Financial Instruments Questions for RBI Grade B (Finance)

Dear aspirants,
We are presenting you the Financial Instruments questions for RBI Grade B Finance Section of the exam. These questions cover the topics like Certificate of Deposits, Commercial Papers etc.

Let’s read the Financial Instruments questions for RBI Grade B and do check answers are given at the end of the quiz.

1. Who governs the issuance of Certificate of Deposit in India?
   1. Reserve Bank of India
   2. Fixed income money markets and derivatives association
   3. Foreign Exchange Dealers’ Association of India
   4. Financial Benchmark India Private Ltd
2. What is the maximum amount of CD can be issued by bank or FI?
   1. Rs 1 lakh
   2. Rs 10 lakh
   3. Rs 1 crore
   4. No such specific limit specified
3. Who among the following is/are not permitted to invest in Certificate of Deposits?
   1. Individuals
   2. Corporations
   3. Foreign portfolio investors
   4. Companies
4. What is the minimum maturity period of Certificate of deposits issued by All-India Financial Institutions?
   1. No minimum time period
   2. 7 days
   3. 1 year
   4. 3 years
5. What is the maximum maturity period of Certificate of deposits issued by All-India Financial Institutions?
   1. No maximum time period
   2. 7 days
   3. 1 year
   4. 3 years
6. When were Certificate of deposits (CDs) introduced in India?
   1. 1989
   2. 1990
   3. 1991
   4. 1992
7. When was Commercial Paper (CP) introduced in India?
   1. 1989
   2. 1990
   3. 1991
   4. 1992
8. Who among the following cannot issue Commercial Paper in India?
   1. Corporates
   2. Primary dealers (PDs)
   3. All-India Financial Institutions (FIs)
   4. Scheduled Commercial Banks
9. What is the minimum maturity period of Commercial Paper (CP)?
   1. No minimum time period
   2. 7 days
   3. 1 year
   4. 3 years
10. What is the maximum maturity period of Commercial Paper (CP)?
    1. No maximum time period
    2. 7 days
    3. 1 year
    4. 3 years

Answers

1. 1
   Guidelines for issue of Certificate of Deposits are presently governed by various directives issued by the Reserve Bank of India (RBI)
2. 4
   Banks can issue CDs depending on their funding requirements and FI can issue CD within the overall umbrella limit prescribed in the Master Circular on Resource Raising Norms for FIs, issued by DBOD and updated from time-to-time
3. 3
   Foreign portfolio investors (FPIs) are not permitted to invest in CDs
4. 3
   The maturity period of CDs issued by FI should not be less than 1 year from date of issue.
5. 4
   The maturity period of CDs issued by FI should not be more than three years from the date of issue.
6. 1
   Certificates of Deposit (CDs) were introduced in India in 1989
7. 2
   Commercial paper (CP) was introduced in India in 1990.
8. 4
   Corporates, Primary dealers (PDs), All-India Financial Institutions (FIs) are permitted to issue commercial paper to enable them to meet their short-term funding requirements for their operations
9. 2
   The maturity period of CP should not be less than 7 days from date of issue.
10. 3
    The maturity period of CP should not be more than 1 year from date of issue.

You may also like to read following MCQs for RBI Grade B exam: 

• Economic Survey of India Quiz for RBI Grade B
• Read CRR and SLR quiz for RBI Grade B
• Read Regulator of banks and FI Quiz for RBI Grade B
• [Part 2]: BASEL quiz for RBI Grade B

Click to go to RBI Grade B Preparation Page  | Click to read more such quizzes

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