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The Reserve Bank of India

Description: Test your knowledge about the Reserve Bank of India, the central bank of India.
Number of Questions: 15
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Tags: economics economic policymaking reserve bank of india
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When was the Reserve Bank of India established?

  1. 1935

  2. 1947

  3. 1950

  4. 1962

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Correct Option: A
Explanation:

The Reserve Bank of India was established on April 1, 1935, under the Reserve Bank of India Act, 1934.

Who is the current Governor of the Reserve Bank of India?

  1. Shantikanta Das

  2. Urjit Patel

  3. Raghuram Rajan

  4. Y. V. Reddy

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Correct Option: A
Explanation:

Shantikanta Das is the current Governor of the Reserve Bank of India, having taken office on December 11, 2018.

What is the primary objective of the Reserve Bank of India?

  1. To maintain price stability

  2. To promote economic growth

  3. To ensure financial stability

  4. To regulate the banking sector

Show answer
Correct Option: A
Explanation:

The primary objective of the Reserve Bank of India is to maintain price stability, which means keeping inflation low and stable.

What are the main functions of the Reserve Bank of India?

  1. Monetary policy

  2. Banking regulation

  3. Foreign exchange management

  4. Government debt management

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Correct Option:
Explanation:

The Reserve Bank of India performs a wide range of functions, including monetary policy, banking regulation, foreign exchange management, and government debt management.

What is the Monetary Policy Committee (MPC) of the Reserve Bank of India?

  1. A committee that sets interest rates

  2. A committee that regulates banks

  3. A committee that manages foreign exchange reserves

  4. A committee that advises the government on economic policy

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Correct Option: A
Explanation:

The Monetary Policy Committee (MPC) of the Reserve Bank of India is a committee that sets interest rates in India.

What is the repo rate set by the Reserve Bank of India?

  1. The interest rate at which banks borrow money from the Reserve Bank of India

  2. The interest rate at which banks lend money to customers

  3. The interest rate at which the government borrows money from the Reserve Bank of India

  4. The interest rate at which the Reserve Bank of India lends money to the government

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Correct Option: A
Explanation:

The repo rate is the interest rate at which banks borrow money from the Reserve Bank of India.

What is the reverse repo rate set by the Reserve Bank of India?

  1. The interest rate at which banks borrow money from the Reserve Bank of India

  2. The interest rate at which banks lend money to customers

  3. The interest rate at which the government borrows money from the Reserve Bank of India

  4. The interest rate at which the Reserve Bank of India lends money to the government

Show answer
Correct Option:
Explanation:

The reverse repo rate is the interest rate at which the Reserve Bank of India borrows money from banks.

What is the marginal standing facility (MSF) rate set by the Reserve Bank of India?

  1. The interest rate at which banks borrow money from the Reserve Bank of India

  2. The interest rate at which banks lend money to customers

  3. The interest rate at which the government borrows money from the Reserve Bank of India

  4. The interest rate at which the Reserve Bank of India lends money to the government

Show answer
Correct Option: A
Explanation:

The marginal standing facility (MSF) rate is the interest rate at which banks borrow money from the Reserve Bank of India.

What is the bank rate set by the Reserve Bank of India?

  1. The interest rate at which banks borrow money from the Reserve Bank of India

  2. The interest rate at which banks lend money to customers

  3. The interest rate at which the government borrows money from the Reserve Bank of India

  4. The interest rate at which the Reserve Bank of India lends money to the government

Show answer
Correct Option:
Explanation:

The bank rate is the interest rate at which the Reserve Bank of India lends money to banks.

What is the cash reserve ratio (CRR) set by the Reserve Bank of India?

  1. The percentage of deposits that banks must hold with the Reserve Bank of India

  2. The percentage of deposits that banks must lend to customers

  3. The percentage of deposits that banks must invest in government securities

  4. The percentage of deposits that banks must hold as cash

Show answer
Correct Option: A
Explanation:

The cash reserve ratio (CRR) is the percentage of deposits that banks must hold with the Reserve Bank of India.

What is the statutory liquidity ratio (SLR) set by the Reserve Bank of India?

  1. The percentage of deposits that banks must hold with the Reserve Bank of India

  2. The percentage of deposits that banks must lend to customers

  3. The percentage of deposits that banks must invest in government securities

  4. The percentage of deposits that banks must hold as cash

Show answer
Correct Option: C
Explanation:

The statutory liquidity ratio (SLR) is the percentage of deposits that banks must invest in government securities.

What is the priority sector lending (PSL) target set by the Reserve Bank of India?

  1. The percentage of loans that banks must lend to agriculture and allied activities

  2. The percentage of loans that banks must lend to small and medium enterprises

  3. The percentage of loans that banks must lend to housing

  4. The percentage of loans that banks must lend to education

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Correct Option:
Explanation:

The priority sector lending (PSL) target set by the Reserve Bank of India includes the percentage of loans that banks must lend to agriculture and allied activities, small and medium enterprises, housing, and education.

What is the role of the Reserve Bank of India in the foreign exchange market?

  1. To regulate the foreign exchange market

  2. To intervene in the foreign exchange market

  3. To manage the foreign exchange reserves of India

  4. All of the above

Show answer
Correct Option: D
Explanation:

The Reserve Bank of India regulates the foreign exchange market, intervenes in the foreign exchange market, and manages the foreign exchange reserves of India.

What is the role of the Reserve Bank of India in the government debt market?

  1. To manage the government debt of India

  2. To regulate the government debt market

  3. To advise the government on debt management

  4. All of the above

Show answer
Correct Option: D
Explanation:

The Reserve Bank of India manages the government debt of India, regulates the government debt market, and advises the government on debt management.

What is the role of the Reserve Bank of India in the financial stability of India?

  1. To regulate the financial sector

  2. To supervise the financial sector

  3. To resolve financial crises

  4. All of the above

Show answer
Correct Option: D
Explanation:

The Reserve Bank of India regulates the financial sector, supervises the financial sector, and resolves financial crises.

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