This Banking & Financial Awareness quiz on Functions of the Reserve Bank of India puts 12 multiple-choice questions to you, the verified MCQs published with GK24's note on the topic, 3 of them asked in real previous-year papers. Every question carries a full explanation of why the correct option is right and why the other options are wrong, so you learn the fact behind the answer rather than the letter. Attempt it right after reading the note, keep to the timer, and use the explanations at the end to mark what needs another look. Sit it again before the exam as a quick revision of the topic.
12 questions with answers and explanations
In which year was the RBI nationalised?
The Reserve Bank of India began as a shareholders' bank and was taken into public ownership on 1 January 1949 under the Reserve Bank (Transfer to Public Ownership) Act, 1948.
Read the full explanation →The legal provisions governing the management of foreign exchange reserves are laid down in the Reserve Bank of India Act, ______.
The Reserve Bank of India Act, 1934 is the statute that created the Bank and it carries the provisions on the custody and deployment of the country's foreign exchange reserves, which the Bank holds and invests.
Read the full explanation →Which of these institutions fixes the Repo Rate and the Reverse Repo Rate in India?
Policy rates are announced by the Reserve Bank, and since 2016 the decision is taken by its Monetary Policy Committee of six members under the chairmanship of the Governor.
Read the full explanation →The Reserve Bank of India commenced its operations on
The Reserve Bank of India Act was passed in 1934 and the Bank began work on the first day of April in the following year, with its central office at Calcutta.
Read the full explanation →The establishment of the Reserve Bank of India was recommended by which commission?
Formally the Royal Commission on Indian Currency and Finance, it reported in 1926 and recommended that the currency and credit functions then divided between the Government and the Imperial Bank be placed in a single central bank.
Read the full explanation →Who was the first Governor of the Reserve Bank of India?
He was the first Governor of the Reserve Bank, taking charge when the Bank opened in 1935, and he had earlier been a managing governor of the Imperial Bank of India.
Read the full explanation →Which of the following is NOT issued by the Reserve Bank of India?
The one rupee note is issued by the Government of India through the Ministry of Finance and carries the signature of the Finance Secretary, not of the Governor.
Read the full explanation →How many members does the Monetary Policy Committee of the Reserve Bank of India have?
The Committee was created by the amendment of the Reserve Bank of India Act in 2016.
Read the full explanation →When the Reserve Bank of India lends to a sound bank that cannot raise funds elsewhere, it is performing the function of
It is the classic central bank function: when a bank is solvent but short of cash and neither the market nor other banks will lend to it, the Reserve Bank lends against eligible securities so that a local shortage does not turn into a general panic and a run on…
Read the full explanation →Under the Minimum Reserve System followed since 1957, the Reserve Bank of India must hold assets of at least
Since 1957 India has followed the Minimum Reserve System of note issue, under which the Reserve Bank must keep assets worth at least two hundred crore rupees against the notes in circulation, of which gold must be worth at least one hundred and fifteen crore rupees and the remainder may…
Read the full explanation →The authority of the Reserve Bank of India to regulate and supervise payment systems in India flows from which law?
It makes the Reserve Bank the designated authority for the regulation and supervision of payment systems in India, so that no person may operate a payment system without its authorisation.
Read the full explanation →The central office of the Reserve Bank of India was shifted from Calcutta to Bombay in which year?
The Reserve Bank opened at Calcutta in 1935 and moved its central office permanently to Bombay two years later, which is where the Governor sits and where policy is announced.
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