IBPS Clerk - RBI, Monetary Policy, Banking Terms Online Test (MCQ Quiz)

1. What does RBI stand for?

A) Reserve Bank of India B) Regional Banking Institute C) Reserve Banking Institution D) Rural Bank of India

2. Which is the central bank of India?

A) State Bank of India B) Reserve Bank of India C) Punjab National Bank D) Bank of Baroda

3. When was the Reserve Bank of India established?

A) 1935 B) 1949 C) 1955 D) 1969

4. The RBI was nationalized in which year?

A) 1947 B) 1949 C) 1955 D) 1969

5. What is the primary role of the RBI?

A) To regulate the issue of bank notes B) To maintain monetary stability C) To manage currency and credit system of the country D) All of the above

6. Which committee recommended the establishment of the RBI?

A) Kelkar Committee B) Chaudhary Committee C) Hilton-Young Committee D) Gadgil Committee

7. What is the main objective of Monetary Policy?

A) To control inflation B) To promote economic growth C) To ensure financial stability D) All of the above

8. Which of the following is a tool of Monetary Policy?

A) Fiscal Policy B) Public Debt Management C) Open Market Operations D) Trade Policy

9. What is the Repo Rate?

A) The rate at which the RBI lends to commercial banks for long-term needs B) The rate at which commercial banks lend to each other C) The rate at which the RBI lends to commercial banks against government securities D) The rate at which commercial banks deposit money with the RBI

10. What is the Reverse Repo Rate?

A) The rate at which the RBI borrows money from commercial banks B) The rate at which commercial banks lend to the RBI C) The rate at which commercial banks lend to each other D) The rate at which the RBI lends to commercial banks

11. What is the Cash Reserve Ratio (CRR)?

A) The percentage of deposits that banks must keep with the RBI B) The percentage of deposits that banks must keep as liquid assets C) The percentage of deposits that banks can lend to customers D) The percentage of profits banks must share with the RBI

12. What is the Statutory Liquidity Ratio (SLR)?

A) The percentage of deposits that banks must maintain in the form of gold B) The percentage of deposits that banks must maintain in the form of cash C) The percentage of deposits that banks must maintain in the form of specified government securities D) The percentage of deposits that banks can lend to other banks

13. What is the Bank Rate?

A) The interest rate at which commercial banks lend to their most creditworthy customers B) The rate at which the RBI lends to commercial banks without any collateral C) The rate at which the RBI discounts bills of exchange D) The rate at which commercial banks lend to each other overnight

14. What is the main purpose of Open Market Operations (OMOs)?

A) To increase the money supply B) To decrease the money supply C) To manage liquidity in the banking system D) All of the above

15. When the RBI buys government securities in OMOs, what is the likely impact on the money supply?

A) Decreases B) Increases C) Remains unchanged D) Becomes volatile

16. When the RBI sells government securities in OMOs, what is the likely impact on the money supply?

A) Decreases B) Increases C) Remains unchanged D) Becomes unpredictable

17. What is Inflation?

A) A sustained increase in the general price level of goods and services B) A sustained decrease in the general price level of goods and services C) A decrease in the cost of production D) An increase in the supply of money

18. What is Deflation?

A) A sustained increase in the general price level B) A sustained decrease in the general price level C) A period of economic stagnation D) A rapid increase in wages

19. What is a 'Fiscal Deficit'?

A) The difference between government revenue and expenditure B) The difference between government borrowing and revenue C) The difference between government expenditure and revenue, excluding borrowing D) The difference between government expenditure and revenue, including borrowing

20. Which of the following is a type of bank account?

A) Current Account B) Savings Account C) Fixed Deposit Account D) All of the above

21. What is a 'Current Account' typically used for?

A) Saving money for the long term B) Frequent transactions by businesses and individuals C) Earning high interest D) Depositing a lump sum for a fixed period

22. What is a 'Savings Account' designed for?

A) High volume of daily transactions B) Accumulating savings with some interest C) Business overdraft facilities D) International money transfers

23. What is a 'Fixed Deposit' (FD)?

A) An account with no fixed term B) A deposit made for a specific period at a fixed interest rate C) An account allowing unlimited withdrawals D) An account with a variable interest rate

24. What is a 'Recurring Deposit' (RD)?

A) A single lump sum deposit made periodically B) A deposit where a fixed sum is invested at regular intervals C) An account with fluctuating deposit amounts D) A short-term deposit for immediate needs

25. What does NPA stand for in banking?

A) Non-Performing Asset B) New Public Account C) Net Profitability Analysis D) Non-Payment Assurance

