IAS Pre Exam 2015 Current Affairs Practice Test-4


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

May 2015                                                                   Ajit Kumar (Wisdom IAS, New Delhi)
 
                     Read Union  Budget 2015-2016 through MCQ- Set-2
 (1) The corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD is for -
(a) Short Term Cooperative Rural Credit Refinance Fund
(b) Short Term RRB Refinance Fund
(c) Long Term Rural Credit Fund
(d) All of the above
Ans.(d) Expl. The implementation phase for projects sanctioned is spread over 2-5 years, varying with type of the project and also location of the State.
Rural Infrastructure Development Fund (RIDF) was instituted in NABARD with an announcement in the Union Budget 1995-96 with the sole objective of giving low cost fund support to State Govts. and State Owned Corporations for quick completion of ongoing projects relating to medium and minor irrigation, soil conservation, watershed management and other forms of rural infrastructure.
Loans sanctioned are secured by the irrevocable letter of authority /mandate registered with Reserve Bank of India / any other Scheduled Commercial Bank, Time promissory Note(TPN), Execution of unconditional Guarantee from State Governments (Additionally required for support to State Govt. sponsored organisations, etc.) and acceptance of terms and conditions of sanction in the duplicate copy of the sanction letter.
Letter of authority : An authorization letter is a legal document which gives permission to a third person to act according to the situation of your behalf. This is a letter by which you transfer your decision making powers to someone else for a short time so that he or she would take decisions when you are not around. 
A Time Promissory Note is a document that records a promise to pay back money (after the complition of the term) that has been loaned.
(2) There is a need to develop a national level single market for agricultural commodities by removing all the existing barriers of-
(a) Licensing
(b) Movement
(c) Storage
(d) All of the above
Ans.(d) Expl. Under the present system, the marketable surplus of agriculture of one area moves out to consumption centers through a network of middlemen and traders, multiple market areas and institutional agencies. Although, there exists a national level physical market, there is no national level regulation for the same and the existing regulation does not provide for a barrier free market in the country.
(3) Which of the following statements are related to the  Micro Units Development and Refinance Agency Ltd /MUDRA bank?
 (I) It will be responsible for refinancing micro-finance institutions in the business of lending to small entities.
(II) It will partner with State and regional-level coordinators to provide finance to last-mile financiers of small and micro business enterprises.
 (III) Its role includes laying down policy guidelines for micro enterprise financing business, registration, accreditation and rating of MFI entities.
(IV) The agency will lay down responsible financing practices to ward off over-indebtedness and ensure proper client protection principles and methods of recovery, according to an official release.
Select the answer from the codes given below-
(a)    I and II                       (b) I and III
(c) I, II and III                      (d) All of the above
Ans.(d)
Expl: MUDRA will be set up through a statutory enactment. It will be responsible for developing and refinancing all micro-finance institutions (MFIs) which are in the business of lending to micro and small business entities engaged in manufacturing, trading and service activities. MUDRA Bank will  refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.
In lending, priority will be given to SC/ST enterprises. These measures will greatly increase the confidence of young, educated or skilled workers who would now be able to aspire to become first generation entrepreneurs; existing small businesses, too,  will be able to expand their activities.
(4) Which of the following statements are correct regarding the  Trade Receivables Discounting System (TReDS)?
(I) The scheme for setting up and operating the institutional mechanism for facilitating the financing of trade receivables of MSMEs from corporate buyers through multiple financiers.
(II) The TReDS will facilitate the discounting of only invoices and not of bills of exchange.
(III) As the underlying entities are the same (MSMEs and corporate buyers) the TReDS could deal with both receivables factoring as well as reverse factoring so that higher transaction volumes come into the system and facilitate in better pricing.
(IV)  The transactions processed under TReDS will be “without recourse” to the MSMEs.
Select the answer from the codes given below-
(a)    I and II                       (b) I, II and III
(c) I, III and IV                      (d) All of the above
Ans.(c)
