Ie&ifs Module C MCQS & Summary

@JAIIB_CAIIB_2024_NOTES_MCQs
The financial system is the system that allows the transfer
of money between savers and borrowers.
It comprises a set of complex and closely interconnected

financial institutions, markets, instruments, services,
practices, and transactions.
Money Markets: Deal in short-term debt instruments like Treasury Bills.
Capital Markets: Deal in long-term securities like stocks and bonds.
Foreign Exchange Markets: Deal in currencies.
Derivatives Markets: Deal in financial contracts like futures and options.

Financial Instruments
These are legal agreements that give rise to a
financial asset to one entity and a financial liability
or equity instrument to another. Examples include:
Equity Securities: Like common stocks.

Debt Securities: Like bonds and debentures.
Derivatives: Like futures, options, and swaps.
Which of the following measures was NOT part of the
Banking Sector Reforms in India between 1992-2008?
(a) Implementation of prudential norms

(b) Deregulation of interest rates
(c) Introduction of Universal Banking
(d) Complete privatization of public sector banks
(D)
Ø Implementation of prudential norms: Prudential norms related to

capital adequacy, income recognition, asset classification ,and
provisioning were implemented as part of the banking sector
reforms.
Ø Deregulation of interest rates: Before the reforms, interest rates in

India were regulated by the government. One of the significant
reforms was the deregulation of interest rates to provide banks with
the freedom to set their interest rates.
Ø Introduction of Universal Banking: The concept of Universal
Banking was introduced where banks were allowed to undertake any
form of financial service sand not just confined to traditional banking.
Ø Complete privatization of public sector banks: This measure was

NOT part of the reforms. Although the government did reduce its
holdings in public sector banks and allowed private banks to operate,
it did not completely privatize public sector banks.
The reform of the banking sector in India between1992-2008
was a critical phase in transforming the banking landscape in
the country. This period saw significant changes like the
introduction of prudential norms improvement in technology,
and efforts to increase transparency and competition. One of
the pivotal reforms during this period was the implementation
of the Basel Accords, which primarily aimed to _________.
(a) increase the gold reserves of the central bank

(b) encourage the merger of small banks
(c) enhance the quality and stability of the financial system
(d) regulate the foreign exchange market
Ø The implementation of the Basel Accords during the reform of the
banking sector in India between 1992- 2008 aimed to enhance the
equality and stability of the financial system.
Ø The Basel Accords are international regulatory frameworks
developed by the Basel Committee on Banking Supervision to ensure
that financial institutions maintain enough capital reserves to absorb
unexpected losses.
Ø By implementing these standards, the goal was to strengthen the
resilience and stability of the banking system, thereby fostering a
more robust and transparent financial environment.
Which type of bank did the Narasimham Committee
Report II (1998) recommend opening in India?
(1) Regional Rural Banks

(2) Private Banks
(3) Corporate Banks
(4) Payment Banks
To intimate the second generation of financial sector
reforms a committee on Banking Sector Reforms was
formed in 1998 again under the chairmanship of M.
Narasimham. The committee submitted its report on
23rd April 1998 by the finance minister of the
Government of India.
NPAs and the Concept of Narrow Banking – High
Non-Performing Assets (NPAs) were a problem
back in 1998, so the Committee recommended
Narrow Banking Concept where the banks could
put their funds in short-term and risk-free assets.
Which of the following is not a similarity between the
Development Finance Institution and the Industrial
Finance Cooperation of India?
(1) Both are regulatory bodies.

(2) Both are set up in 1948.
(3) Both are a part of post-independence development.
(4) Both are headquartered in New Delhi.
Industrial Finance Corporation of India (IFCI),
Industrial Development Bank of India (IDBI),
Industrial Credit and Investment Corporation of
India (ICICI), Industrial Reconstruction Corporation
of India (IRCI), SIDBI (SIDBI), NABARD (NABARD),
NHB ( NHB, Exim Bank are important development
financial institutions in India.
IFCI Ltd (IFCI) was set up as a Statutory Corporation (“then
Industrial Finance Corporation of India”) in 1948 for
providing medium and long-term finance to industry. In
1993, after repeal of the Industrial Finance Corporation Act,
IFCI became a Public Limited Company, registered under
the Companies Act, 1956.
Which was the first institution to be nationalized in India?
(1) State Bank of India

(2) Life Insurance Corporation of India
(3) Syndicate Bank
(4) Reserve Bank of India
The first bank in India to be nationalized was
the Reserve Bank of India which happened in
January 1949. Further, 14 other banks were
nationalized in July 1969.
Which one of the following is Asia’s first stock exchange?
(1) Shanghai Stock Exchange

(2) National Stock Exchange
(3) Hong Kong Stock Exchange
(4) Bombay Stock Exchange
The Bombay Stock Exchange, popularly known
as the BSE, is the oldest stock exchange in Asia.
It was founded on 9th July 1875.
What was the name of the committee whose
recommendation resulted in the formation of the
central bank of India?
(1) Islington Commission

(2) Hilton Young Committee
(3) Montagu-Chelmsford Reforms Committee
(4) Lee Commission
Royal Commission on Indian Currency (Hilton
Young Commission) (1926) recommends the
establishment of a central bank to be called the
'Reserve Bank of India'.

Which of the following activities cannot be done
by the payment bank?
(1) They cannot issue Credit Card

(2) They cannot have ATM
(3) Non-Resident Indians cannot deposits
(4) They cannot lend
Payment banks cannot issue credit cards. It
cannot accept time deposits or NRI deposits. It
cannot issue loans. It cannot set up subsidiaries
to undertake non-banking financial activities.
Development Financial Institutions (DFIs) in India primarily
focus on:
(1) Providing retail banking services to individual customers

(2) Facilitating foreign direct investment in the country
(3) Promoting industrial and infrastructure development
(4) Regulating the banking sector
These institutions are responsible for supporting
the long-term financial requirements for
infrastructure and giving growth to the Indian
economy. National development banks,
investment institutes, state-level institutes and
sector-specific institutions, etc.
The establishment of the Industrial Development Bank of
India (IDBI) was inspired by the recommendations of:
(1) Gadgil Committee

(2) Narasimham Committee
(3) Verma Committee
(4) Nayak Committee
Industrial Development Bank of India (IDBI) was
established in 1964 by the Government of India (GoI)
under an Act of Parliament, the Industrial Development
Bank of India Act, 1964 (the IDBI Act), as a wholly-
owned subsidiary of Reserve Bank of India (RBI) to
provide credit and extend other facilities for the
industrial development.
Which of the following is a regulatory authority for Non-Banking
Financial Institutions (NBFI) in India?
(1) Securities and Exchange Board of India (SEBI)

(2) Insurance Regulatory and Development Authority of India (IRDAI)
(3) Reserve Bank of India (RBI)
(4) National Housing Bank (NHB)
The Department of Non-Banking Supervision
(DNBS) is entrusted with the responsibility of
regulation and supervision of Non-Banking Financial
Companies (NBFCs) under the regulatory -
provisions contained under Chapter III B and C and
Chapter V of the Reserve Bank of India Act, 1934.
What is the purpose of underwriting in the insurance industry?
(1) Setting premium rates for insurance policies

(2) Assessing and managing risks
(3) Handling claims and reimbursements
(4) Marketing insurance products
Underwriting, whether for an insurance policy or
a loan, revaluates the riskiness of a proposed
deal or agreement. For an insurer, the
underwriter must determine the risk of a
policyholder filing a claim that must be paid out
before the policy has become profitable.
The Financial Stability and Development Council (FSDC)
in India is chaired by _______.
(1) President of India

(2) Prime Minister of India
(3) Minister of Finance
(4) Governor of the Reserve Bank of India
The Finance Minister is the Chairman of the
FSDC. Members of FSDC include Heads of the
Financial Sector Regulators listed below: Reserve
Bank of India (RBI) Insurance Regulatory and
Development Authority (IRDA)
The body envisages to strengthen and
institutionalize the mechanism of maintaining
financial stability, financial sector development,
inter-regulatory coordination along with monitoring
macro-prudential regulation of the economy.
The primary function of the Pension Fund Regulatory and
Development Authority (PFRDA) is to:
(1) Regulate and supervise banks and financial institutions

(2) Regulate and supervise the stock market
(3) Regulate and supervise the insurance sector
(4) Regulate and supervise the pension sector
PFRDA helps in educating the citizens about the
importance of pensions in old age. Addresses any
grievances related to pension schemes. Resolves
disputes between various intermediaries. Train and
inform intermediaries about the pension schemes
and their functioning.
On 23rd August, 2003, Interim Pension Fund
Regulatory & Development Authority (PFRDA) was
established through a resolution by the Government
of India to promote, develop and regulate pension
sector in India.
The regulatory body responsible for regulating and supervising the
asset reconstruction companies (ARCs) in India is:

(3) National Bank for Agriculture and Rural Development (NABARD)
(4) Small Industries Development Bank of India (SIDBI)
asset reconstruction company (ARC) registered
with the Reserve Bank under Section 3 of the
Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest
Act, 2002.
Which regulatory body in India is responsible for regulating
and supervising the foreign portfolio investors (FPIs)?

