Money and Banking UPSC. We covered all the Money and Banking UPSC in this post for free so that you can practice well for the exam.
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MCQ on Money and Banking for UPSC Students
Consider the following statements. I. Priority Sector lending started with the establishment of the Banking System in India. II. Priority Sector lending is mainly aimed to give adequate assistance to those sectors which contributed a significant proportion of the national product. Which of the statements given above is/are correct?
(a) Only I
(b) Only Il
(c) Both I and II
(d) Neither I nor II
Option b – Only II
The Reserve Bank of India regulates commercial banks in matters of I. liquidity of assets II. branch expansion III. the merger of banks IV. winding-up of banks Select the correct answer using the codes given below.
(a) I and IV
(b) II, III and III
(c) I, II and III
(d) I, II, III and IV
Option d – I, II, III and IV
Which one of the following currencies are used by RBI to construct the Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER) of Indian Currency?
(a) Japanese Yen
(b) Chinese Renminbi
(c) Pound Sterling
(d) All of the above
Option d – All of the above
Which one of the following is the custodian of the Foreign Exchange Reserve of the Indian Government?
(a) Security Exchange Board of India
(b) Insurance Regulatory Development Authority
(c) Reserve Bank of India
(d) None of the above
Option c – Reserve Bank of India
Which one of the following is not a qualitative control of credit by the Central Bank of a country?
(a) Rationing of the credit
(b) Regulation of consumer credit
(c) Variation of the reserve ratio
(d) Regulation of margin requirements
Option b – Regulation of consumer credit
Priority sector lending by banks in India constitutes lending to
(a) agriculture
(b) micro and small enterprises
(c) weaker sections
(d) All of the above
Option d – All of the above
Foreign Exchange Reserves are accumulated when there is the absorption of the excess foreign exchange flows by the RBI through intervention in foreign exchange markets. Which of the following currency is used by the RBI as an intervention currency?
(a) US Dollar
(b) Euro
(c) Japanese Yen
(d) Both (a) and (b)
Option d – Both (a) and (b)
The monetary and credit policy is announced by which of the following?
(a) Ministry of Finance in Centre
(b) RBI
(c) SBI
(d) Planning Commission
Option b – RBI
Select the correct statement regarding the Priority Sector Lending (PSL) obligations of the banks operating in India.
(a) The number of items in the PSL has been decreased by the Government of India, following the recommendations of the Narasimhan Committee-l
(b) nationalized banks have to fulfill higher targets of the PSL than the Indian private sector banks.
(c) for foreign private banks, the PSL compulsion has been withdrawn.
(d) poorest among the poor also come under the PSL.
Option d – poorest among the poor also come under the PSL
With reference to the institution of the Banking Ombudsman in India, which one of the statements is not correct?
(a) The Banking Ombudsman is appointed by the Reserve Bank of India
(b) The Banking Ombudsman can consider complaints from Non-Resident Indians having accounts in India.
(c) The orders passed by the Banking Ombudsman are final and binding on the parties concerned.
(d) The service provided by the Banking Ombudsman is free of any fee.
Option c – The orders passed by the Banking Ombudsman are final and binding on the parties concerned
Consider the following statements. I. Buying and selling of eligible securities by the Reserve Bank of India is an important feature of the open market operation. II. Open market operation influences the volume of loans and advances made by commercial banks in India. Which of the statements given above is/are correct?
(a) Only I
(b) Only II
(c) Both I and II
(d) Neither I nor II
Option c – Both I and II
Select the correct one/ones about the Banking Financial Supervision (BFS) in India. I. The RBI performs its financial supervision functions under the guidance of the Board for Financial Supervision (BFS). II. The primary objective of BFS is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions, and non-banking finance companies. Codes
(a) Only I
(b) Only II
(c) Both I and II
(d) Neither I nor II
Option c – Both I and II
Which of the following committees was constituted to scrutinize the application for new banks in India?
(a) Bandhan Committee
(b) Deepak Mohanty Committee
(c) Bimal Jalan Committee
(d) Khandelwal Committee
Option c – Bimal Jalan Committee
Which among the following committees was on banking sector reforms?
(a) Narasimham I
(b) Narasimham II
(c) Narasimham III
(d) Damodaran Committee
Option b – Narasimham II
Which of the following committees has given its recommendations on Financial Inclusion?
(a) Rakesh Mohan Committee
(b) Rangarajan Committee
(c) Sinha Committee
(d) Kelar Committee
Option b – Rangarajan Committee
On which of the following committee’s recommendations, RBI introduced the base rate system?
(a) MV Nair Committee
(b) Deepak Mohanty Committee
(c) Khandelwal Committee
(d) Nachiket Mor Committee
Option b – Deepak Mohanty Committee
Which one of the following is not a function of the RBI?
(a) Credit control
(b) Organisation of Scheduled Commercial Banks
(c) Formulation of Monetary Policy
(d) Credit creation
Option d – Credit creation
Consider the following statements regarding India’s minimum reserve system and select the incorrect ones using the codes given below. I. In the minimum reserve system, RBI had to keep a minimum reserve of gold worth 115 crores and the rest in Indian rupees. II. The minimum requirement of foreign securities was diluted when the minimum reserve system was launched.
(a) Only II
(b) Only II
(c) Both I and II
(d) Neither I and II
Option c – Both I and II
Consider the following statements. I. Scheduled Commercial Banks are those which have been included in the First Scheduled of RBI Act, 1934. II. Non-scheduled Commercial Banks are those which have been included in the Second Schedule of the RBI Act, of 1934. Which of the statements given above is/are correct?
(a) Only I
(b) Only II
(c) Both I and II
(d) Neither I nor II
Option b – Only II
Which of the following is not a function of the Reserve Bank of India?
(a) Provide Credit facility to the general public.
(b) Keep government money in various account heads.
(c) Frame Monetary and Credit Policy.
(d) All are RBI’s functions.
Option a – Provide Credit facility to the general public
Consider the following kinds of credit controls. I. Minimum margins for lending against specific securities. II. Ceiling on the amounts of credit for certain purposes. III. Discriminatory rate of interest charged on certain types of advances. Which of the credit controls given above are used by RBI as a selective credit control measure?
(a) I and II
(b) I and II
(c) II and III
(d) All of these
Option d – All of these
The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following? I. Other banks retain their deposits with the RBI. the RBI lends funds to II. The commercial banks in times of need. III. The RBI advises commercial banks on monetary matters. Select the correct answer using the codes given below.
(a) Only II
(b) I and II
(c) II and III
(d) All of these
Option b – I and II
Consider the following statements regarding the Reserve Bank of India. I. It is a banker to the Central Government. II. It formulates and administers the monetary policy. III. It acts as an agent of the Government in respect of India’s membership of the IMF. IV. It handles the borrowing program of the Government of India. Which of these statements is correct?
(a) I and II
(b) II, III and IV
(c) I, II, III and IV
(d) III and IV
Option c – I, II, III and IV
Which one of the following committees was constituted to bring reform to the Indian Banking System? ( Money and Banking UPSC )
(a) Abhijit Sen Committee
(b) Abid Hussain Committee
(c) Suresh Tendulkar Committee
(d) M Narsimham Committee
Option d – M Narsimham Committee
Which one of the following committees were constituted by the RBI to study issues and concerns in the micro-finance sector?
(a) M Narasimhan Committee
(b) S Janikiraman Committee
(c) Chakarvarti Committee
(d) YH Malegam Committee
Option d – YH Malegam Committee
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