money supply, banking & financial institutions section 3 MCQ Questions & Answers Detailed Explanation
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The following question based on Money Supply, Banking and Financial Institutions topic of indian economy mcq
(a) Abid Hussain Committee
(b) S Padmanabhan Committee
(c) R H Khan Committee
(d) Y H Malegam Committee
The correct answers to the above question in:
Answer: (c)
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Read more money and supply banking financial institutions Based Indian Economy Questions and Answers
Question : 1
One amongst the following take the decision about the monetary policy of India.
a) Reserve Bank of India
b) International Monetary Fund
c) Prime Minister of India
d) Finance Minister of India
Answer »Answer: (a)
Question : 2
Consider the following statements regarding the "Kisan Credit Card (KCC)" scheme:
- It provides short term credit for the cultivation of crops
- It provides long term credit
- It provides credit for consumption requirements of farmers household
- Available to owner cultivator, tenant farmers and sharecroppers
a) (ii) & (iv) only
b) (i), (ii) & (iii) only
c) (i) only
d) All of the above
Answer »Answer: (d)
The Kisan Credit Card (KCC) scheme is an innovative credit delivery mechanism to meet the production credit requirements of the farmers in a timely and hassle-free manner.
The scheme is under implementation in the entire country by the vast institutional credit framework involving Commercial Banks, RRBs and Cooperatives and has received wide acceptability amongst bankers and farmers.
Kisan Credit Card Scheme aims at providing adequate and timely credit support from the banking system under a single window to the farmers for their following needs:
To meet the short-term credit requirements for the cultivation of crops
- Post-harvest expenses
- Produce Marketing loan
- Consumption requirements of farmer household
- Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery etc.
- Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc.
The following people are eligible for this scheme
- All Farmers – Individuals / Joint borrowers who are owner cultivators
- Tenant Farmers, Oral Lessees & Share Croppers
- Self Help Groups or Joint Liability Groups of Farmers
Question : 3
"Government offers above-market interest rate on the small savings schemes like PPF etc.". It leads to:
- Hindrance in monetary policy transmission
- Supports monetary policy transmission
- Mostly benefits the rich people
- Mostly benefits the poor people
a) (i) & (iv) only
b) (ii) & (iii) only
c) (i) & (iii) only
d) (ii) & (iv) only
Answer »Answer: (c)
When the government offers high rates on its own savings scheme then banks are apprehensive of reducing their deposit rates as it will lead to people depositing money in government savings schemes rather than in banks.
When the banks are not able to reduce their deposit rate, they do not reduce the lending rate also as it will squeeze/reduce their profits.
It hinders monetary policy transmission and benefits mostly rich people.
[Ref: Economic Survey 2015-16 Vol-I, Page 96, Small Savings]
Question : 4
Consider the following in regards of types of loan:
- Draft Loan
- Term Loan
- Cash credit
- Overdraft
a) 2 only
b) 1 only
c) 3 only
d) 4 only
Answer »Answer: (b)
Types of loan are term loan, cash credit, overdraft, or bills discounted.
Question : 5
The Reserve Bank of India regulates the commercial banks in matters of:
- liquidity of assets
- branch expansion
- merger of banks
- winding-up of banks
a) 2, 3 and 4 only
b) 1 and 4 only
c) 1, 2 and 3 only
d) 1, 2, 3 and 4
Answer »Answer: (d)
The Reserve Bank of India is the main monetary authority of the country and besides that, in its capacity as the central bank, acts as the bank of the national and state governments.
Sometimes it happens that some of the banks close down due to non-recovery of loans or such other issues. In such conditions, people have to suffer as their money is with the bank then.
For this reason, there is a provision for winding up of the banking company under the Banking Regulation Act, 1949. The power of winding up of Bank lies in the hand of the Reserve Bank of India.
Question : 6
A company undertakes a public issue which means that _____ .
- Shares of the company will be issued only through public sector organizations like banks/central financial institutions etc.
- Shares of the company will be issued to general public through the primary market.
- means some stakeholders/promoters are leaving the company and wish to sell their stock to general public.
a) 2 only
b) 1 only
c) 3 only
d) All 1, 2 and 3
Answer »Answer: (a)
GET Money Supply, Banking and Financial Institutions PRACTICE TEST EXERCISES
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