Banking & Finance MCQs

The 'cooling-off period' or 'look-up period' allows borrowers a window to exit the loan by paying the principal and proportionate annual percentage rate (APR) without any penalty, if they decide not to proceed with the loan after disbursement. This enhances consumer protection.

The RBI's Digital Lending Guidelines apply to all Commercial Banks, Primary (Urban) Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, and Non-Banking Financial Companies (NBFCs) that are regulated by the RBI. LSPs work on behalf of these REs.

A core principle of the RBI's Digital Lending Guidelines is that all loan disbursements and repayments must be executed directly between the borrower's bank account and the Regulated Entity (RE) without any pass-through/pool account of the Lending Service Provider (LSP) or any third party.

The Repo Rate is a key quantitative tool used by the RBI to inject or absorb liquidity from the banking system. Moral suasion, direct action, and credit rationing are qualitative tools.

The MPC consists of six members: three officials of the RBI and three external members nominated by the Government of India.

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 is achieved through inflation targeting.

SEBI is the regulatory body for the securities market in India, established in 1992.

Stricter norms aim to ensure a level playing field and prevent market manipulation by entities using high-speed technology.

HFT uses powerful computers and algorithms to transact a large number of orders at extremely high speeds.

The e-Rupee (Retail) is designed to be a token-based system that mimics the anonymity and ease of physical cash in a digital format.