Under the RBI's digital lending guidelines, what is a crucial requirement concerning data privacy and collection by digital lending apps?
A Apps can access all user data without explicit consent.
B Data collection must be need-based and with explicit consent, with an option to revoke.
C Data can be stored indefinitely on foreign servers.
D Borrowers have no control over their data usage.
Answer: B
The guidelines mandate that data collection by digital lending apps must be need-based, with explicit prior consent from the borrower. Borrowers must also have the option to revoke consent and delete their data.
152.
The primary objective behind the Reserve Bank of India's (RBI) new digital lending guidelines, implemented to safeguard borrowers in the evolving digital financial ecosystem, is to:
A Promote unregulated digital lending platforms.
B Enhance transparency and protect borrowers from unethical practices.
C Increase the number of digital lending apps without oversight.
D Allow LSPs to set their own interest rates independently.
Answer: B
The guidelines aim to make the digital lending ecosystem safer and more transparent, protecting borrowers from predatory practices, exorbitant interest rates, and unauthorized data collection by unregulated entities.
153.
Which of the following is a key provision of the Reserve Bank of India's (RBI) digital lending guidelines, effective since 2022 and continuing to shape the digital lending landscape in 2026?
A Loans must be disbursed and repaid directly between the borrower and the Regulated Entity (RE).
B Lending Service Providers (LSPs) are allowed to disburse loans on behalf of REs.
C Digital lenders are exempt from KYC norms.
D There are no restrictions on automatic credit limit increases.
Answer: A
A core principle of the RBI's digital lending guidelines is that the loan disbursement and repayment must be executed directly between the borrower and the Regulated Entity (bank/NBFC) without any pass-through account of the Lending Service Provider (LSP).
154.
Maintaining a high repo rate by the RBI typically has what effect on borrowing costs for commercial banks and, subsequently, for consumers and businesses?
A Decreases borrowing costs, stimulating economic growth.
B Increases borrowing costs, potentially curbing inflation.
C Has no significant impact on borrowing costs.
D Only affects government borrowing, not private sector.
Answer: B
A higher repo rate means banks borrow from the RBI at a higher cost, which they then pass on to their customers (consumers and businesses) in the form of higher interest rates on loans. This makes borrowing more expensive, reducing demand and helping to control inflation.
155.
As of late 2024, which repo rate has the Reserve Bank of India (RBI) consistently maintained amidst persistent inflation concerns, influencing the economic outlook for 2026?
A 6.50%
B 6.25%
C 6.75%
D 7.00%
Answer: A
The RBI's Monetary Policy Committee has maintained the repo rate at 6.50% for several consecutive meetings, citing the need to bring inflation within the target band and anchor inflation expectations.
156.
What is the primary objective of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) when it decides to maintain the repo rate amidst inflation concerns?
A To achieve the inflation target while keeping growth in mind.
B To maximize government revenue.
C To ensure stable exchange rates only.
D To promote exports at all costs.
Answer: A
The primary objective of the MPC is to maintain price stability while keeping in mind the objective of growth. This means targeting inflation within a specified band (currently 4% +/- 2%).
157.
Under the Digital Lending Guidelines, what is mandated regarding the disclosure of the Annual Percentage Rate (APR) to the borrower?
A APR disclosure is optional and depends on the lending platform's policy.
B Lenders must provide a Key Fact Statement (KFS) to the borrower before the execution of the loan contract, explicitly mentioning the APR.
C APR only needs to be disclosed upon the borrower's request after the loan has been disbursed.
D Only the nominal interest rate needs to be disclosed, not the comprehensive APR.
Answer: B
The guidelines mandate that Regulated Entities (REs) and Lending Service Providers (LSPs) must provide a Key Fact Statement (KFS) to the borrower before the execution of the loan contract, which includes details like the Annual Percentage Rate (APR), loan tenure, charges, etc., to ensure transparency.
158.
Which of the following is a primary objective of the Digital Lending Guidelines issued by the Reserve Bank of India?
A To promote unregulated growth of digital lending platforms.
B To ensure fair lending practices, enhance transparency, and protect borrowers from unethical practices.
C To encourage foreign direct investment exclusively in the digital lending sector.
D To centralize all digital lending operations under a single government entity.
Answer: B
The guidelines were introduced to address concerns related to unbridled growth of digital lending, particularly by unregulated entities, and to protect consumers from predatory practices, exorbitant interest rates, and data privacy issues.
159.
What is a key mandatory provision under the RBI's Digital Lending Guidelines concerning loan disbursement and repayment?
A Loans must be disbursed directly into the borrower's bank account and repayments collected directly from the borrower's bank account.
B Lending Service Providers (LSPs) are allowed to disburse loans into their own accounts before transferring to the borrower.
C Cash disbursements are permitted for small-value digital loans.
D Repayments can be collected by third-party agents in cash at the borrower's doorstep.
Answer: A
The guidelines mandate that the disbursement of loans and repayments must be executed directly between the bank account of the borrower and the Regulated Entity (RE) without any pass-through/pool account of the Lending Service Provider (LSP) or any third party.
160.
What is the current inflation target set by the Government of India for the Reserve Bank of India, which the MPC is mandated to achieve?
A 2% with a band of +/- 1%
B 4% with a band of +/- 2%
C 6% with a band of +/- 2%
D 5% with a band of +/- 1%
Answer: B
The Government of India, in consultation with the RBI, sets the inflation target. The current target, renewed in March 2021 for five years (until March 31, 2026), is 4% with an upper tolerance limit of 6% and a lower tolerance limit of 2%. It is highly likely to be continued or renewed with similar parameters.
