Here are some MCQs on RBI Functions – Banker to other banks
1. Which of the following is a function of the Reserve Bank of India (RBI) as a banker to other banks?
a) Issuing currency notes and coins
b) Regulating interest rates in the economy
c) Conducting monetary policy
d) Lending to commercial banks
2. The Reserve Bank of India provides short-term credit to banks through which facility?
a) Cash Reserve Ratio (CRR)
b) Statutory Liquidity Ratio (SLR)
c) Repo Rate
d) Special Drawing Rights (SDR)
3. What is the primary purpose of the RBI providing liquidity support to banks?
a) To help banks with their day-to-day financial needs
b) To encourage banks to lend more to the public
c) To ensure economic stability and financial system integrity
d) To promote competition among banks
4. Which of the following tools does the RBI use to control the money supply in the economy?
a) Open market operations
b) Liquidity Adjustment Facility (LAF)
c) Bank Rate
d) All of the above
5. When the RBI buys government securities in the open market, what is the impact on the money supply?
a) Money supply increases
b) Money supply decreases
c) Money supply remains unchanged
d) It depends on other factors
