C2

Question 1

the ___________ (1933) recommended for the establishment of a Reserve Bank in India.

Answer 1

White Paper on Indian Constitutional Reforms

Question 2

Thus, the Preamble in the RBI Act, as amended by the Finance Act, 2016, provides that the primary objective of the monetary policy is to

Answer 2

maintain price stability, while keeping in mind the objective of growth, and to meet the challenge of an increasingly complex economy.

Question 3

facilitates the RBI to act as a ‘Lender of Last Resort

Answer 3

Section 18

Question 4

Reserve Bank of India is committed to put only clean notes into circulation (Section

Answer 4

(Section 27).

Question 5

Another important function is exchange of mutilated or torn notes, which under the RBI Act is not a matter of right, but of grace (Section

Answer 5

(Section 28).

Question 6

To facilitate introduction of digital currency, the Act was amended in the year ___________ to (i) explicitly define a “bank note” to mean a note issued by the Bank, whether in physical or digital form, under section 22;

Answer 6

2022

Question 7

The Parliament of India enacted the Government Securities Act, 2006 (‘GS Act’) with an objective

Answer 7

“to consolidate and amend the law relating to Government securities and its management by the Reserve Bank of India” (preamble of the Act).

Question 8

The GS Act applies to Government securities created and issued by the Central Government or a State Government (Section

Answer 8

Section 1 of GS Act

Question 9

The GS Act prescribes the procedure and modalities to be followed by the RBI in the management of the public debt and also confers various powers on the RBI, including the power to determine the title to a government security, if there exists any doubt in the opinion of the Reserve Bank of India (Section

Answer 9

Section 12 of GS Act).

Question 10

Further, ______________– provides that no order made by the RBI under that Act shall be called in question by any Court for the reasons stated therein

Answer 10

Section 18 of the GS Act

Question 11

Prior to the enactment of the GS Act, the said public debt functions of the RBI have been governed by the provisions of the

Answer 11

Public Debt Act, 1944

Question 12

__________________ states that the Public Debt Act, 1944, shall cease to apply to the Government securities to which that Act applies and to all matters for which provisions have been made under the GS Act.

Answer 12

Section 31 of the GS Act

Question 13

___________ empowers the RBI to authorize any person to be known as authorized person to deal in foreign exchange or in foreign securities, as an authorized dealer, money changer or offshore banking unit or in any other manner as it deems fit.

Answer 13

Foreign Exchange Management Act, 1999 (“FEMA”).

Question 14

__________- details out the contraventions which may be adjudicated and penalized by the Adjudicating Authority (Directorate of Enforcement).

Answer 14

Section 13 of the FEMA

Question 15

Section 13 of the FEMA details out the contraventions which may be adjudicated and penalized by the Adjudicating Authority (Directorate of Enforcement). RBI has been empowered to compound certain contraventions under _________________ in accordance with the Rules framed in that regard.

Answer 15

Section 15 of the FEMA

Question 16

Co-operative banks (constituted either under

Answer 16

Multi-State Co-operative Societies Act, 2002 or State Co-operative Societies Acts)

Question 17

The power to regulate and supervise banking companies has been provided by the provisions of the

Answer 17

Banking Regulation Act, 1949 (BR Act, 1949) to the RBI

Question 18

The preamble to the BR Act, 1949, states

Answer 18

it is an Act to consolidate and amend the law relating to banking and the powers of RBI to formulate banking policy (Section 5(ca) of BR Act), to regulate and supervise banking business etc., are scattered across the BR Act, 1949.

Question 19

_______________ states that banking policy means any policy, which is specified from time to time by the RBI, in the interest of the banking system or in the interest of monetary stability or sound economic growth, having due regard to the interests of the depositors, the volume of deposits and other resources of the bank and the need for equitable allocation and the efficient use of these deposits and resources.

