Money and Banking MCQ Quiz - Objective Question with Answer for Money and Banking - Download Free PDF

The correct answer is option (3) i.e. 273.

• The Minimum Wages Act, 1948 is the act to to provide for fixing minimum rates of wages in certain employments.
• Since 1973 on the recommendation of B Bhagwati Committee  three estimates of unemployment have been brought by Planning Commission and they are:

1. Usual Principal Status - Persons who remained unemployed for major part of the year.
2. Current Weekly Status - Persons who did not find even a hour of work during the survey time.
3. Current Daily Status - Persons who do not got work for few days during survey week.

The correct answer is Commercial banks will have less money to lend.

Key Points

• Cash Reserve Ratio (CRR) refers to the percentage of deposits banks have to keep as reserve (in cash). This reserve sum is not available for banks for lending and thus if the CRR increases, banks will have less money to lend.
  • As per RBI regulations, a portion of a bank’s total deposit has to be maintained with the RBI as reserves in the form of liquid cash. This portion is decided by the RBI. The higher the CRR, the lower the amount available for lending in the market.
  • CRR is used by RBI to control the flow of money in the economy. 

Additional Information

• CRR ensures transparency of a bank in borrowing and lending in the credit market. 
  • CRR is also used to control inflation. When the inflation is high, RBI increases the CRR hence the banks are left with a lesser amount of money that can be lent as loans. As a result, the money flow is decreased and inflation is brought down.
  • Cash Reserve Ratio was set as 4.5 % in Nov 2022.

The correct answer is 115.

Key Points

• In February 2025, Muthoot Finance received approval from the Reserve Bank of India (RBI) to open 115 new branches across the country.
• This strategic expansion aims to strengthen Muthoot Finance's presence in the gold loan market, a key segment in India's financial sector.
• The approval aligns with Muthoot Finance's vision to broaden its reach, especially in rural and semi-urban areas, to cater to the growing demand for gold loans.
• Muthoot Finance is the largest gold financing company in India, with a market share of over 20% in the organized gold loan market.
• The new branches will enhance access to financial services, including gold loans, insurance, and money transfer services, among underserved populations.

Additional Information

• Gold Loan Market in India:
  • India is one of the largest consumers of gold globally, with households holding over 25,000 tons of gold, making gold loans a popular financial product.
  • Gold loans are secured loans where borrowers pledge their gold jewelry or ornaments as collateral.
  • The organized gold loan market in India is dominated by NBFCs like Muthoot Finance and Manappuram Finance, along with banks.
• Muthoot Finance Overview:
  • Muthoot Finance Limited is a leading Non-Banking Financial Company (NBFC) in India, founded in 1939.
  • It specializes in gold loans, money transfer services, investment products, and insurance services.
  • With a vast network of branches, Muthoot Finance primarily caters to rural and semi-urban customers.
• RBI's Role in Branch Approvals:
  • The Reserve Bank of India regulates NBFCs and approves their expansion plans, ensuring adherence to financial and operational guidelines.
  • Branch expansions are approved based on factors such as financial health, compliance history, and market demand.
• Impact of Branch Expansion:
  • Branch expansions improve financial inclusion by providing easier access to loans and other financial services in underbanked areas.
  • They also contribute to employment generation and support regional economic growth.

The correct answer is 0.054.

Key Points

• The 6th Annual Employment-Unemployment Survey (2016-17) by the Labour Bureau reported the overall unemployment rate in India as 5.4% (0.054).
• The survey highlighted a higher unemployment rate among women (8.7%) compared to men (4.0%).
• Rural unemployment stood at 5.1%, while urban unemployment was slightly higher at 5.8%.
• The survey aimed to provide detailed insights into employment patterns, labor force participation, and unemployment trends across various demographics.
• The report is considered a critical source for policymaking in addressing employment challenges in India.

