Banking System, NPA & IBC — Set 5
Economy Advanced · बैंकिंग प्रणाली, NPA और IBC · Questions 41–50 of 160
The Current Account Deficit (CAD) reflects the gap between exports and imports plus net income flows. When did India last face a significant CAD crisis?
Correct Answer: C. 2013
India faced a significant CAD crisis in 2013 when it reached nearly 5% of GDP. This led to rupee depreciation and required policy interventions.
The RBI's Inflation Targeting Framework aims to maintain CPI inflation at a specific level. What is the target inflation rate as per the current framework?
Correct Answer: B. 4% to 6%
The RBI's inflation target is 4% with a tolerance band of +/- 2%. This framework was adopted to maintain price stability while supporting growth.
The Micro Finance Institutions (MFIs) provide small loans to poor and marginalized populations. What is the typical loan amount provided by MFIs?
Correct Answer: B. Rs. 10000 to 50000
MFIs typically provide loans of Rs. 10,000 to Rs. 50,000 for income-generating activities. These are crucial for financial inclusion of poor populations.
The Medium-term Fiscal Framework (MTFF) is presented along with the Union Budget. What is the typical time horizon for MTFF?
Correct Answer: B. 3 years
The MTFF covers a 3-year period and provides a medium-term fiscal outlook. It helps ensure fiscal sustainability and policy consistency.
The Priority Sector Lending (PSL) guidelines require banks to lend a specific percentage to priority sectors. What is the PSL target for scheduled commercial banks?
Correct Answer: C. 40%
Scheduled commercial banks must lend 40% of their adjusted net bank credit to priority sectors including agriculture, small industries, and exports.
The Payment Settlement System (PSS) ensures safe and efficient transfer of funds. Which body oversees the PSS in India?
Correct Answer: B. RBI
The RBI oversees India's Payment Settlement System through the Payment and Settlement Systems Act, 2007, ensuring smooth financial transactions.
The Term Lending by Commercial Banks is used for long-term investments. What is considered a typical term loan duration?
Correct Answer: C. 7 to 15 years
Term loans from banks typically range from 7 to 15 years for industrial and infrastructure projects. They support long-term capital investments.
The Working Capital Lending by banks supports short-term operational needs of businesses. What is the typical tenure for working capital loans?
Correct Answer: A. 6 months to 1 year
Working capital loans have a typical tenure of 6 months to 1 year, supporting businesses' short-term operational requirements like inventory and receivables management.
The Credit Rating Agencies (CRAs) evaluate creditworthiness of borrowers and securities. Which is the first CRA to be established in India?
Correct Answer: A. ICRA
ICRA (Investment Information and Credit Rating Agency) was the first CRA established in India in 1991. It rates bonds, commercial papers, and other securities.
The Bond Market in India includes government securities, corporate bonds, and municipal bonds. What percentage of Indian companies trade bonds in the market?
Correct Answer: B. 10%
Only about 10% of Indian companies trade bonds directly in the market. Most rely on bank financing, making bonds an alternative financing source for larger enterprises.