money supply, banking & financial institutions section 9 MCQ Questions & Answers Detailed Explanation

Answer: (b)

There are two types of money in a fractional-reserve banking system, currency originally issued by the central bank, and bank deposits at commercial banks:

1. central bank money (all money created by the central bank regardless of its form, e.g. banknotes, coins, electronic money); and
2. commercial bank money (money created in the banking system through borrowing and lending) - sometimes referred to as chequebook money.

Answer: (b)

The inflation target is decided by the Government of India in consultation with RBI

Answer: (d)

The Kisan Credit Card Scheme is being implemented by Commercial Banks, RRBs, Small Finance Banks and Cooperatives.

Answer: (c)

Answer: (a)

Answer: (c)

As per the new policy (2019), Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance has been made the nodal department for the strategic disinvestment. DIPAM and NITI Aayog will now jointly identify PSUs for strategic disinvestment and then it is approved by CCEA.

Government has created an “Alternative Mechanism”, which is an inter-Ministerial body to fasten the process of strategic disinvestment. It will decide the following:

The quantum of shares to be transacted, mode of sale and final pricing of the transaction or lay down the principles/ guidelines for such pricing; and the selection of strategic partner/ buyer; terms and conditions of sale; and

To decide on the proposals of Core Group of Secretaries on Disinvestment (CGD) with regard the timing, price, the terms & conditions of sale, and any other related issue to the transaction.

This will facilitate quick decision-making and obviate the need for multiple instances of approval by CCEA for the same CPSE.