IBPS Placement-Paper : Banking Awareness

Reserve Bank of India- Monetary and Credit Policies (1999-2012)

Dr. D. Subbarao, RBI Governor announces the First Quarter Review of Monetary Policy for the year 2011-12 …
Bank Rate & CRR retained at 6.0%.However policy repo rate increased by 50 basis points
RBI increase the repo rate under LAF by 25 basis points to 7.5 per cent in Mid-Quarter Monetary Policy Review: June 2011 .
RBI announces Annual Monetary Policy Statement for the Year 2011-12

Policy repo rates hiked 50 bps, Bank Rate & CRR retained at 6%, Savings Bank Interest increased to 4%

Reserve Bank of India (RBI) Extends Liquidity Management Measures up to May 6, 2011The Reserve Bank of India releases Mid-Quarter Monetary Policy Review: March 2011RBI increases the repo & reverse repo rates by 25 basis points

Repo & Reverse Repo rates hiked by 25bp but CRR & bank rate retained at 6%

Bank Rate & CRR retained at 6.0%.However, repo & reverse repo rate increased by 25 basis points

General Awareness Questions

1    RBI, in its annual policy for 2011-12, has estimated the wholesale price inflation at about which among the following fractions by March 2012?





2     Who amongst the following was India’s official candidate for the post of UNO’s Secretary Gene- ral ?
(A) Mr. Shyam Saran
(B) Dr. C. Rangarajan
(C) Mr. Shashi Tharoor
(D) Mr. Vijay Nambiar
(E) None of these
Ans (C) Mr. Shashi Tharoor

3     In India Census is done after a gap of every____________
(A) Five years
(B) Seven years
(C) Eight years
(D) Ten years
(E) Fifteen years
Ans (D) Ten years
4     Which of the following pheno-menon is considered responsible for ‘Global Warming’?
(A) Greenhouse Gas Effect
(B) Fox Fire
(C) Dry Farming
(D) Radioactivity
(E) None of these
Ans (A) Greenhouse Gas Effect

5     Which of the following Satellites recentlydedicatedtonation helps Direct to Home Television Ser-vice in India ?
(A) Matsat
(B) Edusat
(C) Insat–4b
(D) Insat–IB
(E) None of these
Ans (C) Insat–4b

6     The Reserve Bank of India (RBI) recently raised the interest rate on savings bank deposits and the repo rate by 50 basis points (bps). In this context, consider the following:

1. CASA Ratio

2. Net Interest Margin

Which among the above of the commercial banks would be affected by the above

step taken by the Reserve Bank of India ?

(A)Only 1

(B)Only 2

(C)Both 1 & 2

(D)Neither 1 nor 2
Ans C Both1 & 2

7    The purchase of shares and bonds of Indian companies by Foreign Institutional Investors is called?


[B]Portfolio Investment

[C]NRI Investment

[D]Foreign Indirect Investment
Ans [D]Foreign Indirect Investment

8     In which year, the World Bank revised the common international poverty line to $1.25 at the 2005 purchasing power parity?




Answer [C]2008

9    As per the recent estimates, India’s overall foodgrain production is expected to be 241.56 million tonnes, which is highest ever. Which among the following shares the maximum quantity in this ?



[C]Coarse cereals


10. Recently RBI governor D Subbarao has pointed out that “recent global macro economic developments pose some risks to domestic growth.” What does he refer to by using the term “domestic growth”?

(A)Per Capita Income

(B)Gross Domestic Product

(C)Net National product

(D)Net National Product per capita
Ans (B)Gross Domestic Product

11     Lending rates are expected to rise further in the coming months because the Reserve Bank of India (RBI) is likely to ………………….. Which among the following would fill the space correctly?

(A)Increase policy rates

(B)Decrease Policy Rates

(C)Conduct Open Market Operations

(D)Conduct Repo Auctions
Ans (A)Increase policy rates

12 .    Recently we read in the newspapers that in the country , there are undoubtedly, negative risks to the fiscal deficit target of 4.6 per cent for 2011-12. Which among the following does not poses such risk to the fiscal deficit targets?

(A)The higher Fuels, Food and Fertilizers prices

(B)Burden of Subsidy

(C)Low collection of Tax Revenue

(D)Lower external commercial borrowings
Ans (D)Lower external commercial borrowings

13    What was the initial growth target of the Eleventh Plan (2007-08 to 2011-12) on an average a year?




Ans (C)9%

14    In the first four years of the Eleventh Plan, Indian economy expanded by which among the following fractions?




Ans (A)8.15%

15     OPEC is a group of countries which are_______
(A) exporting oil
(B) producting cotton
(C) rich and developed
(D) developing and poor
(E) nuclear powers
Answer (A) exporting oil

16    Recently we read in the newspapers that World Bank has now endorsed a longstanding proposal that governments should impose a carbon levy. What is Carbon Levy?

