1. Who regulates the "Nidhi Companies"?
Ministry of Corporate Affairs (MCA) primarily, with RBI regulating deposit taking.
State Governments
RBI only
SEBI
Explanation:
Nidhi companies are governed by the MCA under the Companies Act. However, the RBI has powers to issue directions regarding their deposit acceptance activities to protect depositors.
2. BRBNMPL is a subsidiary of RBI. What is its full form?
Bank Reserve Bond National Management Private Limited
Bharatiya Reserve Bank Note Mudran Private Limited
Bharat Rural Bank Note Management Private Limited
Bharatiya Reserve Bank Network Management Private Limited
Explanation:
BRBNMPL was established by RBI in 1995 to manage the currency note printing presses at Mysore and Salboni.
3. SEBI has been mandated to ensure market integrity and transparency under the:
PMLA Act
FEMA Act
SEBI Act, 1992
Companies Act, 2013
Explanation:
The **SEBI Act, 1992** provides the statutory framework for the establishment, powers, and functions of the Securities and Exchange Board of India. It explicitly mandates SEBI to protect the interests of investors in securities, promote the development of the securities market, and regulate it to ensure market integrity, transparency, and fair practices.
4. Which organization is responsible for granting licenses to new commercial banks in India?
SEBI
Indian Banks’ Association (IBA)
Ministry of Finance
Reserve Bank of India (RBI)
Explanation:
The **Reserve Bank of India (RBI)** is the sole authority vested with the power to grant licenses for commencing banking business in India. This power is derived from **Section 22 of the Banking Regulation Act, 1949**. No company can carry on banking business in India without a license issued by the RBI, ensuring strict regulatory oversight.
5. Which regulator is responsible for promoting and ensuring the orderly growth of the insurance sector?
PFRDA
SEBI
IRDAI
Ministry of Finance
Explanation:
The **Insurance Regulatory and Development Authority of India (IRDAI)** is the statutory body formed under the IRDA Act, 1999. Its preamble explicitly states its mission: "to protect the interests of the holders of insurance policies, to regulate, promote and ensure **orderly growth of the insurance industry**." It covers life, non-life, and health insurance sectors.
6. The legal basis for PFRDA’s regulatory powers is provided by the:
RBI Act
IRDAI Act
Pension Fund Act, 1999
PFRDA Act, 2013
Explanation:
Although the Pension Fund Regulatory and Development Authority (PFRDA) was initially established through an executive order in 2003 to oversee the National Pension System (NPS), it received its full **statutory status** and legal powers only after the passage of the **PFRDA Act, 2013**. This Act empowers PFRDA to regulate, promote, and ensure the orderly growth of the National Pension System.
7. Which regulator is responsible for promoting orderly and healthy growth of the Capital Market?
Explanation:
The **Securities and Exchange Board of India (SEBI)** is the designated regulator for the **Capital Market** (Securities Market). Its statutory mandate includes three key objectives: to protect the interests of investors in securities, to promote the development of the securities market, and to regulate the securities market to ensure it functions in an orderly and healthy manner.
8. The primary responsibility for Anti-Money Laundering (AML) enforcement related to illegal funds lies with the:
Central Bureau of Investigation (CBI)
RBI
Enforcement Directorate (ED)
Financial Intelligence Unit (FIU-IND)
Explanation:
While the RBI sets KYC/AML guidelines and FIU-IND analyzes suspicious transactions, the **Directorate of Enforcement (ED)** is the specialized financial investigation agency under the Ministry of Finance. It has the primary statutory power to investigate and prosecute cases of Money Laundering under the **Prevention of Money Laundering Act (PMLA), 2002**, including the attachment and confiscation of property derived from crime.
9. The International Financial Services Centres Authority (IFSCA) was established to regulate financial services in:
International Financial Services Centres (IFSCs) like GIFT City.
Special Economic Zones (SEZs) only.
Foreign banks operating in rural India.
All Metropolitan cities in India.
Explanation:
IFSCA is a unified authority established to regulate all financial services in International Financial Services Centres (IFSCs) in India. Prior to its establishment, domestic regulators like RBI, SEBI, PFRDA, and IRDAI regulated business in IFSCs. The first IFSC in India has been set up at GIFT City, Gandhinagar, Gujarat.
10. The National Bank for Financing Infrastructure and Development (NaBFID) was set up as a:
Private Commercial Bank
Development Financial Institution (DFI)
Small Finance Bank
Cooperative Society
Explanation:
NaBFID was established by an Act of Parliament in 2021 as a specialized Development Financial Institution (DFI) to support the country's infrastructure sector, bridging the gap for long-term non-recourse finance.
11. The "Base III" norms in banking are primarily concerned with:
Computerization of bank branches.
Providing loans to the poor.
Opening ATMs in rural areas.
Improving risk management and capital adequacy of banks.
Explanation:
Basel III is a global regulatory framework that mandates banks to maintain higher capital (CAR), leverage ratios, and liquidity (LCR/NSFR) to withstand financial stress and prevent systemic failure.
12. The "Regulatory Sandbox" framework introduced by RBI is aimed at:
Regulating the sand mining industry.
Providing loans to sandbox manufacturers.
Relaxing KYC norms for all banks.
Live testing of new financial products/services in a controlled environment.
Explanation:
A Regulatory Sandbox allows FinTech companies to test innovative products with real customers under regulatory supervision but with some relaxed norms for a limited period.
13. Units located in the International Financial Services Centre (IFSC) enjoy a 100% tax holiday on corporate income for a block of:
3 years out of 5 years.
15 years continuously.
5 years out of 10 years.
10 years out of 15 years.
Explanation:
To attract global financial institutions, the government provides a 100% income tax holiday for 10 consecutive years out of a block of 15 years for units in IFSC.
14. The Sub-Committee of the Financial Stability and Development Council (FSDC) is chaired by:
Governor of RBI
Chairman of SEBI
Finance Secretary
Union Finance Minister
Explanation:
While the FSDC is chaired by the Finance Minister, its Sub-Committee, which handles operational coordination, is chaired by the RBI Governor.