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

Question : 1

Consider the following statement:

1. As per recommendations of the Narasimham Committee, it has been decided that credit facilities granted by banks will be classified into performing and non-performing assets (NPA)
2. NPA is a loan which is in default for more than nine months.

a) 2 only

b) 1 only

c) 1 and 2

d) None of the Above

Question : 2

The Narsimhan Committee for financial sector reforms has suggested reduction in

a) SLR, CRR and Priority Sector Financing

b) CRR, Priority Sector Financing and Financing to capital goods sector

c) SLR and Financing to Capital goods sector

d) SLR and CRR

Question : 3

_______ are conducted by the RBI by selling and buying government securities from banks.

1. Bank rate
2. Cash reserve ratio
3. Open market operations
4. Statutory Liquidity Ratio

a) 2 only

b) 1 only

c) 3 only

d) 4 only

Question : 4

Which among the following is not Tier I Capital?

a) Paid up Capital

b) Revaluation Reserves

c) Statutory Reserves

d) Investment Fluctuation Reserves

Question : 5

Consider the following statement.

1. NABARD stands for National Bank for Agriculture and Rural Design
2. NABARD is an apex developmental bank in India.
3. Setting up of NABARD was recommended by the committee to review arrangements for institutional credit for agriculture and rural development, set up by the RBI, under the chairmanship of Shri B. Sivaraman.

a) 2 only

b) 1 only

c) 3 only

d) 4 only

Question : 6

Which one of the following statements correctly describes the meaning of legal tender money?

a) The money which a creditor is under compulsion to accept in settlement of his claims

b) The bank money in the form of cheques, drafts, bills of exchange, etc.

c) The money which is tendered in courts of law to defray the fee of legal cases

d) The metallic money in circulation in a country