Banking & Finance MCQs - 2026-06-04

Monetary Policy, primarily through tools like the Repo Rate, Reverse Repo Rate, and Cash Reserve Ratio, is the RBI's main instrument to manage liquidity and interest rates.

The MPC often maintains a status quo to assess the impact of previous policy actions, manage inflation expectations, and support economic growth without jeopardizing price stability.

The RBI's MPC decided to maintain the status quo on the Repo Rate, keeping it unchanged at its existing level.

The RBI framework prohibits automatic increases in credit limits without the explicit consent of the borrower. Other options are either mandated or permitted practices.

The new guidelines mandate that loan disbursement and collection must be executed directly by the Regulated Entities (REs) to and from the borrower's bank account, without any pass-through involvement of Lending Service Providers (LSPs).

The primary objective of RBI's enhanced regulatory framework for digital lending is to protect consumers from predatory lending practices and ensure responsible conduct by digital lenders.