1.

In most countries which organisations controls the what effect is this likely to have on the money supply
banking system? and the rate of interest?
A) Central bank B) Commercial bank
C) Investment ban D) World bank 14. Who works as RBI's agent at places where it has no
2. Why might a country’s central bank raise interest rate? office of its own?
A) To encourage saving B) To increase the money supply. A) State Bank of India B) Ministry of Finance
C) To raise funds for the governmentD) To reduce the level of C) Government of India D) International Monetary Fund
employment 15. Which of the following is true about the functions
3. What is most likely to be the main function of a central performed by RBI -
bank? (i) It is the Bank of Issue (ii) It acts as banker to the
A) Controlling the money supply B) Investing in commerce Government (iii) It is the banker of other banks
and industry C) Issuing and processing credit card (iv) It regulates the flow of credit
D) Making loans to individuals A) Both (i) and (ii) B) Both (iii) and (iv)
4. To whom does the central bank usually make loans? C)All the Above D) None of the above
A) Individuals B) Limited companies 16. Which among the following is incorrect?
C) The government D) Trade unions A) RBI is the Bank of Issue B) RBI acts as Banker to the
5. What is a function of a central bank? Government C) RBI is Banker's Bank
A) To decide govt. spending B) To determine all spending D) RBI does not regulate the flow of credit
C) To issue new currency D) To lend to private business 17. Which of the following is true about the restrictions on
6. which function is performed by a central bank but not a RBI?
commercial bank? (i) It is not to compete with the commercial banks. (ii) It is not
A) Controlling the money supply B) Dealing in foreign allowed to pay interest on its deposits. (iii) It cannot engage
exchange C) Giving financial advice D) Holding deposits directly or indirectly in trade. (iv) It cannot acquire or advice
7. What can a central bank increase in order to reduce loans against immovable property. (v) It is prohibited from
consumer borrowing? purchasing its own shares or the shares of any other bank or any
A) Commercial bank deposits B) Government spending company or granting loans on such security.
C) Interest rate D) The exchange rate A) only (i),(ii),(iii), and (iv) B)only (v)
8. Open market operation refers to the buying and selling of C)all the above D)none of the above
A) Commercial bills B) Foreign exchanges 18. When did the Reserve Bank of India notify the draft
C) Gold D) Government securities regulations relating to the Credit Information Companies
9. By………………….RBI can reduce the amount of (Regulation) Act, 2005?
borrowing by consumers. A) April 5, 2006 B) May 26, 2006
A) Increasing the exchange rate. B) Increasing the rate of C) June 29, 2007 D) September 30, 2005
interest. C) Encouraging the government to increase its 19. When did the draft guidelines for building grievance
spending. D) Increasing the deposits in banks. redressal mechanism within NBFCs publish?
10. Which of the following is not a function of a central A) April 5, 2006 B) May 26, 2006
bank? C) June 29, 2007 D) September 30, 2005
A) Banker to the government. B) Banker to banks. 20. When did the Centre acquire the RBIs entire 59.73%
C) Producer of notes and coins. D) Holds a country’s equity stake in the SBI at over Rs. 35,531 crore in New
official holdings of gold and foreign exchange. Delhi?
11. The Reserve Bank of India was established on A) April 5, 2006 B) May 26, 2006
A) April 1, 1935 B) July 12, 1982 C) June 29, 2007 D) September 30, 2005
C) May 26, 2006 D) September 30, 2005 21. According to which guidelines did the Government pick
12. India is a member of the International Monetary up the entire SBI shares held by the RBI?
Fund since A) National Stock Exchange of India B) Securities Commission
A) 1934 B) 1935 C) 1947 D) 1949 C) Financial Regulations D) (SEBI)
13. A central bank sells securities in the open market. 22. When did the Government appoint for transfer of stake?
Money supply Rate of interest A) 29 June B) 26 May C)5 April D) 1 April
A Reduce Reduce
B Reduce Money supply
Increase Rate of interest
C Increase
A Reduce Increase Reduce
D Increase
B Reduce Reduce Increase
C Increase Increase
D Increase Reduce
 2. Why might a country’s central bank raise interest rate?
A) To encourage saving B) To increase the money supply.
