Q10. Which among Corporation Bank, Dena Bank, Federal Bank and Vijaya Bank was not a nationalised bank?
[UPSC CSE Prelims 2006]
A. Corporation Bank
B. Dena Bank
C. Federal Bank
D. Vijaya Bank
Answer: (C) Federal Bank
Explanation: Federal Bank is a private-sector commercial bank, whereas the other named institutions were nationalised-sector banks at the time of the question. The historical distinction matters because later public-sector bank mergers changed several bank names and organisational structures.
Q9. At their establishment, which statements about development finance were true?
(1) NHB began as an RBI subsidiary.
(2) SIDBI was created as an IDBI subsidiary.
[UPSC CSE Prelims 2004]
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither
Answer: (C) Both 1 and 2
Explanation: NHB was originally wholly owned by RBI, and SIDBI started as a subsidiary of the Industrial Development Bank of India. The ownership of both changed later. Historical PYQs must be assessed against the legal and institutional position when asked.
Q8. Arrange IFCI, ICICI, IDBI and NABARD chronologically by establishment.
[UPSC CSE Prelims 2002]
A. IFCI, ICICI, IDBI, NABARD
B. ICICI, IDBI, NABARD, IFCI
C. IDBI, NABARD, IFCI, ICICI
D. NABARD, IFCI, ICICI, IDBI
Answer: (A) IFCI, ICICI, IDBI, NABARD
Explanation: IFCI was established in 1948, ICICI in 1955, IDBI in 1964 and NABARD in 1982. These institutions reflected different stages in developing industrial and rural financing capacity after independence.
Q7. What is included in India’s broad money aggregate M3: currency with the public, demand deposits and time deposits?
[UPSC CSE Prelims 2002]
A. Currency and demand deposits only
B. Currency and time deposits only
C. Demand and time deposits only
D. All three
Answer: (D) All three
Explanation: M3, or broad money, combines currency held by the public with demand and time deposits at banks, together with relevant additional RBI deposits under the formal definition. These items cover more than immediately spendable cash balances.
Q6. Which of these were components of domestic government debt: market borrowing, treasury bills and special securities issued to RBI?
[UPSC CSE Prelims 2001]
A. Market borrowing alone
B. Market borrowing and Treasury Bills
C. Treasury Bills alone
D. All three
Answer: (D) All three
Explanation: Internal debt is raised from domestic sources. Market loans, short-term Treasury Bills and qualifying special securities issued to RBI all represent forms of government borrowing within the country rather than external sovereign debt.
Q5. Which functions did the RBI perform: banker to government, monetary policy, IMF-related agency work and government borrowing management?
[UPSC CSE Prelims 2001]
A. Only the first two
B. Only the last three
C. All four
D. Only IMF and borrowing work
Answer: (C) All four
Explanation: The Reserve Bank handles government banking and debt-management operations alongside the country’s monetary policy. It also performs specified agency functions in India’s international financial relations. These roles are complementary parts of its central-banking mandate.
Q4. Which group lists important agricultural credit sources in India?
[UPSC CSE Prelims 1999]
A. Primary agricultural cooperatives, commercial banks, RRBs and private moneylenders
B. Only RBI and NABARD as direct farm lenders
C. Only employment schemes and fertiliser cooperatives
D. Only foreign financial institutions
Answer: (A) Primary agricultural cooperatives, commercial banks, RRBs and private moneylenders
Explanation: Farm finance has both formal channels—cooperatives, commercial banks and regional rural banks—and informal sources such as moneylenders. RBI and NABARD mainly perform regulatory, developmental or refinancing roles rather than replacing every local lending channel.
Q3. What was the RBI accounting year in 1998?
[UPSC CSE Prelims 1998]
A. April to March
B. July to June
C. October to September
D. January to December
Answer: (B) July to June
Explanation: At the time of this examination, RBI followed a July–June accounting year. It later aligned the accounting cycle with the government’s April–March financial year, making July–June the historically correct answer for this older question.
Q2. Which ratio requires banks to maintain a prescribed portion of liabilities in eligible liquid assets?
[UPSC CSE Prelims 1998]
A. Capital gains tax
B. Statutory Liquidity Ratio
C. Import duty ratio
D. Fiscal-deficit ratio
Answer: (B) Statutory Liquidity Ratio
Explanation: The Statutory Liquidity Ratio requires banks to retain a minimum proportion of net demand and time liabilities as specified liquid assets. It supports liquidity discipline, whereas CRR concerns balances maintained with RBI.
Q1. Which items form the usual core of broad money (M3) in India?
[UPSC CSE Prelims 1997]
A. Currency and demand deposits only
B. Currency, demand deposits and time deposits
C. Demand deposits and other RBI deposits only
D. Currency plus other RBI deposits only
Answer: (B) Currency, demand deposits and time deposits
Explanation: Broad money captures currency held by the public plus the deposit base, including demand and time deposits, in the standard definition. It is wider than narrow money because it recognises substantial savings kept as term deposits.
