RBI Exam Practice Quiz
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Questions and Answers

What is the primary function of the Reserve Bank of India?

  • Supervising and regulating the financial system
  • Regulating the monetary policy and issuing currency (correct)
  • Controlling inflation through fiscal measures
  • Managing the country's foreign exchange reserves
  • Which tool is used by the Reserve Bank of India to control inflation?

  • Raising the income tax rates
  • Open market operations (correct)
  • Lowering the reserve requirement
  • Increasing government spending
  • What is the significance of the Cash Reserve Ratio (CRR) set by the Reserve Bank of India?

  • It directly affects the stock market performance
  • It influences the liquidity in the banking system (correct)
  • It regulates the flow of foreign direct investment
  • It determines the exchange rate of the Indian rupee
  • RBI's monetary policy aims to regulate the money supply and interest rates to achieve price stability.

    <p>True</p> Signup and view all the answers

    The Reserve Bank of India is solely responsible for issuing and controlling the currency in India.

    <p>True</p> Signup and view all the answers

    The Reserve Bank of India was established in 1949 as a privately owned bank.

    <p>False</p> Signup and view all the answers

    Study Notes

    Reserve Bank of India Competitive Examination Questions

    • Reserve Bank of India (RBI) is the central bank of India, established in 1935 to regulate the monetary and financial system.
    • The main functions of the RBI include regulating currency issuance, managing foreign exchange, and overseeing monetary policy.
    • RBI also acts as the banker to the government and manages government accounts and public debt.
    • Candidates should be familiar with the structure and functions of the Monetary Policy Committee (MPC) in influencing interest rates.
    • Important RBI publications include the Annual Report, Financial Stability Report, and Monetary Policy Report.
    • Understanding the roles of different departments within RBI such as Banking Regulation and Supervision, and Financial Inclusion is crucial.
    • Economic indicators monitored by RBI include inflation rates, GDP growth, and employment statistics.
    • Candidates should be aware of the various channels through which RBI implements monetary policy, including open market operations and repo rates.
    • Important RBI regulations include the Basel III framework and guidelines related to Non-Banking Financial Companies (NBFCs).
    • Be prepared to discuss historical events associated with RBI, such as the demonetization of 2016 and its economic implications.
    • Familiarity with key terms such as liquidity, fiscal deficit, and capital adequacy ratio is essential.
    • Candidates might be tested on current affairs related to the banking sector, including major mergers, reforms, and policies introduced by RBI.

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    Description

    Quiz: Reserve Bank of India Exam Practice Questions Test your knowledge with these practice questions for the Reserve Bank of India competitive examinations. This quiz covers important topics such as monetary policy, banking regulations, economic indicators, and financial markets. Prepare for the exam and improve your chances of success with these challenging questions.

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