1. In context with the inflation control, what is the meaning of sterilization for foreign inflow?
[A] filtering the black money
[B] compliance with import export regulations
[C] withdrawing a equivalent local currency to maintain desirable rate of exchange
[D] allowing currency trade futures
Show Answer
Correct Answer: C [withdrawing a equivalent local currency to maintain desirable rate of exchange]
Notes:
Sterilization in the context of foreign inflow refers to the process of withdrawing an equivalent amount of local currency from circulation to offset the effects of foreign currency inflows. This is done to maintain a stable exchange rate and control inflation. Central banks often engage in sterilization to prevent excessive money supply growth that could lead to inflation. For example, when foreign investment increases, it can lead to an appreciation of the local currency. sterilization helps mitigate this by neutralizing the impact on the money supply.
2. The “Service area Approach” was an strategy launched to improve which of the following?
[A] Micro, Small and medium Enterprising
[B] Unorganized Sector
[C] Rural lending
[D] Urban Industrial Lending
Show Answer
Correct Answer: C [Rural lending]
Notes:
The “Service Area Approach” was introduced in 1989 by the Reserve Bank of India to enhance rural lending. It aimed to allocate specific geographical areas to banks, ensuring that credit and financial services reached underserved rural populations. This strategy was part of broader efforts to promote financial inclusion and support rural development, addressing the needs of agriculture and small enterprises.
3. Who among the following works as head of the “Board for Financial Supervision” in India?
[A] Finance Minister
[B] RBI Governor
[C] Minister of State for Finance
[D] Independent head appointed by President
Show Answer
Correct Answer: B [RBI Governor]
Notes:
The head of the “Board for Financial Supervision” (BFS) in India is the RBI Governor. Established in 1994, the BFS is responsible for overseeing the financial system, ensuring its stability and soundness. The Reserve Bank of India (RBI) plays a crucial role in regulating the banking sector, and the Governor, as the chief executive, leads this board.
4. How many banks are promoting the National Payments Corporation of India (NPCI)?
[A] 6
[B] 8
[C] 10
[D] 12
Show Answer
Correct Answer: C [10]
Notes:
The National Payments Corporation of India is an umbrella organisation for operating retail payments and settlement systems in India. It is promoted by 10 banks.
5. Who among the following famous author was an Investment Banker prior to turning become to columnist, and speaker?
[A] Arvind Adiga
[B] Chetan Bhagat
[C] Jhumpa Lahiri
[D] Kiran Desai
Show Answer
Correct Answer: B [Chetan Bhagat]
Notes:
Chetan Bhagat, the correct answer, worked as an investment banker at Deutsche Bank before becoming a bestselling author and columnist. His debut novel, “Five Point Someone,” published in 2004, gained immense popularity and was adapted into a successful Bollywood film. Bhagat’s writing often addresses contemporary issues faced by Indian youth, making him a prominent figure in Indian literature.
6. Round tripping is used as a ___?
[A] Policy to boost FDI in country
[B] Means of tax evasion
[C] Policy of export promotion
[D] Calculation of National Income
Show Answer
Correct Answer: B [Means of tax evasion]
Notes:
Round tripping refers to money from one country going out through unofficial channels and being invested back into the same country from outside to avail of tax benefits under the double tax avoidance agreement (DTAA).Round Tripping makes the government lose large amount of tax revenue as taxes on both outgoing and incoming money is lost.
7. Which among the following Indian states is the leading producer of raw silk?
[A] Bihar
[B] West Bengal
[C] Assam
[D] Karnataka
Show Answer
Correct Answer: D [Karnataka]
Notes:
Karnataka is the leading producer of raw silk in India, accounting for more than 40 percent of the total raw silk production. This is in large part due to the state’s favourable climate conditions for silk cultivation, as well as the degree of governmental support in the state for silk farmers.
8. Which among the following bodies regulated the cooperative banks in India?
[A] Reserve Bank of India
[B] Small Industries Development Bank of India
[C] National Bank for Agriculture and Rural Development
[D] National Cooperative Union of India
Show Answer
Correct Answer: A [ Reserve Bank of India ]
Notes:
As per the Cooperative Societies Act, Reserve Bank of India (RBI) regulates the cooperative banks and these are governed by the Banking Regulations Act, 1949 and the Banking Laws (Cooperative Societies) Act, 1965.
9. The negotiable instruments are passed freely from one party to another almost in the same way as money. To be negotiable, the letter of credit must include a / an:
[A] conditional promise to pay on demand or at a definite time
[B] unconditional promise to pay on demand or at an indefinite time
[C] unconditional promise to pay on demand or at a definite time
[D] conditional promise to pay on demand or at a indefinite time
Show Answer
Correct Answer: A [ conditional promise to pay on demand or at a definite time ]
Notes:
To be negotiable, the letter of credit must include an unconditional promise to pay on demand or at a definite time. The LC is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met. In it all parties deal in documents.
10. If a company has “Trade Receivables”, this implies that __:
[A] It has made a sale but yet to collect payments
[B] It has received payments but yet to make a delivery
[C] It has received an order but yet to make delivery
[D] None of the above is a correct definition
Show Answer
Correct Answer: A [ It has made a sale but yet to collect payments ]
Notes:
If a company has receivables, this means it has made a sale but has yet to collect the money from the purchaser.
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