Pariksha Vol 1 (2020-21)

This is a minitest based on RBI’s actions to tackle adverse economic impact of COVID-19. More such focused tests will be released every week. For answer sheet you can join our telegram channel. Though, it is advised that before going for answer sheet why don’t you spend some time on this sheet and make your brain do some work. The best way is to find answers of these questions on your own. In this way, you will interact with this subject without any prior knowledge. This is a reverse learning technique which is quite helpful.

Note : More than one answer can be correct.

1. In terms of the COVID-19 relief package announced on March 27, 2020 by the RBI, identify the incorrect statements.
  1. All Scheduled banks can grant moratorium for 3 months
  2. All NBFCs (not HFCs) can grant moratorium for 3 months
  3. Interest will not accrue during this period
  4. It is not applicable of credit card payments
  5. None of the above
2. In order to minimise risks arising due to the unprecedented situation created by the COVID-19 outbreak, the trading hours for various RBI regulated markets were amended. What were the new truncated working hours ?
  1. 10 am to 2 pm
  2. 9.30 am to 2 pm
  3. 9.45 am to 1.45 pm
  4. 9 am to 3 pm
  5. None of the above
3. In view of the rapidly evolving financial conditions and taking into account the impact of disruptions caused by COVID-19, RBI has decided as an interim measure to extend the window timings of which of the two instruments?
  1. Variable rate repo
  2. Fixed rate repo
  3. Fixed rate reverse repo
  4. Marginal Standing facility
  5. All of the above
4. As a measure to smoothen the flow of liquidity to the Mutual Funds sector, RBI has provided a special liquidity facility. What is the total amount available under this facility (in Rs Crore)?
  1. 10,000
  2. 20,000
  3. 25,000
  4. 40,000
  5. 50,000
5. What was the primary reason offered by RBI while extending a special liquidity facility for Mutual Funds?
  1. Heightened volatility in capital markets in reaction to COVID-19
  2. Redemption pressures related to closure of some debt MFs 
  3. Potential contagious effects
  4. All the above
  5. None of the above
6. Identify the incorrect statement about the Special Liquidity Facility for Mutual Funds (SLF-MF)?
  1. The funds will be provided by RBI to Banks for lending to MFs
  2. The funds will be provided by RBI to MFs
  3. Banks can invest in Certificate of deposits issued by MFs after availing these funds
  4.  Exposures under this facility will not be reckoned under the Large Exposure Framework (LEF)
  5. Support extended to MFs under the SLF-MF shall be exempted from banks’ capital market exposure limits.
7. What does “R” stands for in TLTRO?
  1. Redemption
  2. Reuse
  3. Repurchase
  4. Rolling
  5. None of the above
8. What was the primary reason for conduction the TLTROs by RBI?
  1. To provide sector specific durable liquidity
  2. To provide short term liquidity
  3. To help MFs
  4. It is a routine operation under LAF
  5. None of the above
9. What happens if a bank fails to deploy the funds availed under TLTRO scheme in specified securities within the stipulated time frame ?
  1. The bank will refund the money to RBI
  2. The banks will pay a fix penalty amount
  3. The banks will pay 200 bps of penal interest on the undeployed part
  4. The banks will pay 100 bps of penal interest on the entire loan received from RBI
  5. None of the above
10. With reference to TLTRO 2.0, identify the correct statement?
  1. A total amount of Rs.50,000 crore was offered
  2. Rs. 5,000 crore was offered for MFIs
  3. Rs. 7,500 crore was offered for NBFCs having an asset size below Rs.500 core
  4. Rs. 12,500 crore was offered for NBFCs having an asset size between Rs.500 core and Rs.5,000 crore
  5. Rs. 12,500 crore was offered for NBFCs having an asset size between Rs.5000 core and Rs.10,000 crore
  6. All of the above
11. To support the small and marginal farmers government provide various supports to farming community in the form of interest subvention and prompt repayment schemes. What are the benefits available under these two facilities?
  1. 2% interest subvention and 2% for prompt repayment
  2. 2% interest subvention and 1% for prompt repayment
  3. 1% interest subvention and 2% for prompt repayment
  4. 2% interest subvention and 3% for prompt repayment
  5. None of the above
12. To tide over the situation arising from the outbreak of the COVID-19 pandemic, RBI has decided, in consultation with the Government of India, that the limit for Ways and Means Advances (WMA) for the remaining part of first half of the financial year 2020-21 (April 2020 to September 2020) will be revised to? (Rs.crore)
  1. 1 lac
  2. 2 lac
  3. 3 lac
  4. 1.5 lac
  5. 2.5 lac
13. As part of post Global Financial Crisis (GFC) reforms, Basel Committee on Banking Supervision (BCBS) had introduced Liquidity Coverage Ratio (LCR), which requires banks to maintain High Quality Liquid Assets (HQLAs) to meet 30 days net outgo under stressed conditions. In India, banks were required to maintain LCR of 100 per cent with effect from January 1, 2019. However, in view of the impact of COVID-19 this requirement has been relaxed. Now …
  1. Banks have to maintain LCR of 80 per cent will September 30, 2020
  2. Banks have to maintain LCR of 70 per cent will September 30, 2020
  3. Banks have to maintain LCR of 20 per cent will September 30, 2020
  4. Banks have to maintain LCR of 50 per cent will September 30, 2020
  5. None of the above
14. RBI has banned banks from declaring dividends for the financial year ending March 31, 2020.  What was the primary reasoning given by RBI behind such direction?
  1. Bank can conserve capital to support economy
  2. Banks can absorb losses
  3. Banks have to lend more, so more funds are needed
  4. All of the above
  5. Only 1 and 2 above
15.The restriction of declaring dividend is applicable on?
  1. Scheduled Commercial Banks
  2. All Commercial Banks
  3. All commercial banks except urban co-operative banks
  4. All commercial banks and Co-operative banks
  5. All commercial banks and Co-operative banks except payment banks
16. For refinancing regional rural banks (RRBs), cooperative banks and micro finance institutions (MFIs) how much amount will be provided to SIDBI from RBI? (Rs. Crore)
  1. 10,000
  2. 25,000
  3. 15,000
  4. 20,000
  5. None of the above
17. To address the liquidity stress for the state governments the RBI has increased the limits of Ways and Means advances to …% of the March 31, 2020 level.
  1. 10%
  2. 30%
  3. 50%
  4. 70%
  5. None of the above
18. Under which section of the RBI Act 1934, the Reserve Bank is empowered to buy bonds from public in an exceptional situation?
  1. Sec 10
  2. Sec 11
  3. Sec 8
  4. Sec 18
  5. Sec 17
19. The extension of ways and means limits can be categorised as which type of function of the RBI?
  1. Lender of Last resort
  2. Monetary Authority
  3. Banker to the government
  4. Debt Manager of the Government
  5. Banker to the banks
20. As per the IMF estimate released in April 2020, India’s growth rate  during the year 2020 is likely to remain at which level?
  1. 2%
  2. 2.9%
  3. 2.1%
  4. 1.8%
  5. None of the above