26 Questions
What is essential for the growth of any economy?
Capital formation
Who typically possesses the capital required for investment?
Individuals, firms, corporates, and government
What is the primary role of the financial and banking systems?
To make capital available to entrepreneurs
What is the purpose of the informal financial system?
To offer loans to entrepreneurs
What are the two basic types of financial systems?
Formal system and informal system
What do businesses and entrepreneurs typically require for producing goods and services?
Loans from banks
What is a characteristic of the informal financial system?
Low transaction cost
Which of the following is an example component of the informal financial system?
Individual money lenders
What is a feature of the formal financial system?
Presence of an institutional system
Which of the following is a component of the formal financial system?
Commercial banks
What is the role of financial institutions in the formal financial system?
Providing capital for investments
Which of the following is a component of the informal financial system?
Non-bank financial intermediaries
What distinguishes the informal financial system from the formal financial system?
Presence of regulations
'Individual money lenders' are typically associated with which financial system?
'Individual money lenders' are associated only with the informal financial system
'Commercial and Cooperative Banks' are examples of which type of financial institutions?
'Commercial and Cooperative Banks' are examples of commercial banks
What is a typical feature of non-banking financial companies (NBFCs)?
Lack of regulations
Which characteristic of the informal financial system is NOT mentioned in the given text?
High default rates
Which of the following is NOT included in the components of the informal financial system as per the given text?
Cooperative banks
Which term does NOT describe the informal financial system as per the given text?
Regulated
What is a typical characteristic of non-banking financial companies (NBFCs) based on the given text?
Low default rates
What is the primary function of the financial and banking systems according to the text?
To channel wealth from surplus pockets to deficit pockets
What distinguishes the formal financial system from the informal financial system as per the text?
Stringent regulations and supervision
Which type of financial institutions are 'Commercial and Cooperative Banks' examples of, based on the text?
Formal financial institutions
What is the characteristic feature of non-banking financial companies (NBFCs) according to the text?
Emphasis on microfinance and small loans
What is a typical role of individual money lenders as per the text?
Operating within the informal financial system
What is one of the primary purposes of the informal financial system based on the text?
Providing microfinance to underserved communities
Test your knowledge of the Indian financial system with this quiz. Learn about the essentials of capital formation and the sources of funds for entrepreneurs and businesses.
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