money supply, banking & financial institutions section 1 MCQ Questions & Answers Detailed Explanation

Answer: (b)

The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994.

Currently, it can be changed freely into foreign currency for business and trade expenses but not free for activities like acquiring overseas assets. Full conversation of the currency means the local currency can be exchanged for foreign currency without any governmental control.

Presently, the issue of capital account convertibility is in the discussion stage.

Answer: (a)

Answer: (b)

Green Banking refers to practices and guidelines that make banks sustainable in the economic, environmental, and social dimensions.

Green banking is also known as environment-friendly banking, ethical banking or sustainable banking.

A conventional bank becomes a green bank by directing its core operations towards the betterment of the environment.

Answer: (a)

Answer: (a)

Answer: (d)

When foreign investors come to India, they bring dollars and this dollar they sell in forex market and demand rupees which results in increase in demand of rupee and rupee appreciates.

When exports increase, we earn more dollars from the foreign market and this dollar we sell in the forex market to purchase rupees which results in increase in demand of rupees and rupee appreciates.

When the interest rate in India increases, more foreign investors come to India to invest in fixed interest rate instruments, which results in rupee appreciation.

So, none of the statements are true.