1. The Narasimham Committee-I (1991) recommended the reduction of SLR and CRR to:
Help the government borrow more funds at cheaper rates.
Encourage the nationalization of more banks.
Control inflation by reducing money supply.
Increase the profitability of banks by allowing them more funds for commercial lending.
Explanation:
High SLR and CRR meant a large portion of bank funds were locked up in low-yielding government securities or idle cash (pre-emption of funds). Narasimham-I recommended reducing these ratios to release funds for productive commercial lending, thereby improving bank profitability and efficiency.
2. The mega-merger of Public Sector Banks (PSBs) in 2019-20 reduced the number of PSBs to:
Explanation:
Following the amalgamation of 10 PSBs into 4 anchor banks, the total number of PSBs in India came down to 12, creating larger and stronger banks.
3. Which pillar of the Basel II/III framework deals with "Supervisory Review Process"?
Pillar 4
Pillar 2
Pillar 1
Pillar 3
Explanation:
Basel Norms have 3 pillars: Pillar 1 (Minimum Capital Requirements), Pillar 2 (Supervisory Review Process - ICAAP), and Pillar 3 (Market Discipline - Disclosures).
4. The "Liquidity Coverage Ratio" (LCR) under Basel III norms ensures that banks have enough high-quality liquid assets to survive an acute stress scenario lasting for:
14 Days
7 Days
30 Days
90 Days
Explanation:
LCR promotes short-term resilience by ensuring banks have sufficient High-Quality Liquid Assets (HQLA) to survive a significant stress scenario lasting 30 calendar days.
5. The Narasimham Committee-II (1998) specifically recommended the introduction of which concept to strengthen the banking system?
Small Finance Banks
Priority Sector Lending Certificates
Narrow Banking for weak banks
Universal Banking
Explanation:
The committee suggested "Narrow Banking" for banks with high NPAs, aiming to restrict their activities to risk-free investments (like G-Secs) to ensure depositors' safety.
6. The "Mission Indradhanush" for banking reforms launched in 2015 aimed to revamp:
Public Sector Banks (PSBs)
Regional Rural Banks
Cooperative Banks
Private Sector Banks
Explanation:
Mission Indradhanush was a 7-pronged plan to resolve issues of PSBs, including Appointments, Banks Board Bureau, Capitalization, De-stressing, Empowerment, Framework of Accountability, and Governance Reforms.