Economy MCQ-1 for IAS Exam in August 2015


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

(1) Union Cabinet on July 21, 2015 extended Interest Subvention Scheme (ISS) to -
(i) Public Sector Banks (PSBs)
(ii) Private sector commercial banks
(iii) Rural regional banks (RRBs)
(iv) Cooperative banks and NABARD.
Select the answer from the codes given below –
(a) i, ii and iii       (b) ii, iii and iv
(c) i, iii, iv             (d) All of the above
Ans. (d)
Explanation: Interest subvention was extended to ensure availability of crop loans of up to 3 lakh rupees to farmers at 7 percent per annum. The Cabinet also approved an additional interest subvention of 3 percent per annum for those farmers who repay on time. The government also decided to provide interest subvention to small and marginal farmers with Kisan Credit Cards (KCC) for loans against negotiable warehouse receipts post-harvest at annual interest of seven percent for six months.
 Interest subvention is the subsidy offered on interest rates. For instances, interest subvention is offered on several lending schemes by the government to promote a particular industry. This implies that with the subsidy in hand, the loan borrower has not to pay total interest on loan amount and the balance interest amount is borne by the government. Thus, interest subvention is a form of waiver of some percentage of interest that promotes some particular industry and general public interest. Government of India has come up with an array of interest subvention schemes for different sectors spanning from agriculture, education, handlooms, export-oriented sectors to housing sectors. Interest subvention schemes are implemented with the help of funds allocated by the government for the purpose in a particular financial year.
(2) Which of the following are the criteria for a bank to become a sub-member of National Financial Switch (NFS)?
(i) Core Banking Solution (CBS) fully implemented
(ii) Licence for conducting banking business
(iii) Introduction from sponsor bank (a bank having ATM network connectivity)
(iv) Connectivity with National Payment Corporation of India (NPCI)
Select the answer from the codes given below –
(a) i, ii and iii       (b) ii, iii and iv
(c) i, iii, iv             (d) All of the above
Ans. (d)
Explanation:  National Financial Switch (NFS) connects ATMs of different banks.
National Payments Corporation of India (NPCI) : The Reserve Bank of India, after setting up of the Board for Payment and Settlement Systems in 2005, released a vision document incorporating a proposal to set up an umbrella institution for all the RETAIL PAYMENT SYSTEMS in the country. The core objective was to consolidate and integrate the multiple systems with varying service levels into nation-wide uniform and standard business process for all retail payment systems. The other objective was to facilitate an affordable payment mechanism to benefit the common man across the country and help financial inclusion.
National Payments Corporation of India (NPCI) was incorporated in December 2008 and the Certificate of Commencement of Business was issued in April 2009. It has been incorporated as a Section 8 company under Companies Act, 2013 and is aimed to operate for the benefit of all the member banks and their customers. The authorized capital has been pegged at Rs 300 crore and paid up capital is Rs 100 crore so that the company can create infrastructure of large dimension and operate on high volume resulting payment services at fraction of the present cost structure.
(3) Which of the following statements is/are correct regarding RuPay card ?
(i) RuPay is the Indian domestic card payment network being set up by National Payments Corporation of India (NPCI) at the behest of banks in India.
(ii) The project had been conceived by Indian Banks Association and has the approval of Reserve Bank of India.
Select the answer from the codes given below –
(a) I only       (b) ii only
(c) i and ii             (d) None of the above
Ans. (c)
Explanation:   The objectives of RuPay to be fulfilled are : (i) Reduce overall transaction cost for the banks in India by introducing competition to international card schemes; (ii) Develop products appropriate for the country particularly for financial inclusion; (iii) Provide card payment service option to many banks who are currently not eligible for card issuance under the eligibility criteria of international card schemes; (iv) Build environment whereby payment information of the country remains within the country; and (v) Shift Personal Consumption Expenditure (PCE) from cash to electronic payments in a growing economy with a population of 1.2 billion
(4) The Competition Commission of India (CCI) on 17 July 2015 imposed penalty of 671.05 crore rupees upon four Public Sector Insurance Companies. Which of the following statements is/are correct regarding this?
(i) These companies are National Insurance, New India Assurance, Oriental Insurance and United India Insurance.
(ii) The orders were passed on a complaint filed by IRDA.
 Select the answer from the codes given below –
(a) I only       (b) ii only
(c) i and ii             (d) None of the above
Ans. (a)
Explanation: The orders were passed on anonymous information in Suo Moto case received by CCI under Section 19(1) of the Competition Act, 2002 against the four Insurance companies. The information alleged contravention of the provisions of section 3 of the Act which deals with anti-competitive agreements including bid rigging.
The Commission noted the impugned conduct of these companies to have resulted in manipulation of the bidding process in contravention of the provisions of section 3(1) read with section 3(3)(d) of the Act.
(5) The Reserve Bank of India (RBI) on 25 March 2015 signed a 400 million US dollar currency swap agreement with the Central Bank of Sri Lanka. Which of the following statements is/are correct regarding this?
(i) This agreement will further economic co-operation between the two countries and also bring in more financial stability in the region.
(ii) The swap arrangement is intended to provide a backstop line of funding to meet any balance of payments and liquidity crises till longer term arrangements are.
 Select the answer from the codes given below –
(a) I only       (b) ii only
(c) i and ii             (d) None of the above
Ans. (c)
Explanation: Currency swap is a swap that involves the exchange of principal and interest in one currency for the same in another currency. It is considered to be a foreign exchange transaction.
 
 


Thursday, 23rd Jul 2015, 09:43:36 AM

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