RBI Circulars (Mar-Jun 2025) Questions and Answers Set 1 | IBPS PO Mains RBI Circulars News 2025
Moderate Question Paper: RBI Circulars (Mar-Jun 2025)
Total Marks: 50
Total Time: 25 Minutes
Instructions:
- All
questions are compulsory.
- This
paper is based on potential and illustrative themes of RBI circulars.
- Section
A contains 15 questions of 2 marks each.
- Section
B contains 20 questions of 1 mark each.
Section A: 2-Mark Questions (30 Marks)
1. A hypothetical RBI circular on a "Framework for Green Deposits" is issued. What would be its primary objective?
a) To offer higher interest rates than regular fixed deposits.
b) To mandate that banks lend only to renewable energy companies.
c) To channel funds from depositors specifically towards financing eco-friendly
and sustainable projects.
d) To provide tax exemptions to all customers who open a green deposit account.
e) To simplify the account opening process for rural customers.
2. If the Monetary Policy Committee (MPC) in its April meeting decides to increase the Repo Rate, what is the most likely immediate reason?
a) To encourage banks to lend more freely.
b) To combat rising inflationary pressures in the economy.
c) To boost short-term economic growth.
d) To make it cheaper for corporations to borrow.
e) To increase the amount of money in circulation.
3. A circular titled "Strengthening Cybersecurity Norms for Payment System Operators" would likely obligate entities to do all of the following EXCEPT:
a) Implement multi-factor authentication for critical transactions.
b) Conduct regular vulnerability assessments and penetration testing.
c) Report all cybersecurity incidents to the RBI within a stipulated time
frame.
d) Set the Merchant Discount Rate (MDR) for all card transactions.
e) Maintain a robust incident response and recovery plan.
4. The primary implication of a circular expanding the "CBDC-Retail (e₹-R) Pilot" to new cities would be to:
a) Immediately replace the Unified Payments Interface (UPI).
b) Test the scalability, security, and public adoption of the digital rupee on
a wider scale.
c) Provide a government-backed alternative to cryptocurrency investments.
d) Eliminate the use of physical cash within those new cities.
e) Offer interest on balances held in CBDC wallets.
5. An RBI circular amending the "Master Direction on Digital Lending" to curb unfair practices would most likely prohibit:
a) Offering loans below a certain interest rate.
b) Using automated algorithms for credit assessment.
c) Automatic increases in credit limits without explicit customer consent.
d) Advertising digital loan products on social media.
e) Partnering with a credit information company for credit scores.
6. What is the core purpose of an RBI circular on "Annual Closing of Accounts" issued every March?
a) To announce the new lending targets for the next fiscal year.
b) To declare the annual profits of the Reserve Bank of India.
c) To ensure uniform accounting procedures and timely completion of financial
statements by all banks.
d) To revise the interest rates on savings accounts for all banks.
e) To publish a list of all non-performing assets (NPAs) in the banking system.
7. A circular on "Review of Prudential Norms for Urban Co-operative Banks (UCBs)" would likely focus on:
a) Increasing the number of branches UCBs can open in metro cities.
b) Lowering the educational qualification requirements for UCB directors.
c) Mandating higher capital adequacy ratios (CRAR) to improve their financial
resilience.
d) Simplifying the process for UCBs to convert into small finance banks.
e) Setting customer service hours for all UCB branches.
8. The RBI issues guidelines to "Rationalise Reporting under FEMA". What is the intended benefit of such a measure?
a) To increase the number of regulations for foreign companies.
b) To make it more difficult for Indian residents to send money abroad.
c) To reduce the compliance burden and improve the ease of doing business for
entities involved in foreign exchange transactions.
d) To restrict all forms of foreign direct investment (FDI).
e) To give the RBI more direct control over the import-export policies of the
government.
