RBI, Monetary Policy, Banking Terms - One Line Questions

1. When was the Reserve Bank of India established? — 1935
2. The RBI was nationalized in which year? — 1949
3. What is a 'Debit Card'? — A card that deducts money directly from the cardholder's bank account
4. What is a 'Credit Card'? — A card that allows a customer to borrow funds from the issuer up to a certain limit
5. What is 'Monetary Policy Committee' (MPC)? — A committee that decides on interest rates
6. What is a 'Cheque'? — A written order to a bank to pay a stated sum from the drawer's account
7. What is 'Negotiable Instrument'? — A document that contains an unconditional order or promise to pay a certain sum of money
8. What is 'Letter of Credit' (LC)? — A guarantee from a bank that a buyer will pay the seller
9. What is 'Quantitative Easing' (QE)? — A monetary policy tool where a central bank purchases financial assets to inject liquidity
10. What is a 'Recurring Deposit' (RD)? — A deposit where a fixed sum is invested at regular intervals
11. What is Deflation? — A sustained decrease in the general price level
12. What is Inflation? — A sustained increase in the general price level of goods and services
13. What is a 'Fixed Deposit' (FD)? — A deposit made for a specific period at a fixed interest rate
14. What is 'Interest Rate Swap'? — An agreement to exchange interest rate payments based on a notional principal
15. Which of the following is a type of bank account? — All of the above
16. What is 'Basel Norms' related to? — Bank capital adequacy and risk management
17. When the RBI buys government securities in OMOs, what is the likely impact on the money supply? — Increases
18. When the RBI sells government securities in OMOs, what is the likely impact on the money supply? — Decreases
19. What is 'ECS' in banking? — Electronic Clearing Service
20. Who heads the Monetary Policy Committee in India? — Governor of RBI
21. Which of the following is a tool of Monetary Policy? — Open Market Operations
22. What is 'Laissez-faire' in economics? — Minimal government intervention in the economy
23. What is a 'Savings Account' designed for? — Accumulating savings with some interest
24. Which Act governs Negotiable Instruments in India? — Negotiable Instruments Act, 1881
25. Which committee recommended the establishment of the RBI? — Hilton-Young Committee
26. What is 'KYC' in banking? — Know Your Customer
27. What is 'NEFT'? — National Electronic Fund Transfer
28. What is a major difference between NEFT and RTGS? — NEFT operates on a deferred net settlement basis, while RTGS operates in real-time
29. What does NPA stand for in banking? — Non-Performing Asset
30. What is 'Financial Inclusion'? — Providing financial services to all sections of society at affordable prices
31. What is 'RTGS'? — Real Time Gross Settlement
32. What does RBI stand for? — Reserve Bank of India
33. What is a 'Current Account' typically used for? — Frequent transactions by businesses and individuals
34. Which is the central bank of India? — Reserve Bank of India
35. What is a 'Fiscal Deficit'? — The difference between government expenditure and revenue, excluding borrowing
36. What is the Bank Rate? — The rate at which the RBI discounts bills of exchange
37. What is the Cash Reserve Ratio (CRR)? — The percentage of deposits that banks must keep with the RBI
38. What is the Statutory Liquidity Ratio (SLR)? — The percentage of deposits that banks must maintain in the form of specified government securities
39. What is the 'Prime Lending Rate' (PLR)? — The rate at which banks lend to their most preferred customers
40. What is the Reverse Repo Rate? — The rate at which the RBI borrows money from commercial banks
41. What is the Repo Rate? — The rate at which the RBI lends to commercial banks against government securities
42. What is the main objective of Monetary Policy? — All of the above
43. What is the main purpose of Open Market Operations (OMOs)? — All of the above
44. Why is KYC important for banks? — To prevent money laundering and terrorist financing
45. What is the primary mandate of the MPC? — To maintain price stability while keeping in mind the objective of growth
46. What is the primary function of a 'Commercial Bank'? — To accept deposits and grant loans
47. What is the primary role of the RBI? — All of the above
48. Which of the following is a type of bank license issued by RBI? — All of the above
49. When does a loan become an NPA? — When the borrower fails to pay interest or principal for 90 days
All One Line Questions
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