JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-27

21/03/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-27

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB IE&IFS MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB IE&IFS quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

Q.1 Which commission’s recommendations played a crucial role in the establishment of the Reserve Bank of India?
A) Montagu-Chelmsford Reforms
B) Hilton-Young Commission
C) Simon Commission
D) Macaulay Commission

Q.2 When was the Reserve Bank of India nationalized, becoming a government-owned institution?
A) 1st April 1935
B) 15th August 1947
C) 1st January 1949
D) 26th January 1950

Q 3 Which of the following statements about the Reserve Bank of India (RBI) is NOT correct?
A) RBI was initially established as a private statutory company.
B) RBI’s headquarters was permanently moved to Mumbai in 1937.
C) RBI served as the central bank for Burma until 1950.
D) The Governor and Deputy Governors of RBI are appointed by the Union Government.

Q.4 Which of the following is NOT an objective of the Reserve Bank of India as stated in the RBI Act, 1934?
A) Regulating the issue of banknotes and maintaining monetary stability
B) Ensuring stable payment systems for safe and efficient financial transactions
C) Promoting the development of financial markets and systems
D) Directly providing credit to businesses and industries for economic growth

Q.5 Which of the following statements about India’s Monetary Policy Committee (MPC) is correct?
A) The MPC consists of only RBI officials.
B) The MPC determines the policy interest rate to achieve the inflation target set by the Government.
C) The MPC meets once every quarter to review the monetary policy.
D) The MPC was set up under the Banking Regulation Act, 1949

Q.6 Which of the following is NOT an objective of monetary policy in India?
A) Maintaining price stability
B) Ensuring adequate flow of credit to productive sectors
C) Achieving a fixed exchange rate for the Indian Rupee
D) Maintaining financial stability

Q.7 Which of the following statements regarding the Cash Reserve Ratio (CRR) is correct?
A) CRR is the proportion of a bank’s net demand and time liabilities that must be kept in gold reserves.
B) RBI pays interest on the CRR balances maintained by Scheduled Commercial Banks (SCBs).
C) CRR is maintained by banks in the form of cash deposits with the Reserve Bank of India.
D) CRR has a fixed floor and ceiling rate as per the RBI Act, 1934

Q.8 Which of the following assets is NOT eligible for maintaining the Statutory Liquidity Ratio (SLR)?
A) Government securities
B) Gold valued at a price not exceeding the current market price
C) Corporate bonds rated AAA by credit agencies
D) Cash reserves

Q.9 What is the primary purpose of the Liquidity Adjustment Facility (LAF) operated by the Reserve Bank of India?
A) To regulate foreign exchange reserves
B) To inject or absorb liquidity in the banking system through repos and reverse repos
C) To determine the Statutory Liquidity Ratio (SLR) of banks
D) To control inflation by directly setting lending rates for commercial banks

Q.10 How does a change in the Repo Rate under the Liquidity Adjustment Facility (LAF) impact the financial market?
A) It directly influences short-term money market interest rates, affecting overall monetary policy transmission.
B) It has no impact on borrowing costs for commercial banks.
C) It determines the exchange rate of the Indian Rupee against foreign currencies.
D) It is primarily used to regulate long-term interest rates in the economy.

Q.11 What is the primary objective of the Reserve Bank of India’s Open Market Operations (OMO)?
A) To regulate the demand and supply of foreign exchange in the economy
B) To manage liquidity in the banking system through outright purchase or sale of government securities
C) To provide long-term loans to commercial banks at concessional rates
D) To directly control inflation by fixing the interest rates for all loans in the economy

Q.12 Which of the following statements regarding the Marginal Standing Facility (MSF) and Standing Deposit Facility (SDF) is correct?
A) Under MSF, banks can borrow overnight funds from RBI, even by dipping into their SLR portfolios, up to 2% of their Net Demand and Time Liabilities (NDTL).
B) SDF was introduced in 2016 to replace the Repo Rate as the main liquidity tool.
C) MSF serves as the lower bound (floor) of the policy rate corridor, while SDF serves as the upper bound (cap).
D) Balances maintained by banks under MSF qualify as part of their Statutory Liquidity Ratio (SLR) requirement

Q.13 What is the primary purpose of the Market Stabilisation Scheme (MSS) introduced by the Reserve Bank of India in 2004?
A) To raise funds for the Central Government’s fiscal expenditure
B) To absorb excess liquidity in the economy through the issuance of treasury bills and dated securities
C) To provide long-term financing to commercial banks at concessional rates
D) To regulate foreign exchange reserves and stabilize the Indian Rupee

