Banking & Finance MCQs - 2026-08-30

The expanded guidelines aim to address issues like exorbitant interest rates, hidden charges, unauthorized data collection, and aggressive recovery tactics that have been prevalent in some segments of digital lending, especially by unregulated entities or through unethical practices by LSPs.

A key provision of the guidelines mandates that the disbursal of loans and repayment should be executed directly between the bank account of the borrower and the Regulated Entity (RE), without any pass-through or pooling of funds by the Lending Service Provider (LSP) or any third party.

The expanded guidelines primarily aim to address concerns related to unbridled growth, unethical practices, and lack of transparency in digital lending, thereby enhancing consumer protection and ensuring responsible lending.

CRR, SLR, and OMOs are direct instruments of monetary policy used by the RBI to control liquidity. The Fiscal Deficit Target is a part of fiscal policy, managed by the government, not the RBI's monetary policy.

The Repo Rate is the rate at which commercial banks borrow money from the RBI. An increase in the Repo Rate makes borrowing more expensive for banks, which in turn can lead to higher lending rates for consumers and businesses.

The primary objective of the MPC, as mandated by the RBI Act, is to maintain price stability while keeping in mind the objective of growth. This involves targeting inflation within a specified band.