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Question 1 of 5
1. Question
1 pointsWhich of the following can avail the facility of the Liquidity Adjustment Facility (LAF) extended by the Reserve Bank of India (RBI)?
1. Scheduled Commercial Banks (SCBs)
2. Regional Rural Banks (RRBs)
3. Primary Dealers (PDs)
Select the correct answer using the codes given belowCorrect
All of the above are correct.
Liquidity Adjustment Facility (LAF) is a facility extended by RBI to the scheduled commercial banks (including RRBs which meet certain criteria) and Primary Dealers (PDs) to avail of liquidity in case of requirement or park excess funds with RBI in case of excess liquidity on an overnight basis against the collateral of G-Secs including State Development Loans (SDLs).
• Basically, LAF enables liquidity management on a day to day basis.
• The operations of LAF are conducted by way of repurchase agreements with RBI being the counter-party to all the transactions. The interest rate in LAF is fixed by RBI from time to time.
• LAF is an important tool of monetary policy and liquidity management.Incorrect
All of the above are correct.
Liquidity Adjustment Facility (LAF) is a facility extended by RBI to the scheduled commercial banks (including RRBs which meet certain criteria) and Primary Dealers (PDs) to avail of liquidity in case of requirement or park excess funds with RBI in case of excess liquidity on an overnight basis against the collateral of G-Secs including State Development Loans (SDLs).
• Basically, LAF enables liquidity management on a day to day basis.
• The operations of LAF are conducted by way of repurchase agreements with RBI being the counter-party to all the transactions. The interest rate in LAF is fixed by RBI from time to time.
• LAF is an important tool of monetary policy and liquidity management. -
Question 2 of 5
2. Question
1 pointsConsider the following statements about Angola
1. Angola is a landlocked country.
2. Windhoek is its capital.
3. It is bordered by the Democratic Republic of the Congo to the north.
How many of the statements given above is/ are correct?Correct
Statements 1 and 2 are incorrect. Angola is not a landlocked country. It is located on the west coast of southern Africa and has a coastline of approximately 1,600 km. It is bordered by the Atlantic Ocean to the west. The capital of Angola is Luanda, which is located on the country’s Atlantic coast.
Statement 3 is correct. Angola is bordered by the Democratic Republic of the Congo to the north, as well as by Zambia to the east and Namibia to the south. Recently, Angola has opted to withdraw from the Organization of the Petroleum Exporting Countries (OPEC) due to a disagreement concerning oil production quotas.Incorrect
Statements 1 and 2 are incorrect. Angola is not a landlocked country. It is located on the west coast of southern Africa and has a coastline of approximately 1,600 km. It is bordered by the Atlantic Ocean to the west. The capital of Angola is Luanda, which is located on the country’s Atlantic coast.
Statement 3 is correct. Angola is bordered by the Democratic Republic of the Congo to the north, as well as by Zambia to the east and Namibia to the south. Recently, Angola has opted to withdraw from the Organization of the Petroleum Exporting Countries (OPEC) due to a disagreement concerning oil production quotas. -
Question 3 of 5
3. Question
1 pointsWhich of these actions by the Reserve Bank of India (RBI) will result in scheduled commercial banks lending less money to their retail customers?
1. Reduction in Cash Reserve Ratio
2. Increase in Repo Rate
3. Increase in Statutory Liquidity Ratio
Select the correct answer using the codes given belowCorrect
2 and 3 are correct.
RBI uses various policy instruments to bring forth a healthy Reserve deposit ratio (rdr) in commercial banks. The first instrument is the Cash Reserve Ratio which specifies the fraction of their deposits that banks must keep with RBI. There is another tool called Statutory Liquidity Ratio which requires the banks to maintain a given fraction of their total demand and time deposits in the form of specified liquid assets.
A decline in CRR gives banks more cash at hand, so more lending. An increase in SLR gives less cash at hand, so less lending. An increase in repo rate makes borrowing unattractive for customers since banks now face a higher rate of funds, so less lending from banks.Incorrect
2 and 3 are correct.
RBI uses various policy instruments to bring forth a healthy Reserve deposit ratio (rdr) in commercial banks. The first instrument is the Cash Reserve Ratio which specifies the fraction of their deposits that banks must keep with RBI. There is another tool called Statutory Liquidity Ratio which requires the banks to maintain a given fraction of their total demand and time deposits in the form of specified liquid assets.
A decline in CRR gives banks more cash at hand, so more lending. An increase in SLR gives less cash at hand, so less lending. An increase in repo rate makes borrowing unattractive for customers since banks now face a higher rate of funds, so less lending from banks. -
Question 4 of 5
4. Question
1 pointsIn how many of the below-mentioned areas does the National Payments Corporation of India (NPCI) have a role?
1. Immediate Payment Service (IMPS)
2. RuPay
3. Unified Payments Interface (UPI)
4. International money transfers
5. Cryptocurrencies
Select the correct answer using the codes given belowCorrect
NPCI has a role in 3 out of the 5 mentioned areas:
1. Immediate Payment Service (IMPS): NPCI operates and manages IMPS, which allows real-time fund transfers between bank accounts within India.
2. RuPay: NPCI promotes and develops the RuPay card network, offering an alternative to international card brands for debit and prepaid card transactions in India.
3. Unified Payments Interface (UPI): NPCI built and manages UPI for instant cashless payments between bank accounts in India.
However, NPCI does not play a role in:
4. International money transfers: NPCI currently focuses on domestic transactions. Sending or receiving money internationally requires other platforms and intermediaries like SWIFT or specialized money transfer services.
5. Cryptocurrencies: Cryptocurrencies operate outside the traditional banking system and are not regulated by NPCI or any other central bank in India.Incorrect
NPCI has a role in 3 out of the 5 mentioned areas:
1. Immediate Payment Service (IMPS): NPCI operates and manages IMPS, which allows real-time fund transfers between bank accounts within India.
2. RuPay: NPCI promotes and develops the RuPay card network, offering an alternative to international card brands for debit and prepaid card transactions in India.
3. Unified Payments Interface (UPI): NPCI built and manages UPI for instant cashless payments between bank accounts in India.
However, NPCI does not play a role in:
4. International money transfers: NPCI currently focuses on domestic transactions. Sending or receiving money internationally requires other platforms and intermediaries like SWIFT or specialized money transfer services.
5. Cryptocurrencies: Cryptocurrencies operate outside the traditional banking system and are not regulated by NPCI or any other central bank in India. -
Question 5 of 5
5. Question
1 pointsWhich one of the following statements about the ‘Scheme for Residential Education for Students in High Schools in Targeted Areas (SHRESHTA) scheme’ is correct?
Correct
SHRESHTA is a scheme launched by the Indian government to improve the educational outcomes of Scheduled Castes (SC) students in specific/targeted areas. The scheme aims to bridge the gap in educational opportunities for SC students by providing them with access to high-quality residential education. Ministry of Social Justice & Empowerment is the nodal ministry for the scheme. SC students studying in class 8th and 10th in the current academic year are eligible under the scheme.
Incorrect
SHRESHTA is a scheme launched by the Indian government to improve the educational outcomes of Scheduled Castes (SC) students in specific/targeted areas. The scheme aims to bridge the gap in educational opportunities for SC students by providing them with access to high-quality residential education. Ministry of Social Justice & Empowerment is the nodal ministry for the scheme. SC students studying in class 8th and 10th in the current academic year are eligible under the scheme.
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