UPSC Prelims Marathon 26 July - Banking in India

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Dear Friends,

We are posting prelims marathon MCQs for today. In this initiative, you can attempt 10 subjectwise MCQs daily. Daily Quiz UPSC Prelims Marathon 26 July Banking in India

For schedule, refer to the archive link given below. Best UPSC institute In Delhi,

For the Prelims Marathon archive – click here,

Start Quiz

Marking Pattern

Correct Answer : 2

Wrong Answer : -0.66

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CHOOSE A QUESTION

Time Left :5

Question No. 1

Consider the following statements:
1.Both banks and non-bank financial institutions can accept deposits and provide loans.
2.Non-bank financial institutions allow depositors to withdraw funds using cheques.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 2

Consider the following statements regarding Non-Banking Financial Companies (NBFCs):
1.NBFCs are allowed to accept demand deposits from the public.
2.NBFCs cannot issue cheques drawn on themselves as they do not form part of the payment and settlement system.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 3

Consider the following statements:
1.NBFCs with asset size of ₹500 crore or more are classified as systemically important.
2.All NBFCs are covered under the deposit insurance scheme of DICGC, like scheduled commercial banks.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 4

Consider the following statements regarding the Reserve Bank of India (RBI):
1.The RBI was originally established as a private bank under the RBI Act, 1934.
2.After nationalisation in 1949, the RBI became a technical commercial bank with limited regulatory functions.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 5

Consider the following statements:
1.The Reserve Bank of India issues all denominations of Indian currency notes, including Re. 1.
2.The RBI acts as an agent of the Government of India in the International Monetary Fund (IMF).
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 6

Consider the following statements about Cash Reserve Ratio (CRR):
1.CRR is the percentage of total deposits of a bank that must be maintained in cash with the Reserve Bank of India.
2.The RBI pays interest on the amount maintained by banks as CRR.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 7

Consider the following statements:
Statement I: Cash Reserve Ratio (CRR) helps the RBI control inflation in the economy.
Statement II: By increasing CRR, the RBI increases the lending capacity of banks to stimulate economic growth.
Which one of the following is correct?

ABoth Statement I and Statement II are correct, and Statement II is the correct explanation of Statement I.

BBoth Statement I and Statement II are correct, but Statement II is not the correct explanation of Statement I.

CStatement I is correct, but Statement II is incorrect.

DStatement I is incorrect, but Statement II is correct.

Question No. 8

Consider the following statements:
Statement I: The Bank Rate influences the long-term lending activities of banks and financial institutions in India.
Statement II: Bank Rate is the interest rate at which the Reserve Bank of India lends short-term funds to commercial banks.
Which one of the following is correct?

ABoth Statement I and Statement II are correct, and Statement II is the correct explanation of Statement I.

BBoth Statement I and Statement II are correct, but Statement II is not the correct explanation of Statement I.

CStatement I is correct, but Statement II is incorrect.

DStatement I is incorrect, but Statement II is correct.

Question No. 9

Consider the following statements regarding the monetary policy tools used by the Reserve Bank of India (RBI):
1.Repo rate refers to the interest rate at which the RBI lends short-term funds to commercial banks against government securities.
2.Reverse repo rate is the rate at which the RBI borrows short-term funds from banks and financial institutions.
3.A higher repo rate encourages banks to lend more to the public to earn higher interest income.
Which of the statements given above is/are correct?

A1 and 2 only

B1 and 3 only

C2 and 3 only

D1, 2 and 3

Question No. 10

Consider the following statements:
Statement I: The Marginal Standing Facility (MSF) provides a safety valve against unexpected liquidity shocks to the banking system.
Statement II: Under the MSF, banks can borrow overnight funds from the RBI by pledging government securities, even below the Statutory Liquidity Ratio (SLR) threshold.
Which one of the following is correct?

ABoth Statement I and Statement II are correct, and Statement II is the correct explanation of Statement I.

BBoth Statement I and Statement II are correct, but Statement II is not the correct explanation of Statement I.

CStatement I is correct, but Statement II is incorrect.

DStatement I is incorrect, but Statement II is correct.

Total Number of Questions :

Total Not Attempted Questions :

Total Correct :

Total Wrong :

For schedule, refer to the archive link given below. Best UPSC institute In Delhi,

For the Prelims Marathon archive – click here,

Marking Pattern

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Question No. 6

Question No. 7

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