BPSC CCE Prelims
Money, Banking & Financial System Previous Year Questions (PYQs)
Showing solved Previous Year Questions for Chapter: Money, Banking & Financial System
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The ratio of total deposits that a Commercial Banks must keep with Reserve Bank of India is called
Detailed Explanation:
Cash Reserve Ratio (CRR) is the percentage of total deposits that commercial banks must maintain as reserves with the Reserve Bank of India (RBI).
Statutory Liquidity Ratio (SLR) requires banks to maintain reserves in liquid assets (gold, government securities) with themselves, not with RBI, while Legal Reserve Ratio is a broader term encompassing both CRR and SLR.
Which of the following is a function of Central Bank?
Detailed Explanation:
The Central Bank (RBI in India) performs three core functions: it manages the repo rate to control inflation and liquidity in the economy, lends to commercial banks through repo, Marginal Standing Facility (MSF), and acts as lender of last resort, and provides banking facilities to the government including managing public debt, holding government accounts, issuing currency, and managing foreign exchange reserves.
All three options are correct functions of a central bank.
The expanded form of UPI is
Detailed Explanation:
UPI stands for Unified Payment Interface.
It is a real-time payment system developed by the National Payments Corporation of India (NPCI) that enables instant fund transfers between bank accounts through mobile platforms using a Virtual Payment Address (VPA) or UPI ID.
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Who headed the Royal Commission on Indian currency appointed in 1913?
Detailed Explanation:
Royal Commission on Indian Currency (1913) was appointed to examine India's currency system and the feasibility of adopting the gold standard.
Sir Austin Chamberlain, a British statesman and former Chancellor of the Exchequer, was appointed as the Chairman of this commission. J. M. Keynes served as a prominent member but did not head it.
According to the Reserve Bank of India, what is one of the eligibility criteria for a Small Finance Bank (SFB) to transition into a Universal Bank?
Detailed Explanation:
The Reserve Bank of India (RBI) permits Small Finance Banks (SFBs) to transition into Universal Banks if they meet specific eligibility criteria.
Key requirement: a minimum net worth of ₹1,000 crore as paid-up voting equity capital, completion of at least five years of operations, and adherence to regulatory compliance and sound governance norms.
Bhandari Committee is related to
Detailed Explanation:
The Bhandari Committee (1994) was constituted to examine the functioning and recommend the restructuring of Regional Rural Banks (RRBs). It identified 49 weak RRBs requiring comprehensive restructuring and suggested granting greater autonomy to RRB boards in business and staffing decisions.
The committee had no mandate on taxation (direct/indirect) or general agricultural credit—its focus was exclusively on strengthening the RRB framework.
Therefore, regional rural banks' restructuring is the correct focus, making Option 3 the correct answer.