Question Bank

4 questions

• Economy & Banking25 Apr 2026

  Reserve Bank of India (RBI) typically uses forex reserves for which of the following purposes? (Select the most comprehensive answer)

  1. A.Only managing rupee volatility
  2. B.Only servicing external debt
  3. C.Only ensuring import cover
  4. D.Managing rupee volatility, ensuring import cover, servicing external debt, supporting investor confidence, and buffering external shocks
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  Answer: D. Managing rupee volatility, ensuring import cover, servicing external debt, supporting investor confidence, and buffering external shocks

  RBI uses forex reserves for multiple purposes: (1) managing rupee volatility through dollar sales/purchases; (2) ensuring adequate import cover (3-6 months minimum, India typically 10-12 months); (3) servicing external debt obligations; (4) supporting investor confidence and sovereign credit ratings; (5) buffering against capital-flow reversals and external shocks. All of these together make forex reserves a comprehensive macro-stability tool.

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• Economy & Banking25 Apr 2026

  FASTag and NCMC services — both of which were prohibited for PPBL in January 2024 — are operated by:

  1. A.RBI directly
  2. B.Ministry of Finance
  3. C.National Payments Corporation of India (NPCI)
  4. D.Securities and Exchange Board of India (SEBI)
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  Answer: C. National Payments Corporation of India (NPCI)

  FASTag (electronic toll collection on national highways under the National Electronic Toll Collection or NETC framework) and NCMC ('One Nation One Card' launched March 2019) are both operated by the National Payments Corporation of India (NPCI). NPCI is the umbrella organisation for retail payments, established in 2008 as a Section 8 not-for-profit company.

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• Economy & Banking25 Apr 2026

  Which of the following is a key restriction on payments banks in India that distinguishes them from commercial banks?

  1. A.Cannot accept demand deposits
  2. B.Cannot offer credit/loans
  3. C.Cannot issue debit cards
  4. D.Cannot facilitate digital payments
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  Answer: B. Cannot offer credit/loans

  Payments banks CANNOT offer credit/loans — this is a key restriction distinguishing them from commercial banks and small finance banks. Payments banks CAN: accept demand deposits up to ₹2 lakh per customer, issue ATM/debit cards, facilitate payments and remittances, distribute non-risk-sharing financial products (mutual funds, insurance, pension).

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• Economy & Banking25 Apr 2026

  For the week ended 17 April 2026, India's Foreign Currency Assets (FCA) — the largest component of forex reserves — stood at:

  1. A.$417.46 billion
  2. B.$497.46 billion
  3. C.$557.46 billion
  4. D.$617.46 billion
  Show solution

  Answer: C. $557.46 billion

  Foreign Currency Assets (FCA) stood at $557.46 billion for the week ended 17 April 2026 — up $1.48 billion week-on-week. FCA is typically about 80% of India's total forex reserves and includes foreign currencies, deposits with foreign central banks and BIS, and foreign government securities (mainly US Treasuries).

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