(3) National Securities Depository Limited (NSDL)
(4) Foreign Exchange Dealers' Association of India (FEDAI)
SEBI is the primary regulatory authority
governing FII in Indian stock market. It is
responsible for regulating and supervising
securities markets in the country.
Which of the following acts serves as the primary legislation
for the regulation and supervision of banks in India?
(1) Banking Regulation Act, 1949

(2) Reserve Bank of India (RBI) Act, 1934
(3) Negotiable Instruments Act, 1881
(4) Companies Act, 2013
The Banking Regulation Act,
1949 empowers the Reserve Bank of India
to inspect and supervise commercial banks.
The provisions related to the maintenance of cash
reserves by scheduled banks are covered under which
section of the Banking Regulation Act, 1949?
(1) Section 42(1)

(2) Section 36AD
(3) Section 18(1)
(4) Section 10(2)
In regard to cash reserve, the provisions of section
42 (1) of the Reserve Bank of India Act, 1934 (RBI
Act, 1934), governs scheduled UCBs whereas, non
scheduled UCBs are governed by the provisions of
section 18 of the Banking Regulation Act, 1949 (As
Applicable to Co-operative Societies) [BR Act,
1949(AACS].
PART-I RESERVE BANK OF INDIA ACT, 1934: CHAPTER I TO CHAPTER V
PART-II BANKING REGULATIONS ACT 1949

SCHEDULES TO THE RBI ACT, 1934
The Schedules to the Reserve Bank of India Act,

1934, provide additional details and specifications
that complement the main provisions of the Act.
Schedule 1: Oath for Directors

Schedule 2: Oath for Local Boards & Committees
Schedule 3: Provisions for Issue Department
Schedule 4: Provisions for Banking Department
Schedule 5: Provisions for Amending the Act
Schedule 1: Form of Oath for Directors
This schedule provides the exact wording of the oath or affirmation
that the Directors of the RBI must take before assuming their duties.
It's a promise to do their job honestly and faithfully.
Schedule 2: Form of Oath for Members of Local Boards and
Local Committees
Similar to Schedule 1, this schedule outlines the wording of the oath or
affirmation for members of the Local Boards and Local Committees. It
ensures that they commit to their responsibilities.
Schedule 3: Provisions of the Act Applicable to Issue
Department
This schedule details specific rules and provisions that apply to the
Issue Department of the RBI. The Issue Department is responsible
for issuing (or giving out) currency notes.
Schedule 4: Provisions of the Act Applicable to Banking

Department
This schedule outlines the rules and provisions that apply to the
Banking Department of the RBI. The Banking Department handles
various banking functions, including acting as a banker to the
government.
Schedule 5: Provisions for Amending the Act

This schedule includes provisions that allow for changes or
amendments to the Act. It sets out the process and conditions under
which the Act can be modified.
Schedules to the RBI Act, 1934
BANKING REGULATION ACT, SECTIONS 1-56
Section 1: Title, Extent, Commencement

Section 2: Definitions
Sections 3-6: Application
Sections 7-11: Capital Regulation
Sections 12-19: Banking Operations
BANKING REGULATION ACT, SECTIONS 1-56
Sections 20-30: Control over Management

Sections 31-35: Accounts and Audit
Sections 36-46: Special Provisions
Sections 47-56: Miscellaneous
The Reserve Bank of India Act, 1934, provides the legal basis for
the operation of the Reserve Bank of India (RBI), which serves as
the central bank of India. The Act consists of various provisions
related to the structure, functions, and responsibilities of the RBI.
For example, Section _______ of the Act outlines the central bank's
powers to regulate and supervise commercial banks in India, while
Section _______ of the Act describes the framework for monetary
policy implementation by the RBI.
(a) 22, 45 (b) 45, 22 (c) 36, 49 (d) 49, 36

B
TheReserveBankofIndiaAct,1934,includesvarious
provisions that guide the functioning of the RBI:
1. Section 45: This section of the Act gives the Reserve
Bank the power to undertake inspection and supervision
of commercial banks. This includes authority to demand
necessary information from the banks and ensure
compliance with various regulations.
2. Section 22: This section pertains to the central bank's
authority to carry out the country's monetary policy. It
outlines the framework for managing money supply,
interest rates, and other instruments that the RBI uses to
achieve its monetary policy objectives.
Fill in the blanks in the given statements:
I. The Banking Regulations Act, 1949 governs all the

____ (a) ____ in India.
II. The Act empowers the Reserve Bank of India
to issue ____ (b) ____ to banks and provides instructions on
matters such as opening of new branches, maintaining cash
reserves, etc
(a) (a): banking operations (b): licenses and directives

(b) (a): monetary policies (b): interest rates
(c) (a): monetary policies (b): licenses and directives
(d) (a): monetary policies (b): interest rates
A
I. The Banking Regulations Act, 1949 governs all the

banking operations in India. It sets the legal framework
for banking in India and provides guidelines for all
matters relating to banking.
II. The Act empowers the Reserve Bank of India to issue

licenses and directives to banks and provides
instructions on matters such as the opening of new
branches, maintaining cash reserves, etc. These powers
allow the RBI to effectively regulate the banking
industry and ensure its smooth functioning.
Section _______ of the Banking Regulations
Act, 1949 allows the Reserve Bank of India to
undertake an inspection of any bank.
(a) 30
(b) 35
(c) 40
(d) 45
B
Section 35 of the Banking Regulations Act, 1949 allows the
Reserve Bank of India to undertake an inspection of any bank.
The Banking Regulation Act, 1949 is a legislation in India that
regulates all banking firms in India.
Section 35 of this act authorizes the Reserve Bank of India (RBI)

to undertake an inspection of any bank and its books and
accounts. The primary purpose of the inspection is to ensure that
the affairs of the banks are being conducted in the interests of the
depositors and that the banks are in a position to pay its present
or future depositors in full as their claims accrue.
Which section of the act passed by the government
describes banking in India?
(1) Section 3 of the Banking Regulation Act

(3) Section 5 of the Banking Regulations Act
Section 5 of the Banking Regulations Act.
"banking" means the accepting, for the purpose

of lending or investment, of deposits of money
from the public, repayable on demand or
otherwise, and withdrawable by cheque, draft,
order or otherwise;
The RBI Act, 1934 provides the RBI with the power to
issue and manage currency in India. Which section of the
RBI Act, 1934 deals with this power?
(1) Section 17
(2) Section 22
(3) Section 12
(4) Section 7
In terms of Section 22 of the Act, Reserve Bank has the
sole right to issue banknotes in India.
Section 25 states that the design, form and material of
bank notes shall be such as may be approved by the
Central Government after consideration of the
recommendations made by the Central Board of RBI.
As per the provisions of the Banking Regulation Act,
1949, what is the maximum penalty that can be imposed
by the RBI for violation of its directions?
(1) Rs. 1 lakh (3) Rs. 1 crore

(2) Rs. 10 lakh (4) Rs. 10 crore
3
₹ 10,000 for any violation of agreement or deficiency of

service. ₹ 5 lakh in case there are more than 5
instances of violation of agreement/deficiency in
service by the branch. The levy of such penalty will be
placed in public domain.
Which section of the Banking Regulation Act, 1949
empowers the RBI to inspect the books and accounts
of banks?
(1) Section 21
(3) Section 45
(2) Section 35
(4) Section 30
1
The Section 21 of Act allows RBI to control loans and advances extended
by banking companies. RBI may issue directions in respect of following
items to banking companies and every banking company has to necessarily
comply with its directions:
ü To specify the purposes for which advances may or may not be made.
ü The margins to be maintained in respect of secured advances
ü The maximum amount of advances that can be made to particular
company, firm, association of persons or individual having regard to the
paid-up capital, reserves and deposits of a banking company.
ü The maximum amount of guarantee that can be made by banking on
behalf of particular company, firm, association of persons or individual
having regard to the paid-up capital, reserves and deposits of a banking
company.
Which of the following is an objective of the Reserve
Bank of India (RBI) as per the RBI Act, 1934?
(1) Encouraging competition among banks

(2) Ensuring price stability
(3) Ensuring profitability of banks
(4) Facilitating foreign direct investment
2
Under the Reserve Bank of India, Act,1934 (RBI Act,1934)
(as amended in 2016), RBI is entrusted with the
responsibility of conducting monetary policy in India with
the primary objective of maintaining price stability while
keeping in mind the objective of growth.
(1) Section 42(1)

(2) Section 36AD
(3) Section 18(1)
(4) Section 10(2)
1
In regard to cash reserve, the provisions of section 42
(1) of the Reserve Bank of India Act, 1934 (RBI Act, 1934),
governs scheduled UCBs whereas, non-scheduled UCBs
are governed by the provisions of section 18 of the
Banking Regulation Act, 1949 (As Applicable to Co-
operative Societies) [BR Act, 1949(AACS)].
deals with the licensing of banking companies?
(1) Section 9
(2) Section 22
(3) Section 10
(4) Section 18
Bank will be registered as a public limited
company under the Companies Act, 2013, and
licensed under Section 22 of the Banking
Regulation Act, 1949.
Which of the following bodies has the authority to
supersede the Board of Directors of a banking company
under the Banking Regulation Act, 1949?
(1) Ministry of Finance
(4) Parliament of India
Sec (2) The Reserve Bank may, on supersession of the
Board of Directors of the banking company under sub-
section (1) appoint in consultation with the Central
Government for such period as it may determine, an
Administrator
Under the Banking Regulation Act, 1949, the minimum
paid-up capital requirement for banking companies is
determined by:
Which of the following is not a function of the Reserve Bank of
India (RBI) as per the RBI Act, 1934?
(1) Creation of Currency
(3) Formulate monetary policy
(4) Conduct foreign exchange trading

Early Beginnings (1940s-1950s)
Industrial Finance Corporation of India (IFCI): Established in 1948,
IFCI was the first DFI in India, aimed at providing long-term finance to the
industrial sector.
State Financial Corporations (SFCs): Created under the State Financial
Corporations Act of 1951, SFCs were set up to finance small and medium-
sized enterprises.
Expansion Phase (1960s-1970s)
Industrial Development Bank of India (IDBI): Established in 1964, IDBI
was created to coordinate and supplement the work of other financial
institutions.
Agricultural Refinance and Development Corporation (ARDC):
Formed in 1963, ARDC was focused on agricultural financing.
Export-Import Bank of India (EXIM Bank): Established in 1982, EXIM
Bank was aimed at financing and promoting foreign trade.
Focus on Specific Sectors (1980s-1990s)
National Bank for Agriculture and Rural Development

