Quiz 323: General Studies for PCS Exams.

Notes:
NDS stands for Negotiated Dealing System. It is an electronic platform established by the Reserve Bank of India (RBI) to facilitate the trading of government securities and money market instruments. Launched in 2002, NDS enhances transparency and efficiency in the Indian debt market, allowing participants to negotiate and execute trades electronically.

Notes:
Reserve Bank of India (RBI) is introducing a VSAT (very small aperture terminal) based communication system with Hyderabad as the hub. VSATs allow branches to establish wireless connectivity with their bank’s core banking solution platform. The RBI’s INFINET is a Closed User Group (CUG) network for the Indian banking and financial sector. INFINET is primarily a VSAT and leased line based network.

Notes:
The correct answer is “Leverage.” Leverage in finance refers to the use of borrowed capital to increase the potential return on investment. It magnifies both gains and losses, making it a double-edged sword. For example, using leverage can amplify profits in a rising market, but it can also lead to important losses if the market declines. Historically, leverage has been a key factor in major financial events, such as the 2008 financial crisis, where excessive leverage contributed to widespread defaults.

Notes:
The Insurance Regulatory and Development Authority of India (IRDAI) is the national agency of Government of India (GoI) for the Indian insurance industry. It is the regulatory body established under the Insurance Regulatory and Development Authority Act, 1999 and reports to Ministry of finance. Its headquarters is in Hyderabad, Telangana.

Notes:
The correct answer is “Y V Reddy Committee.” The Reserve Bank of India (RBI) modified the definitions of monetary aggregates M1, M2, and M3 based on the recommendations of the Y V Reddy Committee in 2005. This committee aimed to enhance the measurement of money supply and improve monetary policy effectiveness. Y V Reddy, who served as the RBI Governor from 2003 to 2008, played a important role in India’s monetary policy framework during a period of economic reform.

Notes:
The first pillar of the Basel II Accord is “minimum capital requirements.” This pillar establishes the minimum capital banks must hold to cover risks, ensuring financial stability. Basel II, introduced in 2004 by the Basel Committee on Banking Supervision, aimed to enhance the banking regulatory framework. It replaced the earlier Basel I framework, which primarily focused on credit risk, by incorporating operational and market risks as well. The minimum capital requirement is crucial for maintaining solvency and protecting depositors.

Notes:
The First Finance Commission was constituted under the chairmanship of Shri K.C. Neogy on 6th April, 1952. It covered the recommendations for the period 1952-57.

Notes:
Central Pollution Control Board (CPCB) has declared the permissible noise level in India for different areas. In industrial areas, it is 75 dB (daytime) and 70 dB (night). In commercial areas, it is 65 dB and 55 dB respectively and in residential areas it is 55 dB and 45 dB.

Notes:
M3 is referred to as aggregate monetary resources. It includes M2 plus large time deposits, institutional money market funds, and other larger liquid assets. M3 provides a broader view of the money supply, reflecting the total amount of money available in the economy, which can influence inflation and economic growth. The distinction between M1, M2, and M3 helps economists and policymakers assess monetary policy and economic conditions.

Notes:
The correct answer is “Security Holdings.” Security holdings refer to investments in stocks, bonds, or other financial instruments, which are assets for a bank. In contrast, time deposits, borrowing from savings banks, and demand deposits are liabilities, as they represent money the bank owes to depositors. Commercial banks typically hold a diverse portfolio of securities to manage risk and generate income.