1. In the context of Small Finance Banks (SFB), consider the following statements:
- They are required to extend 75 percent of their Adjusted Net Bank Credit (ANBC) to the sectors eligible for classification as priority sector lending (PSL) by RBI.
- They are not subject to the norms of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Ans:
Exp: a
The Small Finance Bank (SFB) is a private financial institution intended to further the objective of financial inclusion by primarily undertaking basic banking activities of acceptance of deposits and lending to un-served and underserved sections. In view of the objectives for which small finance banks are set up, the bank will be required to extend 75 per cent of its Adjusted Net Bank Credit (ANBC) to the sectors eligible for classification as priority sector lending (PSL) by RBI. So statement 1 is correct. The minimum capital for SFBs is prescribed at Rs. 100 crore with an initial contribution of 40% coming from the promoters, which over a period of 12 years, have to be reduced to 26%.
They are subject to all prudential norms and regulations of RBI as applicable to existing commercial banks like maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). So statement 2 is incorrect.
2. With reference to the Marginal Standing Facility (MSF), consider the following statements:
Its aim is to reduce volatility in the overnight lending rates in the interbank market.
Borrowing rate under this facility is always lower than the repo rate.
Which of the statements given above is/are
correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Ans: a
Exp: Marginal standing facility (MSF) is a window for banks to borrow from the Reserve Bank of India in an emergency situation when inter-bank liquidity dries up completely. Its aim is to reduce volatility in the overnight lending rates in the inter-bank market. So statement 1 is correct.
The MSF would be the last resort for banks once they exhaust all borrowing options including the liquidity adjustment facility by pledging government securities, where the rates are lower in comparison with the MSF.
It refers to the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window. It is always fixed above the repo rate. So statement 2 is incorrect.
3. Which of the following statements about Indian Depository Receipts (IDRs) is/are correct?
- An IDR enables foreign companies to raise funds from the Indian securities Markets.
- It is an instrument denominated in US dollars.
Select the correct answer using the code given below:
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Ans: a
Exp:
An IDR is an instrument denominated in Indian Rupees in the form of a depository receipt created by a Domestic Depository (custodian of securities registered with the Securities and Exchange Board of India) against the underlying equity shares of issuing company to enable foreign companies to raise funds from the Indian securities Markets.
4. Consider the following statements with reference to the Mission Mode Project (MMP), in India:
- A MMP implies that projects are launched by the central government.
- A MMP is an individual project within the National e-Governance Plan that focuses on one aspect of electronic governance, such as banking.
Which of the statements given above is/are incorrect?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Ans: a
Exp: Within NeGP, "mission mode" implies that projects have clearly defined objectives, scopes, and implementation timelines and milestones, as well as measurable outcomes and service levels.
5. Which one of the following organisations has unveiled ‘Payments Vision 2025:
a) Reserve Bank Of India.
b) NITI Aayog.
c) Ministry of Electronics and Information Technology.
d) Indian Banks’ Association (IBA).
Ans: a
Exp: The Reserve Bank of India (RBI) has come out with “Payments Vision 2025” with an objective to provide every user with safe, secure, fast, convenient, accessible and affordable e-payment options.
6. What is the probability that the position of the letters “a” and “s” remain unchanged when the letters of the word "Maths" are re-arranged?
a) 1/12
b) 1/20
c) 1/24
d) 1/120
Ans: b
Exp: Permutations of the arrangement of 5 letters can be done in 5! = 120 ways.
If the places of “a” and “s” is unaltered, then only “m”, “t” and “h” can be arranged in 3! = 6 ways. Therefore the probability = 6/120 = 1/20.
7. A can do a piece of work in 24 days. If B is 60% more efficient than A, then how many days less does B require to do the same piece of work?
a) 6 days
b) 9 days
c) 12 days
d) 15 days
Ans: b
Exp: B is 60% more efficient than A means if A does 100 pieces of work in a day, then B can do 160 pieces of work in a day.
If A finishes work in 24 days, Number of days required by B
= 100 x 24 / 160 = 15
Thus B require 9 days less than A to do same work.
Cover the entire CSAT syllabus in 70 hours.
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