If a merger between two large Public Sector Banks (PSBs) were to be finalized in 2025, what is a primary objective typically cited for such consolidation?
A To reduce the number of ATMs across the country.
B To enhance operational efficiency and financial strength.
C To decrease the number of banking services offered to customers.
D To increase the number of independent branches.
Answer: B
A primary objective of merging Public Sector Banks is often to create larger, more robust entities that can achieve economies of scale, improve operational efficiency, reduce costs, and enhance their overall financial strength and competitiveness.
102.
In a significant development in the Indian banking sector in early 2025, which two major Public Sector Banks (PSBs) were reported to be in advanced talks for a strategic merger?
A Punjab National Bank and Canara Bank
B Bank of Baroda and Union Bank of India
C Indian Bank and Allahabad Bank
D NEEDS_REVIEW
Answer: D
NEEDS_REVIEW
103.
Under the RBI's new digital lending framework, what is the minimum tenure for which a Digital Lending App (DLA) must retain borrower data after the loan account is closed?
A 6 months
B 1 year
C 2 years
D 5 years
Answer: C
The RBI's framework mandates that Digital Lending Apps (DLAs) must retain borrower data for a minimum period of two years after the loan account is closed or the last repayment is made, whichever is later. This is to facilitate audits and address any potential grievances.
104.
The RBI's new framework for digital lending platforms emphasizes the principle of 'One-Fit-All'. What does this principle primarily aim to achieve?
A Ensuring all digital lending platforms offer the same interest rates.
B Standardizing the regulatory approach across different types of digital lending entities.
C Mandating a single technology platform for all digital lending operations.
D Requiring all borrowers to use a single digital lending application.
Answer: B
The 'One-Fit-All' principle in the RBI's digital lending framework aims to bring a standardized regulatory approach to all entities involved in digital lending, irrespective of their specific business models, to ensure a level playing field and consistent consumer protection.
105.
As per the new framework for digital lending platforms unveiled by the RBI in 2024, which of the following is NOT a mandatory requirement for a Digital Lending App (DLA)?
A Disclosure of all-in-cost of loan to the borrower.
B Appointment of a Chief Compliance Officer (CCO) by the Lending Service Provider (LSP).
C Mandatory registration of all Lending Service Providers (LSPs) with the RBI.
D Prohibition of automatic credit limit enhancement without explicit borrower consent.
Answer: C
The RBI's framework mandates that all Lending Service Providers (LSPs) that act as intermediaries and handle customer data must be registered with the RBI. However, the framework does not mandate registration for all LSPs, but rather those that perform specific functions or handle sensitive data. The other options are mandatory requirements.
106.
Which category of banks was introduced by the RBI with a specific mandate to serve the financial needs of unserved and underserved sections of the population, including small businesses, micro and small industries, and the unorganized sector?
A Foreign Banks
B Investment Banks
C Small Finance Banks
D Co-operative Banks
Answer: C
Small Finance Banks (SFBs) were conceptualized by the RBI to further financial inclusion by providing basic banking services like deposits and lending to unserved and underserved sections of the population, which include small business units, small and marginal farmers, micro and small industries, and other unorganized sector entities.
107.
What is the primary objective of RBI's financial inclusion initiatives specifically targeting unbanked rural areas?
A To ensure access to affordable financial products and services for all sections of society.
B To increase the profitability of private sector banks in urban areas.
C To reduce the number of government-owned banks.
D To promote foreign direct investment exclusively in the financial sector.
Answer: A
The core objective of financial inclusion, especially in unbanked rural areas, is to provide access to a full range of affordable, useful, and safe financial products and services—including transactions, payments, savings, credit, and insurance—to all individuals and households, regardless of their income level or location.
108.
Which of the following is a key strategy employed by the RBI to expand banking services and promote financial inclusion in remote and unbanked rural areas?
A Establishing more full-fledged commercial bank branches in metropolitan cities.
B Promoting the use of Business Correspondents (BCs) and Business Facilitators (BFs).
C Focusing solely on online banking platforms for rural customers.
D Encouraging foreign banks to open branches in rural areas.
Answer: B
Business Correspondents (BCs) and Business Facilitators (BFs) play a crucial role in extending banking services to remote and unbanked areas by acting as agents for banks, providing services like account opening, deposits, withdrawals, and remittances at the customer's doorstep or through local outlets.
109.
Under the RBI's digital lending framework, who bears the primary responsibility for the activities of a Lending Service Provider (LSP) engaged on its behalf?
A The Lending Service Provider (LSP) itself.
B The Regulated Entity (RE) that has engaged the LSP.
C The borrower who avails the loan.
D A third-party auditor appointed by the LSP.
Answer: B
The RBI guidelines clearly state that the Regulated Entity (RE) is ultimately responsible for all activities undertaken by the Lending Service Providers (LSPs) engaged by them. This ensures that REs maintain oversight and accountability for their digital lending operations.
110.
Which of the following data access permissions is generally NOT permitted for digital lending apps as per RBI guidelines, to protect borrower privacy?
A One-time access to camera and microphone.
B Access to phone contacts and call logs.
C Access to device location (with explicit consent).
D Access to device storage for KYC documents.
Answer: B
RBI guidelines strictly prohibit digital lending apps from accessing phone contacts, call logs, and media galleries of borrowers. Access to camera, microphone, location, or storage is permitted only with explicit consent and for specific, justifiable purposes (e.g., KYC, video calls).
