Banking & Finance MCQs - 2026-08-22

Unlike commercial bank money, the e-Rupee is a direct liability of the central bank, similar to physical currency. While it offers some level of privacy, it's not entirely anonymous like physical cash, and it is generally not interest-bearing. It is not designed for speculative trading.

The e-Rupee pilot is being conducted for two main categories: e₹-R (Retail) for general public use and e₹-W (Wholesale) for interbank settlements and other wholesale transactions.

The e-Rupee is India's Central Bank Digital Currency (CBDC), a digital form of legal tender issued by the Reserve Bank of India. It is distinct from private cryptocurrencies.

An increase in the Repo Rate makes it more expensive for commercial banks to borrow funds from the RBI. This, in turn, leads to commercial banks increasing their own lending rates, making credit costlier for businesses and consumers, thereby aiming to curb inflation.

The primary objective of the Monetary Policy Committee (MPC) is to maintain price stability, while keeping in mind the objective of growth. This is mandated by the RBI Act, 1934.

The Monetary Policy Committee (MPC) consists of six members: three officials from the Reserve Bank of India (including the Governor as ex-officio Chairperson) and three external members nominated by the Central Government.