Money and Banking Test - 7

A: RBI

The 10 rupee note has been issued by the Reserve Bank of India (RBI), which is the central bank of India. The RBI is responsible for issuing and distributing currency notes in India, including the 10 rupee note.

The RBI is an autonomous institution that is responsible for managing the country 's monetary policy, including the issuance and circulation of currency notes. It is also responsible for regulating and supervising the country 's banking system and for maintaining the stability of the financial system.

The government of India and commercial banks do not issue currency notes in India. The government, through the Ministry of Finance, is responsible for issuing the 1 rupee note, which is the only currency note in India that is not issued by the RBI. Commercial banks are not authorized to issue currency notes and can only lend money to their customers.

B: RBI

The Reserve Bank of India (RBI) is the custodian of the national reserves of international currency in India. The RBI is responsible for managing the country 's foreign exchange reserves, which consist of a variety of foreign currencies and assets such as gold, special drawing rights (SDRs), and foreign currency assets.

The RBI uses the foreign exchange reserves to maintain the external value of the rupee and to intervene in the foreign exchange market as needed to stabilize the exchange rate. The RBI also uses the foreign exchange reserves to support the balance of payments of the country and to provide assistance to the government and banks in times of need.

The State Bank of India (SBI) is a commercial bank that is not responsible for managing the national reserves of international currency. ICICI is a private sector bank and is also not responsible for managing the national reserves of international currency. The World Bank is an international financial institution that provides financial assistance to developing countries, but it is not responsible for managing the national reserves of international currency.

C: RBI

The Reserve Bank of India (RBI) is the banker 's bank in India. This means that the RBI acts as a central bank for all the commercial banks in the country and performs a variety of functions on their behalf.

Some of the key functions of the RBI as the banker 's bank in India include:

• Providing liquidity support to commercial banks: The RBI acts as a lender of last resort for commercial banks, providing them with financial assistance in times of need.

• Regulating and supervising the banking system: The RBI is responsible for regulating and supervising the activities of commercial banks to ensure the stability of the financial system.

• Acting as a clearinghouse for interbank transactions: The RBI acts as a clearinghouse for interbank transactions, facilitating the settlement of transactions between banks and helping to maintain the smooth functioning of the payment and settlement system.

• Providing a variety of services to commercial banks: The RBI provides a range of services to commercial banks, such as currency management, government securities operations, and foreign exchange operations.

The State Bank of India (SBI), Punjab National Bank (PNB), and Oriental Bank of Commerce (OBC) are all commercial banks in India and are not responsible for performing the functions of a central bank.

C: RBI

The Reserve Bank of India (RBI) is the custodian of the national reserves of international currency in India. The RBI is responsible for managing the country 's foreign exchange reserves, which consist of a variety of foreign currencies and assets such as gold, special drawing rights (SDRs), and foreign currency assets.

The RBI uses the foreign exchange reserves to maintain the external value of the rupee and to intervene in the foreign exchange market as needed to stabilize the exchange rate. The RBI also uses the foreign exchange reserves to support the balance of payments of the country and to provide assistance to the government and banks in times of need.

The State Bank of India (SBI), Industrial Development Bank of India (IDBI), and Industrial Credit and Investment Corporation of India (ICICI) are all financial institutions in India, but they are not responsible for managing the national reserves of international currency. Only the RBI has this responsibility as the central bank of the country.

B: RBI

The 10 rupee note is issued by the Reserve Bank of India (RBI), which is the central bank of India. The RBI is responsible for issuing and distributing currency notes in India, including the 10 rupee note.

The RBI is an autonomous institution that is responsible for managing the country 's monetary policy, including the issuance and circulation of currency notes. It is also responsible for regulating and supervising the country 's banking system and for maintaining the stability of the financial system.

The State Bank of India (SBI) is a commercial bank that is not responsible for issuing currency notes. The government of India and the Ministry of Finance are not responsible for issuing currency notes either. The government, through the Ministry of Finance, is responsible for issuing the 1 rupee note, which is the only currency note in India that is not issued by the RBI.

C: Consumer Credit Regulation

The options you listed are all quantitative measures of credit control, except for consumer credit regulation.

• The Bank Rate Policy: The central bank can influence the supply and demand of credit in the economy by changing the bank rate, which is the interest rate at which the central bank lends money to commercial banks. When the bank rate is increased, it becomes more expensive for banks to borrow from the central bank, which in turn increases the cost of borrowing for customers. This can reduce the demand for loans and help to curb inflationary pressures.

• Open Market Operations: The central bank can also influence the supply of credit in the economy through open market operations, which involve buying and selling government securities in the open market. When the central bank buys securities, it increases the supply of money in the economy, which can stimulate economic activity. When it sells securities, it reduces the supply of money, which can help to curb inflationary pressures.

• The Repo Rate: The repo rate is the interest rate at which the central bank lends money to commercial banks through repurchase agreements (repos). By increasing the repo rate, the central bank can make it more expensive for banks to borrow from the central bank, which can reduce the supply of credit in the economy.

Consumer credit regulation refers to the regulation of the lending of money to consumers, such as through credit cards, personal loans, and mortgages. This is not a quantitative measure of credit control, as it does not directly affect the supply or demand of credit in the economy.

Reserve Bank of India(RBI) which is an apex bank that controls and regulates the entire banking system of India was nationalized in 1949. It is the sole agency of issuing currency notes and controls the supply of money in the economy through its monetary policy. 

The reserve requirement (or cash reserve ratio) is a central bank regulation employed by most, but not all, of the world 's central banks, that sets the minimum amount of reserves that must be held by a commercial bank.

B: 1949

The Reserve Bank of India (RBI) was nationalized in the year 1949. Prior to nationalization, the RBI was a privately-owned institution that was established in 1935.

The nationalization of the RBI was carried out through the Reserve Bank of India (Transfer to Public Ownership) Act, 1948, which came into effect on 1 January 1949. Under the act, the RBI became a state-owned institution and the government of India acquired a controlling stake in the bank.

After nationalization, the RBI continued to perform its functions as the central bank of the country, including issuing and distributing currency notes, regulating and supervising the banking system, and managing the country 's monetary policy.

The RBI was not nationalized in 1935, 1969, or 1991. These are all incorrect dates.

C: Reserve Bank of India

The cash reserve ratio (CRR) is determined by the Reserve Bank of India (RBI), which is the central bank of India. The CRR is the percentage of deposits that commercial banks are required to hold with the RBI as a reserve.

The RBI uses the CRR as a tool to regulate the supply of credit in the economy. By increasing the CRR, the RBI can reduce the amount of money that commercial banks have available to lend, which can reduce the supply of credit in the economy. By decreasing the CRR, the RBI can increase the amount of money that commercial banks have available to lend, which can increase the supply of credit in the economy.

The Ministry of Finance, State Bank of India (SBI), and Parliament are not responsible for determining the CRR in India. Only the RBI has this authority as the central bank of the country.