A slight easing of retail inflation in September 2026 might influence the Reserve Bank of India's (RBI) monetary policy stance. What is the likely impact on interest rates?
A The RBI might consider maintaining or even reducing interest rates.
B The RBI will likely increase interest rates to combat inflation.
C Interest rates will remain unchanged regardless of inflation.
D The RBI will focus solely on fiscal policy.
Answer: A
Easing inflation provides the RBI with more room to adopt a less hawkish monetary policy. Therefore, a slight easing in retail inflation might lead the RBI to consider maintaining current interest rates or even contemplating a reduction, depending on other economic factors.
32.
Which of the following components typically contributes most significantly to fluctuations in India's retail inflation?
A Manufacturing sector output.
B Food and beverages prices.
C Services sector growth.
D Export-import balance.
Answer: B
Food and beverages prices, due to their volatile nature and significant weightage in the CPI basket, are often the primary drivers of short-term fluctuations in India's retail inflation.
33.
India's retail inflation, as measured by the Consumer Price Index (CPI), showed a slight easing in September 2026. What is the primary implication of easing retail inflation?
A Increased purchasing power for consumers.
B Higher interest rates by the Reserve Bank of India.
C Reduced demand for essential goods.
D Potential for economic slowdown.
Answer: A
When retail inflation eases, it means that the prices of goods and services are rising at a slower pace. This leads to an increase in the purchasing power of consumers, as their money can buy more than before.
34.
Alternative Investment Funds (AIFs) are categorized into different classes by SEBI. Which of the following is NOT a recognized category of AIFs?
A Category I AIFs
B Category II AIFs
C Category III AIFs
D Category IV AIFs
Answer: D
SEBI categorizes AIFs into Category I, Category II, and Category III. Category I AIFs are those investing in start-ups, SMEs, etc. Category II AIFs include infrastructure, real estate, and private equity funds. Category III AIFs are those that employ diverse or complex trading strategies.
35.
Under the proposed SEBI regulations, which of the following is likely to be a key area of focus for stricter compliance by AIFs?
A Marketing and advertising of AIF schemes.
B Disclosure of fees, charges, and performance reporting.
C Investment strategies only.
D Operational efficiency of the fund manager.
Answer: B
The proposed stricter regulations by SEBI are expected to place a greater emphasis on the disclosure of all fees and charges levied by AIFs, as well as standardized and transparent performance reporting to investors.
36.
The Securities and Exchange Board of India (SEBI) has proposed stricter regulations for Alternative Investment Funds (AIFs). What is a primary reason for SEBI's move?
A To reduce the number of AIFs operating in India.
B To enhance investor protection and market integrity.
C To discourage foreign investment in AIFs.
D To simplify the existing regulatory framework for AIFs.
Answer: B
SEBI's proposal for stricter regulations on AIFs is aimed at strengthening investor protection measures and ensuring greater transparency and accountability, thereby enhancing the overall integrity of the market.
37.
The RBI's new digital lending guidelines emphasize the role of a 'Digital Lending App' (DLA). Which entity is generally responsible for the operation of the DLA under these guidelines?
A The borrower.
B A third-party technology service provider only.
C The regulated entity (e.g., bank or NBFC) that is offering the loan.
D The government of India.
Answer: C
Under the RBI's new guidelines, the regulated entity (RE), such as a bank or Non-Banking Financial Company (NBFC), is responsible for the operation of the Digital Lending App (DLA) and ensuring compliance with the laid-down norms.
38.
As per the new RBI guidelines effective from 2026, digital lending platforms are mandated to disclose all-in costs of loans to borrowers. What does 'all-in cost' typically include?
A Only the principal amount of the loan.
B Interest rate and all other mandatory charges, fees, and levies.
C Processing fees only.
D Late payment penalties only.
Answer: B
The 'all-in cost' of a loan, as per RBI guidelines, encompasses the interest rate along with all other mandatory charges, fees, and levies associated with the loan, providing a comprehensive view of the total cost to the borrower.
39.
The Reserve Bank of India (RBI) recently issued new guidelines for digital lending platforms. Which of the following is a key objective of these guidelines?
A To encourage unregulated lending to increase credit availability.
B To protect borrowers from unfair practices and ensure transparency.
C To reduce the role of banks in digital lending.
D To allow digital lending platforms to set their own interest rates without any cap.
Answer: B
The primary aim of the RBI's new guidelines for digital lending platforms is to safeguard borrowers from predatory lending practices, ensure fair treatment, and promote transparency in digital lending operations.
40.
What is a primary non-tariff barrier that India aims to address through its bilateral trade agreement with the United Kingdom to facilitate smoother trade?
A High import duties on agricultural products.
B Complex customs procedures and technical regulations.
C Restrictions on foreign direct investment in manufacturing.
D Quotas on raw material exports from India.
Answer: B
Beyond tariffs, non-tariff barriers like complex customs procedures, differing technical regulations, and sanitary and phytosanitary measures often hinder trade. India aims to streamline these through the agreement.