14. Who works as RBI's agent at places where it has no C) To raise funds for the governmentD) To reduce the level of
office of its own? employment
A) State Bank of India B) Ministry of Finance 3. What is most likely to be the main function of a central
C) Government of India D) International Monetary Fund bank?
15. Which of the following is true about the functions A) Controlling the money supply B) Investing in commerce
performed by RBI - and industry C) Issuing and processing credit card D)
(i) It is the Bank of Issue (ii) It acts as banker to the Making loans to individuals
Government (iii) It is the banker of other banks 4. To whom does the central bank usually make loans?
(iv) It regulates the flow of credit A) Individuals B) Limited companies
A) Both (i) and (ii) B) Both (iii) and (iv) C) The government D) Trade unions
C)All the Above D) None of the above 5. What is a function of a central bank?
16. Which among the following is incorrect? A) To decide govt. spending B) To determine all spending
A) RBI is the Bank of Issue B) RBI acts as Banker to the C) To issue new currency D) To lend to private business
Government C) RBI is Banker's Bank 6. which function is performed by a central bank but not a
D) RBI does not regulate the flow of credit commercial bank?
17. Which of the following is true about the restrictions on A) Controlling the money supply B) Dealing in foreign
RBI? exchange C) Giving financial advice D) Holding deposits
(i) It is not to compete with the commercial banks. (ii) It is not 7. What can a central bank increase in order to reduce
allowed to pay interest on its deposits. (iii) It cannot engage consumer borrowing?
directly or indirectly in trade. (iv) It cannot acquire or advice A) Commercial bank deposits B) Government spending
loans against immovable property. (v) It is prohibited from C) Interest rate D) The exchange rate
purchasing its own shares or the shares of any other bank or any 8. Open market operation refers to the buying and selling
company or granting loans on such security. of
A) only (i),(ii),(iii), and (iv) B)only (v) A) Commercial bills B) Foreign exchanges
C)all the above D)none of the above C) Gold D) Government securities
18. When did the Reserve Bank of India notify the draft 9. By………………….RBI can reduce the amount of
regulations relating to the Credit Information Companies borrowing by consumers.
(Regulation) Act, 2005? A) Increasing the exchange rate. B) Increasing the rate of
A) April 5, 2006 B) May 26, 2006 interest. C) Encouraging the government to increase its
C) June 29, 2007 D) September 30, 2005 spending. D) Increasing the deposits in banks.
19. When did the draft guidelines for building grievance 10. Which of the following is not a function of a central
redressal mechanism within NBFCs publish? bank?
A) April 5, 2006 B) May 26, 2006 A) Banker to the government. B) Banker to banks.
C) June 29, 2007 D) September 30, 2005 C) Producer of notes and coins. D) Holds a country’s
20. When did the Centre acquire the RBIs entire 59.73% official holdings of gold and foreign exchange.
equity stake in the SBI at over Rs. 35,531 crore in New 11. The Reserve Bank of India was established on
Delhi? A) April 1, 1935 B) July 12, 1982
A) April 5, 2006 B) May 26, 2006 C) May 26, 2006 D) September 30, 2005
C) June 29, 2007 D) September 30, 2005 12. India is a member of the International Monetary
21. According to which guidelines did the Government pick Fund since
up the entire SBI shares held by the RBI? A) 1934 B) 1935 C) 1947 D) 1949
A) National Stock Exchange of India B) Securities Commission 13. A central bank sells securities in the open market. what
C) Financial Regulations D) (SEBI) effect is this likely to have on the money supply and
22. When did the Government appoint for transfer of stake? the rate of interest?
A) 29 June B) 26 May C)5 April D) 1 April
1. In most countries which organisations controls the
banking system?
A) Central bank B) Commercial bank
C) Investment ban D) World bank