Subtopic

Reserve Bank of India & Monetary Policy

Under theme: Indian Economy

52 PYQs. Learn elimination tricks first, then attempt the questions below.

Questions52

Active years13

Tricks15

Timed practice

Attempt all Reserve Bank of India & Monetary Policy PYQs as one test

Every PYQ in this subtopic — exam mode with autosave, negative marking, and explanations after you submit.

52questions
104minutes
−33%per wrong

Practice

Elimination tricks

15 from PYQs

Common distractors and how to eliminate wrong options in this subtopic.

1
Always check the specific year or act mentioned for definitions, as they can change over time.
1
Always place currency as the most liquid asset, as it is cash.

Show 13 more tricks Hide extra tricks

1
Avoid absolute statements like 'no minimum requirement'; they are often false in regulatory contexts.
1
Avoid assuming central bank intervention unless the question explicitly specifies policy actions.
1
Avoid assuming that certain functions like branch expansion or winding-up are solely government's domain; RBI…
1
Avoid confusing SLR with other monetary policy tools like CRR or Repo Rate, though all affect liquidity.
1
Avoid narrowing down PSL categories; remember it's a comprehensive list designed for broad economic and socia…
1
Avoid options that combine contradictory policy actions (e.g., cutting taxes but increasing interest rates) i…
1
Avoid options that describe regulatory measures for new loans or capital infusion, which are distinct from as…
1
Be aware of recent amendments (like 2020) that change the powers and functions of financial institutions like…
1
Be aware of the historical context of institutions, as bodies can be reformed or replaced, which might be a s…
1
Be aware of the recent policy changes making major digital payment systems like RTGS and NEFT available 24x7.
1
Clearly understand that higher interest rates in a major economy attract capital, leading to capital flight f…
1
Connect policy rate changes directly to the RBI's monetary policy stance (tightening or easing).
1
Differentiate between statutory reserves for systemic liquidity and banks' operational cash management for da…

PYQs in this subtopic

2013

2014

2015

2016

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2018

2019

2020

2021

2022

2023

2024

2025

UPSC Prelims 2013 easy Economy Open full page

Supply of money remaining the same when there is an increase in demand for money, there will be:

Explanation

With an increase in demand for money, people will deposit less money in banks. Hence, banks will increase the rate of interest to attract people to deposit money in the bank. Alternatively, Supply remains the same, and an increase in demand for money will lead to more options to lend money for the banks. Thus, banks will lend money at a greater rate of interest to earn more money as there are more customers for the same amount of money.

UPSC Prelims 2013 medium Social Issues & Schemes Open full page

Priority Sector Lending by banks in India constitutes the lending to:

Explanation

Banks have to lend a minimum of 40% to the priority sector, which includes all of the given sectors. Priority Sector Lending is an important role given by the Reserve Bank of India (RBI) to the banks for providing a specified portion of the bank lending to a few specific sectors, like:
- Agriculture and allied activities, - Micro and small enterprises, - Poor people for housing, - Students for education, and - Other low-income groups and weaker sections. This is essentially meant for all-round development of the economy as opposed to focusing only on the financial sector.

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