(NABARD): Created in 1982, NABARD took over the
responsibilities of ARDC and became the apex institution for
rural development.
Small Industries Development Bank of India (SIDBI):
Established in 1990, SIDBI was focused on the development
of small-scale industries.
Housing Development Finance Corporation (HDFC):
Founded in 1977, HDFC was aimed at housing finance.
Development Financial Institutions (DFIs) are specialized
institutions that provide financial support for economic
development, primarily in the industrial, infrastructure, and
agricultural sectors. One of the main objectives of DFIs is to
_________.
(a) Prioritize profit maximization over social and economic
development
(b) promote and finance projects that contribute to economic
growth and development
(c) exclusively invest in high-risk financial markets
(d) focus solely on short-term lending without regard to
developmental impact
B
One of the main objectives of Development Financial Institutions (DFIs) is
to promote and finance projects that contribute to economic growth and
development. DFIs play a crucial role in providing funds for large-scale
projects that can drive economic development, particularly in emerging
markets and less-developed regions.
They often support sectors that are vital for social and economic progress
but might be under served by conventional commercial banks.
DFIs may also consider social and environmental factors in their investment
decisions, aiming to foster sustainable growth.
The changing role of Development Finance Institutions (DFIs) and the
emergence of Universal Banks has been primarily driven by _______.
The trend toward universal banking started gaining momentum in the
_______.
(a) financial liberalization and deregulation, late 20th century
(b) financial liberalization and deregulation, early 20th century
(c) financial regulation and re-liberalization, late 20th century
(d) financial regulation and re-liberalization, early 20th century
A
The changing role of Development Finance Institutions (DFIs) and the
emergence of Universal Banks has been primarily driven by financial
liberalization and deregulation. The trend toward universal banking started
gaining momentum in the late 20th century. Development Finance
Institutions (DFIs) were traditionally set up to provide long-term finance for
industrial and infrastructural projects in developing countries. However,
with financial liberalization and deregulation, and changes in global
financial markets, the role of DFIs has been changing. At the same time, the
concept of Universal Banks, which provide a wide range of financial
services under one roof, has gained popularity.
Which of the following was the first Development Financial
Institution established in India?
(1) Industrial Finance Corporation of India (IFCI)

(2) Industrial Development Bank of India (IDBI)
(3) Export-Import Bank of India (EXIM Bank)
(4) National Bank for Agriculture and Rural Development
(NABARD)
IFCI – 1st DFI in India. Industrial Corporation of
India was established in 1948.
Which Development Financial Institution is responsible for providing
long-term finance to the Indian power sector?
(2) National Bank for Agriculture and Rural Development (NABARD)
(3) Power Finance Corporation (PFC)
Which Development Financial Institution is specialized in
providing financial assistance to micro, small, and medium
enterprises (MSMEs)?
(NABARD)
(4) Industrial Development Bank of India
Which Development Financial Institution is responsible for
financing and promoting India's international trade?
(NABARD)
Which Development Financial Institution is responsible for
providing refinance facilities to banks for financing
agriculture and rural development?
(NABARD)
Which Development Financial Institution was transformed
into a full-fledged commercial bank in 2004?
(1) Industrial Development Bank of India (IDBI)

Which Development Financial Institution provides venture
capital and equity support to technology-based startups
and innovative companies in India?
(NABARD)
Which of the following best describes the primary objectives
of Development Financial Institutions (DFIs) in an economy?
(a) To promote only private sector investments.

(b) To maximize profit without considering societal benefits.
(c) To promote and develop infrastructure and industries in
an economy.
(d) To only provide loans for short-term, low-risk ventures.
C
The primary objectives of DFIs are to promote and develop

infrastructure and industries in an economy.
They do this by providing long-term finance and
development assistance for projects that can contribute to
economic growth and development, such as infrastructure
projects and industries that can drive economic growth, create
jobs, and address societal needs.
Micro Finance Institutions
Traditional Models
Group Lending: Borrowers are organized into small

groups, and each member is responsible for ensuring
that others repay their loans (e.g., Grameen Bank
Model).
Village Banking: Entire villages or communities

participate in managing and receiving microloans.
Cooperative Model: Members pool their savings and

provide loans to one another.
Institutional Models
Microfinance Institutions (MFIs): Specialized

institutions that provide microloans and other financial
services to the underserved population.
Non-Banking Financial Companies (NBFCs): Some

NBFCs focus on microfinance, offering a range of
financial products.
Commercial Banks: Some commercial banks have

microfinance programs or partner with MFIs to reach
low- income customers.
Self-Help Groups (SHGs)
SHG-Bank Linkage Model: SHGs are linked with

banks to provide savings and credit services to their
members (e.g., NABARD's SHG-Bank Linkage
Program in India).
Technology-Driven Models
Mobile Banking: Utilizes mobile phones to provide

microfinance services, especially in remote areas.
Online Platforms: Online microfinance platforms

connect borrowers with individual or institutional
lenders.
Fintech Solutions: Financial technology companies

develop innovative solutions to deliver microfinance
products efficiently.
REGULATORY FRAMEWORK FOR MICRO FINANCE LOANS RBI DIRECTIONS 2022
Ø The RBI issued revised directions for regulating

microfinance loans in March 2022. These directions
replace the earlier regulations from 2011.
Ø Microfinance loans are defined as collateral-free loans
given to low income borrowers, with loan amount not
exceeding Rs 1 lakh per borrower.
Ø Only Non-Banking Financial Companies (NBFCs),
banks, Small Finance Banks (SFBs), Not for Profit
MFIs and other registered entities can provide
microfinance loans.
Ø An individual borrower cannot borrow more than Rs 1 lakh

in total from all regulated entities. Total indebtedness of a
borrower should not exceed Rs 1 lakh.
Ø Maximum loan tenure is 24 months for loan amount up to
Rs 30,000 and 36 months for loans above Rs 30,000. There
should be minimum moratorium between two loans.
Ø Pricing guidelines include interest rates, processing fees
and insurance premium caps. Interest rates should be on
declining balance basis.
Ø Strict customer protection guidelines like fair practices

code, restrictions on coercive recovery methods,
adequate loan documentation etc. are laid down.
Ø Detailed governance requirements, systems and
processes to be put in place by lenders. Self-regulatory
organizations expected to enhance industry monitoring.
Ø Regulatory reporting requirements include compliance
certificate, quarterly reports, credit info reporting and
audited financial statements submission.
RBI’s Fair Practices Code for NBFC-MFIs
The Reserve Bank of India (RBI) introduced the Fair

Practices Code (FPC) for Non-Banking Financial
Company- Microfinance Institutions (NBFC-MFIs) to
ensure that these institutions adhere to responsible lending
practices and maintain transparency and fairness in their
dealings with customers.
RBI’s Fair Practices Code for NBFC-MFIs
Ø Application and Loan Process
Ø Pricing of Financial Products
Ø Fair and Ethical Practices
Ø Responsible Lending
Ø Transparency and Disclosure
Ø Customer Education and Awareness
Ø Monitoring and Compliance
The key aspects of the RBI's Fair Practices Code for NBFC-MFIs:
Application and Loan Process
Transparency: Clear and transparent communication of all terms and
conditions.
Due Diligence: Proper assessment of the borrower's need and
repayment capacity.
Documentation: Providing acknowledgment of all loan applications
and maintaining proper documentation.
Pricing of Financial Products
Interest Rates: Disclosure of interest rates and other charges in a
transparent manner.
No Hidden Charges: Prohibition of hidden charges and ensuring
clarity in the pricing structure.
Fair and Ethical Practices

Non-Coercive Methods: Prohibition of coercive methods in loan
recovery.
Privacy: Respect for the privacy and dignity of clients.
Grievance Redressal: Establishment of a grievance
redressal mechanism to address customer complaints.
Responsible Lending
3⁄4Avoiding Over-Indebtedness: Ensuring that loans are provided based on the
borrower's capacity to repay and avoiding over-indebtedness.
3⁄4 Multiple Lending Restrictions: Restrictions on lending to borrowers who
have loans from multiple institutions.
Transparency and Disclosure
3⁄4 Clear Communication: Providing information in the local language or a
language understood by the borrower.
3⁄4 Disclosure of Terms: Clear disclosure of all terms and conditions, including
interest rates, processing fees, and other charges.
Customer Education and Awareness
3⁄4 Financial Education: Providing education and awareness to customers about
financial products and responsible borrowing.
3⁄4 Awareness of Grievance Mechanisms: Informing customers about the
grievance redressal mechanisms available to them.
Monitoring and Compliance
3⁄4 Internal Monitoring: Regular internal monitoring to ensure compliance with
the Fair Practices Code.
3⁄4 Reporting to RBI: Periodic reporting to the RBI on compliance and any
deviations.
The Grameen Bank Model is a microfinance system
founded in Bangladesh that targets the poor, especially
women, to provide them with small loans without
requiring collateral. This innovative model aims to
_________.
(a) focus solely on high-interest, short-term loans

