Quiz 389: Banking Awareness for Banking Examinations May 27, 2010 1. From the given options 1 to 4 , please find out the one which is not an objective of a central Bank of a country?The central Bank of a country aims at profitThe central bank is given powers to control and regulate the working of the commercial banksThe central bank is given powers to control and regulate the working of the commercial banksCentral Bank generally controls the credit2. From the given options, bring out the one which is not a function / power of Reserve Bank of India:To assume the responsibility of meeting directly or indirectly all reasonable demands for accommodationTo hold cash reserves of the commercial banks and make available financial accommodation to themTo enjoy monopoly of the note issueTo assume the responsibility of statistical analysis of data related to macro economy of India3. Many a times we read in the newspapers about margin requirements. Which of the following correctly indicates margin requirements?Margin requirements aim at the regulation of the volume of credit as well as flow of the creditMargin requirements imply that every bank has to keep certain minimum cash reserves with the reserve bank of IndiaMargin requirements imply that every bank has to keep certain proportion of its total deposits in the form of cash with it selfMargin requirements imply to a cushion against the decline in the value of the security4. What will be the impact on the cash reserves of commercial banks if RBI conducts a sale of securities ?IncreaseDecreaseRemain constantIncrease or decrease5. Which among the following is a major qualitative control measure in India ?Bank Rate PolicyOpen market Operationsways and means advancesMargin Requirements6. Many a times we read in the financial newspapers that Reserve bank of India is “Lender of Last Resort (LOLR) ” In India. Which among the following statement gives the most correct definition of “Lender of Last Resort”?If a person or firm which is eligible to get a loan, does not get it from any commercial bank, may approach to Reserve Bank of India for loan.If the state governments are in crisis and need money for short term , they can approach RBI for this purposeIf a commercial bank is in crisis, it may place its reasonable demand for accommodation to Reserve Bank of IndiaA scheduled commercial bank meets all of its demands in all weathers from Reserve bank of India7. Many a times we read in the newspapers that RBI takes certain steps to curb the menace of Inflation. In this context, which among the following will not help RBI in controlling the inflation in the country?An increase in the Bank RateAn increase in the Reserve Ratio RequirementsA purchase of securities in the open marketIncreasing the Repo Rate8. We suppose that Reserve Bank of India would like to increase the cash Reserves of the commercial Banks. Which among the following would be most appropriate action of the RBI to achieve this aim?RBI would release gold from its reservesRBI would raise the reserve ratioRBI would buy the bonds in the open marketRBI will stop the transactions which involve the bills of exchange9. Which among the following is a incorrect statement:The Reserve Bank of India has the special powers to control and regulate the commercial banking systemA rise in the bank rate is a strong anti-deflationary monetary toolMinimum Reserve Requirements are fixed to ensure the liquidity and solvency of individual commercial banksReserve Ratio Requirement is a quicker method than bank rate and OMO (Open Market Operations) in general credit regulations10. The “Service area Approach” was an strategy launched to improve which of the following?Micro, Small and medium EnterprisingUnorganized SectorRural lendingUrban Industrial LendingSubmit Test « Previous Next »