Indian Economy MCQs

Notes:
Under the Statutory Liquidity Ratio (SLR), banks must maintain liquid assets such as cash, gold, or approved securities with themselves. SLR is mandated by the Reserve Bank of India under the Banking Regulation Act, 1949. The current SLR requirement is 18% of Net Demand and Time Liabilities (NDTL) as per RBI policy. These assets are not kept with the RBI.

Notes:
Collateralized Borrowing and Lending Obligation (CBLO) was introduced in India in 2003. It is a money market instrument developed by the Clearing Corporation of India Limited (CCIL) and approved by the Reserve Bank of India. CBLO facilitates collateralized borrowing and lending among financial institutions by using government securities as collateral and operates under the RBI’s regulatory framework, with maturity periods from one day to one year.

Notes:
Nylon fiber is a synthetic polymer regulated under petrochemicals. The Department of Chemicals and Petrochemicals operates under the Ministry of Chemicals and Fertilizers. The ministry monitors petrochemicals and synthetic fiber industries in India. This ministry administers policies, development, and regulation of nylon production and trade. The department was previously under the Ministry of Petroleum until 1991, then reassigned.

Notes:
The Consolidated Fund of India was created under Article 266 of the Indian Constitution. The government meets all its expenditure from this fund and it needs parliamentary approval to withdraw money from this fund.

Notes:
Statement 1 is correct because Narrow Banking limits banks to investing in liquid, safe assets, such as government securities, avoiding higher-risk strategies. Statement 2 is also correct since matching the maturity and risk of assets and liabilities reduces the possibility of asset-liability mismatches. Therefore, both statements correctly describe the essential features of Narrow Banking.

Notes:
Department of Industrial Policy and Promotion is mandated to receive FDI proposals under the Government Route since 2017. It operates under the Ministry of Commerce and Industry. The Foreign Investment Facilitation Portal is managed by the Department for Promotion of Industry and Internal Trade, previously DIPP. FDI proposals in single brand retailing must be filed online with this department, complying with FEMA regulations.

Notes:
The call money is the short-term money market instrument where money is borrowed or lent on demand for a day. It is also known as overnight money market instrument. Intervening holidays and/or Sunday are excluded for this purpose. Thus, it is money borrowed on a day and repaid on the next working day (irrespective of the number of intervening holidays).

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The World Economic Forum published the Global Competitiveness Report annually from 2004 to 2020. The report used the Global Competitiveness Index to assess countries’ economic fundamentals, institutions, and policies. The Global Competitiveness Report was discontinued after 2020 and is not currently published by any organization.

Notes:
Interval funds are a hybrid of open-ended and closed-ended funds. They allow continuous purchases but restrict redemptions to specific intervals, usually monthly or quarterly. Redemptions are permitted only during these fixed periods. The Securities and Exchange Commission (SEC) regulates these funds in the United States. Interval funds are different from daily-liquid mutual funds.

Notes:
The Financial Action Task Force is an intergovernmental body established in 1989 at the G7 Summit in Paris. FATF sets international standards to prevent money laundering and terrorist financing. The organization developed 40 Recommendations as technical standards. It conducts mutual evaluations of members. FATF monitors risks and trends in global money laundering and terrorist financing.