(b) facilitate large-scale investments in urban industries
(c) empower the impoverished through access to credit
and financial inclusion
(d) centralize all banking activities in major cities
C
The Grameen Bank Model aims to empower the
impoverished through access to credit and financial inclusion.
Founded by Nobel laureate Muhammad Yunus, this model emphasizes
providing small loans to those who are traditionally excluded from the
formal banking sector, especially women and the poor.
By extending credit without the need for collateral, the Grameen Bank
Model enables borrowers to invest in small businesses, education, and
other opportunities that can lead to economic self-sufficiency and
improved quality of life.
Founded by: Professor Muhammad Yunus in 1976.
Philosophy: The belief that credit is a fundamental

human right, and that even the poorest individuals can
be creditworthy.
Which of the following options best reflects a key aspect that should
be part of the regulatory framework for MFIs?
(a) The regulatory framework should promote

unrestricted interest rates and loan disbursement without any
guidelines, allowing MFIs complete autonomy in their operations.
(b) The regulatory framework should ensure transparency, customer
protection, responsible lending practices, and effective supervision of
MFIs, while encouraging their role in financial inclusion.
(c) The regulatory framework should completely prohibit MFIs from
operating, favoring traditional banking channels exclusively for
financial services.
(d) The regulatory framework should mandate that MFIs only provide
loans to large corporations, ignoring the needs of small businesses
and individual borrowers.
B
The regulatory framework for Microfinance Institutions
(MFIs) should be designed to oversee their operations,
promote financial inclusion, and protect the interests of
the borrowers.
It must strike a balance between encouraging the
positive role of MFIs and ensuring responsible
practices.
The concept of microfinance originated in;
(1) India
(2) Bangladesh
(3) South Africa
(4) Brazil
The approach of microfinance was institutionalized
by Yunus in 1976, with the foundation of Grameen
Bank in Bangladesh.
Microfinance institutions primarily focus on
providing financial services to:
(1) Large corporate businesses

(2) Medium-sized enterprises
(3) Small and low-income individuals
(4) Government agencies
Microfinance services are provided to unemployed
or low-income individuals because most people
trapped in poverty, or who have limited financial
resources, don't have enough income to do
business with traditional financial institutions.
The interest rate charged by microfinance
institutions is often:
(1) Higher than traditional banks

(2) Lower than traditional banks
(3) Similar to traditional banks
(4) Non existent
They usually range between 24% to 30%. However,
statutorily MFIs are required to determine their
interest rates in the following way. 1) The cost of
borrowing funds plus 12% margin (Say, if the MFIs
borrowed funds at 15%, it can loan the funds at 27%
or less than that.)
Which organization regulates microfinance
institutions in India?
(3) National Bank for Agriculture and Rural
Development (NABARD)
(4) Small Industries Development Bank of India
(SIDBI)
The Reserve Bank of India (RBI) shall regulate
the micro finance sector; it may set an upper
limit on the lending rate and margins of Micro
Finance Institutions (MFIs).
Which type of microfinance institution is owned
and operated by the borrowers themselves?
(1) Non-governmental organization (NGO)

microfinance institution
(2) Cooperative microfinance institution
(3) Commercial microfinance institution
(4) Public sector microfinance institution
Which microfinance institution in India is known for
its successful group-based lending model?
(1) Bandhan Bank

(2) Grameen Bank
(3) SKS Microfinance
(4) Bharatiya Mahila Bank
An NBFC-MFI that operates in a Joint Liability Group
lending model of Grameen, Fusion Microfinance was
set up in the year 2010. This company focuses on
providing financial services to female entrepreneurs
that belong to society as well as economically deprived
sections of society.
Which of the following is an example of a self- help
group (SHG) in the context of microfinance?
(1) Commercial bank branch

(2) Microfinance investment fund
(3) Government welfare scheme
(4) Group of women saving and lending collectively
Which of the following is a key principle of microfinance?
(1) Profit maximization

(2) Interest rate liberalization
(3) Poverty alleviation
(4) Merger and consolidation
In the Indian financial system, there exists a mechanism to
facilitate credit to farmers and the rural population who have no
means to offer collateral or security for availing loans. This model
is based on the principle of collective responsibility and mutual
guarantee. Typically, such a group consists of 4-10 individuals who
come together for the purpose of availing a bank loan on
individual or collective basis against mutual guarantee. This type
of group, which primarily aims to harness the power of collective
responsibility for ensuring the repayment of loans, is also known
as __________.
(a) Self-Help Groups

(b) Joint Liability Groups (JLGs)
(c) Micro Finance Institutions (d) Cooperative Societies
Joint Liability Groups (JLGs) are mechanism used in
India to provide credit to farmers and rural populations
who have no means to offer collateral for loans. They
are based on the principle of mutual guarantee, with
group members taking collective responsibility for loan
repayment.
The decision to include bank finance to Microfinance
Institutions (MFIs) in Priority Sector Lending (PSL) was
implemented by the Reserve Bank of India (RBI) to
_______. This policy came into effect in _______.
(a) encourage banks to lend more to MFIs, 2011

(b) encourage banks to lend more to MFIs, 2000
(c) discourage banks from lending to MFIs, 2011
(d) discourage banks from lending to MFIs, 2000
The decision to include bank finance to Microfinance Institutions
(MFIs) in Priority Sector Lending (PSL) was implemented by the
Reserve Bank of India (RBI) to encourage banks to lend more to
MFIs. This policy came into effect in 2011. In an effort to promote
financial inclusion and cater to the needs of underserved sections of
the society, the Reserve Bank of India (RBI) introduced Priority
Sector Lending (PSL). Under PSL, certain sectors, which may not get
timely and adequate credit in the absence of this special dispensation,
are identified and banks are mandated to provide a certain percentage
of their loans to these sectors. In 2011, RBI took a major step towards
boosting the reach of MFIs by including bank credit to MFIs for on-
lending to borrowers under the priority sector category. This was
aimed at encouraging more banks to lend to MFIs, thereby increasing
the flow of credit to the underserved sections of the society.
Which of the following statement(s) is incorrect in the context of the
regulatory framework for Microfinance Institutions (MFIs) in India?
I. The Reserve Bank of India (RBI) does not play any role in the
regulation of MFIs.
II. Non-Banking Financial Company-Micro Finance Institutions (NBFC-
MFIs) are a category of NBFCs that have Microfinance as their primary
business.
III. The regulatory framework for MFIs in India specifies that the interest
rate charged by an MFI cannot exceed a certain cap defined by RBI.
IV. As per RBI regulations, MFIs cannot lend to small businesses.
(a) Only I and IV (b) Only II and III (c) Only I and III (d) Both II and IV
Statement I is incorrect. The Reserve Bank of India (RBI)
plays a crucial role in the regulation of MFIs in India. It
sets the rules and guidelines for the functioning of
different categories of MFIs including NBFC-MFIs,
NGOs, and SHGs.
Which of the following statement is incorrect about the
functionality of JLGs?
(a) JLGs allow small farmers like me to avail loans without

collateral.
(b) Being a member of a JLG would require me to share
liability with the other members for the loans taken by the
group.
(c) If one member defaults, other members of the JLG are
responsible to repay the entire loan amount.
(d) JLGs require a mandatory savings component which will be
kept in a fixed deposit with the lending bank.
The statement that "JLGs require a mandatory savings
component which will be kept in a fixed deposit with the
lending bank" is incorrect. Joint Liability Groups are an
informal group comprising 4-10 individuals usually coming
together for the purposes of availing bank loan either singly
or through the group mechanism against mutual guarantee.
While JLGs do encourage savings among members, it's not a
requirement to have a mandatory savings component in a
fixed deposit with the lending bank.
Obtaining a Certificate of Registration from the RBI
Application: An NBFC must apply to the Reserve Bank of

India (RBI) for a Certificate of Registration (CoR).
Compliance: The company must comply with all the rules,
regulations, and guidelines set by the RBI.
Assessment: The RBI assesses the application based on
various factors, including the company's financial standing,
management expertise, and adherence to regulations.
Issuance: If the RBI is satisfied with the application, it issues
the CoR, allowing the company to operate as an NBFC.
Minimum Requirement: The NBFC must have
NOF of at least Rs 2 crores (or as prescribed by the
RBI from time to time).
Systemically Important NBFCs (NBFC-ND-SI): Non-
Deposit Taking NBFCs with an asset size of Rs 500
crore or more are considered systemically important.
They are subject to stricter regulatory oversight due to
their potential impact on financial stability.
Types of NBFCs
NBFC-Deposit Taking (NBFC-D): All deposit-taking
NBFCs are covered under the scheme.
NBFC-Non-Deposit Taking (NBFC-ND): Non-deposit

taking NBFCs with an asset size of Rs. 100 crores or
more (as per the last audited balance sheet) are covered.
Ø Base layer NBFCs are non-deposit taking NBFCs with asset
size <₹1,000 crore. They will be subjected to minimal
regulation.
Ø Middle layer will include deposit taking NBFCs and non-
deposit taking NBFCs with assets ₹1,000 - ₹5,000 crore.
They will be regulated based on governance standards and
prudent risk management requirements.
Ø Upper layer will include NBFCs with assets ₹5,000 -
₹15,000 crore. Strict monitoring in terms of capital,
liquidity, governance etc.
Ø Top layer will include NBFCs with assets above ₹15,000
crore as well as all NBFC ICs (investment companies).
Highest level of scrutiny by RBI.
Non-Banking Financial Companies (NBFCs) play a
significant role in the financial system, offering a
variety of financial products and services. In India,
the principal regulatory authority responsible for the
supervision and regulation of NBFCs, ensuring that
they comply with specific guidelines and standards, is
_________.
(a) Securities and Exchange Board of India (SEBI)
(b) National Bank for Agriculture and Rural
(c) Reserve Bank of India (RBI)
(d) Life Insurance Corporation of India (LIC)
The principal regulatory authority responsible for the
supervision and regulation of Non Banking Financial
Companies (NBFCs) in India is the Reserve Bank of
India (RBI).
Column-I Column-II
Engaged in the business of infrastructure
A. Asset Finance Company(AFC) (i)
finance
B. Investment Company (ii) Invests in various equities and securities
C. Infrastructure Finance Company (IFC) (iii) Provides loans for physical asset creation
Provides small loans and financial services
D. Micro Finance Company (vi)
to low- income groups
(a) A-(iii), B-(ii), C-(i), D-(iv)

