An increase in which of the following ratios would typically indicate an improvement in the asset quality of Public Sector Banks?
A Provision Coverage Ratio (PCR)
B Gross Non-Performing Assets (GNPA) Ratio
C Cost-to-Income Ratio
D Capital Adequacy Ratio (CAR)
Answer: A
The Provision Coverage Ratio (PCR) indicates the proportion of bad loans that a bank has provided for. An increase in PCR signifies that the bank has set aside more funds to cover potential losses from NPAs, thus reflecting better asset quality and a stronger balance sheet.
1512.
Which of the following factors is most likely to contribute significantly to the strong Q2 performance of Public Sector Banks (PSBs) in 2026?
A Sustained improvement in asset quality, leading to lower provisioning requirements.
B A sharp decline in Net Interest Margin (NIM) due to increased competition.
C Reduced focus on retail lending in favor of large corporate loans.
D Increased reliance on non-interest income from trading activities.
Answer: A
A sustained improvement in asset quality, characterized by lower Gross and Net NPAs, directly reduces the need for banks to set aside funds as provisions. This positively impacts profitability and is a key driver for strong financial performance in PSBs.
1513.
Which of the following consumer protection measures is mandated by the RBI's digital lending framework, allowing borrowers a specific period to reconsider their loan?
A A mandatory 'cooling-off' or 'look-up' period during which borrowers can exit the loan by paying the principal and proportionate Annual Percentage Rate (APR) without penalty.
B A provision for automatic loan forgiveness if the borrower faces financial hardship within the first month.
C The right to transfer the loan to another digital lending platform without any processing fees.
D A guarantee that the interest rate will not increase for the entire loan tenure, regardless of market conditions.
Answer: A
The RBI's digital lending guidelines mandate a 'cooling-off' or 'look-up' period. This period allows borrowers to exit the loan by repaying the principal along with the proportionate Annual Percentage Rate (APR) for the period the loan was utilized, without any penalty, thereby providing an important consumer protection mechanism.
1514.
What is the primary responsibility of a Regulated Entity (RE) concerning Lending Service Providers (LSPs) under the RBI's digital lending framework?
A REs are solely responsible for all activities of LSPs engaged by them, including compliance with all regulatory guidelines.
B LSPs are independent entities and bear full responsibility for their own compliance and customer interactions.
C REs are only responsible for the financial solvency of LSPs, not their operational conduct.
D LSPs must obtain a separate license from the RBI to operate independently of REs.
Answer: A
The RBI's digital lending framework clearly states that Regulated Entities (REs) are ultimately responsible for the activities of their Lending Service Providers (LSPs). LSPs act as agents of REs, and REs must ensure that LSPs comply with all regulatory guidelines, including those related to customer protection and data privacy.
1515.
Which of the following is a mandatory requirement for loan disbursement under the RBI's framework for digital lending platforms, effective by 2026?
A Loans must be disbursed directly into the borrower's bank account by the Regulated Entity (RE).
B Lending Service Providers (LSPs) can disburse loans directly to the borrower's digital wallet.
C Borrowers can receive loans in cash from agents of the digital lending platform.
D The first installment of the loan can be adjusted against any outstanding dues with the LSP.
Answer: A
Under the RBI's digital lending guidelines, all loan disbursements and repayments must be executed directly between the Regulated Entity (RE) and the borrower's bank account, without any pass-through or pooling by the Lending Service Provider (LSP). This ensures transparency and accountability.
1516.
The digital integration of MGNREGA wage payments aims to improve financial inclusion. Which of the following is a direct consequence of this integration?
A Increased reliance on cash transactions.
B Reduced access to banking services for rural workers.
C Greater participation of beneficiaries in the formal banking system.
D Higher instances of wage theft and corruption.
Answer: C
By linking wage payments to bank accounts and using digital platforms, MGNREGA's digital integration encourages workers to open bank accounts and use banking services, thereby enhancing their financial inclusion.
1517.
Which digital payment system is predominantly used for direct wage disbursement to MGNREGA workers, ensuring their identity verification?
A Cheque payments
B Demand Drafts
C Aadhaar-Enabled Payment System (AEPS)
D Mobile wallets without bank linkage
Answer: C
AEPS leverages Aadhaar authentication to enable beneficiaries to withdraw wages directly from their bank accounts at banking points, ensuring that payments are made to the verified identity of the worker.
1518.
What is the primary goal of integrating digital technologies into MGNREGA wage payments as of 2026?
A To reduce the number of man-days generated under the scheme.
B To ensure timely, transparent, and leak-proof disbursement of wages directly to beneficiaries' bank accounts.
C To replace manual record-keeping with paper-based systems.
D To increase the administrative costs of the scheme.
Answer: B
Digital integration, through systems like Aadhaar-Enabled Payment System (AEPS) and direct bank transfers, aims to eliminate intermediaries, reduce delays, and prevent leakage, ensuring that wages reach the intended beneficiaries promptly and securely.
1519.
Under the PM-Surya Ghar Muft Bijli Yojana, what is the maximum capacity for which subsidies are typically provided for residential rooftop solar systems as of 2026?
A 1 kilowatt (kW)
B 3 kilowatts (kW)
C 5 kilowatts (kW)
D 10 kilowatts (kW)
Answer: C
While subsidies can vary, the scheme generally targets residential rooftop solar systems up to 3 kW for significant subsidy benefits, with provisions for larger systems at potentially reduced subsidy rates.
1520.
Which of the following is a key component of the financial assistance provided under the PM-Surya Ghar Muft Bijli Yojana for rooftop solar installations?
A Direct cash transfer of the entire installation cost.
B A central financial assistance (CFA) subsidy based on the installed capacity.
C Low-interest loans from public sector banks only.
D Tax rebates on electricity bills for 10 years.
Answer: B
The scheme provides a Central Financial Assistance (CFA) subsidy, which is a direct financial support from the government, calculated based on the capacity of the rooftop solar system installed.
