Challenge Prelims V1.0 – Day 65 – GS Paper (Indian Economy)

1. With reference to capital markets, ‘rights issue’ essentially refers to

2. Which of the following funds invest exclusively in government securities?

3. With reference to the fundamentals of the capital market, which one of the following statements is not correct?

4. Which of the following is not correct with reference to zero coupon bonds?

5. Consider the following statements regarding Balance of Payments (BoP):

1. The BoP of a country comprises transactions between residents and nonresidents during a period.
2. A country having a balance of payments equilibrium will experience an increase in foreign exchange reserves.

Which of the statements given above is/are correct?

6. How many of the following fall under the capital account of the Balance of Payments?

1. Intergovernmental loans
2. Private remittances
3. Gifts from abroad
4. Foreign Institutional Investment

Select the correct answer using the code given below.

7. Consider the following statements regarding the Current Account of Balance of Payments:

1. A country with a surplus on the current account necessarily borrows from other countries.
2. A surplus on the current account necessarily implies that the country has a surplus balance of trade.

Which of the statements given above is/are correct?

8. Consider the following statements regarding the Neobanks:

1. They are the fintech firms, with only a digital presence.
2. They do not have a bank license of their own.
3. They offer debit cards.

How many of the statements given above is/are correct?

9. Consider the following statements regarding the Small Finance Banks in India:

1. They are registered as public limited companies under the Companies Act, 2013.
2. They accept deposits and lend to unserved and underserved sections.
3. Like commercial banks, these banks have to maintain both Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).

How many of the statements given above is/are correct?

10. Consider the following statements regarding National Bank for Financing Infrastructure Development (NaBFID):

1. It will solve the long-term credit bottlenecks of infrastructural projects.
2. It will be regulated and supervised as an All-India Financial Institution by RBI.
3. It is the second All India Financial Institution developed in India.

How many of the statements given above is/are correct?

11. With reference to the Small Industries Development Bank of India (SIDBI), consider the following statements:

1. The primary function of the Small Industries Development Bank of India (SIDBI) is to provide finance to small and medium enterprises.
2. SIDBI provides credit support for skill development and technology modernisation.
3. RBI is the largest shareholder of SIDBI.

How many of the statements given above is/are correct?

12. With reference to Regional Rural Banks (RRBs) in India, consider the following statements:

1. They are owned by the central government and the concerned state government with a 50:50 proportion in shareholding.
2. They have been created with a view of serving primarily the rural areas of India with basic banking and financial services.
3. The target of priority sector lending norms applicable to RRBs is higher than that of commercial banks.

How many of the statements given above is/are correct?

13. Consider the following statements:

1. Written-off loans are still counted as assets as the borrowers are still liable for repayment.
2. The tax liability of a bank reduces if it writes off a loan.
3. Private sector banks accounts for more than 50% of the total banking sector write-offs in India.

How many of the statements given above are not correct?

14. Consider the following statements regarding the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002:

1. The SARFAESI Act is applicable to all secured and unsecured loans.
2. Cooperative Banks can invoke the SARFAESI Act to recover the loans.

Which of the statements given above is/are correct?

15. Consider the following statements with reference to the Basel norms:

1. These are international banking regulations issued by Basel Committee on Banking Supervision (BCBS).
2. Under the norms, Tier 2 capital is more liquid and considered more secure than Tier 1 capital.
3. Basel III norms prescribe the capital conservation buffer and the countercyclical capital buffer to mitigate systemic risk.

How many of the following statements above is/are correct?