Answer 19

Section 5(ca) of the BR Act

Question 20

The appointment, re-appointment or termination of chairman and whole-time directors of a banking company shall not have effect, unless done with the previous approval of the Reserve Bank (Section

Answer 20

(Section 35 B of BR Act).

Question 21

Similarly, as a part of control over management, Section ______________-, empowers RBI to appoint additional directors on the boards of banking companies.

Answer 21

36-AB of BR Act, 1949

Question 22

Section_____________ enables RBI to remove executives, officers and employees of a banking company under certain conditions.

Answer 22

36-AA of the BR Act, 1949

Question 23

Moreover, the RBI has been empowered under BR Act, 1949, to supersede the boards of banking companies (Section

Answer 23

(Section 36ACA of BR Act).

Question 24

Though it is not the role of the Reserve Bank to micro-manage the affairs of banks, it has powers to control advances by banking companies (Section

Answer 24

(Section 21 of BR Act

Question 25

___________ confers on RBI the power to issue licenses and also to cancel licenses of banking companies.

Answer 25

Section 22 of the BR Act, 1949

Question 26

Under Section ____________, RBI has the power to issue directions to banking companies in public interest

Answer 26

35A of the BR Act, 1949

Question 27

The Banking Regulation (Amendment) Act, 2017 has provided powers to RBI to issue directions to any banking company to initiate insolvency resolution process in respect of a default, if authorized by the Central Government (Section

Answer 27

(Section 35AA of BR Act

Question 28

to issue directions to banking companies in relation to resolution of stressed assets (Section

Answer 28

(Section 35 AB of BR Act).

Question 29

As part of the supervisory powers, RBI has been empowered to inspect banking companies on its own or at the instance of Central Government under the provisions of the

Answer 29

BR Act, 1949 (Section 35).

Question 30

Only those provisions of the BR Act which are mentioned in section ____________ will apply to State Bank of India, Nationalised Banks and Regional Rural Banks.

Answer 30

51 of the BR Act

Question 31

In the case of co-operative banks, the application of the provisions of the BR Act will be subject to the modifications mentioned in ___________________.

Answer 31

section 56 of the very same Act

Question 32

The Bank may, in addition to the above, in the interest of financial stability, amalgamate or reconstruct or split an NBFC into different units (Section

Answer 32

(Section 45 MBA).

Question 33

In terms of _____________ of India, the legislative powers of the Union and the State are given in three Lists, viz., the Union List, the State List and the Concurrent List respectively of Schedule VII to the Constitution.

Answer 33

article 246

Question 34

The Amendment Act states that the BR Act will not apply to ____________ whose principal business is long term financing for agricultural development, if these societies do not use the words ‘bank’, ‘banker’ or ‘banking’ in their name or in connection with their business and does not act as drawee of cheques.

Answer 34

primary agricultural credit societies and cooperative societies

Question 35

Further, it may issue unsecured debentures or bonds or similar securities with maturity of ___________ to such persons subject to the prior approval of the Reserve Bank of India (RBI), and any other conditions as may be specified by RBI.

Answer 35

ten or more years

Question 36

Further, ______________has been newly inserted and made applicable to co-operative banks, whereby RBI may exempt a cooperative bank or a class of cooperative banks from certain provisions of the Act through notification for such time period and under such conditions as may be specified by the RBI.

Answer 36

section 53A

Question 37

As _____________- have been made applicable to Co-operative Banks following the Banking Regulation (Amendment) Act, 2020, any changes to a cooperative bank's name or byelaws require written certification from the Reserve Bank confirming no objection before approval by the Central/State Registrar of Cooperative Societies.

Answer 37

Sections 49B and 49C of the Banking Regulation Act, 1949

Question 38

Chapter III-D was inserted in the RBI Act with effect from

Answer 38

January 09, 2007.