(b) A-(iv), B-(i), C-(iii), D-(ii)
(c) A-(ii), B-(iii), C-(iv), D-(i)
(d) A-(i), B-(iv), C-(ii), D-(iii)
Column-I Column-II
Provides loans for physical asset
A. Asset Finance Company(AFC) (i)
creation
Invests in various equities and
B. Investment Company (ii)
securities
Infrastructure Finance Engaged in the business of
C. (iii)
Company (IFC) infrastructure finance
Provides small loans and
D. Micro Finance Company (vi) financial services to low-income
groups
As per the Reserve Bank of India's regulations,
banks' exposure to a single NBFC should not exceed
_______ of their capital funds.
(a) 15% (b) 20%
(c) 10% (d) 25%

As per the Reserve Bank of India's regulations, banks' exposure to a
single NBFC should not exceed 20% of their capital funds.
The Reserve Bank of India (RBI) has provided guidelines on banks'
lending to Non-Banking Financial Companies (NBFCs). According
to these regulations, a bank's exposure to a single NBFC (both
funded and non-funded) should not exceed 20% of its tier 1 capital.
However, the bank's board of directors may choose to set a more
stringent limit. This regulation is in place to mitigate risks associated
with excessive exposure to a single entity.
Which of the following is not a type of Non- Banking
Financial Institution (NBFI)?
(1) Insurance companies

(2) Mutual funds
(3) Stock exchanges
(4) Payment banks
Which of the following is a primary function of Non-
Banking Financial Institutions?
(1) Accepting deposits from the public

(2) Granting loans and advances
(3) Issuing currency notes
(4) Managing monetary policy
Which of the following is a characteristic feature of Non-
Banking Financial Institutions?
(1) They are regulated by the Reserve Bank of India (RBI)
(2) They can accept demand deposits
(3) They issue currency notes and coins
(4) They have access to the banking system's payment and
settlement mechanisms
Which of the following is true about Non- Banking
Financial Institutions (NBFI) in India?
(1) They are not subject to any regulations or supervision.

(2) They can carry out all banking activities without a
banking license.
(3) They are prohibited from accepting any form of
deposits.
(4) They can engage in lending activities but cannot grant
loans to individuals.
Which of the following is a regulatory authority for Non-
Banking Financial Institutions (NBFI) in India?

(2) Insurance Regulatory and Development Authority of
India (IRDAI)
(4) National Housing Bank (NHB)
The Department of Non-Banking Supervision (DNBS) is
entrusted with the responsibility of regulation and
supervision of Non-Banking Financial Companies
(NBFCs) under the regulatory - provisions contained
under Chapter III B and C and Chapter V of the Reserve
Bank of India Act, 1934.
Which of the following is a type of Non- Banking Financial
Company (NBFC) based on the nature of its activities?
(1) Asset Financing NBFC

(2) Infrastructure Finance NBFC
(3) Core Investment Company (CIC)
(4) All of the above
Which of the following is a risk associated with
Non-Banking Financial Institutions (NBFI)?
(1) Credit risk

(2) Market risk
(3) Liquidity risk
(4) All of the above
Which of the following Non-Banking Financial Institutions
(NBFI) primarily deals with the securitization of assets?
(1) Housing Finance Companies (HFCs)

(2) Investment Companies (ICs)
(3) Asset Reconstruction Companies (ARCs)
(4) Microfinance Institutions (MFIs)
The applicability of the Ombudsman Scheme to Non
Banking Financial Companies (NBFCs) was announced by
the Reserve Bank of India (RBI) to _______. The scheme
was extended to NBFCs in _______.
(a) provide a mechanism for resolution of complaints against NBFCs, 2018

(b) provide a mechanism for resolution of complaints against NBFCs, 2011
(c) discourage the activities of NBFCs, 2018
(d) discourage the activities of NBFCs, 2011
A
The applicability of the Ombudsman Scheme to Non Banking

Financial Companies (NBFCs) was announced by the Reserve Bank
of India (RBI) to provide a mechanism for resolution of complaints
against NBFCs. The scheme was extended to NBFCs in 2018. The
RBI introduced the Ombudsman Scheme for Non-Banking Financial
Companies (NBFCs) in 2018 to provide a cost-free and expeditious
complaint redressal mechanism relating to deficiency in the services
by NBFCs covered under the Scheme. The Scheme covers all
deposit-taking NBFCs, and identified non-deposit taking NBFCs
with customer interface.
Which of the following statements about SBR for NBFCs is
incorrect?
(a) SBR categorizes NBFCs into four tiers based on their systemic
risk contribution.
(b) SBR is designed to create a homogeneous class of NBFCs.
(c) Under SBR, NBFCs that contribute significantly to systemic
risk are subject to a higher level of regulation.
(d) The regulatory requirements such as capital adequacy,
liquidity, and disclosure norms vary depending on the tier of the
NBFC under the SBR framework.
D
The RBI monitors and regulates NBFCs to ensure that they

adhere to prescribed regulations and standards, including those
related to capital adequacy, disclosure norms, and corporate
governance.
The oversight by the RBI aims to maintain stability and

integrity in the financial system, protecting consumers and
promoting confidence in the non- banking financial sector.
Insurance Act, 1938
Provisions: Contains regulations concerning the

conduct of insurance business, investments,
maintenance of solvency margin, and other
compliance-related aspects.
Amendments: Various amendments have been

made over the years to adapt to changes in the
industry and market dynamics.
Life Insurance Corporation Act, 1956
Establishment of LIC: This act led to the
creation of the Life Insurance Corporation (LIC),
which played a pivotal role in expanding life
insurance in India.
General Insurance Business
(Nationalization) Act, 1972
Nationalization of Non-Life Insurance: The act
led to the nationalization of the general insurance
business, placing it under state control.
Insurance Regulatory and Development
Authority Act, 1999 (IRDA Act)
Establishment of IRDAI: The act led to the
formation of the Insurance Regulatory and
Development Authority of India (IRDAI), the
regulatory body for insurance in India.
Regulatory Functions: IRDAI is responsible for

regulating, promoting, and ensuring orderly
growth in the insurance industry.
Consumer Protection Act, 2019
Consumer Rights: The act provides for the
protection of consumer interests, ensuring
transparency, fairness, and redressal mechanisms in
the insurance industry.
Prohibition of Inducements and Rebates
Section 41 of the Insurance Act: Prohibits agents
from offering inducements or rebates to
policyholders, ensuring ethical practices.
Micro Insurance Regulations
Focus on Inclusion: Specific regulations cater to micro- insurance
products, promoting financial inclusion and accessibility for
marginalized populations.
Other Regulations and Guidelines

Health Insurance Regulations, Product Regulations, etc.: These
provide detailed guidelines for specific products, operations, and
segments within the industry.
Insurance Agents
Individual or Corporate Agents: Act on behalf of one or more
insurers to sell insurance products.
Regulation: Governed by the IRDAI (Licensing of Individual
Agents) Regulations.
Insurance Brokers
Function: Provide professional advice on insurance and risk
management, representing the client rather than the insurer.
Types: Direct brokers, reinsurance brokers, and composite brokers.
Regulation: IRDAI (Insurance Brokers) Regulations.
Surveyors and Loss Assessors
Function: Assess and estimate losses on behalf of
insurers, particularly for property and liability claims.
Regulation: IRDAI (Insurance Surveyors and Loss
Assessors) Regulations.
Third-Party Administrators (TPAs)
Function: Provide health insurance claim services.
Regulation: IRDAI (TPA - Health Services)
Regulations.
The operation of insurance companies in India is primarily
governed by two key legislations: _______ and _______. The
first legislation was enacted in the year _______.
(a) The Companies Act, 2013, The Insurance Regulatory

and Development Authority Act, 1999, 2013
(b) The Companies Act, 2013, The Banking Regulation
Act, 1949, 2013
(c) The InsuranceAct,1938,The Insurance Regulatory and
Development Authority Act, 1999, 1938
(d) The Insurance Act, 1938, The Banking Regulation Act,
1949, 1938
c
Which of the following insurance products
provides coverage for medical expenses?
(1) Disability insurance

(2) Home insurance
(3) Health insurance
(4) Liability insurance
3
Health insurance is the insurance product that provides
coverage for medical expenses incurred by the insured
individual. It typically includes coverage for doctor
visits, hospital stays, prescription medications, and
other healthcare-related services. Disability insurance
provides income replacement in the event of a disability
preventing the insured from working, home insurance
covers property damage or loss, and liability insurance
protects against legal liabilities arising from bodily
injury or property damage caused by the insured.
Which of the following is an example of a life
insurance product?
(1) Health insurance

(2) Home insurance
(3) Term insurance
(4) Auto insurance
3
Term insurance is a type of life insurance that

provides coverage for a specific period,
typically ranging from 5 to 30 years. It offers
a death benefit to the beneficiaries if the
insured passes away during the policy term.
What does the term "cash value" refer to in life insurance
policies?
(1) The amount of money paid to the beneficiaries
upon the insured's death
(2) The amount the insured receives if they
surrender the policy before maturity
(3) The premium amount paid by the insured
(4) The maximum coverage limit of the policy
2
The amount the insured receives if they surrender the

policy before maturity. Cash value is a feature of
certain types of life insurance policies, such as whole
life or universal life. It represents the savings
component of the policy and can be accessed by the
insured if they decide to surrender the policy before it
reaches maturity
What is the purpose of underwriting in the
insurance industry?
(1) Setting premium rates for insurance policies

