Functions of FSC

Description: This quiz is designed to test your knowledge on the functions of the Financial Stability and Development Council (FSDC) in India.
Number of Questions: 15
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Tags: fsdc financial stability monetary policy reserve bank of india
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What is the primary objective of the Financial Stability and Development Council (FSDC)?

  1. To ensure financial stability and economic growth.

  2. To regulate the banking sector.

  3. To set interest rates.

  4. To manage the foreign exchange reserves.


Correct Option: A
Explanation:

The FSDC's primary objective is to ensure financial stability and economic growth by promoting a sound and efficient financial system.

Which institution serves as the secretariat of the FSDC?

  1. Reserve Bank of India (RBI)

  2. Ministry of Finance

  3. Securities and Exchange Board of India (SEBI)

  4. Insurance Regulatory and Development Authority of India (IRDAI)


Correct Option: A
Explanation:

The Reserve Bank of India (RBI) serves as the secretariat of the FSDC.

Who is the chairperson of the FSDC?

  1. Prime Minister of India

  2. Minister of Finance

  3. Governor of the Reserve Bank of India

  4. Chairperson of the Securities and Exchange Board of India (SEBI)


Correct Option: A
Explanation:

The Prime Minister of India is the chairperson of the FSDC.

What is the frequency of the FSDC meetings?

  1. Once a year

  2. Twice a year

  3. Quarterly

  4. As and when required


Correct Option: D
Explanation:

The FSDC meetings are held as and when required, based on the need to address emerging issues and challenges.

Which of the following is NOT a member of the FSDC?

  1. Governor of the Reserve Bank of India

  2. Chairperson of the Securities and Exchange Board of India (SEBI)

  3. Chairperson of the Insurance Regulatory and Development Authority of India (IRDAI)

  4. Chairperson of the Pension Fund Regulatory and Development Authority (PFRDA)


Correct Option: D
Explanation:

The Chairperson of the Pension Fund Regulatory and Development Authority (PFRDA) is not a member of the FSDC.

What is the role of the FSDC in promoting financial inclusion?

  1. To formulate policies and strategies for promoting financial inclusion.

  2. To monitor the progress of financial inclusion initiatives.

  3. To provide financial assistance to banks and other financial institutions for promoting financial inclusion.

  4. All of the above


Correct Option: D
Explanation:

The FSDC plays a comprehensive role in promoting financial inclusion, including formulating policies and strategies, monitoring progress, and providing financial assistance.

What is the FSDC's role in addressing systemic risks in the financial system?

  1. To identify and assess systemic risks.

  2. To develop and implement measures to mitigate systemic risks.

  3. To coordinate the actions of different financial regulators and agencies in addressing systemic risks.

  4. All of the above


Correct Option: D
Explanation:

The FSDC plays a crucial role in addressing systemic risks in the financial system by identifying and assessing risks, developing and implementing mitigation measures, and coordinating the actions of different financial regulators and agencies.

How does the FSDC contribute to the development of the financial sector in India?

  1. By promoting financial inclusion.

  2. By addressing systemic risks.

  3. By facilitating the flow of credit to productive sectors of the economy.

  4. All of the above


Correct Option: D
Explanation:

The FSDC contributes to the development of the financial sector in India by promoting financial inclusion, addressing systemic risks, and facilitating the flow of credit to productive sectors of the economy.

What is the significance of the FSDC in ensuring financial stability and economic growth in India?

  1. It helps to maintain confidence in the financial system.

  2. It promotes financial inclusion and access to credit.

  3. It mitigates systemic risks and prevents financial crises.

  4. All of the above


Correct Option: D
Explanation:

The FSDC plays a significant role in ensuring financial stability and economic growth in India by maintaining confidence in the financial system, promoting financial inclusion, and mitigating systemic risks.

Which of the following is NOT a function of the FSDC?

  1. To regulate the banking sector.

  2. To set interest rates.

  3. To manage the foreign exchange reserves.

  4. To promote financial inclusion.


Correct Option: A
Explanation:

The FSDC does not have the function of regulating the banking sector. This function is primarily carried out by the Reserve Bank of India (RBI).

How does the FSDC coordinate the actions of different financial regulators and agencies?

  1. By issuing directives and guidelines.

  2. By holding regular meetings and consultations.

  3. By establishing working groups and committees.

  4. All of the above


Correct Option: D
Explanation:

The FSDC coordinates the actions of different financial regulators and agencies by issuing directives and guidelines, holding regular meetings and consultations, and establishing working groups and committees.

What is the role of the FSDC in promoting financial literacy and awareness among the public?

  1. To develop and implement financial literacy programs.

  2. To collaborate with financial institutions and NGOs in promoting financial literacy.

  3. To conduct financial literacy campaigns and workshops.

  4. All of the above


Correct Option: D
Explanation:

The FSDC plays a comprehensive role in promoting financial literacy and awareness among the public by developing and implementing financial literacy programs, collaborating with financial institutions and NGOs, and conducting financial literacy campaigns and workshops.

How does the FSDC contribute to the development of the bond market in India?

  1. By promoting the issuance of corporate bonds.

  2. By facilitating the trading of bonds in the secondary market.

  3. By developing regulations and guidelines for the bond market.

  4. All of the above


Correct Option: D
Explanation:

The FSDC contributes to the development of the bond market in India by promoting the issuance of corporate bonds, facilitating the trading of bonds in the secondary market, and developing regulations and guidelines for the bond market.

What is the FSDC's role in promoting sustainable finance and green investments?

  1. To develop a framework for sustainable finance.

  2. To encourage financial institutions to adopt sustainable lending practices.

  3. To promote the issuance of green bonds.

  4. All of the above


Correct Option: D
Explanation:

The FSDC plays a crucial role in promoting sustainable finance and green investments by developing a framework for sustainable finance, encouraging financial institutions to adopt sustainable lending practices, and promoting the issuance of green bonds.

How does the FSDC contribute to the development of the fintech sector in India?

  1. By promoting innovation in the fintech sector.

  2. By facilitating the entry of new fintech players into the market.

  3. By developing regulations and guidelines for the fintech sector.

  4. All of the above


Correct Option: D
Explanation:

The FSDC contributes to the development of the fintech sector in India by promoting innovation, facilitating the entry of new fintech players, and developing regulations and guidelines for the sector.

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