Banking & Finance MCQs: RBI and Cooperative Bank Reforms

1.

Which of the following is typically a trigger for the RBI to impose corrective actions under the PCA framework on a UCB?

A Consistent profitability over several quarters.

B A significant decline in asset quality (increase in NPAs).

C Excessive capital adequacy ratio.

D Low levels of liquidity.

2.

What is the primary objective of the PCA framework for UCBs?

A To encourage aggressive expansion of UCBs.

B To monitor and address financial vulnerabilities of UCBs before they become critical.

C To reduce the regulatory burden on UCBs.

D To facilitate mergers and acquisitions of UCBs.

3.

The Reserve Bank of India (RBI) recently conducted a strategic review of the Prompt Corrective Action (PCA) framework for which category of banks?

A Commercial Banks

B Regional Rural Banks (RRBs)

C Urban Co-operative Banks (UCBs)

D Small Finance Banks (SFBs)

4.

What is a key objective of the RBI's enhanced transparency measures in digital lending?

A To encourage predatory lending practices.

B To protect borrowers from unfair practices and ensure informed decision-making.

C To increase the operational costs for digital lenders.

D To reduce the availability of credit to small businesses.

5.

As per the RBI's guidelines on digital lending, what is the 'all-in-cost' of a loan supposed to include?

A Only the principal and interest rate.

B Interest rate, processing fees, and other charges.

C Only the processing fees and late payment charges.

D Principal, interest rate, and any penalty for early repayment.

6.

Which of the following measures has been introduced by the RBI to enhance transparency in digital lending?

A Mandatory disclosure of all-in-cost of loans by lenders.

B Introduction of a standardized loan agreement format.

C Requirement for lenders to provide a cooling-off period for borrowers.

D All of the above.

Banking & Finance MCQs - 2026-05-25