Monday, 18 July 2016

RBI : Most Important Questions

 
                     
RBI : Most Important Questions 


Introduction

Which institution formulates, controls, and regulates the monetary policy of India? – The Reserve Bank of India (RBI)
When was RBI founded? – 1 April, 1935 (founded as per the provisions of the RBI Act, 1934)
What was the primary objective for establishing the RBI then? – To respond to the economic problems faced by the Indian economy then (primarily due to innumerable problems posed in the aftermath of the First World War)
The RBI also acted as the central bank of Pakistan until which when? – Until June 1948 (When Pakistan established its own central bank – the State Bank of Pakistan)
When was the RBI nationalized? – On 1 January 1949 (Before it RBI was as a shareholders’ bank. Nationalization meant that it became fully owned by the Indian Govt.)
Which institution is the central bank of India? – RBI
Which institution is called Banker’s bank in India? – RBI (Because commercial banks of the country can open accounts and deposit money in the RBI. RBI maintains banking accounts of all scheduled banks)
Headquarters

Where is RBI headquartered? – Mumbai
Where was the headquarters of the RBI established originally? – Calcutta (now Kolkata)
When RBI headquarters were moved from Calcutta to Bombay? – 1937



Raghuram-Rajan-2015
RBI Governors
Who heads the RBI as its Chief Executive? – Governor of the RBI
Who was the first Governor of the RBI? – Sir Osborne Smith (1 April 1935 to 30 June 1937)
Who was the first Indian Governor of the RBI? – Sir C.D. Deshmukh (11 August 1943 to 30 June 1949)
Who had the longest tenure as RBI Governor? – Sir Benegal Rama Rau (7 years 197 days – from 1 July 1949 to 14 January 1957)
Who had the shortest tenure as RBI Governor? – Amitav Ghosh (He was RBI Governor for just 20 days from 15 January 1985 to 4 February 1985)
Who is the only RBI Governor to also serve as Finance Minister of India? – Dr. Manmohan Singh (His RBI Governor tenure was from 16 September 1982 to 14 January 1985. Later he also became Prime Minister of India)
Who is the present Governor of RBI? – Dr. Raghuram G. Rajan (From 4 September 2013 till date)
Raghuram Rajan is the …………Governor of the RBI – 23rd
How many Deputy Governors the RBI has? – Four
Who are the present four Deputy Governors of the RBI? – H.R. Khan, Dr. Urjit Patel, R.Gandhi and S.S. Mundra
Traditionally how many Deputy Governors are selected from RBI ranks? – Two (They are selected from amongst RBI’s Executive Directors. Of the remaining two, one is nominated from among the Chairpersons of public sector banks and the other is an economist)
RBI-2015

RBI’s structure

Who heads the RBI? – Its Governor
Which is the highest decision making authority in the RBI? – The Central Board of Directors
How many members are there in RBI’s Central Board of Directors? – 21 members
What is the composition of RBI’s Central Board of Directors? – The RBI Governor, 4 Deputy Governors of the RBI, 2 representatives from the Finance Ministry, 10 directors nominated by the Union Govt. and 4 members from 4 regional representatives
RBI’s 4 regional representatives are situated in – North in New Delhi, South in Chennai, East in Kolkata and West in Mumbai
RBI’s regional headquarters are situated at – New Delhi, Mumbai, Kolkata and Chennai
How many zonal offices RBI has at present? – 19 (Ahmedabad, Bangalore, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kochi, Kolkata, Lucknow, Mumbai, Nagpur, Patna and Thiruvananthapuram)
The RBI has how many sub-offices at present? – 11 (Agartala, Aizawal, Dehradun, Gangtok, Imphal, Panaji, Raipur, Ranchi, Shillong, Shimla and Srinagar. The sub-offices in Aizawal and Imphal were added recently)
Training Colleges

Which are the two training colleges of the RBI, which impart training to different levels of officers of the RBI? – 1) Reserve Bank Staff College (Chennai) and 2) College of Agricultural Banking (Pune)
The RBI has how many zonal training centres? – Four (Situated at Mumbai, Chennai, Kolkata and New Delhi)
The RBI runs three autonomous institutes to impart training on banking procedures and technology. What are the names of these 3 institutes? – 1) National Institute of Bank Management (NIBM), 2) Indira Gandhi Institute for Development Research (IGIDR) and 3) Institute for Development and Research in Banking Technology, Hyderabad (IDRBT)
National Institute of Bank Management (NIBM) is situated in which city? – Pune (It was established in 1969 by the RBI in association with the Indian Government. NIBM imparts research, training and consultancy in banking and finance)
Indira Gandhi Institute for Development Research (IGIDR) is situated in which city? – Mumbai (It was established by the RBI in 1987 on the occasion of its Golden Jubilee. The institute primarily carries out research on developmental issues from a multi-disciplinary point of view)
Institute for Development and Research in Banking Technology (IDRBT) is situated in which city? – Hyderabad (It was established by the RBI in 1996 to provide the operational service support in information technology to banks and financial institutions)
Which autonomous institute of RBI had established the National Financial Switch (NFS) to handle payment authentication services? – IDRBT (The NFS was set up by the IDRBT in 2004 and was a precursor of the payment authentication services being handles by the National Payments Corporation of India (NPCI). The NFS was transferred to the NPCI in 2009)
Banking Operations

