Correct Answer :   1994

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A currency is deemed convertible on the current account if it can be freely converted into other convertible currencies for purchase and sale of commodities and services. For example, if the rupee is convertible on the current account an Indian firm should be able to freely convert rupee into Yen (JPY) to purchase from a Japanese Company. Since August 20, 1994, the rupee has been made a freely convertible currency on current account.

Correct Answer :   IDBI

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IDBI Bank Limited is an Indian financial service company headquartered Mumbai, India. RBI categorised IDBI as an “other public sector bank”. It was established in 1964 by an Act of Parliament to provide credit and other facilities for the development of the fledgling Indian industry. The Industrial Development Bank of India (IDBI) was established on 1 July, 1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16 February, 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in the country.

Correct Answer :   Four tier hierarchy of the Banking structure

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Two expert Committees were set up in 1990s under the chairmanship of M. Narasimhan (an exRBI (Reserve Bank of India) governor). The first Narasimhan Committee (Committee on the Financial System - CFS) was appointed by Manmohan Singh as India’s Finance Minister on 14 August 1991, and the second one (Committee on Banking Sector Reforms) was appointed by P. Chidambaram as Finance Minister in December 1997. The 1991 committee submitted its report to the Finance Minister in November 1991 which was placed on the table of Parliament on December 17, 1991. It recommended the introduction of a four tier banking system in the country:

I tier: 3 or 4 International Banks;
II tier: 8 to 10 National Banks;
III tier Regional Banks;
IV tier: Rural Banks.

Correct Answer :   2007 to 2012

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Eleventh Five-Year Plan (2007–2012) aims to accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016–17; create 70 million new work opportunities; increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits; etc.

Correct Answer :   Population growth

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Rising population can be a virtue or can be vice with regards to economic development of a country. In India, demerits of population growth outweigh its merits. Due to large population size and its rate of growth, our per capita income continues to be stagnant at a low level. Since First Five Year Plan, our national income has increased about 11 times but our per capita income has increased only about three and half times, thanks to the rise in population. Also, large population size has tended to reduce the land man ratio in India which reduces productivity of land and labour. Growing population has also reduced per capita availability of cereals and pulses. Further, due to high growth rate of population, unemployment is assuming monstrous proportions. Lack of employment opportunities outside agriculture, builds pressure on farming as a source of subsistence. Consequently, disguised unemployment in the farming sector is emerging as a serious challenge.

Correct Answer :   Sick Industiral Companies Act

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The Board for Industrial and Financial Reconstruction (BIFR) is an agency of the government of India, part of the Department of Financial Services of the Ministry of Finance to determine sickness of industrial companies and to assist in reviving those that may be viable and shutting down the others. It was established under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The board was set up in January 1987 and became functional as of 15 May 1987.

Correct Answer :   Sales tax

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The principal source of States own tax revenues is sales tax which accounts for about 60 per cent of the total. The other major components of States own tax revenues according to their revenue share are State excise, registration and stamp duty, motor vehicle and passenger tax, electricity duty, land revenues, profession tax, entertainment taxes and other sundry taxes. In the wake of economic reforms, several States competitively announced various tax concessions, especially sales tax concessions, to attract private investments. These tax wars resulted in considerable reduction in the buoyancy of growth of tax revenues of the States without commensurate gains in terms of private investment.

Correct Answer :   II Schedule of Reserve Bank of India Act

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Commercial banks are classified into two: (a) Scheduled banks and (b) other banks. A scheduled bank is one which is included in the second schedule of Reserve Bank of India Act, 1934. A scheduled bank should comply with the following terms: (i) It must have paid up capital and reserves as specified; and (ii) the activities to be carried out should not be detrimental to the interests of the depositors; and (iii) it should be incorporated under the Companies Act, 1956, that is, it should not be the sole trader for a partnership firm or business organization.

Correct Answer :   Selling of gilt-edged securities by the Government

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An open market operation (also known as OMO) is an activity by a central bank to buy or sell government bonds on the open market. A central bank uses them as the primary means of implementing monetary policy. The usual aim of open market operations is to control the short term interest rate and the supply of base money in an economy, and thus indirectly control the total money supply. This involves meeting the demand of base money at the target interest rate by buying and selling government securities, or other financial instruments. Monetary targets, such as inflation, interest rates, or exchange rates, are used to guide this implementation.

Correct Answer :   Varada Grameen Bank

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Varada Grameena Bank is a Regional Rural Bank (RRB) named after the Wardha River which is one of the biggest rivers in Vidarbha region in India. It is one of those banks which were amalgamated and newly opened. It has been serving Kumta in Karnataka, providing excellent banks service to those in need.