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CSE Qualifier 2025 Question Booklet: PTS-5162

GENERAL STUDIES

ECONOMY 2
Time Allowed: One Hour Maximum Marks: 100

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 2

1. The Reserve Bank of India takes major to 4. Consider the following statements regarding
increase liquidity in the market. In this the RBI Retail Direct Scheme:
context, consider the following: 1. It has the objective to provide the retail
1. Purchasing Government Securities investors of the country a simple, safe,
through Open market operations secure direct access to the Indian G-Sec
2. Decreasing Discount Rate market.

3. Increasing reverse repo rate and 2. Under this, payments for transactions
decreasing Repo Rate can be done using saving bank account
through UniÞed Payments Interface
How many of the above statements is/are (UPI).
correct ?
Which of the above statements is/are correct?
(a) Only one
(a) 1 only
(b) Only two
(b) 2 only
(c) All three
(c) Both 1 and 2
(d) None
(d) Neither 1 nor 2

2. Consider the following statements about

Co-operative Banking in India: 5. Consider the following statements regarding
the Priority Sectors Lending:
1. Primary Agricultural Credit Societies
(PACS), the lowest tier of the Co-operative 1. Besides microÞnance groups, individual
sector in India, are not regulated by the farmers are also eligible to get credit
Reserve Bank of India directly. under this arrangement.

2. National Bank for Agricultural and 2. Priority Sectors Lending certiÞcates can
Rural Development has been delegated be traded on RBI’s e-Kuber platform.
the powers to conduct inspection of State Which of the above statements is/are
and Central Cooperative Banks. incorrect?
3. Only Central Cooperative Banks, and (a) 1 only
not the State Cooperative Banks, are
regulated by Banking Regulation Act, (b) 2 only
1949. (c) Both 1 and 2
How many of the above statements is/are (d) Neither 1 nor 2
correct ?
(a) Only one 6. Consider the following:
(b) Only two Statement I
(c) All three RBI is a banker to each and every state
(d) None governments in India.
Statement II
3. Consider the following statements regarding It is both right and obligation on the Reserve
the National Housing Bank: Bank of India to act as a banker to both central
1. It is a reÞnancing agency and provides and state governments.
Þnancial and other supports to the Which one of the following is correct in respect
housing Þnance institutions. of the above statements?
2. It also regulates the housing Þnance (a) Both Statement-I and Statement-II
companies. are correct and Statement-II explain
3. It is a fully government-owned agency. Statement-I
How many of the above statements is/are (b) Both Statement-I and Statement-II are
correct ? correct but Statement-II does not explain
Statement-I
(a) Only one
(c) Statement-I is correct but Statement-II
(b) Only two
is incorrect
(c) All three
(d) Statement-I is incorrect but Statement-
(d) None II is correct
 3

7. Consider the following statements regarding 10. Consider the following statement regarding
the National Bank for Agriculture and Rural Central Bank Digital Currency (CBDC):
Development: 1. CBDC is a digital Þat currency that can
1. It was established by transferring the be used to settle a public or private debt
reÞnancing functions of RBI. or meet a Þnancial obligation.
2. The RBI and the Government have equal 2. They are based on distributed ledger
shares in it. technology.
3. It is both the direct Þnancing as well as 3. India recently launched e-RUPI as its
reÞnancing agency. Þrst CBDC.
4. CBDC can reduce the high Currency to
How many of the above statements is/are
GDP ratio.
correct ?
How many of the above statements is/are
(a) Only one
correct?
(b) Only two (a) All four
(c) All three (b) Only one
(d) None (c) Only two
(d) Only three
8. Consider the following statements regarding
domestic systemically important banks
(D-SIBs) of India: 11. If RBI increases the monetary base but still
money supply does not increase correspond-
1. Banks whose assets exceed 2% of GDP ingly, what could be the reason behind this?
are considered part of this group.
Statement - I :
2. All the banks under D-SIB have to
maintain a higher share of risk-weighted Banks may be depositing the excess money
assets as tier-I equity than others. with RBI rather than lending to the public.
3. All the banks under D-SIBs are in the Statement - II :
same bucket. People’s tendency of depositing money in the
Which of the above statements is/are correct? banks are high.

