Money and Banking online Test - 16

The Cash Reserve Ratio refers to a certain percentage of total deposits the commercial banks are required to maintain in the form of cash reserve with the Reserve Bank of India.

The objective of maintaining the cash reserve is to prevent the shortage of funds in meeting the demand by the depositor.

If there had been no government rules, the commercial banks would keep a very low percentage of their deposits in the form of reserves.

Presently the CRR is 4% in India.

Banks in India these days hold about 4 per cent of their deposits as cash. This is kept as provision to pay the depositors who might come to withdraw money from the bank on any given day. 

• RBI is the central bank of India
  
• Monetary policy (Money supply system)  is regulated by RBI
• Supervision of credit activities in formal/ regulated sector is one of the main functions of RBI.
  
• RBI prints and circulates paper currency and coins except One Rupee coins on behalf of Government of India.
• RBI is also Bankers' bank.
• The correct option is D.
  

NABARD was established on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premier agencies providing developmental credit in rural areas. NABARD is India's specialised bank for Agriculture and Rural Development in India.

• RBI is the central bank of India
  
• RBI prints and circulates paper currency and coins except One Rupee coins on behalf of Government of India.
• Finance Ministry prints One Rupee Coins.
• Monetary policy (Money supply system)  is regulated by RBI
  

Indian Audit and Accounts Service (IAAS) is an Indian Central Government service, free of control from any executive authority, under the Comptroller and Auditor General of India. The officers of the Indian Audit and Accounts Department serve in an audit managerial capacity. IAAS is responsible for auditing the accounts of the Union and State governments and public sector organizations, and for maintaining the accounts of State governments.

Hence, option (C) is the correct answer.

Major functions of the RBI are as follows:

1. Issue of Bank Notes

2. Banker to Government

3. Custodian of Cash Reserves of Commercial Banks

4. Custodian of Country’s Foreign Currency Reserves

5. Lender of Last Resort

6. Central Clearance and Accounts Settlement

7. Controller of Credit

A Bank is a financial institution which is involved in borrowing and lending money. Banks take customer deposits in return for paying customers an annual interest payment. The bank then use the majority of these deposits to lend to other customers for a variety of loans. The difference between the two interest rates is effectively the profit margin for banks. Banks play an important role in the economy by offering a service for people wishing to save. Banks also play an important role in offering finance to businesses who wish to invest and expand.  These loans and business investment are important for enabling economic growth.

Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form of cash, or gold or govt. approved securities before providing credit to the customers. Here by approved securities we mean, bond and shares of different companies.

The coins of Mauryan period manifest that they were cut and clipped for proper weight and adjustments. The coins were struck in conceivable geometric form including round, oval and elliptical. The coins showcased only one symbol and it had been observed that the idea was perhaps taken from the Vedic period. Later the number of symbols increased and the punching devices of these coins had no inscriptions but they bore a number of symbols. The symbols varied from geometrical and floral patterns, with hills, birds, animals, reptiles, human figures and the like. A particular symbol stands for the representation of a particular place or area. Often the flans or planchets of the coins were smaller than the size of the punches. Sometimes, in an attempt to accommodate the complete symbols; they were punched together, one overlapping another. Several symbols were introduced in the ancient Indian coins abut with the commencement period of the Mauryan empire the symbols got a bolder look. The earlier coins with five symbols were a representation of a particular feature. Even silver punch marked coins were also issued during this age. Silver coins were found in four denominations viz. 'pana', 'ardha-pana', 'pada' and 'asta-bhaga' or 'ardhapadika'. These coins were issued from the mints of the Mauryan Empire as per 'Arthasastra'.