9. A circular on "Priority Sector Lending (PSL) Targets for FY 2025-26" is issued. The underlying principle of PSL is to:
a) Ensure banks lend only to large, profitable corporations.
b) Encourage banks to invest exclusively in government securities.
c) Channel a specific portion of bank credit towards economically important but
underserved sectors.
d) Provide interest-free loans to all citizens.
e) Limit the total amount of loans a bank can issue in a year.
10. If the RBI issues guidelines on "Fair Lending Practices" related to recovery agents, which action would it most likely forbid?
a) Contacting the borrower during standard business hours.
b) Sending official written notices to the borrower's registered address.
c) Harassing the borrower or their family members at odd hours.
d) Using the legal process to recover the loan amount.
e) Informing the borrower about their outstanding dues.
11. A circular on "Enhancements to UPI for Cross-Border Transactions" would aim to achieve which of the following?
a) Make it mandatory for all international travelers to use UPI.
b) Restrict the use of UPI to domestic transactions only.
c) Make small-value international remittances faster, cheaper, and more
seamless.
d) Replace the SWIFT international payment network entirely.
e) Allow UPI payments only in Indian Rupees, regardless of the country.
12. What would be the most significant aspect of a "Master Direction on KYC - Periodic Updation"?
a) Eliminating the need for KYC for all new bank accounts.
b) Requiring all customers to visit the branch physically every six months.
c) Defining different KYC update frequencies based on customer risk profiles
(low, medium, high).
d) Making a passport the only acceptable identity proof.
e) Linking KYC status to the customer's social media accounts.
13. A framework for managing "Climate-Related Financial Risks" would require banks to:
a) Stop lending to all industries except solar and wind energy.
b) Assess how environmental factors like floods or droughts could impact the
value of their loan assets.
c) Install solar panels on all their branch buildings.
d) Offer discounted loans for electric vehicles only.
e) Ignore climate factors as they are not a direct financial risk.
14. If a circular updates "Bank Locker Agreements," what is its primary goal?
a) To allow banks to open any locker at will.
b) To increase bank revenue by doubling locker rental fees.
c) To enhance transparency, clarify the bank's liability, and protect customer
interests.
d) To store a digital copy of all items kept inside the locker.
e) To make it mandatory for every savings account holder to have a locker.
15. A circular on "Reporting of Central Government Transactions" for agency banks is crucial for:
a) Deciding the country's foreign trade policy.
b) The accurate and timely consolidation of the Government of India's accounts.
c) Setting the salaries of government employees.
d) Calculating the stock market index.
e) Determining the price of petrol and diesel.
Section B: 1-Mark Questions (20 Marks)
1. What does MPC stand for in the context of the RBI?
a) Market Policy Committee
b) Monetary Planning Council
c) Monetary Policy Committee
d) Main Policy Commission
e) Master Planning Committee
2. The rate at which the RBI lends money to commercial banks is known as the:
a) Reverse Repo Rate
b) Bank Rate
c) Lending Rate
d) Repo Rate
e) Deposit Rate
3. PSL is an RBI guideline for banks. What does PSL stand for?
a) Public Sector Lending
b) Priority Sector Lending
c) Private Sector Loans
d) Primary Service Lending
e) Provisional Sanctioned Loan
4. The RBI's digital version of the legal tender is called:
a) e-Wallet
b) DigiCash
c) Crypto-Rupee
d) Unified Payment Coin
e) Central Bank Digital Currency (CBDC)
