money supply, banking & financial institutions section 6 MCQ Questions & Answers Detailed Explanation

Question : 1

Priority Sector lending by banks in India constitutes the lending to

a) Micro and small enterprises

b) All of the above

c) Weaker sections

d) Agriculture

Question : 2

The _________ bank linkage programme continued to be the main micro-finance model by which the formal banking system reaches micro-entrepreneurs (including farmers).

1. Self-Help Group
2. Indian bank
3. SBI
4. PNB

a) 2 only

b) 1 only

c) 3 only

d) 4 only

Question : 3

In the context of the Indian economy, which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’?

1. To enable the Central Bank to control the number of advances the banks can create
2. To make the people’s deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements

a) 1 and 2 only

b) 1 only

c) 2 and 3 only

d) 1, 2, 3 and 4

Question : 4

The Government is planning merger of public sector banks. It will benefit in which of the following ways:

1. Reducing cost and achieving efficiency
2. Achieving economies of scale
3. Leading to consolidation
4. The merged entity will have less NPA as compared to the individuals

a) (i), (ii) & (iii) only

b) (ii), (iii) & (iv)

c) (i) & (ii) only

d) All of the above

Question : 5

Which one of the following statements about foreign exchange reserves of India is not true?

a) It is maintained with the Reserve Bank of India

b) Presently foreign exchange situation is satisfactory in India

c) Special drawing rights are not included in it

d) It includes foreign currency assets and gold holdings of Reserve Bank of India

Question : 6

Study the following statements with regard to Reserve Bank of India and select your answer from the codes given below.

1. It is the Apex Bank.
2. It regulates the money supply.
3. It gives loan to the business houses.
4. It supervises the operations of NABARD.

a) 2 and 4

b) 1, 2 and 4

c) 1, 2 and 3

d) 1 and 2