(2) Assessing and managing risks
(3) Handling claims and reimbursements
(4) Marketing insurance products
2
Underwriting is the process that insurance companies
use to evaluate the risk associated with insuring a
particular individual, property, or event. It involves
assessing factors such as the applicant's health,
lifestyle, occupation, and other relevant information to
determine the insurability and pricing of the policy.
What is the main purpose of liability insurance?
(1) To protect against damage to one's own property

(2) To provide coverage for medical expenses
(3) To compensate for lost income due to disability
(4) To protect against legal claims and lawsuits
4
Liability insurance is designed to provide financial
protection to individuals or businesses in the event that
they are held liable for causing injury or damage to
another person or their property. It covers legal
defence costs and potential settlements or judgements.
Which of the following insurance policies is typically
required by law for vehicle owners?
(1) Life insurance

(2) Home insurance
(3) Auto insurance
(4) Travel insurance
What is the purpose of an insurance premium?
(1) To determine the policy's deductible

(2) To provide coverage for the insured event
(3) To compensate the insurance agent
(4) To generate revenue for the insurance company
4
An insurance premium is the amount of money an
individual or business pays to an insurance company
for the coverage provided by an insurance policy. It
represents the cost of the insurance and helps
generate revenue for the insurer to cover claims and
operational expenses.
What is the purpose of an insurance deductible?
(1) To limit the number of claims an insured can make

(2) To determine the policy's premium amount
(3) To increase the coverage limit of the policy
(4) To share the financial responsibility with the insured
4
To share the financial responsibility with the insured.
An insurance deductible is the amount of money that
the insured must pay out of pocket before the insurance
company starts to cover the remaining costs. It helps
share the financial responsibility between the insured
and the insurer and is typically chosen by the insured
when purchasing the policy.
Financial sector regulators play a vital role in shaping
and maintaining the stability and integrity of an
economy's financial system. In a complex economic
environment, these regulatory bodies ensure that
financial institutions operate transparently, efficiently,
and in the best interest of consumers.
The roles of these regulators:
ü Ensuring Stability
ü Protecting Consumers
ü Promoting Competition
ü Ensuring Integrity and Transparency
ü Regulating Intermediaries
ü Supporting Economic Policies
Key regulators in India
1. Reserve Bank of India (RBI): Regulates banks, monetary
policy, and payment systems.
2. Securities and Exchange Board of India (SEBI): Oversees
securities markets and investor protection.
3. Insurance Regulatory and Development Authority of
India (IRDAI): Regulates the insurance industry.
4. Pension Fund Regulatory and Development Authority
(PFRDA): Oversees pension funds and retirement planning.
RBI
The Reserve Bank of India (RBI) is the central banking
institution of India, responsible for regulating the country's
monetary and financial system. Established on April 1, 1935,
under the Reserve Bank of India Act, 1934, the RBI plays a
crucial role in the development strategy of the Indian
government.
SEBI
The Securities and Exchange Board of India (SEBI) is the
regulator for the securities market in India. Established in
1988 and given statutory powers through the SEBI Act,
1992, it plays a key role in ensuring the stability and
integrity of the Indian capital markets.
IRDAI
The Insurance Regulatory and Development Authority of
India (IRDAI) is a statutory body tasked with regulating
and promoting the insurance industry in India. Established
in 1999 under the IRDA Act, its role is vital in ensuring
that the insurance sector functions with integrity,
transparency, and in the best interests of the policyholders.
PFRDA
The Pension Fund Regulatory and Development Authority
(PFRDA) is a statutory authority responsible for regulating
and promoting the pension sector in India. Established in
2003 and given statutory status in 2013 through the
PFRDA Act, it aims to ensure a sustainable and inclusive
pension system in the country.
Which of the following statement(s) is correct regarding the
role of financial sector regulators in an economy?
I. Financial sector regulators work to ensure stability,
efficiency, and integrity in the financial system.
II. Financial sector regulators typically focus only on
controlling inflation without any concern for consumer
protection.
III. A financial sector regulator such as a central bank may
influence monetary policy, including interest rates and
money supply.
IV. Financial sector regulators usually encourage financial
institutions to take excessive risks for higher profits.
(a) I & III (b) II & IV (c) III & IV (d) I & II
A
Which of the following statement is NOT correct about the
PFRDA?
(a) The PFRDA is responsible for the promotion of old age

income security in India.
(b) The PFRDA regulates the National Pension System (NPS)
and the Atal Pension Yojana (APY).
(c) The PFRDA is responsible for setting up, regulating, and
administering pension funds in India.
(d) The PFRDA solely manages all the pension funds in India
without any intermediaries.
d
Assertion (A): The Pension Fund Regulatory and Development Authority
(PFRDA) is a regulatory body in India that oversees and regulates all
pension funds to protect the interests of subscribers and to promote old
age income security.
Reason (R): The PFRDA's main function is to regulate the stock market
and manage public debt, and it has no role in overseeing pension funds.
(a) A is true but R is false
(b) Both A and R are false
(c) A is false but R is true
(d) Both A and R are true
a
Which regulatory body in India is responsible for
regulating and supervising the securities market?
(3) Insurance Regulatory and Development
Authority (IRDAI)
(4) National Stock Exchange of India (NSE)
SEBI is the regulatory authority that oversees the
securities market in India, ensuring fair practices,
investor protection, and market stability. The Securities
and Exchange Board of India was established as a
statutory body in the year 1992 and the provisions of
the Securities and Exchange Board of India Act, 1992
(15 of 1992) came into force on January 30, 1992.
and supervising the foreign exchange market?
(3) Forward Markets Commission (FMC)
(4) Insurance Regulatory and Development Authority
(IRDAI)
RBI regulates and supervises the foreign exchange
market in India, ensuring stability in currency rates,
managing foreign reserves, and facilitating cross-
border transactions. Reserve Bank of India (RBI),
the central bank of India, established in 1935 by the
Reserve Bank of India Act (1934). Originally
privately owned, the RBI was nationalized in 1949.
The Financial Stability and Development Council (FSDC) in
India is chaired by _______.
(1) President of India
(2) Prime Minister of India
(3) Minister of Finance
(4) Governor of the Reserve Bank of India

The FSDC is an apex body responsible for
coordinating and monitoring various financial sector
regulators and promoting financial stability and
development in India. It is chaired by the Minister of
Finance.
and supervising the foreign portfolio investors (FPIs)?
(3) National Securities Depository Limited (NSDL)
(4) Foreign Exchange Dealers' Association of India
(FEDAI)
SEBI, the Securities and Exchange Board of India, holds
the authority to regulate and supervise Foreign Portfolio
Investors (FPIs) in India. It ensures that FPIs comply with
the guidelines set for foreign investments and adhere to
market conduct regulations. Through active monitoring
and periodic inspections, SEBI aims to maintain
transparency, prevent market abuse, and safeguard
the interests of both domestic and foreign investors
participating in the Indian securities market.
Which regulatory body in India regulates and
supervises the insurance sector?
(2) Insurance Regulatory and Development
Authority (IRDAI)
(4) National Insurance Company Limited (NICL)
The Insurance Regulatory and Development
Authority of India (IRDAI) serves as the
regulatory body responsible for overseeing and
regulating the insurance sector in India.
regulating and supervising the pension sector?
(1) Pension Fund Regulatory and Development
Authority (PFRDA)
(IRDAI)
PFRDA formulates policies, guidelines, and regulations
to promote the development and growth of pension funds
and schemes. It aims to ensure the protection of the
interests of pension subscribers and facilitate the efficient
management of pension funds, thereby fostering a
sustainable retirement income system in the country.
PFRDA also plays a crucial role in educating and creating
awareness among individuals about the importance of
retirement planning and the benefits of participating in
pension schemes.
The primary function of the Pension Fund Regulatory and
Development Authority (PFRDA) is to:
(2) Regulate and supervise the stock market
(3) Regulate and supervise the insurance sector
(4) Regulate and supervise the pension sector
The Pension Fund Regulatory and Development Authority
(PFRDA) is the regulatory authority responsible for overseeing
the pension sector in India. PFRDA's primary objective is to
promote the growth and stability of pension funds and schemes
while ensuring the protection of the interests of subscribers.
PFRDA formulates regulations, guidelines, and policies to
govern pension funds, service providers, and intermediaries,
fostering transparency, innovation, and efficiency in the
pension industry to facilitate a secure and sustainable retirement
income system in India.
The regulatory body responsible for regulating and
supervising the asset reconstruction companies (ARCs)
in India is:
(3) National Bank for Agriculture and Rural
The Reserve Bank of India (RBI) is the regulatory and
supervisory authority for Asset Reconstruction
Companies (ARCs) in India. ARCs are specialized
financial institutions that play a vital role in resolving
non-performing assets (NPAs) of banks and financial
institutions. RBI ensures that ARCs comply with
regulations, guidelines, and prudential norms
regulating and supervising the stock exchanges and
clearing corporations?
(IRDAI)
(4) National Stock Exchange of India (NSE)
SEBI, the Securities and Exchange Board of India, plays
a crucial role in regulating and supervising stock
exchanges and clearing corporations in India. It ensures
that these entities adhere to fair, transparent, and efficient
trading and settlement processes. SEBI sets guidelines
and regulations to maintain market integrity, prevent
manipulation, and promote investor protection.
The primary role of the Forward Markets Commission
(FMC) is to regulate and supervise:
(1) Banks and financial institutions
(2) Mutual funds and asset companies
(3) Commodity futures market
(4) Insurance companies
FMC was the regulatory body responsible for regulating
and supervising commodity futures trading in India
before it was merged with SEBI in 2015. Before its
merger with SEBI in 2015, the Forward Markets
Commission (FMC) served as the regulatory body
overseeing the commodity futures market in India. FMC
was responsible for regulating and supervising
commodity futures trading, ensuring fair practices,
market integrity, and risk management.
Which of the following acts serves as the primary legislation
for the regulation and supervision of banks in India?
Which of the following is not a function of the Reserve
Bank of India (RBI) as per the RBI Act, 1934?
(1) Issue and manage currency in India

