Q70. Which Indian authority introduced credit planning in the organised banking sector?
[WBCS Mains 2016]
A. Reserve Bank of India
B. National Stock Exchange
C. Competition Commission
D. Ministry of External Affairs
Answer: (A) Reserve Bank of India
Explanation: Credit planning was pursued through RBI’s credit and banking policies to allocate finance in support of national development priorities. This historical approach became less direct as Indian monetary management and banking markets evolved.
Q69. Which combination of measures can generally support demand during a downturn?
[WBCS Mains 2016]
A. Cutting repo rates and easing reserve restrictions
B. Raising all reserve ratios and policy rates
C. Selling securities to remove every reserve
D. Banning all deposits
Answer: (A) Cutting repo rates and easing reserve restrictions
Explanation: Lower policy rates and relaxed liquidity requirements generally aim to make credit less costly and more available. The eventual impact depends on banking health, borrowers’ demand and wider economic conditions, so stimulus is not automatic.
Q68. Which bank was not among the original fourteen banks nationalised in 1969?
[WBCS Mains 2016]
A. Vijaya Bank
B. Canara Bank
C. Bank of India
D. Central Bank of India
Answer: (A) Vijaya Bank
Explanation: Vijaya Bank was among the six banks nationalised in 1980, rather than the fourteen taken over in 1969. The two nationalisation waves are historically distinct and appear frequently in banking examinations.
Q67. Which of the following is an important historical weakness of nationalised banks?
[WBCS Mains 2016]
A. Rising stressed loans and weak capital ratios
B. Excessively high net profits in every year
C. The absence of deposit accounts
D. No requirement to disclose financial data
Answer: (A) Rising stressed loans and weak capital ratios
Explanation: Weak asset quality and pressure on capital adequacy have periodically troubled public-sector banks. Non-performing loans consume earnings and capital, while a thin capital buffer can constrain expansion and heighten supervisory concerns.
Q66. In central-bank operations, what is meant by sterilisation of a foreign-exchange intervention?
[WBCS Mains 2016]
A. Offsetting the intervention’s effect on domestic liquidity
B. Purifying old currency notes
C. Closing every external bank account
D. Writing off every non-performing asset
Answer: (A) Offsetting the intervention’s effect on domestic liquidity
Explanation: Sterilised intervention counterbalances domestic liquidity changes caused by currency-market operations, for example with securities transactions. It attempts to limit unintended monetary expansion or contraction while exchange-market objectives are pursued.
Q65. On which date did RBI become government-owned?
[WBCS Mains 2016]
A. 1 January 1949
B. 15 August 1947
C. 1 April 1935
D. 26 January 1950
Answer: (A) 1 January 1949
Explanation: The Reserve Bank began operations as a shareholder-owned institution in 1935. Nationalisation took effect from 1 January 1949, when ownership was transferred to the Government of India under relevant legislation.
Q64. To increase liquidity through securities transactions, which action can RBI undertake?
[WBCS Mains 2016]
A. Purchase government bonds from the market
B. Sell government bonds to withdraw cash
C. Raise every reserve requirement
D. Collect direct personal income tax
Answer: (A) Purchase government bonds from the market
Explanation: An open-market purchase of government securities generally injects funds into the banking system. Sellers receive payment and banks obtain additional settlement balances, enabling money-market liquidity to expand in the short term.
Q63. Following the Narasimham reform recommendations, what change supported greater banking competition?
[WBCS Mains 2016]
A. Providing guidelines for new private-sector bank entry
B. Banning private ownership of all banks
C. Mandating only one nationwide bank
D. Replacing bank regulation with stock-market regulation
Answer: (A) Providing guidelines for new private-sector bank entry
Explanation: Banking reform in the 1990s enabled licensing of new private-sector banks under RBI rules. The measure was intended to increase competition, operational efficiency and service quality within a stronger prudential regulatory environment.
Q62. Which is the accurate order in which IFCI, ICICI, IDBI and IIBI were established?
[MPSC Rajyaseva GS I 2016]
A. IFCI → ICICI → IDBI → IIBI
B. IDBI → IFCI → ICICI → IIBI
C. IIBI → IFCI → IDBI → ICICI
D. ICICI → IIBI → IFCI → IDBI
Answer: (A) IFCI → ICICI → IDBI → IIBI
Explanation: IFCI dates to 1948, ICICI to 1955, IDBI to 1964 and the later IIBI form to 1997. The sequence charts phases in India’s developmental and industrial finance architecture.
Q61. Which objective was not among RBI short-term priorities highlighted in its 2014–15 Annual Report?
[WBCS Prelims 2016]
A. Reducing inflation
B. Helping resolve distressed projects
C. Supporting new lending
D. Ensuring credit exclusively to public sector undertakings
Answer: (D) Ensuring credit exclusively to public sector undertakings
Explanation: The cited report emphasised inflation reduction, addressing stressed projects and supporting lending conditions. A mandate to guarantee preferential credit to all public-sector enterprises was not listed as that short-term policy priority.
