Finance MCQ Quiz in తెలుగు - Objective Question with Answer for Finance - ముఫ్త్ [PDF] డౌన్‌లోడ్ కరెన్

The correct answer is UPI.

Key Points

• UPI stands for Unified Payments Interface.
• It is a real-time payment system developed by the National Payments Corporation of India (NPCI).
• UPI facilitates inter-bank transactions by instantly transferring funds between two bank accounts on a mobile platform.
• This digital payment method has seen rapid adoption due to its ease of use and security features.
• In 2024, UPI recorded a 45% increase in transaction volume, highlighting its growing popularity in India.
• UPI supports multiple banks and has a wide range of applications including peer-to-peer transfers, bill payments, and merchant transactions.
• It is supported by major banks and numerous third-party apps like Google Pay, PhonePe, and Paytm.

 Additional Information

• NEFT
  • NEFT stands for National Electronic Funds Transfer.
  • It is a nationwide payment system facilitating one-to-one funds transfer.
  • Transfers through NEFT are settled in batches and are not real-time.
• RTGS
  • RTGS stands for Real Time Gross Settlement.
  • It is used for large-value transactions that need to be settled in real-time on a gross basis.
  • RTGS is primarily meant for high-value transactions and has a minimum transfer limit.
• IMPS
  • IMPS stands for Immediate Payment Service.
  • It is an instant interbank electronic fund transfer service through mobile phones and internet banking.
  • IMPS is available 24/7 and is used for smaller value transactions compared to RTGS.

Key Points

• Open Market Operations (OMO) involve the buying and selling of government securities in the open market by the Reserve Bank of India (RBI).
• This monetary tool is used to regulate the money supply in the economy.
• When the RBI buys securities, it injects liquidity into the financial system, making funds more available for banks to lend.
• Conversely, when the RBI sells securities, it absorbs liquidity from the market, reducing the amount of money available for lending.
• OMOs are crucial for maintaining economic stability, especially during periods of volatile global conditions.
• By adjusting the liquidity in the financial system, the RBI can influence interest rates and control inflation.
• In FY 2023-24, OMOs were persistently used to ensure the financial system remains robust against external shocks.

 Additional Information

• Increase in Cash Reserve Ratio (CRR)
  • The Cash Reserve Ratio (CRR) is the percentage of a bank's total deposits that must be held in reserve, in the form of cash, with the RBI.
  • An increase in CRR means banks have less money to lend, which can help control inflation but may not be as effective in managing liquidity during volatile conditions.
• Decrease in Statutory Liquidity Ratio (SLR)
  • The Statutory Liquidity Ratio (SLR) is the percentage of a bank's net demand and time liabilities that must be maintained in the form of liquid assets, such as cash, gold, or government-approved securities.
  • A decrease in SLR would make more funds available for lending but might not provide the precise control over liquidity that OMOs offer.
• Implementation of Targeted Long Term Repo Operations (TLTRO)
  • Targeted Long-Term Repo Operations (TLTRO) allows banks to borrow money from the RBI for a period of up to three years at a fixed repo rate.
  • These funds are specifically directed towards investment in corporate bonds and commercial paper, aiding specific sectors but not providing the broad liquidity management that OMOs do.

The correct answer is  1, 2 and 3.

Key PointsSEBI Exit Guidelines for Stock Exchanges

• Statement 1: SEBI requires stock exchanges to have an annual trading turnover of ₹10 billion under its exit guidelines.
  • This statement pertains to the criteria that SEBI has set for stock exchanges to remain operational. As per the guidelines, a stock exchange must meet an annual trading turnover threshold of ₹10 billion to continue functioning.
  • This criterion is significant to ensure that only exchanges with substantial trading activity and liquidity are operational.
  • Hence, statement 1 is correct.
• Statement 2: Stock exchanges failing to meet criteria within two years are subject to compulsory exit.
  • This statement mentions a time frame of two years for stock exchanges to meet the criteria set by SEBI, failing which they are subject to compulsory exit
  • Hence, statement 2 is correct.
• Statement 3: The exit guidelines were implemented in 2012.
  • This statement refers to the year of implementation of SEBI's exit guidelines for stock exchanges. The guidelines were indeed introduced in 2012.
  • This information is correct and aligns with SEBI's regulatory updates.
  • Hence, statement 3 is correct.

Additional Information

• Securities and Exchange Board of India (SEBI):
  • The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India, established in 1988 and given statutory powers through the SEBI Act, 1992.
  • SEBI's primary functions include protecting investor interests, promoting and regulating securities markets, and ensuring market integrity and transparency.
• Exit Guidelines for Stock Exchanges:
  • The exit guidelines were formulated to ensure that stock exchanges maintain a certain level of trading activity to remain operational.
  • The guidelines provide a framework for the voluntary exit of stock exchanges that are unable to maintain the prescribed turnover threshold.
  • They also include provisions for compulsory exit in cases where exchanges fail to meet regulatory requirements.
• Annual Trading Turnover:
  • Annual trading turnover is a critical metric for stock exchanges, indicating the total value of securities traded on the exchange over a year.
  • A higher turnover reflects greater market activity and liquidity, which are essential for the efficient functioning of stock markets.

The correct answer is 1 and 3 only.