(3) Formulate monetary policy
(4) Conduct foreign exchange trading
Which of the following bodies has the authority to
supersede the Board of Directors of a banking company
under the Banking Regulation Act, 1949?
deals with the licensing of banking companies?
(1) Section 9
(1) Section 22
(3) Section 10
(1) Section 18
(1) Section 42(1)
(2) Section 36AD
(3) Section 18(1)
(4) Section 10(2)
In regard to cash reserve, the provisions of section 42
(1) of the Reserve Bank of India Act, 1934 (RBI Act,
1934), governs scheduled UCBs whereas, non scheduled
UCBs are governed by the provisions of section 18 of the
Banking Regulation Act, 1949 (As Applicable to Co-
operative Societies) [BR Act, 1949(AACS)].
The RBI Act, 1934 provides the RBI with the power
to issue and manage currency in India. Which section
of the RBI Act, 1934 deals with this power?
(1) Section 17
(2) Section 22
(3) Section 12
(4) Section 7
In terms of Section 22 of the Act, Reserve Bank has
the sole right to issue banknotes in India. Section 25
states that the design, form and material of bank
notes shall be such as may be approved by the
Central Government after consideration of the
recommendations made by the Central Board of RBI.
Which of the following acts gives power to central
banking institution of India i.e. The RBI?

The framework of central banking policy in
India has evolved around its objectives
specified under the Reserve Bank of India
Act, 1934
BAD BANKS
"Bad Banks" is a term used to describe a financial entity

created to buy and hold non-performing assets (NPAs) or
bad loans from other banks. This concept is implemented to
segregate bad loans from the balance sheets of the original
banks, allowing them to focus on their core banking
activities.
Purpose of Bad Banks
ü Isolate Bad Loans: To separate non-performing assets from
the healthy assets of the bank.
ü Improve Balance Sheets: To clean up the balance sheets of
the original banks, making them more attractive to investors.
ü Enhance Credit Flow: By freeing up capital, it allows
banks to lend more and revive credit growth.
ü Specialized Management: Bad Banks are specialized in
handling stressed assets and can work on their recovery
more efficiently.
NATIONAL ASSET RECONSTRUCTION BANK (NARCL)
It is a bad bank set up by the Government of India

and the Reserve Bank of India to consolidate and
resolve stressed assets of public sector banks.
NARCL was incorporated in July 2021 and became
operational in 2022.
NATIONAL ASSET RECONSTRUCTION BANK (NARCL)
The idea is that NARCL will acquire stressed assets from

banks and then work to resolve them over a period of time.
This will help clean up the balance sheets of public sector
banks.
Banks will transfer identified bad loans to NARCL at net
book value (i.e. book value less provisions held). NARCL
will pay 15% of the consideration amount in cash and
issue Security Receipts for the balance 85% to the banks.
NATIONAL BANK FOR FINANCING, INFRASTRUCTURE &
DEVELOPMENT
The National Bank for Financing Infrastructure and

Development (NaBFID) is a major initiative by the
Government of India to boost infrastructure financing in
the country. Established through the National Bank for
Financing Infrastructure and Development Act, 2021,
NaBFID aims to support the long- term development of
critical infrastructure projects.
Formation of NaBFID
Legal Basis: Established through specific legislation,

reflecting the government's commitment to
infrastructure development.
Ownership: Primarily owned by the Government of

India, with provisions for private sector participation.
Capital Structure: The bank has an authorized capital

of INR 1 lakh crore, aiming to leverage it to provide
financing for various infrastructure projects.
Enhanced Access and Service Excellence
Enhanced Access and Service Excellence
Objectives of EASE
Enhance Customer Experience: To improve the quality and
accessibility of banking services for customers.
Promote Digital Banking: To increase the adoption of digital
banking channels and reduce the reliance on physical branches.
Improve Governance and Oversight: To enhance governance in
PSBs through better accountability and transparency.
Encourage Responsible Banking: To in still a responsible banking
culture, emphasizing customer rights and ethical practices.
"Bad Banks" refer to a financial entity that is created to
buy and hold non-performing assets (NPAs) from other
financial institutions. The primary purpose of a bad
bank is to _________.
(a) generate immediate profits for shareholders

(b) invest in high-risk financial markets
(c) segregate and manage toxic assets, improving the
selling bank's balance sheet
(d) provide traditional banking services to individual
customers
c
A bad bank is a bank set up to buy the bad loans and

other illiquid holdings of another financial institution.
The entity holding significant nonperforming assets
will sell these holdings to the bad bank at market
price.
Assertion (A): A 'Bad Bank' is a financial institution created
to buy and hold non-performing assets (NPAs) from other
banks to clean up their balance sheets.
Reason (R): The creation of a 'Bad Bank' improves the health

of the banking sector by transferring NPAs but it also
increases the overall financial risk in the system.
(a) A is true but R is false (b) Both A and R are false

(c) A is false but R is true (d) Both A and R are true
a
The EASE (Enhanced Access and Service Excellence) agenda
was launched by the _______ in _______ with an aim to
_______.
(a) Reserve Bank of India, 2018, facilitate the role of

Public Sector Banks in the Indian economy
(b) Government of India, 2018, facilitate the role of Public
Sector Banks in the Indian economy
(c) Reserve Bank of India, 2019, discourage the role of
Public Sector Banks in the Indian economy
(d) Government of India, 2019, discourage the role of Public
Sector Banks in the Indian economy
International Financial Service Centres (IFSC)
The main objective of the IFSCA is to develop a

strong global connect and focus on the needs of the
Indian economy as well as to serve as an
international financial platform for the entire region
and the global economy as a whole.
Establishment of IFSCA
The International Financial Services Centres Authority
(IFSCA) has been established on April 27, 2020 under the
International Financial Services Centres Authority Act, 2019.
It is headquartered at GIFT City, Gandhinagar in Gujarat.

Opportunities At Gift City
Ø Access to large hinterland economy

Ø Access to international markets
Ø Connecting 30 Mn strong Indian diaspora which has a combined
worth of USD 3 trillion to India through the IFSC
Ø Inbound and outbound gateway for international financial services
Ø Potential to be a leading destination for Global in-house Centers with
a globally competitive cost structure
Ø Attracting global talent to the world class fin tech hub in Gift city
Ø Emerging as a leading hub for fund administration.
Guidelines For Setting Up Of IFSC Banking Units (IBU)
Eligibility –
Ø Indian banks viz., Banks in the Public Sector and
the Private Sector authorized to deal in foreign
exchange will be eligible to set up IBUs.
Ø Each eligible bank would be permitted to set up

only one IBU in each IFSC.
Licensing
Eligible Banks interested in setting up IBUs will be

required to obtain prior permission of the RBI for
opening an IBU.
For most regulatory purposes, an IBU will be treated

on par with a foreign branch of an Indian bank.
Capital –
The parent bank will be required to provide a

minimum capital of USD 20 Mn or equivalent in any
foreign currency to its IBU which should be
maintained at all times.
Reserve requirements
The liabilities of the IBU are exempt from, both, CRR

and SLR requirements of RBI.
Resources and deployment – The funds raised will be

from Non Residents and Overseas branches
Resources and deployment
The funds raised will be from Non Residents and Overseas

branches of Indian Banks.
Deployment of funds can be with, both, persons resident in

India as well as persons resident outside India.
However, deployment of funds with persons resident in

India shall be subject to the provisions of FEMA 1999.
Operational Aspects
Cash transactions and savings bank accounts are not

permitted. Deposits can be maintained in current
accounts and term deposits.
Indian KYC-AML and delinquency norms are

applicable.
Deposits with IBUs are not insured

The Parent Bank is required to satisfy the following conditions:
Ø Maintain necessary regulatory capital subject to a minimum of USD 20

Mn at the Parent Bank level.
Ø Obtain No Objection letter from home country regulator for setting up
an IBU in IFSC.
Ø Letter of comfort from Parent Bank regarding liquidity and resource
support to IBU.
Ø IBUs are not required to maintain SLR and CRR.
Ø IBUs are required to maintain LCR and Net Stable Funding Ratio at IBU
level. However, the same may be maintained at the parent level with
IFSCA permission.
The Parent Bank is required to satisfy the following conditions:
Ø Leverage ratio for IBUs may be maintained by the Parent

Bank and at the level specified by the home regulator and
subject to the regulations applicable to the parent bank.
Ø IBUs are required to maintain a Retail Deposit Reserve

Ratio on daily basis at 3% of the deposits raised from
individuals outstanding as at the end of the previous
working day.
Ø IBUs are required to comply with the prudential directions

and instructions issued by their home regulator unless
otherwise specified by the IFSCA.
Permissible Activities At IBUs
Ø IBUs can undertake transactions with