(a) 1 and 2 only Which one of the following is correct in respect

of the above statements?
(b) 2 and 3 only
(a) Both Statement-I and Statement-II
(c) 1 only are correct and Statement-II explain
(d) 1, 2 and 3 Statement-I
(b) Both Statement-I and Statement-II are
9. Consider the following : correct but Statement-II does not explain
Statement-I
1. Market Stabilisation Scheme bonds
(c) Statement-I is correct but Statement-II
2. Treasury bills is incorrect
3. Notes held with Banks
(d) Statement-I is incorrect but Statement-
4. Reserve Tranche Position (Reserve Bank II is correct
position with International Monetary
Fund) 12. With reference to the Banking Sector in India,
5. Paid-up Capital and Reserve Fund consider the following statements:
How many of the above is/are the liabilities of 1. Until the establishment of the Reserve
Reserve Bank of India? Bank of India in 1935, the Imperial Bank
of India performed certain central bank-
(a) Only two ing functions in addition to its normal
(b) Only three commercial banking functions.
2. The Reserve Bank of India was national-
(c) Only four
ized under the Banking Regulation Act,
(d) All Þve 1949.
 4

Which of the statements given above is/are 1980s was the regulation of credit in
correct? accordance with the developmental needs
(a) 1 only of the country.

(b) 2 only 2. The collapse of the Bretton-Woods system

of Þxed exchange rates and high inßation
(c) Both 1 and 2 in many advanced economies during the
(d) Neither 1 nor 2 1970s also guided the monetary policy
framework in India.
13. In the context of Small Finance Banks (SFB), 3. Since the early 1990s, India formally
consider the following statements: switched to inßation targeting as the
1. They are required to extend 75 percent preferred policy framework.
of their Adjusted Net Bank Credit to the
How many of the above statements is/are
priority sectors.
incorrect ?
2. They are subjected to the norms of Cash
Reserve Ratio and Statutory Liquidity (a) Only one
Ratio. (b) Only two
Which of the statements given above is/are (c) All three
correct?
(d) None
(a) 1 only
(b) 2 only 16. With reference to the Securities and Exchange
(c) Both 1 and 2 Board of India (SEBI), consider the following
statements:
(d) Neither 1 nor 2
1. The SEBI was originally constituted as
14. With reference to Basel Committee, Consider a non-statutory body in 1988 through a
the following statements: resolution of the Government of India.
1. It was established by the central bank 2. Registration and regulation of the
governors of the G-20 countries in the working of venture capital funds is kept
aftermath of serious disruptions in outside the purview of SEBI.
international currency and banking
Which of the statements given above is/are
markets.
correct?
2. The committee introduced the capital
measurement system called Basel capital (a) 1 only
accord in 1988. (b) 2 only
3. The Basel-II Framework requires the
(c) 1 and 2 both
banks to measure the interest rate risk
in the banking book. (d) Neither 1 nor 2
How many of the above statements is/are
correct ? 17. Consider the following statements:
(a) Only one 1. Money multiplier is the ratio of stock
of high-powered money to the stock of
(b) Only two
money in an economy.
(c) All three
2. Value of money multiplier comes to be
(d) None more than 1.
Which of the above statements is/are correct?
15. With reference to the evolution of monetary
policy in India, consider the following (a) 1 only
statements: (b) 2 only
1. With the nationalization of major banks
(c) Both 1 and 2
in 1969, the main objective of monetary
policy through the 1970s till the mid- (d) Neither 1 and 2
 5

18. Consider the following statements: 21. Consider the following statements with
1. Under cash reserve ratio (CRR), a reference to recent restructuring of Insolvency
commercial banks have to hold a certain and Bankruptcy Code, 2016 (IBC):
minimum amount of deposits as reserves 1. It allows for restructuring of Þrms
with itself. involving cross border jurisdictions.
2. Statutory Liquidity Ratio is the minimum 2. Foreign creditors can make claims
percentage of deposits that a commercial against a domestic company in India.
bank has to maintain in the form of liquid 3. It allows for automatic recognition of
cash, gold or other securities with itself. any insolvency proceedings in other
3. Banks earn a Þxed interest on the money countries.
that is set aside as CRR. How many of the above statements is/are
Which of the statements given above is/are correct ?
correct? (a) Only one
(a) 1 only (b) Only two
(b) 1 and 2 only (c) All three
(c) 2 only (d) None
(d) 1, 2 and 3
22. Consider the following statements about
19. Consider the following statements: Money Market instruments in India:
1. The RBI acts as the debt manager to both 1. Generally, large Þrms with considerable
Central & the State Governments. Þnancial strength and ratings can issue
the Commercial Papers.
2. The Reserve Bank’s debt management
strategy includes minimizing the cost 2. The maturity period of CertiÞcates of
of borrowing and reducing the roll-over Deposits cannot be more than a year.
risks. 3. In Repurchase Agreements, one party
Which of the statements given above is/are sells a security to another, with the
promise of buying it back at a later date
correct?
from the buyer.
(a) 1 only
Which of the above statements is/are correct?
(b) 2 only
(a) 1 only
(c) Both 1 and 2
(b) 1 and 2 only
(d) Neither 1 nor 2
(c) 1 and 3 only

