According to RBI's digital lending guidelines, who is primarily responsible for paying fees and charges to Lending Service Providers (LSPs), and what mandatory document must be provided to the borrower before loan execution?
A Borrower; Loan Agreement Summary
B Regulated Entity (RE); Key Fact Statement (KFS)
C Lending Service Provider (LSP); Terms and Conditions Document
D Borrower; Detailed Fee Schedule
Answer: B
The guidelines state that all fees and charges payable to LSPs must be paid by the RE and not by the borrower. Additionally, a Key Fact Statement (KFS) must be provided to the borrower before executing the loan contract.
12.
Which of the following is a key mandate under the RBI's guidelines for digital lending platforms concerning loan disbursal and repayment, effective as of 2026?
A Loans must be disbursed directly into the borrower's bank account by the Regulated Entity (RE) and repayments directly to the RE.
B Lending Service Providers (LSPs) can use their pool accounts for disbursal and collection.
C Borrowers can choose to repay through any third-party payment gateway without RE's direct involvement.
D REs can mandate borrowers to use specific digital wallets for all transactions.
Answer: A
The RBI guidelines mandate that loan disbursals and repayments must be executed only 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.
13.
What is the primary purpose of the 'cooling-off' or 'look-up' period introduced by the RBI's Digital Lending Guidelines for borrowers?
A To allow the lender to verify the borrower's credit history.
B To enable the borrower to exit the loan by paying the principal and proportionate APR without penalty.
C To provide time for the LSP to process the loan application.
D To allow the borrower to negotiate a lower interest rate.
Answer: B
The cooling-off/look-up period allows borrowers a window to exit the loan by repaying the principal and proportionate Annual Percentage Rate (APR) without any penalty, should they decide not to proceed with the loan after understanding its terms. This empowers borrowers and protects them from impulsive decisions.
14.
Which document, made mandatory by the RBI's Digital Lending Guidelines, provides a summary of the loan product, including the Annual Percentage Rate (APR), tenure, and all associated charges?
A Loan Agreement
B Key Fact Statement (KFS)
C Sanction Letter
D Terms and Conditions document
Answer: B
The Key Fact Statement (KFS) is a crucial requirement under the RBI's Digital Lending Guidelines. It ensures that borrowers are fully aware of all terms, conditions, and the all-inclusive cost (APR) associated with a digital loan, promoting transparency and informed decision-making.
15.
According to the RBI's Digital Lending Guidelines, which entity is mandated to directly disburse and collect loan repayments from the borrower?
A Regulated Entity (RE)
B Lending Service Provider (LSP)
C Payment Gateway
D Third-party collection agent
Answer: A
The RBI's Digital Lending Guidelines mandate that loan disbursement and repayment must be executed directly between the borrower and the Regulated Entity (RE), such as a bank or NBFC, without any pass-through involvement of the Lending Service Provider (LSP). This enhances transparency and accountability.
16.
When discussing India's GDP growth in Q2 FY27, what does the term 'FY27' refer to?
A The calendar year 2027.
B The fiscal year starting from April 1, 2027, to March 31, 2028.
C The fiscal year starting from April 1, 2026, to March 31, 2027.
D The period of 27 months from the start of the current fiscal year.
Answer: C
In India, the fiscal year (FY) runs from April 1st to March 31st. Therefore, FY27 refers to the financial year that began on April 1, 2026, and will end on March 31, 2027. Q2 FY27 would be July 1, 2026, to September 30, 2026.
17.
A surge in India's GDP growth in Q2 FY27 is often linked to increased domestic demand. Which of the following indicators would best reflect this increase in domestic demand?
A Rise in the country's foreign exchange reserves.
B Increase in the Index of Industrial Production (IIP).
C Growth in exports of goods and services.
D Decline in inflation rates.
Answer: B
The Index of Industrial Production (IIP) measures the growth in the volume of production of various industries in the economy. An increase in IIP directly reflects higher manufacturing and industrial output, which is a strong indicator of robust domestic demand for goods.
18.
India's GDP growth rate for the second quarter (Q2) of the Financial Year 2026-27 (FY27) has been reported as robust. Which of the following sectors is typically a major contributor to such growth?
A Agriculture
B Services
C Mining and Quarrying
D Forestry and Fishing
Answer: B
The Services sector, encompassing IT, finance, trade, hospitality, etc., is consistently the largest contributor to India's GDP and a primary driver of its growth, especially during periods of economic expansion.
19.
Under the proposed stricter norms by SEBI for Investment Advisors in 2026, what is a potential consequence for an IA found to be in breach of fiduciary duty?
A A mandatory mentorship program with senior advisors.
B Temporary suspension or permanent debarment from practicing.
C A requirement to offer free advisory services for a year.
D A public apology to the affected client.
Answer: B
Breach of fiduciary duty is a serious offense. SEBI's stricter norms are likely to include severe penalties, such as temporary suspension or permanent debarment from acting as an Investment Advisor, to deter misconduct and protect investors.
20.
SEBI's proposed stricter norms for Investment Advisors in 2026 also focus on the 'Know Your Client' (KYC) process. What is a likely enhancement in this area?
A Reducing the frequency of KYC updates for existing clients.
B Allowing verbal confirmation for certain KYC details.
C Mandating a more robust verification of client's risk profiling and financial goals.
D Simplifying the documentation required for initial client onboarding.
Answer: C
Stricter norms often involve enhancing due diligence. SEBI is likely proposing a more rigorous verification of a client's risk profile and financial objectives to ensure that the advice provided is truly suitable and aligned with the client's specific needs and capacity.
