannot undertake ordinary lending or issue credit cards, although debit-card and payment services are permitted within the regulatory framework.
Q76. What does Core Banking Solution mean?
[UPSC CSE Prelims 2016]
A. A branch network sharing a central system so customers can operate accounts across branches
B. A legal takeover process for insolvent banks
C. An RBI-owned insurance programme
D. A system restricted to headquarters cash vaults
Answer: (A) A branch network sharing a central system so customers can operate accounts across branches
Explanation: Core Banking Solution links a bank’s branches to centralised account records and transaction processing. Customers can access the same account through connected branches and channels. It is an information system, not a statutory bank-resolution or insurance mechanism.
Q75. What objectives did RBI set for Marginal Cost of Funds Based Lending Rate (MCLR)?
[UPSC CSE Prelims 2016]
A. Greater rate-setting transparency only
B. Fair lending rates only
C. Both transparency and fairness
D. Neither
Answer: (C) Both transparency and fairness
Explanation: MCLR replaced the earlier base-rate benchmark for new eligible loans in April 2016. It sought to make loan-pricing methodology more transparent and improve transmission of banks’ funding costs into rates charged to borrowers.
Q74. How many constituent companies were traditionally represented in the benchmark BSE Sensex index?
[WBCS Mains 2016]
A. 40
B. 30
C. 50
D. 60
Answer: (B) 30
Explanation: Sensex is the S&P BSE 30 index, comprising thirty selected liquid and representative listed companies. It is widely used as a barometer of Indian large-cap equity performance and is not the same as the broader Nifty 50.
Q73. What is the conventional name of the government-securities trading market?
[WBCS Mains 2016]
A. Gilt-edged market
B. Industrial goods market
C. Call-money market only
D. Agricultural commodity market
Answer: (A) Gilt-edged market
Explanation: Government bonds and related sovereign instruments trade in the gilt-edged market. Because sovereign securities often have lower credit risk than corporate borrowing, they also play an important role in collateral and liquidity management.
Q72. Which among RBI, commercial banks and SEBI is not itself a money-market participant in the usual classification?
[WBCS Mains 2016]
A. RBI
B. Commercial banks
C. SEBI
D. All three are identical participants
Answer: (C) SEBI
Explanation: RBI operates in the money market and commercial banks regularly use short-term funding instruments. SEBI is the capital-market regulator; oversight of securities does not make it a typical cash-funding market participant.
Q71. Which policy interest rate is linked most directly to RBI short-term repo funding to banks?
[WBCS Mains 2016]
A. Reverse repo rate
B. Repo rate
C. Dividend yield
D. Treasury revenue ratio
Answer: (B) Repo rate
Explanation: Repo transactions allow eligible financial institutions to obtain short-term liquidity from the RBI against specified securities. The policy repo rate is a key benchmark influencing market rates and monetary transmission.
