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

Question : 1

Consider the following statements regarding NonBanking Finance Companies (NBFCs):

1. NBFCs can also engage in Micro-Finance Activities.
2. Housing-finance companies form a distinct subgroup of the NBFCs.
3. The deposit insurance facility of the Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors.

a) 1 and 3

b) Only 1

c) All of there

d) None of these

Question : 2

Bank rate refers to:

a) the rate at which banks lend to its prime borrowers

b) the rate at which banks rediscount bills with RBI

c) the maximum rate that banks can pay for deposit

d) the rate of interest charged on inter-bank transactions

Question : 3

Rural Infrastructure Development Fund is being financed by

a) Reserve Bank of India

b) Selected group of Public Sector Banks

c) Ministry of Rural Development

d) NABARD

Question : 4

The Bank rate is the rate at which

a) the RBI lends to the public

b) the Government of India lends to other countries

c) the RBI gives credit to the commercial banks

d) a bank lends to the public

Question : 5

What do we call an arrangement whereby an issuing Bank at the request of the Importer (Buyer) undertakes to make payment to the exporter (Beneficiary) against stipulated documents?

a) Bill of Exchange

b) Letter of Credit

c) Letter of Exchange

d) Bill of Entry

Question : 6

Which of the following is not a function of Reserve Bank of India?

a) Regulation of foreign trade

b) Custody and management of country’s foreign exchange reserved

c) Regulation of credit

d) Regulation of currency