20. Consider the following pairs: (d) 3 only

Committees Scope 23. Consider the following statements regarding

1. Narasimham Banking Sector the Bank Rate:
Committee (II), 1998 Reforms 1. Bank Rate is the rate at which the
2. A. Ghosh Committee, Transparency of Reserve Bank is ready to rediscount bills
1991 Balance sheet of exchange or other commercial papers.
3. C. Rangarajan Mechanization of 2. It changes automatically when the MSF
Committee, 1988 Banking Industry rate changes alongside policy repo rate.
4. Narasimham Committee on 3. It is the rate that must be 100 basis
Committee (I), 1991 Customer Service points above the policy repo rate.
How many pairs given above are correctly How many of the above statements is/are
matched? correct ?
(a) Only one pair (a) Only one
(b) Only two pairs (b) Only two
(c) Only three pairs (c) All three
(d) All four pairs (d) None
 6

24. Consider the following statements regarding (c) All three

the monetary policy committee:
(d) None
1. Each member of the MPC has one vote
and only the RBI Governor has a second 27. Consider the following statements about the
or casting vote. Call Money Rate:
2. The MPC is required to meet at least two 1. It is the rate at which short term and
times in a year. long term funds are borrowed and lent in
Which of the above statements is/are correct? the money market.

(a) 1 only 2. A tight liquidity condition leads to a fall

in call money rate.
(b) 2 only 3. It has maturity period of 1 day only.
(c) Both 1 and 2 How many of the above statements is/are
(d) Neither 1 nor 2 correct ?
(a) Only one
25. Which of the following statements regarding (b) Only two
Non-Banking Financial Companies (NBFCs)
is/are incorrect? (c) All three
1. They can lend and make investments but (d) None
cannot accept demand deposits.
2. Deposit insurance facility of Deposit 28. Consider the following statements regarding
Insurance and Credit Guarantee Capital Adequacy ratio (CAR):
Corporation is not available to depositors 1. It is the ratio of a bank’s total capital to
of NBFCs. its total risk weighted assets and current
3. All the NBFCs are regulated by the RBI liabilities.
Act, 1934. 2. Tier I capital consists mainly of share
capital and disclosed reserves and it is a
Select the correct answer using the codes given
bank’s highest quality capital because it
below:
is fully available to cover losses.
(a) 1 and 2 only 3. The requirement of CAR in India is
(b) 2 only more than that required in the Basel III
norms.
(c) 3 only
How many of the above statements is/are
(d) 1 and 3 only correct ?
(a) Only one
26. Consider the following statements regarding
the role of RBI in monetary policy: (b) Only two

1. The primary objective of monetary (c) All three

policy is to maintain price stability while (d) None
keeping in mind the objective of growth.
2. The Reserve Bank of India is vested with 29. Consider the following statements regarding
the responsibility for the implementation Primary market:
of the ßexible inßation targeting
1. The primary markets are used by
framework with a statutory basis. companies for the purpose of setting up
3. If the RBI fails to keep inßation within new ventures or for expanding existing
2-6 per cent in any quarter, it has to write business.
to the government to justify the reasons 2. Other than shares and debentures, a
for it. company can raise capital through the
How many of the above statements is/are primary market in the form of loans and
correct ? deposits.
3. Only large banks and Þnancial
(a) Only one
institutions and, not individuals, are
(b) Only two allowed to invest in the primary market.
 7