Additional Information

• Unemployment Rate:
  • It refers to the percentage of individuals in the labor force who are unable to find jobs despite actively seeking work.
  • Unemployment is categorized into types such as structural, frictional, cyclical, and seasonal unemployment.
• Labour Bureau Surveys:
  • The Labour Bureau, under the Ministry of Labour and Employment, conducts these surveys to assess employment and unemployment trends in India.
  • The surveys are critical in identifying challenges in the labor market and formulating evidence-based policies.
• Periodic Labour Force Survey (PLFS):
  • Since 2017-18, the PLFS by the National Statistical Office (NSO) has replaced the Labour Bureau surveys for better and more frequent labor market data.
  • PLFS provides quarterly estimates for urban areas and annual estimates for both rural and urban regions.
• Labor Force Participation Rate (LFPR):
  • It is the percentage of the working-age population that is either employed or actively seeking employment.
  • India's LFPR has historically been low, particularly for women, due to various social, economic, and cultural factors.
• Policy Interventions:
  • The Indian government has launched schemes like MGNREGA, Skill India, and Start-Up India to address unemployment and enhance skill development.
  • These initiatives aim to provide employment opportunities and promote entrepreneurship among the youth.

The correct answer is It will increase.

Key Points

• Cash Reserve Ratio (C. R. R.) refers to the number of money banks have to keep with the central bank.
• If RBI reduces the cash reserve ratio, credit creation will increase.
• Banks have more money at their disposal when the CRR requirement is reduced, which can subsequently be utilized to create credit in the economy.
• When determining the base rate, one of the reference rates is the Cash Reserve Ratio.
• The base rate is the lowest lending rate at which a bank is not permitted to lend money.
• The Reserve Bank of India determines the base rate.

Important Points

• When the RBI decides to increase the Cash Reserve Ratio, the amount of money that is available with the banks reduces.
• This is the RBI’s way of controlling the excess flow of money in the economy.

The correct answer is Custom duties.

Important Points

• The tax imposed on the import and export of commodities is called Custom duties.
• This is a form of foreign trade control and a policy that taxes foreign goods to encourage or protect domestic industry.
• Tariffs may be set (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies by price). Import taxation means that consumers are less likely to purchase them because they are more costly.
• An excise tax is an indirect tax on the sale of a particular good or service charged by the Government.
• A VAT (Value-added tax) is a consumption tax that is imposed on a product whenever a value is added at each stage of the supply chain, from production to point of sale.
• Goods and Services Tax(GST) is an Indirect tax on the purchase of goods and services used in India.

The correct answer is Ellora Caves.

Key Points

• In April 2019, RBI issued new Rs. 20 currency notes in the Mahatma Gandhi (New) series. 
• The new Rs 20 notes have the signature of the Reserve Bank's Governor.
• The base colour of the new note is Greenish Yellow.
• The new (Rs 20) denomination has the motif of Ellora Caves on the reverse side of the note.
• The dimension of the banknote will be 63 mm x 129 mm.

Additional Information

The correct answer is Sanchi Stupa.

Key Points 

• Rs 200 note
  • The motif of the new denomination Rs. 200 is Sanchi Stupa on the reverse and its colour is Bright Yellow.
  • The dimension of the banknote is 66 mm*146 mm.
  • It is released on 25 August 2017.
  • The obverse design is of Mahatma Gandhi.
• The Reserve Bank of India has the sole authority to issue banknotes in India except for the one-rupee note which is released by the Ministry of Finance.
• The Government of India is the issuing authority of coins and supplies coins to the Reserve Bank on demand.
• Along with new 200 Rs. note Rs. 2000, 500, 200, 100, 50, 20,10 banknotes were also released.

Additional Information 

The correct answer is fluorescent blue. Key Points

• The Rs. 50 banknote of the Mahatma Gandhi (New) series has a base color of fluorescent blue.
• It is part of the new series of Indian currency notes introduced by the Reserve Bank of India (RBI).
• The color fluorescent blue is chosen to enhance the security features of the banknote and make it more difficult to counterfeit.
• The reverse of the new 50 rupee banknote in the Mahatma Gandhi (New) series has a motif of the Hampi with Chariot.
• Hampi is an ancient city located in the state of Karnataka, India. It is a UNESCO World Heritage Site and was once the capital of the Vijayanagara Empire.

Important PointsOther notes of Indian Currency-

The correct answer is FII.

Key Points

• Foreign Institutional Investor (FII) is known as Hot money.
• FII is an investor or investment body that is present outside the country.
• Hot Money refers to funds that are controlled by investors who actively seek short-term returns.