Q.14 What is the key objective of the Long-Term Repo Operation (LTRO) and Targeted Long-Term Repo Operations (TLTRO) introduced by the RBI?
A) To provide long-term liquidity at variable interest rates to curb inflation
B) To ensure the availability of durable liquidity at reasonable costs, facilitating monetary policy transmission and credit flow
C) To regulate foreign exchange rates by stabilizing the Indian Rupee against the US Dollar
D) To provide short-term liquidity to commercial banks for overnight lending

Q.15 Which of the following statements is correct regarding the issuance of paper currency in India?
A) The Paper Currency Act of 1861 granted the Government of India a monopoly over printing currency.
B) The Reserve Bank of India (RBI) has always had the exclusive right to issue all currency notes, including coins.
C) The first paper currency issued by the RBI was the Rs 1 note in 1935.
D) The Re 1 note is signed by the RBI Governor, as it is a legal tender issued by the Reserve Bank of India.

Q.16 Which of the following statements correctly describes the regulatory framework of Urban Cooperative Banks (UCBs) in India?
A) UCBs are entirely regulated and supervised by the Reserve Bank of India (RBI) for both banking and managerial functions.
B) Only multi-state UCBs are included in the second schedule of the RBI Act, 1934, irrespective of their Net Demand and Time Liabilities (NDTL).
C) RBI regulates the banking operations of UCBs, while their managerial aspects fall under the jurisdiction of state governments through cooperative societies acts.
D) UCBs are required to have a minimum NDTL of Rs 500 crore to be included in the second schedule of the RBI Act, 1934.

Q.17 Which of the following is a key reform accepted by RBI from the recommendations of the N. S. Vishwanathan Committee on the Revised Regulatory Framework for Urban Cooperative Banks (UCBs)?
A) Minimum net worth of Rs 5 crore for all Tier 1 UCBs, regardless of their area of operation.
B) Minimum Capital to Risk-weighted Assets Ratio (CRAR) requirement for Tier 1 UCBs increased to 12%.
C) UCBs must assign risk weights on housing loans solely based on the Loan to Value (LTV) Ratio.
D) Revaluation Reserves will not be considered as part of Tier-I capital under any circumstances.

Q.18 Which of the following statements correctly describes the organisational setup of the Securities and Exchange Board of India (SEBI)?
A) SEBI is headed by a chairman and supported by 5 full-time members and 3 part-time members.
B) The full-time members of SEBI are supported by Executive Directors and other officials.
C) All members of SEBI, including the chairman, are appointed directly by the Reserve Bank of India (RBI).
D) SEBI has no part-time members; all members serve on a full-time basis

Q.19 Which of the following is NOT a function of the Insurance Regulatory and Development Authority of India (IRDAI)?
A) Regulating and promoting the insurance and reinsurance business in India.
B) Protecting the interests of policyholders by ensuring fair treatment and transparency.
C) Issuing currency notes and regulating monetary policy.
D) Synchronizing the Indian insurance market with the global insurance market

Q.20 What was the primary objective of the Malhotra Committee, formed in 1993?
A) To regulate the stock market and ensure investor protection.
B) To reform and restructure the insurance sector in India.
C) To introduce new monetary policy measures for financial stability.
D) To privatize all public sector financial institutions in India

Q.21 Which of the following was NOT a recommendation of the Malhotra Committee regarding competition in the insurance sector?
A) Allowing private insurance companies with a minimum paidup capital of ₹100 crores to enter the industry.
B) Allowing a company to operate in both Life and General Insurance under a single entity.
C) Permitting foreign companies to enter the Indian insurance sector through joint ventures with domestic firms.
D) Establishing an independent Insurance Regulatory Body

Q.22 Which of the following is NOT a function of the Pension Fund Regulatory and Development Authority (PFRDA)?
A) Regulating and developing the pension sector in India.
B) Managing and directly disbursing pension funds to retirees.
C) Appointing intermediaries such as Pension Fund Managers and Central Record Keeping Agencies.
D) Addressing grievances and disputes related to pension schemes

Q.23 What is the primary role of the Central Record Keeping Agency (CRA) in the National Pension System (NPS)?
A) Managing investment decisions on behalf of subscribers.
B) Acting as an intermediary between PFRDA and other entities while maintaining records of NPS subscribers.
C) Directly disbursing pension payouts to retired individuals.
D) Formulating policies for pension fund regulation in India

Answer:

Q1: B
Q2: C
Q3: C
Q4: D
Q5: B
Q6: C
Q7: C
Q8: C
Q9: B
Q10: A
Q11: B
Q12: A
Q13: B
Q14: B
Q15: A
Q16: C
Q17: C
Q18: B
Q19: C
Q20: B
Q21: B
Q22: B
Q23: B