Expl: The TReDS will facilitate the discounting of both invoices as well as bills of exchange. MSME sellers, corporate buyers and financiers – both banks and non-bank (NBFC factors) will be direct participants in the TReDS. The TReDS will provide the platform to bring these participants together for facilitating uploading, accepting, discounting, trading and settlement of the invoices / bills of MSMEs. The bankers of MSMEs and corporate buyers may be provided access to the system, where necessary, for obtaining information on the portfolio of discounted invoices / bills of respective clients. The TReDS may tie up with necessary technology providers, system integrators and entities providing dematerialisation services for providing its services.
The objective of the TReDS is to facilitate financing of invoices / bills of MSMEs drawn on corporate buyers by way of discounting by financiers. To enable this, the TReDS has to put in place suitable mechanism whereby the invoice / bill is converted into “factoring units”.
In the first phase, the TReDS would facilitate the discounting of these factoring units by the financiers resulting in flow of funds to the MSME with final payment of the factoring unit being made by the corporate buyer to the financier on due date. In the second phase, the TReDS would enable further discounting / re-discounting of the discounted factoring units by the financiers, thus resulting in assignment in favour of other financiers.
The process flow of the TReDS has to enable at the minimum the uploading of invoices/bills and creation of factoring units by the MSME sellers; its acceptance by the corporate buyers; discounting, rating and re-discounting of factoring units; sending of notifications at each to the relevant parties to the transaction; reporting and MIS requirements; and finally generation and submission of settlement of obligations. A brief outline of the minimum features required in the process flow is given in the Annex.
The TReDS may also introduce some random audits to ensure that there is no window dressing and that factoring units uploaded on the exchange are authentic & based on genuine transactions.
TReDS would put in place a standardized mechanism / process for on-boarding of buyers and sellers on the TReDS. This one-time on boarding process will require the entities to submit all KYC related documents to the TReDS, along with resolutions / documents specific to authorised personnel of the buyer corporate and the MSME seller who would be provided IDs / Passwords for TReDS authorisations (multi-level). Indemnity in favour of TReDS, if required, may also be given if it is made part of the standardized on-boarding process.
There would be a one-time agreement drawn up amongst the participants in the TReDS: (a) master agreement between the financier and the TReDS, stating the terms and conditions of dealings between both the entities; (b) master agreement between the buyer corporate and the TReDS, stating the terms and conditions of dealings between both the entities. This agreement should clearly capture the following aspects: (i) the buyer’s obligation to pay on the due date once the factoring unit is accepted online; (ii) no recourse to disputes with respect to quality of goods or otherwise; (iii) no set offs to be allowed.
(5) The postal offices will function as payment banks which would be allowed to-
(I) do payments services through various channels
(II) do remittance services through various channels
(III) issue credit cards
(IV)  undertake lending activities
Select the answer from the codes given below-
(a)    I and II                       (b) II and III
(c) III and IV                      (d) All of the above
Ans.(c)
Expl: (a) Expl. The Payment Banks would be allowed payments and remittance services through various channels. However, such lenders cannot issue credit cards or undertake lending activities. Post office in India has 1,54,000 rural branches, while all other banks put together have about 35,000 rural banks, most of which are not in rural panchayat towns.
A task force led by TSR Subramanian, former cabinet secretary, had suggested that government should leverage the post offices network of the country for extending services in the fields of banking, insurance and e-commerce.
(6) TheUnion  Budget 2015-16 proposed that Non-Banking Financial Companies (NBFCs) registered with RBI and having asset size of Rs.500 crore and above will be considered as ‘Financial Institution’ in order to-
(I)  bring parity in regulation of  NBFCs with other financial institutions in matters relating to recovery.
(II) bring parity in all activities of  NBFCs with commercial banks.
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)
Expl: To bring parity in regulation of Non-Banking Financial Companies (NBFCs) with other financial institutions in matters relating to recovery, it is proposed that NBFCs registered with RBI and having asset size of Rs.500 crore and above will be considered for notifications as ‘Financial Institution’ in terms of the SARFAESI Act, 2002.
(7) Which of the following statements is/are correct?
(I) Atal Pension Yojana will cover accidental death risk of Rs.2 lakh for a premium of just Rs.12 per year.
(II) Pradhan Mantri Suraksha Bima Yojna will provide a defined pension, depending on the contribution, and its period.
