Indian Financial System & Banking Structure Part 2
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary role of the Reserve Bank of India (RBI) in the Indian financial system?
The RBI acts as the central bank of India, responsible for monetary policy formulation, regulation of banks and financial institutions, and maintaining financial stability and currency management.
What is the Cash Reserve Ratio (CRR) and which authority mandates it?
Percentage of deposits banks must keep with RBI; mandated by RBI.
What is the difference between a scheduled bank and a non-scheduled bank in India?
A scheduled bank is included in the Second Schedule of the RBI Act, 1934, and must maintain a minimum paid-up capital and reserves of Rs 5 lakh, while non-scheduled banks do not meet these criteria and have limited access to RBI facilities.
What is the Liquidity Adjustment Facility (LAF) used for by RBI?
LAF manages short-term liquidity in the banking system via repo and reverse repo.
What are the three pillars of the Indian financial system?
The three pillars of the Indian financial system are financial institutions, financial markets, and financial instruments (securities), all regulated by statutory bodies like RBI, SEBI, IRDA, and PFRDA.
What is the Standing Deposit Facility (SDF) introduced by RBI?
SDF allows banks to park excess funds with RBI without collateral.
Which body regulates the capital markets and securities trading in India?
The Securities and Exchange Board of India (SEBI), established under the SEBI Act 1992, regulates capital markets, stock exchanges, mutual funds, and securities trading in India.
What are Systemically Important Banks (D-SIBs) in India?
Large banks whose failure could destabilize the financial system; SBI and HDFC are D-SIBs.
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