Indian Economy Textbook Questions – Money · Reserve Bank of India · Monetary Policy · Inflation · Banking (Part 1)

← Back

Indian Economy Textbook Questions – Money · Reserve Bank of India · Monetary Policy · Inflation · Banking (Part 1) – 19 questions, subject: Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

Get daily current affairs & exam alerts – follow us YouTube WhatsApp Channel Telegram Channel Facebook Page Instagram
Share with friends & study groups
Link to this page from your website / blog (HTML code)
1.  
Who said “Money is what money does”?

Correct Answer: B [Walker]

Explanation:

Crowther defined money by its three functions.

2.  
Who mints and issues coins in India?

Correct Answer: C [Union Government (Finance Ministry)]

Explanation:

Coinage Act 2011; the RBI only puts coins into circulation.

3.  
Which of the following is NOT a function of the RBI?

Correct Answer: A [Safe deposit locker]

Explanation:

Safe deposit locker is a general utility function of a commercial bank.

4.  
Which provision requires banks to obtain an RBI licence?

Correct Answer: C [Banking Regulation Act s.22]

Explanation:

Section 24 = SLR; 45ZB = MPC.

5.  
Which of the following is a qualitative (selective) credit control tool?

Correct Answer: D [Moral suasion]

Explanation:

The other three are quantitative credit control tools.

6.  
What is India's inflation target (till 31.3.2031)?

Correct Answer: B [CPI 4% ± 2%]

Explanation:

Consumer Price Index; notification dated 25.3.2026.

7.  
If the annual inflation rate is between 10% and 20%, it is:

Correct Answer: A [Running inflation]

Explanation:

Walking 3–9%; galloping 20–100%.

8.  
When did the Imperial Bank of India become the State Bank of India?

Correct Answer: D [1.7.1955]

Explanation:

1921 = Imperial Bank; 1949 = RBI nationalised; 1969 = 14 banks.

9.  
How many public sector banks has India had since 1.4.2020?

Correct Answer: C [12]

Explanation:

12 after 10 banks were merged into 4.

10.  
A loan becomes a non-performing asset when dues remain unpaid for more than:

Correct Answer: B [90 days]

Explanation:

The 90-day rule applies from 31.3.2004.

11.  
Under MUDRA, which category covers loans of ₹10–20 lakh?

Correct Answer: D [Tarun Plus]

Explanation:

Tarun Plus from 24.10.2024.

12.  
When was NABARD established?

Correct Answer: A [12.7.1982]

Explanation:

1963 = ARDC; 1975 = first RRB; 1990 = SIDBI.

13.  
Match the following:
a. M01. M1 + post office savings deposits
b. M22. Reserve money (high-powered money)
c. M33. M3 + all post office deposits
d. M44. M1 + net time deposits

Correct Answer: C [2 1 4 3]

Explanation:

M1 = narrow, demand deposits; M3 = time deposits; M0 = reserve money; M4 = all post office deposits.

14.  
Which of the following statements about the RBI are correct?
  1. The RBI was nationalised on 1.1.1949.
  2. The RBI began operations on 1.4.1934.
  3. The RBI central office was shifted to Mumbai in 1937.

Correct Answer: B [1, 3 only]

Explanation:

The RBI began on 1.4.1935; only the Act is of 1934.

15.  
Which of these note presses is run by BRBNMPL, an RBI subsidiary?

Correct Answer: D [Salboni]

Explanation:

Nashik, Dewas = SPMCIL (government); Noida is a mint. Mysuru, Salboni = BRBNMPL.

16.  
Match the following:
a. FEMA1. 2007
b. Payment and Settlement Systems Act2. 2021
c. Banking Ombudsman Scheme3. 1999
d. Integrated Ombudsman Scheme4. 1995

Correct Answer: B [3 1 4 2]

Explanation:

FEMA 1999 = foreign exchange; PSS Act 2007 = payments; Ombudsman 1995; Integrated Scheme 2021.

17.  
If the repo rate is 5.25%, what is the SDF rate (floor of the corridor)?

Correct Answer: C [5.00%]

Explanation:

SDF = repo − 0.25; MSF = repo + 0.25; 3.35% = fixed reverse repo (not the corridor floor since 8.4.2022).

18.  
Which measures can the RBI take to control inflation?
  1. Raising the repo rate
  2. Buying government securities in the market
  3. Raising the cash reserve ratio

Correct Answer: D [1, 3 only]

Explanation:

During inflation the RBI sells securities, it does not buy them.

19.  
Which statements about the Monetary Policy Committee are correct?
  1. The MPC has six members; three are appointed by the Union Government.
  2. In a tie the Governor has a second or casting vote.
  3. By law the MPC must meet every month.

Correct Answer: A [1, 2 only]

Explanation:

By law at least 4 meetings a year; in practice 6.

? Full lessons and explanations – Indian Economy PDF textbook (₹299): www.shanmugamiasacademy.in/study-materials/tnpsc-gs-unit-5-indian-economy

📘 இந்தியப் பொருளாதாரம் — முந்தைய ஆண்டு வினா – விடை – விளக்கம் (2020 – 2026)
Here you get the answer with a one-line explanation. 474 வினாக்கள் தமிழ் + ஆங்கிலத்தில் · சரிபார்க்கப்பட்ட விடை + விளக்கம் · 46 அட்டவணைகள் & குறிப்புகள் · 25 பகுதிகள் · 2020 – 2026 TNPSC தேர்வுகள்
Get the book – ₹149 ₹299 →
Score: 0 Answered: 0 / 0