The Imperial Bank of India was converted into which bank in 1955?
- A.Reserve Bank of India
- B.Punjab National Bank
- C.State Bank of India
- D.Bank of Baroda
Correct answer
Explanation
The correct answer is C, State Bank of India. The Imperial Bank of India had itself been created in 1921 by merging the three presidency banks, the Bank of Bengal of 1806, the Bank of Bombay of 1840 and the Bank of Madras of 1843. Acting on the recommendation of the All India Rural Credit Survey Committee, the government converted it into the State Bank of India on 1 July 1955 so that a state-owned bank could extend banking into the countryside.
Option A, the Reserve Bank of India, is the central bank and was created separately in 1935; before that the Imperial Bank had performed some central banking duties, which is why it appears as a distractor. Option B, the Punjab National Bank, was founded in 1894 as the first bank started with wholly Indian capital and management and has an independent history. Option D, the Bank of Baroda, was founded in 1908 under the patronage of the Maharaja of Baroda and was nationalised in 1969. The chain to remember is presidency banks, Imperial Bank, State Bank of India.
Read the full article: Money and Banking in India: RBI, Supply and Policy
Practice Questions
View allThe Reserve Bank of India began its operations on which date?
- A.1 April 1935
- B.1 January 1949
- C.1 July 1955
- D.19 July 1969
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The Reserve Bank of India was constituted under the Reserve Bank of India Act of 1934, on the recommendation of the Hilton Young Commission, and started functioning on 1 April 1935 with its central office at Calcutta, which was shifted permanently to Bombay in 1937.
Read the full explanation →In the measurement of money supply in India, which aggregate is known as broad money?
- A.M0
- B.M1
- C.M3
- D.M4
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M3 is M1 plus time deposits with banks, and it is called broad money or the aggregate monetary resource. It is the measure the Reserve Bank follows most closely because it captures both spendable balances and funds held for a fixed term.
Read the full explanation →The repo rate is the rate of interest at which
- A.Commercial banks lend to their prime customers
- B.The Reserve Bank lends short-term funds to banks against government securities
- C.The Reserve Bank borrows surplus funds from commercial banks
- D.Banks pay interest on savings deposits
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In a repurchase or repo transaction a bank sells government paper to the Reserve Bank and agrees to buy it back shortly afterwards at a slightly higher price; the difference works out as interest at the repo rate.
Read the full explanation →How many commercial banks were nationalised in India in the first round of bank nationalisation in July 1969?
- A.Six
- B.Twelve
- C.Fourteen
- D.Twenty
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On 19 July 1969 the government nationalised fourteen of the largest commercial banks in the country, the aim being to take banking to rural areas, direct credit to agriculture and small industry, and end the concentration of bank funds in a few business houses.
Read the full explanation →In India, the one rupee note is issued by
- A.The Reserve Bank of India
- B.The State Bank of India
- C.The Government of India
- D.The Security Printing and Minting Corporation
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The one rupee note and all coins are issued by the Government of India through the Ministry of Finance, and the one rupee note carries the signature of the Finance Secretary rather than that of the Governor of the Reserve Bank.
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