First In India Questions and Answers

Answer: A

Bank of Baroda had the highest concentrations of operations with 46 branches, 8 subsidiaries, 3 representative offices and 1 joint venture bank, followed by State Bank of India with 42 branches, 5 subsidiaries, 4 joint ventures and 8 representative offices, and Bank of India with 24 branches, 3 subsidiaries, 1 joint venture bank and 5 representative offices.

Answer: B

The City Union Bank is a private sector bank. The bank 'The Kumbakonam Bank Limited', as it was called then, was organized as a limited company on the 31st of October, 1904. In the beginning it was a regional bank but steadily built for itself a place in the Delta District of Thanjavur.

Answer: B

Correct answer: 1949

The failures that began in 1913 were followed by decades in which weak, undercapitalised banks continued to collapse - there was no supervisor with power to prevent it. That ended only with the Banking Regulation Act of 1949, which gave the Reserve Bank authority over licensing, capital, management and inspection. Regulation, rather than any single event, is what closed the era of bank failures.

Answer: D

Correct answer: RBI does not regulate the flow of credit

That statement is false, and it inverts one of the RBI's principal functions. Regulating the flow of credit is monetary policy, conducted through the repo rate, the cash reserve ratio, the statutory liquidity ratio and open market operations.

The other three are accurate. The RBI is the bank of issue, holding the sole right to issue currency notes other than the one-rupee note; it is banker to the Government, keeping its accounts and managing its debt; and it is the bankers' bank, holding their reserves and acting as lender of last resort.

Answer: C

Correct answer: Paper gold

Special Drawing Rights are an international reserve asset created by the IMF in 1969 and allocated to member countries in proportion to their quotas. They are called paper gold because they supplement official reserves as gold once did, without being a currency or a claim on the Fund itself - a member may exchange them with another member for freely usable currency. Their value is set from a basket of major currencies.

Answer: C

Correct answer: Double-dip Recession

A double-dip recession is one in which the economy contracts, recovers briefly, and then contracts again before the recovery is established - a W shape rather than the usual V or U. It is more damaging than a single recession of the same total depth, because the second fall arrives when confidence, reserves and policy room have already been spent on the first. Deflation is a fall in the general price level, which is a different phenomenon.

Answer: B

Correct answer: 1850

The Triton Insurance Company, established in Calcutta in 1850, was the first general insurance company in India. It was British-owned, and general insurance in India remained largely in foreign hands until the Indian Mercantile Insurance was founded in 1907 as the first Indian company able to transact all classes of general insurance business.

Answer: D

Correct answer: 12

The number has fallen sharply through consolidation. There were 27 public sector banks until the State Bank associates merged in 2017, leaving 21; Dena and Vijaya Banks merged into Bank of Baroda in 2019, leaving 19; and the four-way amalgamation effective 1 April 2020 - Oriental Bank of Commerce and United Bank into Punjab National Bank, Syndicate into Canara, Andhra and Corporation into Union Bank, Allahabad into Indian Bank - brought the number to 12.

Answer: C

In December, 1997, the Government of India appointed a committee under the chairmanship of Shri M.Narasimham to strengthen the banking system which submitted its report in April, 1998. The government accepted some of its recommendations, viz. prudential accounting norms, and classification of government-guaranteed advances.

Answer: D

The Money market in India is the money market for short-term and long-term funds with maturity ranging from overnight to one year in India including financial instruments that are deemed to be close substitutes of money.