(A)It’s a tax levied on jet and shipping fuel to finance climate change mitigation

(B)It’s a tax levied on carbon fuel

(C)It’s a tax levied on production of fossil fuel and coal

(D)It’s a tax levied on production of coal only
Ans (B)It’s a tax levied on carbon fuel

17     Sandhyarani Devi Wangkhem, was a winner of a Silver Medal in the 2010 Asian Games in Guangzhou , China . In which sports she won this medal?




Ans (D)Wushu

18:     Who is the VC and CEO of HDFC bank?
Keki Mistry

19     Which bank has entered into pact with SBI Mutual Fund?
Indian Bank

20    ASBA (application Supported by Blocked Amounts) is a term used in which of the following sectors?
(a) Aviation
(b) Real Estate
© Insurance
(d) Capital Markets
Ans (d) Capital Markets

21    Which of the following started production at India’s largest naphtha cracker project recently?
(a) ONGC
(b) Essar Oil
© Indian Oil
(d) Reliance Industries Ltd
Ans Indian Oil

22    Which of the following is/are correctly matched after RBI’s ‘Third Quarter Review of Monetary Policy 2010-11’ on January 26, 2011?
I. Repo rate – 6.5%
II. Reserve Repo rate – 5.5%
III. Cash Reserve Ratio – 6%
(a) I only
(b) I and II only
(c) II and III only
(d) I, II and III
Ans (d) I, II and III
(d) Rs 902000 crore

23    The union finance Ministry raised the tax collection target for 2010-11 to _________ recently.
(a) Rs 782000 crore
(b) Rs 834000 crore
© Rs 871000 crore
(d) Rs 902000 crore
Ans(a) Rs 782000 crore

24     Which of the following became the first oil & Gas Company to find shale gas deposits in India recently?

(a) Reliance Industries Ltd.

(b) Carin India

© Essar Oil

(d) ONGC
Ans (d) ONGC

25 . Who among the following has been recently appointed as chairman of Central Board of Direct Taxes?

(A)Prakash Chandra

(B)Sudhir Chandra

(C)Satyanand Mishra

(D)Sri Kumar
Ans (A)Prakash Chandra

26     According to the state-wise cotton crop data released by the Agriculture Ministry for 2010-11 on 25 July 2011 which variety of cotton emerged as the largest cotton crop in all the major cotton producing states?
a. V-797
b. RS2013
c. Digvijay
d. Bt cotton
Ans: (d) Bt cotton

27     The Reserve Bank of India (RBI) in a bid to tame inflationary pressure hiked the short-term indicative policy rate (repo rate) by 50 basis points on 26 July 2011. The repo rate currently stands at what percentage?
a. 7%
b. 7.5%
c. 8%
d. 8.5%
Answer: (c) 8%
28    The Union government on 26 July 2011 announced restoration of the popular duty entitlement pass book (DEPB) scheme for export of cotton. Which of the following is/are not true with regard to the following?
1. Restoration of the popular duty entitlement pass book (DEPB) scheme was announced for export of cotton with retrospective effect from 1 April 2011 and on cotton yarn from 1 October 2010.
2. Cotton yarn had been placed under Open General Licence for exports from 1 October 2011.
3. Exports of cotton were dis-incentivised by virtue of export tax, following a sharp rise in prices in January 2011.
4. Restrictions continue to remain on export of cotton, that is, 65 lakh bales this year.
a. Only 1
b. Only 2
c. Both 1 & 2
d. Only 4
Ans: (b) Only 2

29    Who among the following had written the books “Reintegrating India with the World Economy’ and ‘Understanding Reforms’.?

(A)C Rangrajan

(B)Amartya Sen

(C)Suresh Tendulkar

(D)C K Prahalad

Ans (C)Suresh Tendulkar

30. As per the recent Data released by the Central Statistical Organization, what is India ’s Percapita income in 2010-11?

(A)Rs. 54835

(B)Rs. 52165

(C)Rs. 56115

(D)Rs. 50143

Ans (A)Rs. 54835

 The RBI decreased the RR (Repo Rate) and the RRR (Reverse Repo Rate) by 50 basis points on April 17, 2012. The Reserve Bank of India cut the repurchase rate to 8.00%.

Repo Rate, or repurchase rate, is the rate at which RBI lends to banks for short periods. This is done by RBI buying government bonds from banks with an agreement to sell them back at a fixed rate. If the RBI wants to make it more expensive for banks to borrow money, it increases the repo rate. Similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.
Please note that Bank Rate and Repo Rate seem to be similar terms because in both of them RBI lends to the banks. However, Repo Rate is a short-term measure and it refers to short-term loans and used for controlling the amount of money in the market, Bank Rate is a long-term measure and is governed by the long-term monetary policies of the RBI. In broader term, bank rate is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. RBI uses this tool to control the money supply.
How Repo Rate Works?
When RBI reduces the Repo Rate, the banks can borrow more at a lower cost. This contributes to lowering of the rates. The effects can be seen on the markets in short term.

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