✓ Residents (for deployment of funds)
✓ Non-residents entities other than individuals including HNIs/retail
customers (for both raising of resources and deployment of funds).
Ø All transactions shall in currency other than INR.
Ø IBUs can deal with WOS/JVs of Indian companies registered abroad.
Ø IBUs are not allowed to open SB accounts.
Ø They can open foreign currency current accounts of units operating in
IFSCs and of Non-resident institutional investors to facilitate their
investment transactions.
Ø They can open foreign currency current accounts (including escrow
accounts) of their corporate borrowers subject to FEMA.
Ø No cheque facility will be available for holders of current
accounts in the IBUs.
Ø All transactions are to be done through bank transfers.
Ø IBUs are permitted to undertake factoring/forfaiting of export
receivables.
Ø IBUs shall obtain prior approval of RBI for offering derivative
products.
Ø IBUs are allowed to open foreign currency Escrow accounts of
Indian resident entities for the purpose of temporarily
subscriptions to GDR/ADR issues, until issuance of receipts.
Ø IBUs are allowed to act as underwriter/arranger of INR

denominated Overseas bonds issued by Indian entities in
Overseas markets.
Ø Exposure ceiling for IBUs shall be 5% of the parent’s Bank Tier
I Capital in case of Single borrower and 10% of the parent
Bank’s Tier I Capital in the case of a borrower group.
Ø All AML/CFT instructions issued by RBI to be followed.
Ø The IBUs will be regulated and supervised by the RBI.
Ø No liquidity support will be available to the IBUs from the RBI.
Q. The objectives of IFSCA are?
A. Creating a strong global connection while focusing

on the requirements of the Indian economy
B. Serving as an international financial platform for the
entire region and the global economy
C. To facilitate doing business in the IFSC and to offer
a world-class regulatory environment.
D. All of the above
The International Financial Services Centres entity (IFSCA) is a
unified entity in India responsible for the development and
regulation of financial products, financial services, and financial
institutions in the IFSC. The current regulators, the RBI, SEBI,
PFRDA, and IRDAI, regulated enterprises in the IFSC prior to the
foundation of the IFSCA. The IFSCA Act 2019 formed IFSCA on April
27th, 2020, with headquarters in Gandhinagar, Gujarat.
The main objectives of IFSCA are:

1) Creating a strong global connection while focusing on the
requirements of the Indian economy
2) Serving as an international financial platform for the entire
region and the global economy
3) To facilitate doing business in the IFSC and to offer a world-class
regulatory environment
Q. What are the opportunities available at GIFT
City?
A. Access to large hinterland economy
B. Attracting to global talent to the world class
fin tech hub
C. Inbound and Outbound gateway for
international financial services
D. All of the above
Opportunities at GIFT CITY
1) Access to large hinterland economy

2) Access to international markets
3) Connecting 30 Mn strong Indian diaspora which has a combined
worth of USD 3 Trillion to India through the IFSC
4) Inbound and Outbound gateway for international
financial services
5) Potential to be a leading destination for Global in-house Centers
with a gloablly competitive cost structure
6) Attracting to global talent to the world class fin tech hub
7) Emerging as a leading hub for fund administration
Q. The Parent bank setting up an IBU unit at IFSC must
satisfy the following conditions under the regulatory
framework. Which of the following is not a condition
that the parent bank should satisfy?
A. IBUs are required to maintain SLR and CRR

B. Letter of comfort from Parent Bank regarding
liquidity and resource support to IBU
C. Obtain no objection letter from home country
regulator for setting up an IBU in IFSC
D. IBUs are required to maintain a retail deposit reserve
ratio of 3% of deposits raised from persons
outstanding at the end of the preceding working day on
a daily basis
Indian and Foreign Banks intending to set up an IBU in IFSC are required to obtain a license
from IFSCA.
The parent bank is required to satisfy the following conditions:
1) Maintain necessary regulatory capital subject to minimum of USD 20 Mn at the Parent
Bank level.
2) Obtain no objection letter from the home country regulator for setting up an IBU in IFSC
3) Letter of comfort from Parent Bank regarding liquidity and resource support to IBU
4) IBUs are not required to maintain SLR and CRR
5) IBUs are required to maintain LCR and Net Stable Funding Ratio at IBU level. However,
the same may be maintained at the parent level with IFSCA permission.
6) Leverage ratio for IBUs may be maintained by the Parent bank and at the level specified
by the home regulator and subject to the regulations applicable to the parent bank.
7) IBUs are required to maintain a retail deposit reserve ratio of 3% of deposits raised from
persons outstanding at the end of the preceding working day on a daily basis
8) Unless otherwise indicated by the IFSCA, IBUs must follow the prudential guidelines and
instructions issued by their home regulator
Q. Each of the following is a relaxation given to the FPI (Foreign
portfolio investors) entities at GIFT CITY except?
A. Short-term capital gains tax exemption for derivatives

trading
B. Companies to pay securities transaction tax or commodity
transaction costs
C. FPIs are permitted to trade commodities derivatives on the
IFSC exchange.
D. Allowing retail investors to trade to build liquidity in the
market
Relaxations for the FPI Entities at Gift City
1) SEBI has permitted FPIs registered in India to trade on
exchanges operating in the GIFT City
2) FPIs are permitted to trade commodities derivatives
on the IFSC exchange.
3) Companies do not pay securities transaction tax or
commodity transaction costs
4) All exchanges are open 24 hours a day, and FPIs can
trade without additional documents.
5) Short-term capital gains tax exemption for derivatives
trading
6) Allowing retail investors to trade to build liquidity in
the market
Which of the following is not included in the
features of the informal financial system?
(1) Lack of regulation

(2) Low transaction cost
(3) Institutionalised
(4) Default rate is less
3
What is common among RBI, IRDA, and SEBI
is a component of the the following?
(1) They are Non- Intermediates Financial Institution

(2) They are Regulatory Financial Institution
(3) They are Intermediates Financial Institution
(4) They are Non-Depository Financial
Institutions
The State Bank of India was formed from the
merger of three banks. Which of the following
was not included in the merger?
(1) Bank of Bengal

(2) Bank of Madras
(3) Bank of Oudh
(4) Bank of Bombay
The first bank merger happened in 1921
by the Bank of Bengal, Bank of Bombay,
and the Bank of Madras, which is now
the State Bank of India.
Which one of the following is Asia’s first stock
exchange?
(1) Shanghai Stock Exchange

(2) National Stock Exchange
(3) Hong Kong Stock Exchange
(4) Bombay Stock Exchange
What was the name of the committee whose recommendation
resulted in the formation of the central bank of India?
(1) Islington Commission

(2) Hilton Young Committee
(3) Montagu-Chelmsford Reforms Committee
(4) Lee Commission
Which was the first institution to be
nationalized in India?
(1) State Bank of India

(2) Life Insurance Corporation of India
(3) Syndicate Bank
(4) Reserve Bank of India
What is common in the following?
Demand Loans, Overdrafts, Cash Credit
(1) They are a type of demand deposit.

(2) They are a type of time deposit.
(3) They are a type of non-fund-based facility.
(4) They are a type of fund-based facility.
Which of the following banks is not a
presidency bank?
(1) Bank of Bombay

(2) Bank of Oudh
(3) Bank of Madras
(4) Bank of Bengal
Which was the first ethnic bank established
in India?
(1) Punjab National Bank
(2) Bank of Baroda
(3) Central Bank of India
(4) Canara Bank

Ie&ifs Module C MCQS & Summary

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@JAIIB_CAIIB_2024_NOTES_MCQs

It comprises a set of complex and closely interconnected

Capital Markets: Deal in long-term securities like stocks and bonds.

Foreign Exchange Markets: Deal in currencies.

Derivatives Markets: Deal in financial contracts like futures and options.

Equity Securities: Like common stocks.

(a) Implementation of prudential norms

Ø Implementation of prudential norms: Prudential norms related to

Ø Deregulation of interest rates: Before the reforms, interest rates in

Ø Complete privatization of public sector banks: This measure was

(a) increase the gold reserves of the central bank

(1) Regional Rural Banks

(1) Both are regulatory bodies.

(1) State Bank of India

(1) Shanghai Stock Exchange

(1) Islington Commission

Young Commission) (1926) recommends the

establishment of a central bank to be called the

'Reserve Bank of India'.

(1) They cannot issue Credit Card

(1) Providing retail banking services to individual customers

(1) Gadgil Committee

(1) Securities and Exchange Board of India (SEBI)

(1) Setting premium rates for insurance policies

(1) President of India

(1) Regulate and supervise banks and financial institutions

(1) Reserve Bank of India (RBI)

(1) Reserve Bank of India (RBI)

(1) Banking Regulation Act, 1949

(1) Section 42(1)

PART-II BANKING REGULATIONS ACT 1949

The Schedules to the Reserve Bank of India Act,

Schedule 1: Oath for Directors

Schedule 4: Provisions of the Act Applicable to Banking

Schedule 5: Provisions for Amending the Act

BANKING REGULATION ACT, SECTIONS 1-56

Section 1: Title, Extent, Commencement

BANKING REGULATION ACT, SECTIONS 1-56

Sections 20-30: Control over Management

(a) 22, 45 (b) 45, 22 (c) 36, 49 (d) 49, 36

I. The Banking Regulations Act, 1949 governs all the

(a) (a): banking operations (b): licenses and directives

I. The Banking Regulations Act, 1949 governs all the

II. The Act empowers the Reserve Bank of India to issue

Section 35 of this act authorizes the Reserve Bank of India (RBI)

(1) Section 3 of the Banking Regulation Act

"banking" means the accepting, for the purpose

(1) Rs. 1 lakh (3) Rs. 1 crore

₹ 10,000 for any violation of agreement or deficiency of

(1) Encouraging competition among banks

(1) Section 42(1)

India (RBI) as per the RBI Act, 1934?

(1) Creation of Currency

(2) Regulate and supervise banks and financial institutions

(3) Formulate monetary policy

(4) Conduct foreign exchange trading

National Bank for Agriculture and Rural Development

(1) Industrial Finance Corporation of India (IFCI)

(1) Industrial Development Bank of India (IDBI)