Question 1

Which of the following coins is not issued by the RBI ?
A)Re. 1
B)Rs. 2
C)Rs. 5
D)Rs. 10

Accepted Answer

The Reserve Bank of India (RBI) does not issue the Re. 1 coin. This responsibility lies with the Government of India, specifically the Ministry of Finance.

Question 2

RBI has withdrawn the circulation of coins in the denomination of 1 paise, 2 paise, 3 paise, 5 paise, 10 paise, 20 paise and 25 paise in which year ?
A)2010
B)2011
C)2012
D)2013

Accepted Answer

The Reserve Bank of India (RBI) withdrew the circulation of coins in the denominations mentioned in 2011, making these coins no longer legal tender for transactions.

Question 3

Which among the following would not help RBI to control the inflation in the country ?
A)Increase in Reserve Ratio Requirements
B)Increase in Bank Rate
C)Purchase of securities in open market
D)Increase in Repo Rate

Accepted Answer

D

Question 4

What would be the impact on cash reserves of the commercial banks if RBI conducts the sale of securities?
A)Decrease
B)Increase
C)Either increase or decrease
D)Remains contant

Accepted Answer

When the Reserve Bank of India (RBI) sells securities, it effectively takes money out of the banking system, as commercial banks or other entities purchase these securities with cash. This action reduces the cash reserves of the commercial banks because they are exchanging their cash for the securities.

Question 5

Which of the following works as the agent of RBI while it has no own offices ?
A)IMF
B)SBI
C)GOI
D)Ministry of Finance

Accepted Answer

The State Bank of India (SBI) acts as the agent of the Reserve Bank of India (RBI) in places where the RBI has no offices of its own. SBI performs various functions on behalf of the RBI, such as government transactions and other banking operations.

Question 6

Which of the followong Governors of RBI also served as the Finance Minister of India ?
A)Pranav Mukherjee
B)Amitabha Ghosh
C)Sir Benegal Rama Rao
D)Dr. Manmohan Singh

Accepted Answer

Dr. Manmohan Singh served as the Governor of the Reserve Bank of India from 1982 to 1985 and later became the Finance Minister of India from 1991 to 1996.

Question 7

Which of the following statements is/are not true ?
A)RBI is the Bank of Issue.
B)RBI acts as the Banker of the Government.
C)RBI is known as the Banker's Bank.
D)RBI does not regulate the credit flow.

Accepted Answer

The Reserve Bank of India (RBI) does indeed regulate the credit flow in the economy, which is a key function of the central bank. This involves adjusting the availability and cost of money to achieve economic objectives such as controlling inflation and promoting growth.

Question 8

Which is not a function of RBI ?
A)Holding cash reserves of all commercial banks and make available financial accommodation to them.
B)Assuming responsibility of all banking operations of the government.
C)Assuming the responsibility of the statistical analysis of data related to macro economy of India .
D)Assuming the responsibility to meet directly or indirectly all reasonable demands for the accommodation.

Accepted Answer

The Reserve Bank of India (RBI) does not assume the responsibility of the statistical analysis of data related to the macroeconomy of India. This function is typically carried out by other government bodies such as the Ministry of Statistics and Programme Implementation (MoSPI). The RBI's primary functions include monetary policy regulation, financial supervision, management of foreign exchange, and serving as the banker to the government and to the commercial banks.

Question 9

To control inflation and tackle the problem of exchange liquidity due to foreign exchange inflows, the RBI
A)Sells government securities.
B)Purchase securities
C)Decrease bank rate.
D)Raise interest rate.

Accepted Answer

Selling government securities is a tool used by the RBI to absorb excess liquidity from the market, which can help control inflation and manage foreign exchange inflows.

Question 10

Ways and Means advanced by RBI refers to
A)Meeting temporary mismatches between receipts and expenditure.
B)Providing short term loans for consumption expenditure.
C)Buying goods from abro

Accepted Answer

Ways and Means Advances (WMA) are a mechanism used by the Reserve Bank of India (RBI) to provide temporary financial assistance to the government to meet its mismatches between receipts and expenditures.

Question 11

The commercial banks were required to keep some percentages of their time deposits and their demand deposits with the RBI in the form of reserves is known as
A)Statutory Liquidity ratio
B)Cash reserve ratio
C)Moral suasion
D)Open market operation

Accepted Answer

The Cash Reserve Ratio (CRR) is the percentage of a bank's total deposits that must be kept in reserve with the central bank (RBI in India). This is a requirement meant to ensure liquidity and stability in the banking system.

Question 12

Decreasing percentage of statutory liquidity ratio by RBI
A)Increase the volume credits at the hands of commercial banks.
B)Reduce inflation.
C)Decrease the volume credit at the hands of commercial banks.
D)Raise the interest rate charged by the commercial banks.

