Q.1 When was the Reserve Bank of India (RBI) established?
1930
1935
1947
1950
Explanation - The RBI was established on April 1, 1935 under the Reserve Bank of India Act, 1934.
Correct answer is: 1935
Q.2 The Reserve Bank of India was nationalized in which year?
1947
1949
1951
1955
Explanation - The RBI was nationalized on January 1, 1949, two years after India gained independence.
Correct answer is: 1949
Q.3 Who was the first Governor of the Reserve Bank of India?
C. D. Deshmukh
Sir Osborne Smith
Benegal Rama Rau
M. Narasimham
Explanation - Sir Osborne Smith, a British banker, was the first Governor of RBI from 1935 to 1937.
Correct answer is: Sir Osborne Smith
Q.4 Who was the first Indian Governor of the Reserve Bank of India?
C. D. Deshmukh
Benegal Rama Rau
K. G. Ambegaonkar
R. N. Malhotra
Explanation - C. D. Deshmukh became the first Indian Governor of the RBI in 1943.
Correct answer is: C. D. Deshmukh
Q.5 The Reserve Bank of India was originally set up based on the recommendations of which commission?
Hilton Young Commission
Hunter Commission
Simon Commission
Radcliffe Commission
Explanation - The Hilton Young Commission (1926) recommended the creation of a central bank for India.
Correct answer is: Hilton Young Commission
Q.6 Where is the headquarters of the Reserve Bank of India located?
New Delhi
Kolkata
Mumbai
Chennai
Explanation - The headquarters of the RBI is in Mumbai, Maharashtra.
Correct answer is: Mumbai
Q.7 The Reserve Bank of India is responsible for issuing which of the following?
All coins and banknotes
Only coins
Only banknotes (except ₹1)
Foreign currency notes
Explanation - RBI issues all currency notes except the ₹1 note and coins, which are issued by the Ministry of Finance.
Correct answer is: Only banknotes (except ₹1)
Q.8 Which department of RBI handles the issuance of currency notes?
Monetary Policy Department
Issue Department
Banking Regulation Department
Currency Management Department
Explanation - The Issue Department of RBI is responsible for currency issuance and management.
Correct answer is: Issue Department
Q.9 What is the main function of the RBI’s Monetary Policy Committee (MPC)?
To decide tax rates
To decide repo rates
To control fiscal deficit
To print currency
Explanation - The MPC decides key policy rates such as the repo rate to control inflation and liquidity.
Correct answer is: To decide repo rates
Q.10 Who chairs the Monetary Policy Committee (MPC)?
Finance Minister
Governor of RBI
Prime Minister
Chief Economic Adviser
Explanation - The RBI Governor is the ex-officio Chairperson of the MPC.
Correct answer is: Governor of RBI
Q.11 What is the current legal tender in India?
Gold and Silver
Indian Rupee
US Dollar
Special Drawing Rights
Explanation - The Indian Rupee, issued by the RBI, is the legal tender in India.
Correct answer is: Indian Rupee
Q.12 Which Act governs the functioning of the Reserve Bank of India?
Banking Regulation Act, 1949
Reserve Bank of India Act, 1934
Companies Act, 1956
Securities Act, 1992
Explanation - RBI’s operations are primarily governed by the RBI Act, 1934.
Correct answer is: Reserve Bank of India Act, 1934
Q.13 What is the full form of SLR in banking?
Statutory Liquidity Ratio
Special Lending Rate
Standard Loan Ratio
Savings and Lending Rate
Explanation - SLR is the percentage of deposits that banks must maintain in liquid assets before giving credit.
Correct answer is: Statutory Liquidity Ratio
Q.14 Which of the following instruments is NOT a tool of monetary policy?
Repo rate
Reverse repo rate
Fiscal deficit
Cash reserve ratio
Explanation - Fiscal deficit is a fiscal policy tool, not a monetary one. Monetary tools are managed by the RBI.
Correct answer is: Fiscal deficit
Q.15 The Reserve Bank of India acts as a banker to which of the following?
Only commercial banks
Only state governments
Central and state governments
Only central government
Explanation - RBI acts as a banker to both the central and state governments as per the RBI Act.
Correct answer is: Central and state governments
Q.16 Which of the following rates is decided by the RBI?
Base rate
Prime lending rate
Repo rate
Overnight call rate
Explanation - Repo rate is the rate at which RBI lends money to commercial banks and is determined by RBI.
Correct answer is: Repo rate
Q.17 When was the Monetary Policy Committee (MPC) formed?
2012
2014
2016
2018
Explanation - The MPC was constituted in 2016 under the amended RBI Act, 1934.
Correct answer is: 2016
Q.18 Which of the following is a quantitative instrument of monetary policy?
Credit rationing
Moral suasion
Cash Reserve Ratio
Margin requirements
Explanation - CRR is a quantitative instrument affecting the total volume of credit in the economy.
Correct answer is: Cash Reserve Ratio
Q.19 The term 'LAF' used by the RBI stands for what?
Liquidity Adjustment Facility
Loan Adjustment Framework
Lending Arrangement Facility
Liquidity Allocation Fund
Explanation - LAF is a tool used by RBI to control liquidity in the banking system through repo and reverse repo operations.
Correct answer is: Liquidity Adjustment Facility
Q.20 Which of the following statements about RBI is TRUE?
RBI is a public limited company
RBI is a statutory body
RBI is a private company
RBI is a constitutional body
Explanation - RBI was established under the RBI Act, 1934, making it a statutory body.
Correct answer is: RBI is a statutory body
Q.21 Which of the following is NOT a function of the RBI?
Controlling credit
Acting as custodian of foreign exchange
Formulating fiscal policy
Issuing currency
Explanation - Fiscal policy is formulated by the government, not the RBI.
Correct answer is: Formulating fiscal policy
Q.22 RBI’s primary objective in monetary policy is to maintain:
Price stability
High employment
Fiscal deficit
Trade surplus
Explanation - The main goal of RBI’s monetary policy is maintaining price stability while supporting growth.
Correct answer is: Price stability
Q.23 Which of the following is NOT managed by the RBI?
Foreign exchange reserves
Public debt
Government subsidies
Monetary policy
Explanation - Government subsidies are managed by the Ministry of Finance, not the RBI.
Correct answer is: Government subsidies
Q.24 Which of the following departments regulates Non-Banking Financial Companies (NBFCs)?
Department of Banking Regulation
Department of Non-Banking Supervision
Department of Economic Policy
Department of Financial Services
Explanation - The Department of Non-Banking Supervision of RBI regulates and supervises NBFCs in India.
Correct answer is: Department of Non-Banking Supervision
Q.25 Which of these committees recommended the establishment of the Deposit Insurance Corporation in India?
Narasimham Committee
Gadgil Committee
Raghuram Rajan Committee
Chakravarty Committee
Explanation - The Gadgil Committee recommended establishing a deposit insurance corporation, which led to the formation of DICGC in 1962.
Correct answer is: Gadgil Committee
Q.26 RBI regulates the credit flow to various sectors through which mechanism?
Credit rationing
Deficit financing
Monetary targeting
Fiscal deficit control
Explanation - Credit rationing is used by RBI to control and direct the flow of credit to specific sectors.
Correct answer is: Credit rationing