MCQ on Money and Banking. We covered all the MCQ on Money and Banking in this post for free so that you can practice well for the exam.
Install our MCQTUBE Android app from the Google Play Store and prepare for any competitive government exams for free.
These types of competitive MCQs appear in the exams like UPSC, State PCS, CDS, NDA, Assistant Commandant, SSC, Railway, Bank, Delhi Police, UPSSC, and other Competitive Examinations, etc. We created all the competitive exam MCQs into several small posts on our website for your convenience.
You will get their respective links in the related posts section provided below.
Related Posts:
- MCQ on Emergency Provisions
- Local Self Government Urban Class 9 ICSE
- Local Self Government Rural Class 9 ICSE
Mock Test on Money and Banking for Students
When the Reserve Bank of India announced an increase in the Cash Reserve Ratio (CRR), what does it means?
(a) Commercial banks will have less money to lend.
(b) The Reserve Bank of India will have less money to lend.
(c) The Union Government will have less money to lend.
(d) None of the above
Option a – Commercial banks will have less money to lend
Which one among the following is the precious metal (Gold) or other approved securities that a commercial bank must maintain as reserves other than the cash with RBI?
(a) Cash Reserve Requirement
(b) Statutory Liquidity Requirement
(c) Forward Fund
(d) Reserve Money
Option b – Statutory Liquidity Requirement
In India, the Repo Rate is announced by
(a) the Ministry of Finance, Government of India
(b) the Prime Minister of India
(c) the Reserve Bank of India
(d) the President of India
Option c – the Reserve Bank of India
Which one of the following rates is the rate at which banks park their funds with the Central Bank?
(a) Repo Rate
(b) Bank Rate
(c) Prime Lending Rate
(d) Reverse Repo Rate
Option d – Reverse Repo Rate
The banks are required to maintain a certain ratio between their cash in hand and total assets. This is called
(a) SLR
(b) CBR
(c) SBR
(d) CRR
Option d – CRR
If the Cash Reserve Ratio is lowered by the RBI, its impact on credit creation will be to
(a) increase it
(b) decrease it
(c) have no impact
(d) None of these
Option a – increase it
The Cash Reserve Ratio refers to
(a) the share of Net Demand and Time Liabilities that banks have to hold as liquid assets.
(b) the share of Net Demand and Time Liabilities that banks have to hold as balances with the RBI.
(c) the share of Net Demand and Time Liabilities that banks have to hold as part of their cash reserves.
(d) the ratio of cash holding to reserve banks.
Option b – the share of Net Demand and Time Liabilities that banks have to hold as balances with the RBI
Supply of money regaining the same when there is an increase in demand for money, there will be
(a) a fall in the level of prices
(b) an increase in the rate of interest.
(c) a decrease in the rate of interest.
(d) an increase in the level of income and employment.
Option a – a fall in the level of prices
An increase in the bank rate generally indicates that the
(a) market rate of interest is likely to fall.
(b) Central Bank is no longer making loans to commercial banks.
(c) Central Bank is following an easy money policy.
(d) Central Bank is following a tight money policy.
Which one of the following is the correct description of the Bank Rate in the Indian money market?
(a) Rate of interest charged by commercial banks from the borrowers.
(b) Rate of interest which commercial banks discounted bills of their borrowers.
(c) The rate of interest allows by commercial banks on their deposits.
(d) The rate at which RBI purchases or rediscounts bills of exchange of commercial banks.
Option d – The rate at which RBI purchases or rediscounts bills of exchange of commercial banks
Reserve Bank of India gives short-term loans to commercial banks.
(a) interest rate
(b) bank rate
(c) reserve repo rate
(d) repo rate
Option d – repo rate
If the inflation in an economy is rising steadily, the Central Bank might
(a) increase the repo rate
(b) decrease the reverse repo rate
(c) decrease the repo rate
(d) keep the repo rate unchanged
Option a – increase the repo rate
Which one of the following is not correct about the Repo rate?
(a) It is the interest rate charged by the Central Bank on overnight loans.
(b) It is the interest rate paid by commercial banks on overnight borrowing.
(c) It is the interest rate agreed upon in the loan contract between a commercial bank and the Central Bank
(d) It is the cost of collateral security.
Option d – It is the cost of collateral security
Which of these institutions fixes the Repo Rate and the Reverse Repo Rate in India?
(a) Comptroller and Auditor General of India
(b) Reserve Bank of India
(c) Ministry of Finance
(d) State Bank of India
Option b – Reserve Bank of India
Which of the following terms indicates a mechanism used by commercial banks for providing credit to the Government?
(a) Cash Credit Ratio
(b) Debit Service Obligation
(c) Liquidity Adjustment Facility
(d) Statutory Liquidity Ratio
Option d – Statutory Liquidity Ratio
When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?
(a) India’s GDP growth rate increases drastically.
(b) Foreign institutional investors may bring more capital into our country.
(c) Scheduled commercial banks may cut their lending rates.
(d) It may drastically reduce the liquidity of the banking system.
Option c – Scheduled commercial banks may cut their lending rates
With the aim of containing inflation and anchoring inflationary expectations, in recent times, the Reserve Bank of India actively managed liquidity through the appropriate use of which one of the following?
(a) Liquidity Adjustment Facility
(b) Interest Subvention
(c) Open Market Operations
(d) Both (a) and (c)
Option d – Both (a) and (c)
Which among the following is/are the recommendations of the Nachiket Mor Committee? 1. Every adult in our country should have a bank account by 1st January 2016. II. Abolition of interest subsidies. III. Unified financial redress agency under Finance Ministry for customer grievances IV. Raising priority sector lending cap for banks to 70% from the current 40%. Choose the right answer from the codes given below.
(a) I, II and Ill
(b) Only IV
(c) II and IV
(d) All of the above
Option a – I, II and III
What do you mean by the Open Market Operation of RBI?
(a) Trading of securities
(b) Auction of foreign currency
(c) Trade of Gold
(d) None of the above
Option a – Trading of securities
Open market operations of the Reserve Bank of India refers to
(a) trading in securities
(b) auctioning of foreign exchange
(c) transaction in gold
(d) None of the above
Option a – trading in securities
Banks of India are required to maintain a certain ratio between their risky assets and capital which is known as
(a) Cap Adeuacy Ratio (CAR)
(b) Statutory Liquidity Ratio (SLR)
(c) General Bank Reserve (GBR)
(d) Capital-to-Risk-Weighted Adequacy Ratio (CRAR)
Option d – Capital-to-Risk-Weighted Adequacy Ratio (CRAR)
Bank rate means ( MCQ on Money and Banking )
(a) interest rate charged by moneylenders.
(b) the interest rate charged by scheduled banks.
(c) rate of profit of banking institutions.
(d) the official rate of interest charged by the Central Bank.
Option d – the official rate of interest charged by the Central Bank
Who among the following was the Chairman of the Committee on Deepening Digital Payments appointed by the RBI? ( MCQ on Money and Banking )
(a) HR Khan
(b) Nandan Nilekani
(c) NR Narayana Murthy
(d) Sanjay Jain
Option b – Nandan Nilekani
The Reserve Bank of India has recently constituted a high-level task force on Public Credit Registry (PCR) to suggest a road map for developing a transparent, comprehensive, and near-real-time PCR for India. The task force is headed by
(a) Sekar Karnam
(b) Vishakha Mulye
(c) Sriram Kalyanaraman
(d) YM Deosthalee
Option d – YM Deosthalee
We covered all the mcq on money and banking above in this post for free so that you can practice well for the exam.
Check out the latest MCQ content by visiting our mcqtube website homepage.
Also, check out:
