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Prelims-IAS –ECONOMICS MCQ-12

1..Which of the followings are regulated by the Reserve Bank of India?

  1. Scheduled banks
  2. Non-banking financial Companies
  3. Regional Rural Banks
  4. State Cooperative Banks

Select the correct answer using the codes given below.
(a) 1, 3 and 4 only
(b) 2, 3 and 4 only
(c) 3 and 4 only
(d) 1, 2, 3 and 4 only


2..Increasing Bank Rate by the RBI leads to:

  1. More liquidity in the market
  2. Less liquidity in the market
  3. Increases investment in the economy
  4. Mobilization of more deposits by commercial banks.

Which of the above statements is/are correct?
(a) 2 and 3 only
(b) 1 and 4 only
(c) 2 and 4 only
(d) 1 and 3 only


3..With reference to the setting up of ‘Payment Banks’ to speed up the process of Financial Inclusion, consider the following statements:

  1. They will be registered as a public limited company under the Companies Act, 2013.
  2. They cannot set up subsidiaries to undertake non-banking financial activities.
  3. They can undertake lending activities and 25% of the loans must be given under priority sector lending.
  4. Like regular banks they will have to comply with CRR and SLR requirements.

Which of the statement(s) given above is/are correct?
(a) 1, 3 and 4 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) 1, 2 and 4 only


4..Consider the following statements regarding various tools of monetary policy of RBI:

  1. Bank rate is charged on long term lendings while Repo rate is charged on short term lendings.
  2. Reverse repo rate is generally higher than repo rate in India.
  3. If repo rate is increased then money supply will decrease in the economy.

Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3


5..Which of the following are eligible to participate in Liquidity Adjustment Facility (LAF) auctions?

  1. Private Banks
  2. Foreign Banks
  3. Regional Rural Banks
  4. Primary Dealers
  5. NBFCs

Select the correct answer using the code given below.
(a) 1, 2 and 3 only
(b) 1, 3 and 5 only
(c) 2, 3 and 4 only
(d) 1, 2, 4 and 5 only


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