RBI's Functions in Financial Stability

Description: This quiz is designed to assess your understanding of the Reserve Bank of India's (RBI) role in maintaining financial stability. The quiz covers various aspects of RBI's functions, including its role in regulating banks, managing foreign exchange reserves, and promoting financial inclusion.
Number of Questions: 15
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Tags: rbi financial stability banking regulation foreign exchange reserves financial inclusion
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What is the primary objective of RBI's financial stability function?

  1. To maintain price stability

  2. To promote economic growth

  3. To ensure the stability of the financial system

  4. To manage the country's foreign exchange reserves


Correct Option: C
Explanation:

The primary objective of RBI's financial stability function is to ensure the stability of the financial system by maintaining confidence in the financial markets, preventing systemic crises, and promoting the smooth functioning of the financial system.

Which of the following is not a tool used by RBI to regulate banks?

  1. Reserve requirements

  2. Interest rate policy

  3. Open market operations

  4. Margin requirements


Correct Option: D
Explanation:

Margin requirements are not a tool used by RBI to regulate banks. Margin requirements are used by stock exchanges to ensure that investors have sufficient funds to cover potential losses on their investments.

What is the purpose of RBI's foreign exchange reserves?

  1. To maintain the value of the rupee

  2. To facilitate international trade

  3. To provide liquidity to the foreign exchange market

  4. All of the above


Correct Option: D
Explanation:

RBI's foreign exchange reserves serve multiple purposes, including maintaining the value of the rupee, facilitating international trade, and providing liquidity to the foreign exchange market.

What is the name of RBI's program to promote financial inclusion?

  1. Pradhan Mantri Jan Dhan Yojana

  2. Atal Pension Yojana

  3. Sukanya Samriddhi Yojana

  4. None of the above


Correct Option: A
Explanation:

Pradhan Mantri Jan Dhan Yojana is RBI's program to promote financial inclusion by providing banking services to the unbanked population of India.

Which of the following is not a function of RBI's financial stability function?

  1. Regulating banks

  2. Managing foreign exchange reserves

  3. Promoting financial inclusion

  4. Conducting monetary policy


Correct Option: D
Explanation:

Conducting monetary policy is not a function of RBI's financial stability function. Monetary policy is conducted by RBI's Monetary Policy Committee.

What is the name of RBI's real-time gross settlement system?

  1. National Electronic Funds Transfer (NEFT)

  2. Real Time Gross Settlement (RTGS)

  3. Immediate Payment Service (IMPS)

  4. Unified Payments Interface (UPI)


Correct Option: B
Explanation:

Real Time Gross Settlement (RTGS) is RBI's real-time gross settlement system that facilitates the transfer of funds between banks on a real-time basis.

What is the purpose of RBI's Financial Stability Report?

  1. To assess the risks to financial stability

  2. To make recommendations for improving financial stability

  3. To inform the public about the state of the financial system

  4. All of the above


Correct Option: D
Explanation:

RBI's Financial Stability Report serves multiple purposes, including assessing the risks to financial stability, making recommendations for improving financial stability, and informing the public about the state of the financial system.

Which of the following is not a member of RBI's Monetary Policy Committee?

  1. Governor of RBI

  2. Deputy Governor in charge of monetary policy

  3. Economic Affairs Secretary

  4. Chief Economic Adviser


Correct Option: C
Explanation:

The Economic Affairs Secretary is not a member of RBI's Monetary Policy Committee.

What is the name of RBI's program to promote financial literacy?

  1. Financial Literacy Week

  2. Financial Literacy Month

  3. Financial Literacy Year

  4. None of the above


Correct Option: A
Explanation:

Financial Literacy Week is RBI's program to promote financial literacy among the general public.

Which of the following is not a component of RBI's financial stability framework?

  1. Macroprudential regulation

  2. Microprudential regulation

  3. Crisis management

  4. Monetary policy


Correct Option: D
Explanation:

Monetary policy is not a component of RBI's financial stability framework. Monetary policy is conducted by RBI's Monetary Policy Committee.

What is the name of RBI's program to promote digital payments?

  1. Digital India

  2. Bharat Interface for Money (BHIM)

  3. Unified Payments Interface (UPI)

  4. None of the above


Correct Option: B
Explanation:

Bharat Interface for Money (BHIM) is RBI's program to promote digital payments among the general public.

Which of the following is not a tool used by RBI to manage foreign exchange reserves?

  1. Foreign exchange intervention

  2. Sterilization operations

  3. Reserve requirements

  4. Open market operations


Correct Option: C
Explanation:

Reserve requirements are not a tool used by RBI to manage foreign exchange reserves. Reserve requirements are used by RBI to regulate banks.

What is the name of RBI's program to promote financial inclusion among women?

  1. Mahila Pradhan Kshetriya Bank Yojana

  2. Stree Shakti Package

  3. Bharatiya Mahila Bank

  4. None of the above


Correct Option: C
Explanation:

Bharatiya Mahila Bank was RBI's program to promote financial inclusion among women. However, the bank was merged with State Bank of India in 2017.

Which of the following is not a function of RBI's financial stability function?

  1. Promoting financial inclusion

  2. Regulating banks

  3. Managing foreign exchange reserves

  4. Conducting monetary policy


Correct Option: D
Explanation:

Conducting monetary policy is not a function of RBI's financial stability function. Monetary policy is conducted by RBI's Monetary Policy Committee.

What is the name of RBI's program to promote financial inclusion among farmers?

  1. Kisan Credit Card Scheme

  2. Pradhan Mantri Kisan Samman Nidhi Yojana

  3. National Bank for Agriculture and Rural Development (NABARD)

  4. None of the above


Correct Option: A
Explanation:

Kisan Credit Card Scheme is RBI's program to promote financial inclusion among farmers.

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