Banking Regulation MCQ – 2 | JAIIB PPB Quiz

Banking Regulation MCQ - 2

Here is the quiz series for Principles and Practices of Banking. This quiz covers the topics of Banking Regulation MCQ – 2. Answers are given at the end of the quiz.

Q1. Which among the following is not a function of RBI?

  1. Banker to the Central government
  2. Banker to those state government which have entered into agreement with it
  3. Banker to banks
  4. Lender of last resort
  5. All above are correct

Answer: (5)

Q2. The Reserve Bank of India performs the supervisory function under the guidance of the _______.

  1. Department of Economic Affairs
  2. Ministry of Finance
  3. Board for Financial Supervision (BFS)
  4. IFMS

Answer; (3)
The Reserve Bank of India performs this function under the guidance of the Board for Financial Supervision (BFS). The Board was constituted in November 1994 as a committee of the Central Board of Directors of the Reserve Bank of India. Primary objective of BFS is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies.

Q3. Who administers the FEMA Act, 1999? 

  1. RBI
  2. SEBI
  3. AMFI
  4. Directorate of Enforcement

Answer: (1)
RBI administers the FEMA and Directorate of Enforcement (ED) is the authority for the enforcement of FEMA

Q4. Which among the following is not the principle followed by RBI while investing in foreign assets? 

  1. Safety
  2. Liquidity
  3. Return
  4. High Risk

Answer: (4)
While investing in foreign assets no Central Banking authority likes to get involved in high risk assets.

Q5. Which report of RBI discloses forex reserve position of RBI to the market? 

  1. Report on Trend and Progress of Banking in India
  2. Weekly Statistical Supplement
  3. Basic Statistical Returns of Scheduled Commercial Banks in India
  4. Report on Currency and Finance

Answer: (2)
Weekly Statistical Supplement provides forex reserve data and the changes in that week. It also talks about the RBI Balance sheet, Reserve money, Money Supply, Bank Credit etc

Q6. Who acts as regulator and supervisor of payments and settlement system in country?

  1. NPCI
  2. SEBI
  3. RBI
  4. CCIL

Answer: (3)
The Payment and Settlement Systems Act of 2007 (PSS Act) gives the Reserve Bank oversight authority, including regulation and supervision, for the payment and settlement systems in the country

Q7. Financial Stability Report is published on ____ basis?

  1. Yearly
  2. Monthly
  3. Quarterly
  4. Half-Yearly

Answer: (4)
The Financial Stability Reports, published on half-yearly basis by Reserve Bank of India, after approved by FSDC Sub-Committee. It is published in January and July every year

Q8. Who is the ex-officio chairperson of sub-committee of FSDC? 

  1. RBI Governor
  2. Finance Minister
  3. Finance Secretary
  4. Prime Minister

Answer: (1)
FSDC sub-committee is headed by the Governor of RBI

Q9. A banking company cannot hold shares in any company whether as pledgee, mortgagee or absolute owner of an amount exceeding _____ of the paid-up capital of that company or _____ of its own paid-up capital and reserves, , whichever is less.

  1. 20%, 25%
  2. 20%, 30%
  3. 25%, 25%
  4. 30%, 30%

Answer: (4)
Sub-section (2) of the Section 19 of the Banking Regulation Act, 1949 provides that no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of any amount exceeding 30 per cent of the paid –up share capital of that company or 30 per cent of its own paid-up share capital and reserves

Q10. The aggregate exposure of a bank to the capital markets in all forms (both fund based and non-fund based) should not exceed __ of its net worth as on March 31 of the previous year

  1. 30%
  2. 40%
  3. 50%
  4. 60%

Answer: (4)
The aggregate exposure of a bank to the capital markets in all forms (both fund based and non-fund based) should not exceed 40 per cent of its net worth (as defined in paragraph 2.3.4), as on March 31 of the previous year. Within this overall ceiling, the bank’s direct investment in shares, convertible bonds / debentures, units of equity-oriented mutual funds and all exposures to Venture Capital Funds (VCFs) [both registered and unregistered] should not exceed 20 per cent of its net worth.

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