5. KYC norms are primarily designed to:
a) Increase bank profits
b) Prevent identity theft and money laundering
c) Market new loan products
d) Speed up transaction processing
e) Assess a customer's credit score
6. Which of the following would be considered a "Green Project" under a Green Deposit framework?
a) Building a new coal power plant
b) Financing a fast-fashion clothing brand
c) Funding a renewable energy (solar) park
d) Investing in a highway expansion project
e) Expanding a plastics manufacturing unit
7. FEMA, an act whose reporting requirements the RBI might simplify, stands for:
a) Foreign Exchange Marketing Act
b) Federal Economy Management Act
c) Financial & Equity Market Authority
d) Foreign Exchange Management Act
e) Fiscal Entity Monitoring Act
8. A "Digital Lending App" (DLA) is a:
a) Government tax filing portal
b) Mobile application for stock trading
c) Web or mobile-based platform for availing loans
d) Social media application
e) Bank's internal accounting software
9. Which body in India is responsible for issuing circulars related to banking regulation?
a) SEBI
b) IRDAI
c) PFRDA
d) Ministry of Finance
e) RBI
10.A bank that handles the receipts and payments for the government is called an:
a) Investment Bank
b) Agency Bank
c) Niche Bank
d) Universal Bank
e) Custodian Bank
11.UCBs, often subject to specific RBI regulations, are:
a) Universal Commercial Banks
b) Underwriting Corporate Banks
c) Urban Co-operative Banks
d) Union of Central Banks
e) Unregulated Commercial Bodies
12.The main purpose of a "Cybersecurity Framework" is to:
a) Increase the number of bank holidays
b) Protect information systems from theft or damage
c) Design marketing pamphlets
d) Set interest rates for loans
e) Recruit new employees
13."Cross-border payments" refer to transactions that:
a) Occur between two states in India
b) Take place between a customer and a merchant
c) Move money from one country to another
d) Are processed only through cheques
e) Involve only physical cash
14.What does CRAR, a key prudential norm for banks, stand for?
a) Credit Risk and Return
b) Capital to Risk-weighted Assets Ratio
c) Current Ratio and Asset Ratio
d) Corporate Risk Assessment Rating
e) Customer Return on Assets Ratio
15.What is the financial year in India for which banks would perform their "Annual Closing" on March 31st, 2025?
a) 2025-2026
b) 2023-2024
c) 2025 (Calendar Year)
d) 2024-2025
e) 2022-2023
16.The term "fintech" is a portmanteau of:
a) Final Technology
b) Finance and Technique
c) Financial Technology
d) Fiscal Technicalities
e) Finalized Treasury
17.If the RBI simplifies KYC, a "low-risk" customer would likely have:
a) More frequent KYC updates
b) Less frequent KYC updates
c) The same frequency of updates as a high-risk customer
d) Their account closed
e) To submit more documents than before
18.What is the primary function of UPI?
a) Long-term investment
b) Issuing credit cards
c) Instant real-time payments
d) Providing bank lockers
e) Managing foreign exchange reserves
19.A "recovery agent" is an individual or entity that:
a) Helps customers open new accounts
b) Sells insurance policies for the bank
c) Collects overdue payments from borrowers on behalf of the bank
d) Manages the bank's stock investments
e) Approves new loans
20.A key goal of RBI's customer service circulars is to ensure:
a) Banks achieve maximum profitability
b) Fair and transparent treatment of all customers
c) All banking services are made free of charge
d) Banks only serve high-net-worth individuals
e) Customers can borrow unlimited amounts
Answer Key
Question |
Answer |
Question |
Answer |
|
Section A - 2 Marks |
Section B - 1 Mark |
|||
1 |
c |
1 |
c |
|
2 |
b |
2 |
d |
|
3 |
d |
3 |
b |
|
4 |
b |
4 |
e |
|
5 |
c |
5 |
b |
|
6 |
c |
6 |
c |
|
7 |
c |
7 |
d |
|
8 |
c |
8 |
c |
|
9 |
c |
9 |
e |
|
10 |
c |
10 |
b |
|
11 |
c |
11 |
c |
|
12 |
c |
12 |
b |
|
13 |
b |
13 |
c |
|
14 |
c |
14 |
b |
|
15 |
b |
15 |
d |
|
16 |
c |
|||
17 |
b |
|||
18 |
c |
|||
19 |
c |
|||
20 |
b |
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