Banking & Finance MCQs

The new guidelines aim to protect borrowers from unfair practices, ensure transparency in digital lending, and prevent predatory lending by strengthening consumer protection measures.

The primary objective of the RBI's monetary policy, including the repo rate decision, is to maintain price stability by controlling inflation, while keeping in mind the objective of growth.

The Monetary Policy Committee (MPC) is mandated by the RBI Act to determine the policy repo rate required to meet the inflation target while considering the objective of maintaining price stability.

The Reserve Bank of India's Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5% during its August 2026 review.

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The RBI guidelines stipulate a mandatory 'cooling-off' or 'look-up' period. For loans with a tenure of 7 days or more, the cooling-off period is 3 days. For loans with a tenure of less than 7 days, the cooling-off period is at least 1 day. During this period, borrowers can exit the loan by paying the principal and proportionate APR without any penalty.

The Key Fact Statement (KFS) is a mandatory disclosure requirement under RBI's digital lending guidelines. Its primary purpose is to provide borrowers with a clear, concise, and standardized summary of the loan terms, including the Annual Percentage Rate (APR), all fees, charges, and other relevant information, enabling informed decision-making.

The RBI's digital lending guidelines mandate that the disbursement of loans must be made directly into the borrower's bank account by the Regulated Entity (RE), and repayments must also be collected directly by the RE. This ensures transparency and prevents the routing of funds through Loan Service Providers (LSPs).