Miscellaneous Questions and Answers

Answer: B

Correct answer: Bank of Hindustan

The Bank of Hindustan, established at Calcutta in 1770, was the first bank in India. It failed in 1832. The General Bank of India followed in 1786, and the Bank of Calcutta - later the Bank of Bengal, and an ancestor of the State Bank of India - in 1806.

Answer: B

Correct answer: Dadabhai Naoroji

Dadabhai Naoroji set out the drain theory in Poverty and Un-British Rule in India (1901): a substantial part of India’s wealth was transferred to Britain each year - as home charges, salaries and pensions, and profits - without any equivalent return, and that unrequited transfer was the cause of Indian poverty. R. C. Dutt developed the argument, but Naoroji originated it.

Answer: B

Correct answer: Finance Secretary

The one-rupee note is issued by the Government of India, not by the Reserve Bank, so it bears the signature of the Finance Secretary. Every other denomination is issued by the RBI and carries the Governor’s signature.

Answer: B

Correct answer: 1955

The Imperial Bank of India was nationalised in 1955 and renamed the State Bank of India, on the recommendation of the All India Rural Credit Survey. The object was to extend banking into the countryside, which the Imperial Bank, as a commercial institution, had not done.

Answer: A

Correct answer: Money Transfer Service Scheme

MTSS is the RBI-approved channel for receiving personal remittances from abroad in India - money sent by a person overseas and paid out in rupees at an agent’s counter. It is for personal remittances only: donations, trade payments and business transactions are excluded, and there are limits on the amount and the number of transactions a year.

Answer: D

Correct answer: Advocates of globalisation argue that it will result in cultural homogenisation.

The other three statements pair each argument with the side that actually makes it. Advocates argue for economic growth, through wider markets, specialisation and the movement of capital to where it is most productive. Critics argue that the gains are unevenly shared, producing greater disparity between and within countries; and it is the critics, not the advocates, who complain of cultural homogenisation - local languages, food and custom giving way to a global consumer culture. Attributing that complaint to globalisation's advocates is the statement that does not hold.

Answer: C

Correct answer: Foreign Exchange Management Act

Hawala transfers money across borders outside the banking system and without any foreign exchange actually crossing it, which makes it a contravention of the Foreign Exchange Management Act, 1999 (and before that of FERA). Because it leaves no audit trail it is also a route for money laundering, so the Prevention of Money Laundering Act bears on it too.

Answer: A

Correct answer: Education of children between 6-14 years

Sarva Shiksha Abhiyan, launched in 2001, aims at universal elementary education for all children aged 6 to 14. It became the vehicle for implementing the Right to Education Act, 2009, which made that schooling a fundamental right.

Answer: C

Correct answer: Deposit Insurance and Credit Guarantee Corporation

DICGC, a wholly owned subsidiary of the RBI, insures bank deposits - up to ₹5 lakh per depositor per bank since 2020. The cover exists so that ordinary depositors need not judge a bank’s soundness for themselves, which is also what prevents runs.

Answer: C

Correct answer: Credit Default Swap

A credit default swap is insurance against a borrower’s default: the buyer pays a periodic premium and the seller compensates them if the reference entity fails. Its role in the 2008 crisis came from being sold in enormous volume by parties who had not reserved against having to pay.