Accepted Answer

Decreasing the Statutory Liquidity Ratio (SLR) allows banks to have more funds available for lending, thus increasing the volume of credits at the hands of commercial banks. This is because banks are required to keep a lesser portion of their deposits in safe and liquid assets, freeing up more resources for loans and advances.

Question 13

If the RBI wants to control the speculation on the price of essential commodities, adopted a measure known as
A)Open market Operations.
B)Credit monitoring Arrangement
C)Selective credit control
D)Moral suasion.

Accepted Answer

Selective credit control is a method used by central banks to regulate and control credit flow for specific purposes, such as controlling speculation on the prices of essential commodities. This approach allows the central bank to restrict the amount of credit available for speculative activities, thereby helping to stabilize prices.

Question 14

The RBI's function of Banker to Government implies
A)Issue of currency
B)Buys and sells government securities
C)Manages public debt by issuing government loans
D)Sells treasury bills on behalf of government

Accepted Answer

The answer of The RBI's function of Banker to Government...

Question 15

Which of the following is a commercial bank?
A)State Bank of India
B)Unit Trust of India (UTI
C)IDBI
D)NABARD

Accepted Answer

State Bank of India (SBI) is a commercial bank that provides banking and financial services to the public, unlike UTI, IDBI, and NABARD, which focus on investment, development finance, and agricultural and rural development, respectively.

Question 16

Which one of the following is near money?
A)Treasury Bills
B)Bills of Exchange
C)Bonds and Debentures
D)All of the above

Accepted Answer

Near money refers to assets that can easily be converted into cash but are not cash themselves. Treasury Bills, Bills of Exchange, and Bonds and Debentures all fit this definition as they can be quickly converted into cash and are often used for short-term financing needs.

Question 17

In July 1969, 14 major Indian scheduled banks were nationalised and 6 more banks were nationalised in
A)April 1980
B)May 1980
C)April 1981
D)May 1981

Accepted Answer

The second phase of bank nationalisation in India took place in April 1980, when 6 more banks were nationalised, bringing the total to 20 nationalised banks at that time.

Question 18

The liabilities of a bank are
A)Advance and loans
B)Time deposits and shares
C)Cash with reserve ratio
D)Bonds and debentures of share holders

Accepted Answer

Time deposits and shares are considered liabilities for a bank because they represent money the bank owes to its depositors and shareholders.

Question 19

The recent conversion of Financial Institutions into Commercial Banks or Non-Banking Finance Companies (NBFCs) under the regulatory aspect of RBI was suggested by
A)Narasimham Committee
B)Ministry of Company Affairs
C)Ministry of Finance
D)None of the above

Accepted Answer

The Narasimham Committee was instrumental in suggesting reforms that led to the conversion of Financial Institutions into Commercial Banks or Non-Banking Finance Companies (NBFCs), under the regulatory purview of the Reserve Bank of India (RBI). This was part of broader financial sector reforms aimed at enhancing the efficiency and stability of the financial system in India.

Question 20

Rupee is a coin
A)Full Value
B)Token money
C)Credit money
D)Convertible

Accepted Answer

Rupee, when referred to as a coin, is considered token money. This means it is a type of currency whose face value is greater than its metal value, and it represents a claim on a commodity rather than holding intrinsic value.

Quiz 2: RBI and Banking : Coins, Instruments, Functions

Which of the following coins is not issued by the RBI ?

RBI has withdrawn the circulation of coins in the denomination of 1 paise, 2 paise, 3 paise, 5 paise, 10 paise, 20 paise and 25 paise in which year ?

Which among the following would not help RBI to control the inflation in the country ?

What would be the impact on cash reserves of the commercial banks if RBI conducts the sale of securities?

Which of the following works as the agent of RBI while it has no own offices ?

Which of the followong Governors of RBI also served as the Finance Minister of India ?

Which of the following statements is/are not true ?

Which is not a function of RBI ?

To control inflation and tackle the problem of exchange liquidity due to foreign exchange inflows, the RBI

Ways and Means advanced by RBI refers to

The commercial banks were required to keep some percentages of their time deposits and their demand deposits with the RBI in the form of reserves is known as

Decreasing percentage of statutory liquidity ratio by RBI

If the RBI wants to control the speculation on the price of essential commodities, adopted a measure known as

The RBI's function of Banker to Government implies

Which of the following is a commercial bank?

Which one of the following is near money?

In July 1969, 14 major Indian scheduled banks were nationalised and 6 more banks were nationalised in

The liabilities of a bank are

The recent conversion of Financial Institutions into Commercial Banks or Non-Banking Finance Companies (NBFCs) under the regulatory aspect of RBI was suggested by

Rupee is a coin