220+ Banking Services Management BSM Solved MCQs with PDF Download

Because households would have more money, there would be an increase in the demand for products and services. Lower money supply in the economy is the result of higher interest rates. As the money supply shrinks, borrowing prices rise, making it more expensive for consumers to carry debt. India’s total money supply increased by 9.9 percent over the same period the previous year, reaching Rs 19,09,6038 crore as of June 4th, 2021. The amount of money in circulation was Rs 2,87,8,270 crore, up 13.1% yearly.The reason for the surge was India continues to receive foreign currency, which raises demand for the rupee relative to the dollar.

Although the who regulates the money circulation in india has the power to print Indian currency, the government still has the final say on a majority of the Reserve Bank’s actions. For example, the government decides whichdenominationsare printed and the design of the banknotes, including the security features. As per IMD, the weather system is likely to concentrate into a depression over southeast Bay of Bengal around May 9 and intensify into a cyclonic storm and move nearly northward towards central Bay of Bengal. Doctors typically suggest exercise as one of the initial treatments for patients who have recently been diagnosed with type 2 diabetes, along with dietary modifications. Exercises like running, lifting weights, and high-intensity interval training all aid in better glucose management and control of blood sugar levels.

They do so by lending the money they get to those who need it for various purposes. I may be setting up a plant to produce some item and may need long-term capital. I may need capital to pay wages to my workers and also to buy raw material.

Objectives of the Financial Market Regulators

Japan established the Japanese Virtual Currency Exchange Association in 2020, and all crypto exchanges are members. The PSPR distinguishes between four categories of payment services providers and sets out the rules governing those, namely each of a micro payment institution , a major PI, a micro-electronic money institution and a major EMI. Regulatory responses to supervise the changing payments landscape vary across jurisdictions and are dependent on multiple factors. The two key general approaches for the achievement of regulatory objectives are rules-based regulatory approach and principle-based regulatory approach.

SARIE is an important component of the payments infrastructure and environment in the KSA. SARIE has facilitated the development of a wide range of electronic banking systems. The ministry of corporate affairs regulates corporate affairs in the country through the Companies Act 1956, 2013, and other allied Acts and rules & regulations.

However, the CIC was back up rapidly and was over 28 trillion rupees as of March 2021. The currency in circulation in a country is part of the total money supply chain, and it represents the physical cash that people might have in hand or stored in banks or other financial institutions. The bank’s additional responsibilities include regulating the country’s credit systems and using monetary policy to establish financial stability in India. Before 1934, the government of India had the responsibility of printing money. However, RBI was granted its role in currency management on the basis of the Reserve Bank of India Act in 1934.

A part of the profit earned by my business is paid to the banks as interest for the loan I have taken. What this means is that a bank does not have the money that its depositors deposited with it. If all the depositors come to a bank and want to withdraw their deposits, the bank would not be able to pay them. This is where the RBI plays the role of a banker to the banks, giving money to the banks. Central banks have been exploring a number of use cases in blockchain technology.

Central banks in the US, Singapore and the UK have already set up separate FinTech advisory arms to engage with FinTechs through different initiatives such as open banking and sandbox regulatory frameworks. Data protection is one of the critical considerations in digital payments and regulators have mandated banks to share customer data only with authorised third-party service providers after consent has been obtained from the customer. For example, the General Data Protection Regulation , a data protection and privacy regulation for the EU, addresses the issue of transfer of data within and outside the EU. International remittances contribute to more than 20% of the gross domestic product of certain countries.

Payment and Settlement: The Plumbing in the Architecture of India’s Financial System

Its sole purpose is to secure the smooth functioning of the corporate sector in India. Sannihitha Ponaka is an MBA graduate from Symbiosis and has more than 5 years of experience in the financial sector. Following her dreams in the field of finance, she leverages writing to communicate the importance of investing.

Commodity trading is permitted on 22 Indian exchanges, six of which are national. Checking price-fixing, preventing insider trading, promoting fair procedures, and raising financial awareness among investors are some of its safeguarding functions. The several types of money that circulate in an economy such Full-bodied money, Token money/credit money/paper money, and Representative Full-bodied money.

There is a 30% tax levied on all crypto investments and a 1% tax deduction at source on crypto trades. The government is working on the Digital Asset Basic Act, which might take shape by the first half of 2023. Australia classifies cryptocurrencies as legal property, making them subject to capital gains tax. It resulted in significant implications in the 19th century when the world’s largest countries were under the gold standard. The discovery of huge volumes of silver in the European colonies and the U.S. sparked the panic of 1873.

All bankers use the technique of a margin requirement to calculate the loan value of security supplied as collateral by the borrower. These tools are used to differentiate between different types of credit, such as preferring export credit over import credit or important credit supply over non-essential credit supply. Barbados’ currency is the Barbados dollar, which is pegged to the U.S. dollar at a rate of Bds$2 to $1.

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Prescribes the parameters for the functioning of India’s banking and financial system. “…to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.” The Paraguay guarani is the national currency of Paraguay, which was first issued in 1944. The Reserve Bank of India is the central bank of India, which was established on Apr. 1, 1935, under the Reserve Bank of India Act. Although the government handles minting coins, the Reserve Bank issues them for circulation.

