RBI OFFICER GRADE ‘B’ PHASE-I EXAM Held on : 03.08.2014(Part-II)

Total Questions: 50

21. Who among the following is the oldest Minister in Prime Minister Narendra Modi's Cabinet?

Correct Answer: (2) Najma Heptullah
Solution:Najma Heptullah, aged 74 years, is the oldest minister in Prime Minister Narendra Modi's cabinet. She holds the Ministry of Minority Affairs in the Government of India.

22. Which of the following correctly explains Ways and Means Advance?

Correct Answer: (5) All of the above
Solution:Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which it provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. This is guided under Section 17(5) of RBI Act, 1934.

23. Which of the following comes under Demand Liabilities?

Correct Answer: (5) All of the above
Solution:Demand Liabilities of a bank are liabilities which are payable on demand. These include current deposits, demand liabilities portion of savings bank deposits, margins held against letters of credit/guarantees, balances in overdue fixed deposits, cash certificates and cumulative/recurring deposits, outstanding Telegraphic Transfers (TTs), Mail Transfers (MTs), Demand Drafts (DDs), unclaimed deposits, credit balances in the Cash Credit account and deposits held as security for advances which are payable on demand.

24. The Reserve Bank of India recently released Report of the GIRO Advisory Group. Who heads this Advisory Group?

Correct Answer: (1) Umesh Bhullar
Solution:GIRO Advisory Group (GAG) was constituted by the RBI in October 2013, under the chairmanship of Prof. Umesh Bellur, Indian Institute of Technology, Bombay to implement a national GIRO-based Indian Bill Payment System. The panel has recommended a mechanism for centralized bills payment system in India.

25. The State Bank of India recently signed up with which Anil Ambani Group company, in a 'business correspondent' deal to source a range of banking services?

Correct Answer: (1) Reliance Money Infrastructure
Solution:State Bank of India signed up Reliance Money Infrastructure (RMIL), an Anil Ambani group company, in a 'business correspondent' deal to source a range of banking services. The deal authorises RMIL to identify borrowers; collect, process, and submit loan applications; promote credit groups; take up post-sanction monitoring, follow-up, and recovery.

26. Which of the following terms expresses a tax where the tax rate increases as the taxable base amount increases?

Correct Answer: (5) Progressive Tax
Solution:A progressive tax is a tax where the tax rate increases as the taxable base amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate.

27. What are the effects of rupee depreciation?

Correct Answer: (1) Capital inflow slows down
Solution:As a result of rupee depreciation, trade deficit widens because of costlier imports, worsening the current account deficit. Capital inflow slows and Forex reserves also decline. Besides, spending on discretionary goods also increases.

28. The process of curing inflation by reducing money supply is called

Correct Answer: (3) Disinflation
Solution:Disinflation is a decrease in the rate of inflation - a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising.

29. The potential of a bank borrower or counterparty to fail in meeting its obligations in accordance with agreed terms is known as

Correct Answer: (2) Credit Risk
Solution:Credit risk is most simply defined as the potential of a bank borrower or counterparty to fail in meeting its obligations in accordance with agreed terms. When this happens, the bank will experience a loss of some or all of the credit it provided to its customer.

30. Devaluation of currency leads to

Correct Answer: (5) All of the above
Solution:Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. It leads to expansion of export trade, contraction of import trade and expansion of import substitution.