Which of the above statements is/are correct? 33. What is the role of the National Bank for
Financing Infrastructure and Development
(a) 1 only
(NBFID) ?
(b) 3 only
1. to directly or indirectly lend, invest, or
(c) 1 and 2 only attract investments for infrastructure
projects located entirely or partly in
(d) 2 and 3 only
India
2. to organize and facilitate foreign
30. Consider the following statements regarding
participation in infrastructure projects
the marginal cost of funds-based lending rate
(MCLR): 3. to facilitate the development of the
market for bonds, loans, and derivatives
1. The Reserve Bank of India introduced
for infrastructure Þnancing
the MCLR methodology by replacing the
base rate structure. How many of the above statements is/are
2. Under the MCLR regime, banks are free correct ?
to offer all categories of loans on Þxed or (a) Only one
ßoating interest rates.
(b) Only two
Which of the above statements is/are correct?
(c) All three
(a) 1 only
(d) None
(b) 2 only
(c) Both 1 and 2 34. Consider the following statements:
(d) Neither 1 nor 2 Statement - I:
The auctions of the G-Secs are conducted on
31. Consider the following: the electronic platform called the E-Kuber.
1. External Debt Statement - II
2. Marketable Securities
Only the members of E-Kuber can participate
3. Provident fund in the primary auction of the G-Secs.
4. National Small Savings Fund Which one of the following is correct in respect
How many of the above is/are part of the Public of the above statements?
Debt of India ? (a) Both Statement-I and Statement-II
(a) 1, 2, and 3 only are correct and Statement-II explain
Statement-I
(b) 1, 2, 3, and 4
(b) Both Statement-I and Statement-II are
(c) 1 and 2 only correct but Statement-II does not explain
(d) 2 and 4 only Statement-I
(c) Statement-I is correct but Statement-II
32. Which of the following statements correctly is incorrect
differentiates between Money market and
(d) Statement-I is incorrect but Statement-
Capital market?
II is correct.
(a) The investment in money markets
generally yields a higher return for 35. Consider the following statements regarding
investors than the capital markets. the Marginal Standing Facilities:
(b) Investment in capital market instruments 1. MSF can be used by a bank after it
requires huge sums of money as compared exhausts its eligible security holdings for
to the money market. borrowing, i.e., SLR.
(c) Unlike money market, capital market 2. Banks can get the credit on both MSF
securities are not considered liquid and Repo rates but MSF rate is always
investments. higher than the Policy Repo Rate.
(d) Capital market instruments are riskier 3. Higher the MSF rates, lower is the
than the money market. liquidity in market.
 8

How many of the above statements is/are Which one of the following is correct in respect
correct ? of the above statements?
(a) Only one (a) Both Statement-I and Statement-II
(b) Only two are correct and Statement-II explain
Statement-I
(c) All three
(b) Both Statement-I and Statement-II are
(d) None
correct but Statement-II does not explain
Statement-I
36. Consider the following statements:
1. Currently, card-less cash withdrawal (c) Statement-I is correct but Statement-II
through ATMs is a permitted only by is incorrect
a few banks in the country for their (d) Statement-I is incorrect but Statement-
customers at their own ATMs. II is correct.
2. The absence of need for a card to initiate
cash withdrawal transactions would help
39. Regarding the bidding of the Government
in containing frauds like skimming, card
cloning, and device tampering. bonds, consider the following statements:

Which of the statements given above is/are 1. Competitive bids are made by well-
correct? informed institutional investors such
as banks, Þnancial institutions, PDs,
(a) 1 only
mutual funds, and insurance companies.
(b) 2 only 2. Only, the corporate bodies are allowed
(c) 1 and 2 both participation on “non-competitive” basis
(d) Neither 1 nor 2 in select auctions of dated Government
of India (GoI) securities and Treasury
Bills.
37. Consider the following statements regarding
Indian Depository Receipts (IDRs): Which of the statements given above is/are
1. IDR is an instrument created by Indian correct?
depository in India against underlying (a) 1 only
shares of issuing company.
2. It allows foreign investors to invest in (b) 2 only
listed Indian companies. (c) 1 and 2 both
3. IDRs are denominated in Indian rupees.
(d) Neither 1 nor 2
How many of the above statements is/are
incorrect ? 40. Which of the following statements are correct
(a) Only one regarding the ‘Liquidity Trap’?
(b) Only two 1. It is a state in which the nominal interest
(c) All three rate is close or equal to zero.

(d) None 2. Conventional Expansionary monetary

policy is ineffective in this situation.
38. Consider the following: 3. It can be overcome only by an expansionary
Þscal policy.
Statement - I:
Select the correct option using the code given
Exim Bank extends Lines of Credit to overseas
Þnancial institutions, regional development below:
banks, sovereign governments and other (a) 1 and 2 only
entities overseas.
(b) 2 and 3 only
Statement - II:
(c) 1 and 3 only
It is one of the Þve All India Financial
Institutes. (d) 1, 2 and 3
 9

41. Consider the following statements regarding 3. National Asset Reconstruction Company
Negative yield bonds: Ltd (NARCL) is being created in
1. They are debt instruments by which collaboration with both public and private
investors pay interest to the borrower to sector banks for taking over stressed
keep their money with them. assets of lenders.
2. Negative-yield bonds attract investments Which of the above statements is/are correct?
during times of stress and uncertainty (a) 1 and 2 only
as investors look to protect their capital
from signiÞcant erosion. (b) 2 only
3. For the bond yields to go negative, the (c) 1 and 3 only
interest rate must be set below zero. (d) 1, 2 and 3
How many of the above statements is/are
correct ? 44. With reference to crypto currencies, consider
(a) Only one the following statements:

(b) Only two 1. Cryptocurrency is a decentralized

medium of exchange that uses encryption
(c) All three techniques to control the creation of
(d) None monetary units.
2. They are subject to market ßuctuations.
42. Consider the following statements: 3. In India, all entities regulated by
1. Narsimhan committee report I RBI are not allowed to deal in private
recommended setting up of Asset cryptocurrencies.
Reconstruction fund to take over a 4. China is the Þrst country in the world to
portion of the loan portfolio of banks adopt Bitcoin as a legal tender.
whose recovery has become difÞcult
Which of the above statements are correct?
2. Narsimhan committee report II
recommended ‘Narrow Banking Concept’ (a) 1 and 2 only
where weak banks will be allowed to (b) 3 and 4 only
place their funds only in the short term
(c) 1, 2 and 3 only
and risk-free assets.
3. PJ Nayak committee recommended that (d) 1, 2 and 4 only
each Indian resident, above the age of 18
years would have an individual, safe and 45. Consider the following statements:
secure electronic bank account. 1. National Company Law Tribunal (NCLT)
Which of the above statements are correct? under IBC, 2016 is the adjudicating
authority for individual as well as
(a) 1 and 2 only
corporate insolvency.
(b) 2 and 3 only 2. The board of directors of a company is
(c) 1 and 3 only immediately suspended if NCLT admits
the case.
(d) 1, 2 and 3
3. As per RBI’s Prudential Framework for
Resolution of Stressed Assets, banks
43. Consider the following statements:
have to mandatorily refer defaults to
1. Asset reconstruction companies (ARCs) NCLT.
are specialized Þnancial institution that
Which of the above statements is/are correct?
buys the Non-Performing Assets (NPAs)
from banks and Þnancial institutions. (a) 1 and 2 only
2. Recovery of Debt Due to Banks and (b) 2 only
Financial Institutions Act, 1993 (DRT
(c) 2 and 3 only
Act) provides the legal basis for the
setting up of ARCs in India. (d) 1 and 3 only
10

46. Consider the following statements: (c) Statement-I is correct but Statement-II
1. Insurance Regulatory and Development is incorrect
Authority of India (IRDAI) is the sole (d) Statement-I is incorrect but Statement-
national re-insurer in India.
II is correct
2. Insurance penetration is the ratio of
premium underwritten in a particular
year to the GDP. 49. Consider the following statements:

3. Insurance density is the ratio of premium Statement-I:

underwritten in a given year to the total
The RBI act 1934 provides detailed provisions
number of population.
regarding supervision and regulation of public
How many of the above statements is/are and private sector banks.
incorrect ?
Statement-II:
(a) Only one
RBI can direct the bank to initiate insolvency
(b) Only two
resolution process in respect of default.
(c) All three
Which one of the following is correct in respect
(d) None
of the above statements?

47. With reference to inßation, consider the (a) Both Statement-I and Statement-II
following statements: are correct and Statement-II explain
1. Skewßation refers to price rise of one Statement-I
or a small group of commodities over a (b) Both Statement-I and Statement-II are
sustained period of time in an economy. correct but Statement-II does not explain
2. RBI uses Consumer Price Index (CPI) as Statement-I
the key measure of inßation targeting in
India. (c) Statement-I is correct but Statement-II
is incorrect
3. A Wholesale Price Index (WPI) basket
does not include services. (d) Statement-I is incorrect but Statement-
Which of the above statements is/are correct? II is correct

(a) 1 only
50. Consider the following pairs:
(b) 1 and 2 only
Type of Inßation Description
(c) 2 and 3 only
1. Hyperinßation – Extremely high
(d) 1, 2 and 3
inßation, typically above 50% per month
2. Galloping Inßation – A rapid increase
48. Consider the following statements:
in prices, generally between 10-20% per
Statement-I: year
If inßation is too high, RBI is likely to buy 3. Walking Inßation – A slow and
government securities.
steady rise in prices, usually less than
Statement-II: 3% per year
Monetary Policy is likely to be one of the 4. Creeping Inßation – Moderate
widespread tools to control inßation. inßation, typically between 3-10% per
Which one of the following is correct in respect year
of the above statements?
How many of the above pairs is/are correct?
(a) Both Statement-I and Statement-II
are correct and Statement-II explain (a) Only one
Statement-I (b) Only two
(b) Both Statement-I and Statement-II are (c) Only three
correct but Statement-II does not explain
Statement-I (d) All four