26. When does a loan become an NPA?

A) When the borrower fails to pay interest for 90 days B) When the borrower fails to pay principal for 90 days C) When the borrower fails to pay interest or principal for 90 days D) When the borrower misses the first EMI payment

27. What is a 'Cheque'?

A) A digital instruction for payment B) A written order to a bank to pay a stated sum from the drawer's account C) A form of promissory note D) A direct debit mandate

28. What is 'Negotiable Instrument'?

A) A document that guarantees payment B) A document that contains an unconditional order or promise to pay a certain sum of money C) A document requiring court approval for transfer D) A document restricted to specific parties

29. Which Act governs Negotiable Instruments in India?

A) Indian Contract Act, 1872 B) Negotiable Instruments Act, 1881 C) Indian Penal Code, 1860 D) Banking Regulation Act, 1949

30. What is 'ECS' in banking?

A) Electronic Clearing Service B) Electronic Credit System C) Electronic Cash Settlement D) Electronic Customer Service

31. What is 'NEFT'?

A) National Electronic Fund Transfer B) New Electronic Fund Transfer C) National Exchange For Transfer D) Networked Electronic Fund Transfer

32. What is 'RTGS'?

A) Real Time Gross Settlement B) Rapid Transfer Gross Settlement C) Real Time Global Settlement D) Registered Transfer Gross Settlement

33. What is a major difference between NEFT and RTGS?

A) NEFT operates on a deferred net settlement basis, while RTGS operates in real-time B) RTGS is for smaller amounts, while NEFT is for larger amounts C) NEFT is only for inter-bank transfers, while RTGS is for intra-bank transfers D) NEFT works 24x7, while RTGS has specific operating hours

34. What is a 'Credit Card'?

A) A card used for withdrawing cash from ATMs B) A card that allows a customer to borrow funds from the issuer up to a certain limit C) A card used to earn loyalty points D) A card linked directly to a bank account for debit transactions

35. What is a 'Debit Card'?

A) A card allowing deferred payment B) A card that deducts money directly from the cardholder's bank account C) A card used for making only online purchases D) A card that requires a PIN for every transaction, including small amounts

36. What is 'KYC' in banking?

A) Know Your Customer B) Keep Your Credentials C) Know Your Client D) Key Customer Verification

37. Why is KYC important for banks?

A) To increase the number of customers B) To prevent money laundering and terrorist financing C) To offer personalized services D) To reduce transaction costs

38. What is 'Monetary Policy Committee' (MPC)?

A) A committee that decides on interest rates B) A committee that manages government debt C) A committee that oversees banking regulations D) A committee that plans infrastructure projects

39. Who heads the Monetary Policy Committee in India?

A) Finance Minister B) Governor of RBI C) Chief Economic Advisor D) Chairman of SBI

40. What is the primary mandate of the MPC?

A) To maintain price stability while keeping in mind the objective of growth B) To ensure maximum employment C) To manage foreign exchange reserves D) To regulate the stock market

41. What is 'Interest Rate Swap'?

A) An agreement to exchange principal amounts B) An agreement to exchange interest rate payments based on a notional principal C) An agreement to exchange currencies D) An agreement to exchange shares of companies

42. What is 'Letter of Credit' (LC)?

A) A guarantee from a bank that a buyer will pay the seller B) A document allowing a customer to withdraw funds C) A loan approval letter D) A statement of account balance

43. What is 'Basel Norms' related to?

A) Customer service standards B) Bank capital adequacy and risk management C) Interest rate determination D) Digital banking security

44. Which of the following is a type of bank license issued by RBI?

A) Universal Bank License B) Small Finance Bank License C) Payment Bank License D) All of the above

45. What is 'Laissez-faire' in economics?

A) Government intervention in the economy B) Minimal government intervention in the economy C) Central planning of the economy D) High taxation rates

46. What is 'Quantitative Easing' (QE)?

A) A monetary policy tool where a central bank purchases financial assets to inject liquidity B) A fiscal policy tool to reduce government spending C) A regulatory measure to increase bank capital D) A method to control exchange rates

47. What is the primary function of a 'Commercial Bank'?

A) To print currency B) To accept deposits and grant loans C) To regulate the stock market D) To manage foreign exchange reserves

48. What is the 'Prime Lending Rate' (PLR)?

A) The rate at which banks lend to their most preferred customers B) The average interest rate charged by banks C) The rate at which banks borrow from the RBI D) The rate offered on fixed deposits

49. What is 'Financial Inclusion'?

A) Providing financial services to all sections of society at affordable prices B) Focusing on high-net-worth individuals C) Restricting access to banking services D) Increasing the number of ATMs

RBI, Monetary Policy, Banking Terms - Online Test

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