Additional Information 

• Foreign direct investment (FDI): 
  • FDI is an investment in the form of controlling ownership in a business in one country by an entity based in another country. 
• ​American Depositary Receipts (ADR): 
  • ADRs are a type of stock that allows US people to invest in non-US corporations and receive dividends in US dollars.
• Global Depositary Receipts (GDR): 
  • GDRs are like ADRs except for the fact that it is listed on an exchange outside the United States and help the issuer raise funds simultaneously in different markets like Luxembourg or London.

• The question asks about Language Panel and NOT the whole note.

Key Points

• Contemporary Currency notes have 15 languages on the panel which appears on the reverse of the note.
• Source - https://www.rbi.org.in/scripts/ic_languagepanel.aspx
• Languages included on the panel are Assamese, Bengali, Gujarati, Kannada, Kashmiri, Konkani, Malayalam, Marathi, Nepali, Odia, Punjabi, Sanskrit, Tamil, Telugu, and Urdu.
• The Reserve Bank has the sole authority to issue banknotes in India.
• Reserve Bank, like other central banks the world over, changes the design of banknotes from time to time.
• The Reserve Bank has introduced banknotes in the Mahatma Gandhi Series since 1996 and has so far issued notes in the denominations of Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.2000 in this series.
• Source - Here

The correct answer is disguised unemployment.

Important Points

• The type of unemployment in the agricultural sector of India where more people are employed than required is known as disguised unemployment.
  • It is a common form of unemployment in rural areas.
  • Disguised unemployment will occur when more people are engaged in a job than required.
  • A study conducted in the late 1950s reported that one-third of agriculture workers in India as disguisedly unemployed
• Unemployment is the situation where a person is searching for a job but not able to get one.

Additional Information

• Seasonal unemployment is the unemployment that occurs during a certain season of the year.
  • Unemployment of the farmers during non-crop season is an example of seasonal unemployment.
• Structural unemployment is unemployment that arises due to the change in the structure of the economy.

The correct answer is Union Budget 2021-22.

Key Points

• On 1 February 2021, Finance Minister Nirmala Sitharaman presented the first paperless budget. This was done due to the ongoing COVID-19 pandemic in India.
• The Union Budget 2021 was presented in a digital format for the first time to promote the Government of India's (GoI) Digital India flagship programme.

Additional Information

• The Union Budget of India also referred to as the Annual Financial Statement in Article 112 of the Constitution of India, is the annual budget of the Republic of India.
• The Government presents it on the first day of February so that it could be materialized before the beginning of the new financial year in April.
• Until 2016 it was presented on the last working day of February by the Finance Minister in Parliament.
• The budget division of the department of economic affairs (DEA) in the finance ministry is the nodal body responsible for producing the budget.
• It is presented by means of the Finance Bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect on 1 April, the start of India's financial year.
• Since 1947, there have been a total of 73 annual budgets, 14 interim budgets, and four special budgets, or mini-budgets.

The correct answer is Mangalayan.

Key Points

• India witnessed the second major monetary reform in November 2016 when it withdrew the legal tender status of ₹ 500 and ₹ 1,000 denominations of banknotes of the Mahatma Gandhi Series.
• It was issued by the Reserve Bank of India on November 8, 2016.
• The new banknotes were introduced in the Mahatma Gandhi (New) Series, highlighting the cultural heritage and scientific achievements of the country.
• Distinct colours were used for the different denominations and size was reduced.
• Two new denominations viz. ₹ 2000 on November 08, 2016, and ₹ 200 on August 23, 2017, were introduced in the Mahatma Gandhi (New) Series.
• Rupees Two Thousand Size: 66 x 166 mm
• Motifs: Mangalayam

Additional Information

The correct answer is Tiger.

Key Points

• Tiger is the animal present on the insignia of the RBI.
  • Insignia of the RBI consist of a tiger and palm tree.
  • Initially, Insignia of the RBI consist lion and palm tree, but later it was decided to replace the lion with the tiger.
  • Tiger is the national animal of India.

Additional Information

• Reserve Bank of India was formed on 1^st April 1935.
  • It is the central bank of India.
  • The recommendation of the Hilton Young Commission in 1926 leads to the formation of the Reserve Bank of India.
  • Reserve Bank of India is also called a "banker's bank".
  • RBI was nationalised on 1^st January 1949.
  • RBI issues all the currency notes above one rupee.
• Sir Osborne Smith served as the first governor of RBI.
• C. D Deshmukh served as the first Indian governor of RBI.
• Sanjay Malhotra is the current governor of RBI.