Most of the commercial banks in India come under which category? – Scheduled Banks
Scheduled Banks come under which Schedule of the RBI Act? – 2nd Schedule of RBI Act, 1934
What are the primary benefits that Scheduled Banks get from the RBI? – These banks are eligible for loans from the RBI at bank rate (They also get membership of clearing houses)
Functions of RBI

What are the main functions of the RBI? – 1) Regulator and supervisor of the financial system 2) Formulation and regulation of monetary policy 3) Foreign Exchange Management 4) Issue of Currency 5) Financial supervision of the economy and 6) Credit Policy and its regulation
Currency-Notes-2015

Currency Issue

Which section of the RBI Act 1934 mentions that RBI is the sole authority for issue of currency in India? – Section 22
Which section of the RBI Act 1934 mentions that the RBI is liable to pay the value of banknote to its holder? – Section 26 (The Bank’s obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions)
The RBI considers which factors to decide about as to how many notes are to be published by it? – Inflation, GDP growth, replacement of soiled banknotes and reserve stock requirements
RBI issues all currency denominations in India except – Re. 1 coin (Minting of Re. 1 coin is the responsibility of the Government of India, and not of the RBI. For this reason, the Re 1 note has the signature of the Finance Secretary to the Government of India)
Why minting of Re.1 coin is under Govt. of India? – Because when the one rupee note was reintroduced as a war time measure in 1940, it was issued by the Government of India with the status of a coin (This practice continued since then)
The RBI withdrew the circulation of coins in the denomination of 1 paise, 2 paise, 3 paise, 5 paise, 10 paise, 20 paise and 25 paise on which date? – 30 June 2011
The RBI now mints coins of which denominations? – Rs. 2 and Rs. 5
The RBI issues notes of which denominations now? – Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500, and Rs. 1000
Why currency notes are also called banknotes? – Because they are issued by the Reserve Bank of India (India’s central bank)
Which was the highest denomination currency note ever printed by the RBI? – Rs. 10,000 (This note was first printed in 1938 and again in 1954. These notes were demonetized in 1946 and again in 1978. The demonetization of high denomination currency was done to curb unaccounted money)
After Independence, the notes of higher denominations (Rs. 1000, Rs. 5,000 and Rs. 10,000) were issued by the RBI in which year? – In 1954 (It is worth mentioning that the older high denomination notes (Rs. 1000 and Rs. 10,000) were demonetized in January 1946)
When RBI demonetized the higher denomination notes of Rs. 1000 and Rs. 10,000? – January 1978
In which year the RBI re-introduced the Rs. 1,000 note? – In 2000
Under the provisions of the Reserve Bank of India Act, 1934, the RBI can issue banknotes up to which denomination? – Rs. 10,000 (It cannot issue notes over Rs. 10,000 denomination)
The Govt. of India owns how many security printing presses to print currency notes? – Two (These presses are in Nashik (Maharashtra) and Dewas (Madhya Pradesh). The two presses come under Security Printing and Minting Corporation of India Limited (SPMCIL), wholly owned company of Govt. of India)
The RBI owns how many security printing presses to print currency notes? – Two (These two presses are situated at Mysuru (Karnataka) and Salboni (West Bengal). The two presses are owned by Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a wholly owned subsidiary of the RBI)
The RBI had launched a website www.paisaboltahai.rbi.org.in with which objectives? – To create awareness among masses about fake notes in the market

Monetary Policy

What is monetary policy? – Monetary Policy is the process through which an authority (generally central bank) controls the supply of money in the economy by its control over interest rates in order to maintain price stability and achieve high economic growth
Which authority is the central monetary authority in India? – RBI
Which is the most important monetary policy operation of the RBI? – Open Market Operations (An open market operation is an instrument of monetary policy which involves buying or selling of government securities from or to the public and banks. The RBI sells government securities to control the flow of credit and buys government securities to increase credit flow)
What is Cash Reserve Ratio (CRR)? – It is another monetary policy measure of the RBI under which banks are required to keep a certain percentage of bank deposits with RBI in the form of reserves or balances (Higher the CRR with the RBI lower will be the liquidity in the system and vice versa)
What is Statutory Liquidity Ratio (SLR)? – It is a monetary policy measure under which every financial institution has to maintain a certain quantity of liquid assets with themselves at any point of time of their total time and demand liabilities
Which is the most important rate fixed by the RBI, which affects interest rates in the economy? – Repo Rate (Repo rate is the rate at which RBI lends short-term funds to commercial banks generally against government securities. Reduction in Repo rate helps the commercial banks to get money at a cheaper rate and increase in Repo rate discourages the commercial banks to get money as the rate increases and becomes expensive)
What is Reverse Repo Rate? – Reverse Repo rate is the rate at which RBI borrows money from the commercial banks (The increase in the Repo rate will increase the cost of borrowing and lending of the banks which will discourage the public to borrow money and will encourage them to deposit)

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