Question 39

_______________defines derivative as an instrument to be settled at a future date, whose value is derived from change in interest rate, foreign exchange rate, credit rating or credit index, price of securities (also called ‘underlying’), or a combination of more than one of them and includes interest rate swaps, forward rate agreements, foreign currency swaps, foreign currency-rupee swaps, foreign currency options, foreign currency rupee options or such other instruments as may be specified by the RBI from time to time.

Answer 39

Sub-section (a) of Section 45U of the RBI Act

Question 40

Similarly, money market instruments have been defined to include

Answer 40

call or notice money, term money, repo, reverse repo, certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity up to one year as the RBI may specify from time to time.

Question 41

The expression “securities” have been defined to

Answer 41

mean securities of Central Government or a State Government or securities of local authority specified by the Central Government and for the purpose of ‘repo’ and ‘reverse repo’ to include corporate bonds and debentures.

Question 42

The power of RBI to regulate transactions in derivatives, money market instruments etc. have been provided under Section

Answer 42

45W of the RBI Act, which states that the RBI may, in public interest or to regulate the financial system of the country to its advantage, determine the policy relating to interest rates or interest rate products and give directions in that behalf to all agencies or any of them, dealing in securities, money market instruments, foreign exchange, derivatives, or other instruments of like nature as the RBI may specify from time to time.

Question 43

_____________also provides that transactions in derivatives specified by RBI shall be valid, if at least one of the parties to the transaction is an entity falling within the regulatory purview of RBI, thus conferring certainty to the legal validity of such contracts.

Answer 43

Section 45V

Question 44

Under _______________, no person shall commence or operate a payment system except with an authorization issued by the RBI.

Answer 44

Section 4 of the PSS Act, 2007

Question 45

under _______________, RBI has the power to revoke the authorization granted to any person if it contravenes any of the provisions of the PSS Act or does not comply with regulations or fails to comply with the orders or directions issued by the RBI or operates the payment system contrary to the conditions subject to which the authorization was issued.

Answer 45

Section 8 of the PSS Act, 2007

Question 46

The regulation and supervision of payment systems has been conferred on the RBI by virtue of provisions of

Answer 46

Chapter IV of the PSS Act, 2007

Question 47

Reserve Bank has been entrusted with the task of regulation and supervision of Credit Information Companies under the

Answer 47

Credit Information Companies (Regulation) Act, 2005

Question 48

Banking Ombudsman Scheme

Answer 48

2006,

Question 49

Ombudsman Scheme for Non-Banking Financial Companies,

Answer 49

2018,

Question 50

Ombudsman Scheme for Digital Transactions,

Answer 50

2019,

Question 51

‘The Reserve Bank - Integrated Ombudsman Scheme, 2021 (the Scheme / RB-IOS, 2021)’ with effect from

Answer 51

November 12, 2021.

Question 52

__________________ states that the promoting, establishing, supporting or aiding in the promotion, establishment and support of any financial institution - whether as its subsidiary or otherwise, is a business which can be transacted by the Reserve Bank.

Answer 52

Clause (8AA) of section 17 of the RBI Act

Question 53

Factoring Regulation Act

Answer 53

Factoring Regulation Act 2011

Question 54

The provisions of the Act mandate that a senior official from the RBI, not below the rank of an ___________________, is included in the National Board for MSMEs, ensuring that the RBI has a significant role in the policy-making process for the MSME sector.

Answer 54

Executive Director

Question 55

MSME Act

Answer 55

MSME Act 2006

Question 56

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act

Answer 56

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002

Question 57

______________ empowers RBI with regard to regulation and supervision of Asset Reconstruction Companies.

Answer 57

The provisions of SARFAESI Act

Question 58

The amendments made in the year __________ to the provisions of National Housing Bank Act, 1987 transferred certain regulatory powers over housing finance companies from the National Housing Bank (NHB) to the Reserve Bank of India (RBI).

Answer 58

2019

Question 59

Accordingly, HFCs are being treated as one of the categories of _____________- for regulatory purposes.

Answer 59

NBFCs