(a)    I only                        (b) II only
(c) I and II                     (d) None  of the above
Ans.(d)
Expl: Pradhan Mantri Suraksha Bima Yojna will cover accidental death risk of Rs.2 lakh for a premium of just Rs.12 per year. Similarly, we will also launch the Atal Pension Yojana, which will provide a defined pension, depending on the contribution, and its period. To encourage people to join this scheme, the Government will contribute 50% of the beneficiaries’ premium limited to Rs.1,000 each year, for five years, in the new accounts opened before 31st December, 2015. 
(8) TheUnion  Budget 2015-16 announces a social security Scheme colled the ‘Pradhan Mantri Jeevan Jyoti Bima Yojana’. Which of the followiong statements are correct regardinf the scheme?
(I)  Rs.2 lakhs is payable on a subscriber’s death due to any reason
 (II) The premium payable is Rs.330/- per annum per subscriber
(III) The scheme is for the age group 18-50
(a)    I and II                        (b) II and III
(c) I,  II and III                (d) None  of the above
Ans.(d)
Expl: The Pradhan Mantri Jeevan Jyoti Bima Yojana will be a one year cover Term Life Insurance Scheme, renewable from year to year, offering life insurance cover for death due to any reason.  The premium will be deducted from the account holder’s savings bank account through ‘auto debit’ facility in one installment, as per the option to be given on enrolment. Members may also give one-time mandate for auto-debit every year till the scheme is in force, subject to re-calibration that may be deemed necessary on review of experience of the scheme from year to year.
The scheme would be offered / administered through LIC and other Life Insurance companies willing to offer the product with necessary approvals on similar terms, in collaboration with participating Banks. Participating banks will be free to engage any such life insurance company for implementing the scheme for their subscribers.
All savings bank account holders in the age 18 to 50 years in participating banks will be entitled to join. In case of multiple saving bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one savings bank account only.
 The scheme will be administered by LIC or any other Life Insurance company which is willing to offer such a product in partnership with a bank / banks. It will be the responsibility of the participating bank to recover the appropriate annual premium in one installment, as per the option, from the account holders on or before the due date through ‘auto-debit’ process and transfer the amount due to the insurance company.Enrollment form / Auto-debit authorization / Consent cum Declaration form in the prescribed proforma, as required, shall be obtained and retained by the participating bank. In case of claim, LIC / insurance company may seek submission of the same. LIC / Insurance Company also reserve the right to call for these documents at any point of time.
(9) The Finance Bill 2015 provides for the establishment of Senior Citizens Welfare Fund. Which of the followiong statements are correct regardinf the fund ?
(I) The fund is alike to the Investor Education and Protection Fund to be constituted under the Companies Act 2013.
(II) The object of this fund to utilize for providing welfare of senior citizens and for such other purposes as may be prescribed.
(III) the administration of the fund would be done by the RBI
Select the answer from the codes given below
(a)    I and II                        (b) II and III
(c) I,  II and III                (d) None  of the above
Ans.(a)
Expl: The Central Government shall, from time to time, notify the eligible rate of interest for money lying in the Senior Citizen Welfare Fund.
For the administration of the fund the Central Government shall constitute, by notification, an Inter-Ministerial Committee consisting of a Chairperson and such other number of members as the Central Government may appoint.  The manner of administration of the Fund, holding of meetings of the Committee, shall be in accordance with such rules as may be prescribed.  It shall be competent for the Committee to spend money out of the Fund for carrying out the objects of the Fund.
(10) In the Budget 2015-16, the Central Government has announced the launching of an integrated education and livelihood initiative called-
(a) Nai Manzil
(b) Hamari Darohar
(c) Multi Sectoral Development Programme (MsDP)
(d) National Minorities Development & Finance Corporation (NMDFC)
Ans.(a)
Expl: The Union Budget 2015-16 announced an integrated education and livelihood scheme called ‘Nai Manzil’ for the benefit of the minority youths who do not have a formal school leaving certificate. This means that “Nai Manzil” is an enabling scheme for those in the category of school-dropouts or educated in the community education institutions like the Madarsas, to seek better employment in the organized sector and thus to equip them for better lives. The scheme also visualizes providing bridge courses to Madarsa educated youth to enable them to seek higher education.The scheme will be launched shortly. 
 


Saturday, 02nd May 2015, 11:04:48 AM

Add Your Comment:
Post Comment