Banking & Finance MCQs

The MPC consists of six members: three officials of the Reserve Bank of India and three external members nominated by the Government of India. This structure has been in place since its inception.

The primary objective of the MPC is to maintain price stability, which is a necessary precondition for sustainable growth. The flexible inflation targeting framework aims to keep inflation within a specified band.

To enhance digital banking in rural areas, the framework would likely include initiatives like developing accessible mobile apps and promoting digital payment solutions tailored for rural users.

The framework aims to leverage technology to make digital financial services more accessible and available to the underserved population in rural areas, fostering greater financial inclusion.

The RBI's new digital banking framework is designed to improve access to digital financial services for individuals and businesses in rural areas, thereby promoting financial inclusion.

The Monetary Policy Committee (MPC) is responsible for setting the policy repo rate in India. The decision in October 2026 was made by the MPC.

The RBI's mandate is to maintain price stability while keeping in mind the objective of growth. Keeping the repo rate steady at 6.5% in October 2026 reflects a balance between these objectives, primarily focusing on controlling inflation.

The RBI's Monetary Policy Committee, in its October 2026 review, decided to keep the repo rate unchanged at 6.5%.

By facilitating a more efficient and timely resolution of stressed assets, the framework helps banks recover more of their dues, leading to improved asset quality, better capital adequacy, and overall enhanced financial health.

The framework introduces a 'Resolution Plan' that lenders must invoke within 30 days of a default for large value loans. This plan outlines the steps for resolving the stressed asset, promoting a proactive approach.