The Odisha government has already put collectors of 18 coastal and adjoining districts and officials of 11 departments on the alert, its special relief commissioner Satyabrata Sahu said on Wednesday. The Met office in Bhubaneshwar had also informed that a cyclonic circulation is likely to develop over Southeast Bay of Bengal around May 6. Under its influence, a low pressure area is likely to form over the same region around May 7. It is likely to concentrate into a depression over Southeast Bay of Bengal on May 8. The naming of the cyclone was done as per the decree issued by the World Meteorological Organisation , which states that each cyclone must be named to avoid confusion in instances where multiple systems operate in one location.

Different forms of money, liquidity

AMFI checks all the investors and companies under it and sees whether they all follow the regulations. To maintain a repository related to trading goods with information regarding supply, demand, and prices and address all data to the central government. Its headquarters are in Mumbai, Maharastra, and the Ministry of Finance administers FMC.

Controls and regulates the rates, terms and conditions of the insurance policies. The Insurance Regulatory and Development Authority of India is the authority that regulates insurance in India. Furthermore, the regulatory body was established under the Insurance Regulatory and Development Authority Act of 1999. Issues, exchanges, and destroys coins that are not fit for circulation.

PFRDA protects clients and pensioners from fraud and other malpractices and listens to their grievances. IRDA regulates and ensures that the insurance reaches rural areas and vulnerable parts of society. World-class wealth management using science, data and technology, leveraged by our experience, and human touch. Resolves disputes between insurers and intermediaries or insurance intermediaries. Specifies code of conduct, qualifications, and practical training for insurance intermediaries and agents.

Banking Services Management (BSM) Solved MCQs

HVPS has come a long way from deferred net settlement systems which settle transactions only at the end of each day to real-time gross settlement systems which settle transactions on a continuous basis. More than 150 RTGS systems are currently in operation, a few of which have also introduced multi-currency functionality to enable cross-border payments. An easy way to learn everything about stocks, investments, and trading.

2) The foremost responsibility of RBI is to maintain the supply of currency in the country. RBI has to address all the issues related to the currency, such as printing money or removing old coins. It acts as a bank to the state banks in the country and funds them as per requirements.

It’s worth noting that in a surprise move on November 8, 2016, the Indian government announced it would be withdrawing 500 and 1,000 rupee notes from circulation to help curb counterfeiting and corruption. To deter counterfeiting and fraud, the Indian government withdrew the 500 and 1,000 rupee notes from circulation in 2016. He said the details about the path and intensification will be provided after the formation of a low-pressure area. Mohapatra said the weather system was likely to concentrate into a depression over southeast Bay of Bengal around May 9 and intensify into a cyclonic storm and move nearly northward towards central Bay of Bengal. India’s benchmark indices dropped 1% on Friday, wiping out the previous day’s gains, as lenders — led by HDFC group stocks — led the selloff.

• Japan established the Japanese Virtual Currency Exchange Association in 2020, and all crypto exchanges are members.
• Commercial banks, international money transfer operators , local MTOs, postal networks, exchange bureau and agents can all be categorised as RSPs.
• Adoption of increased settlement cycles and sophisticated liquidity management systems with high availability.
• One of the issues the Biden administration seeks to tackle is illegal cryptocurrency activity.

This classification was introduced in April 1977 by the Reserve Bank of India. Standard coins/full-bodied coins – Standard coins are ones whose face value is equivalent to their intrinsic value. For example – A five rupee coin will be referred to as a standard coin and accepted as full-bodied money if the metal content is equal to five rupees. The Reserve Bank of India prints and manages currency in India, whereas the Indian government regulates what denominations to circulate. Full BioMichael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.

Some of these are customer behaviour and expectations, technological innovation, emergence of non-banking and FinTech players, financial inclusion and the need for better payments instruments and settlement services. Financial market regulators are government bodies or agencies appointed by ministries or the government of India to restrict and control financial institutions in the country. A financial institution refers to any organization—banks, insurance companies, or any other financial body—which participates in financial transactions like accepting deposits, extending loans, or simply exchanging money. The banks themselves hold some money in their ATMs and vaults for their daily requirements, and this money is not with the public.

Full BioKevin George is a freelance crypto writer and editor for Investopedia. He holds a master’s degree in finance and has extensive knowledge and experience in the area of trading, markets, and economics. Other exchange rates, such as INR/JPY and EUR/INR, are subject to fluctuations characteristic of floating exchange rates. As a result, it generates arbitrage opportunities against the exchange rates.

The main objective of this financial regulatory body is to promote and develop an organized pension system that can serve the needs of Indian citizens. PFRDA launched the National Pension Scheme in 2003, and in 2009, it was expanded to all sections of the population. Its headquarters are located in Delhi, and regional offices are spread across India. A.section 10 of the banking regulation act, 1949.B.section 3 of the r.b.i. act, 1934.C.section 31 of the negotiable instruments act, 1881.D.none of theseAnswer» C. Prohibits a banking company from creating a charge upon any unpaid capital of the company.

Furthermore, the main objective of the regulator body is to ensure income security for senior citizens by regulating and developing pension funds. Central bank money is designated as M0 in money supply data, whereas commercial bank money is subdivided into M1 and M3 components. The Central Bank of the country keeps track of the overall money supply. A change in the supply of money in an economy can alter the price level of securities, inflation, currency rates, corporate practices, and so on. Money Supply is the total amount of money circulating in an economy at a given point in time.