banking, security market & insurance section 1 MCQ Questions & Answers Detailed Explanation

Answer: (a)

A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves, and that is commonly used in international transactions for commodities like oil and gold.

Persons who live in a country that issues a reserve currency can purchase imports and borrow across borders more cheaply than persons in other nations because they need not exchange their currency to do so.

Answer: (c)

Answer: (d)

Money laundering occurs in three steps:

1. the first step involves introducing cash into the financial system by some means called placement;
2. the second involves carrying out complex financial transactions to camouflage the illegal source called layering, and
3. the final step entails acquiring wealth generated from the transactions of the illicit funds called integration.

Money Laundering - It is the process of transforming the profits of crime and corruption into ostensibly legitimate assets.

Answer: (b)

Small Industries Development Bank of India is a non-independent financial institution aimed to aid the growth and development of micro, small and medium-scale enterprises.

It was incorporated initially as a wholly-owned subsidiary of the Industrial Development Bank of India.

SIDBI has taken over the responsibility of administering small industry development funds managed by the IDBI.

Answer: (c)

In India, commercial banks have the highest share in the disbursement of credit to agriculture and allied activities.

The commercial banks disburse around 60% credit followed by cooperative banks around 30%.

Answer: (d)