Key Points

• NBFCs play a critical role in bridging the financial inclusion gap by serving MSMEs and rural borrowers.
• They are allowed to provide infrastructure loans within RBI guidelines.
• Customized loan products make NBFCs attractive to niche market segments.
• NBFCs often complement banks by serving high-risk or low-profitability sectors.

Additional Information

• Infrastructure Loans: Include funding for roads, bridges, and renewable energy projects.
• Flexibility: NBFCs are agile and can tailor products based on customer requirements.
• MSMEs: A significant portion of NBFC credit is directed toward this underserved sector.

The Correct answer is Option 1. 

Key Points

• It was launched by the President of India on 17th September 2023 (1): This statement is NOT true. The PM-VISHWAKARMA scheme was launched by the Prime Minister of India, not the President, on this date.
• It is a Central Sector Scheme (2):  This statement is true. PM-VISHWAKARMA is indeed classified as a Central Sector Scheme.
• The new scheme intends to provide recognition and holistic support to traditional artisans (3):  This statement is true. The scheme aims to support and recognize traditional artisans and their contributions.
• The scheme intends to improve the quality, scale and reach of artisans’ products (4):  This statement is true. PM-VISHWAKARMA focuses on enhancing the quality and market reach of artisans' products.
• The statement that is NOT true in relation to PM-VISHWAKARMA is Option 1.

The correct answer is  All of the above.

Key PointsImpact of GST on Tax Compliance and Ease of Doing Business in India

• Simplified tax compliance: The introduction of the Goods and Services Tax (GST) has streamlined the tax structure by replacing various indirect taxes such as Value Added Tax (VAT), Central Excise, and Service Tax. This has resulted in a simplified tax compliance process for businesses.
• Increased tax rates: While the primary aim of GST was to simplify tax compliance, it has also led to an increase in tax rates for some sectors. However, the overall impact on businesses has been balanced by the input tax credit mechanism.
• Reduced tax liability: The GST framework allows businesses to claim input tax credits on the taxes paid for inputs, which effectively reduces the overall tax liability. This has been beneficial for businesses in reducing their operational costs.
• Reduced compliance burden: The unified tax structure under GST has significantly reduced the compliance burden for businesses. The implementation of a single tax system has eliminated the need to comply with multiple tax authorities and regulations.

Hence, the statement “The Goods and Services Tax (GST) replaced various indirect taxes, including Value Added Tax (VAT), Central Excise, and Service Tax. How has the introduction of GST impacted tax compliance and the ease of doing business in India?” is correct.

Additional Information

• GST Council: The GST Council is a constitutional body responsible for making recommendations to the Union and State Governments on issues related to GST. It is chaired by the Union Finance Minister and includes the finance ministers of all states.
• Input Tax Credit (ITC): One of the key features of GST is the availability of input tax credit, which allows businesses to offset the taxes paid on inputs against the taxes payable on outputs. This mechanism has helped in reducing the cascading effect of taxes.
• Composition Scheme: The GST framework includes a composition scheme designed for small businesses with a turnover of up to Rs. 1.5 crore. Under this scheme, businesses can pay tax at a lower rate and with reduced compliance requirements.
• GST Network (GSTN): The GST Network is an IT backbone of the GST system, providing a common platform for taxpayers to file returns, make tax payments, and claim refunds. This has enhanced transparency and efficiency in the tax administration process.
• Ease of Doing Business: According to the World Bank's Ease of Doing Business Index, the introduction of GST has been a significant reform in improving the business environment in India. It has simplified the tax structure, reduced compliance costs, and made it easier for businesses to operate across state boundaries.

The correct answer is  ₹50,000.

Key PointsMaximum Deduction under Section 80D

• Under Section 80D of the Income Tax Act, individuals can claim deductions for premiums paid towards health insurance policies.
• The maximum deduction allowed for health insurance premiums paid for senior citizens (aged 60 years and above) is ₹50,000.
• This deduction is applicable for premiums paid for self, spouse, dependent children, and parents.
• If both the taxpayer and the parents are senior citizens, the total deduction can be up to ₹100,000 (₹50,000 for self and family and ₹50,000 for parents).
• Additionally, preventive health check-ups can provide a deduction of up to ₹5,000 within the overall limit.

Additional Information

• Section 80D is a key provision in the Income Tax Act that encourages taxpayers to invest in health insurance.
• The provision aims to promote health security by offering tax benefits on premiums paid towards health insurance policies.
• For individuals below 60 years, the maximum deduction under Section 80D is ₹25,000.
• In the case of Hindu Undivided Families (HUF), the deduction is allowed for premiums paid for insuring the health of any member of the HUF.
• Section 80D also covers expenses incurred for preventive health check-ups, up to a specified limit.
• The importance of investing in health insurance has increased significantly, especially with rising medical costs and the prevalence of lifestyle diseases.

The correct answer is 15 billion.

Key PointsUPI Transactions in August 2024

• Unified Payments Interface (UPI) was launched by the National Payments Corporation of India (NPCI) in 2016.
• UPI has transformed the landscape of digital payments in India, making it easier for people to transfer money instantly between bank accounts using a mobile device.
• In August 2024, there were 14.96 billion Unified Payments Interface (UPI) transactions, which was a 41% increase year-on-year. This was also a 3.6% increase month-on-month. The total value of these transactions was Rs 20,60,735.57 crore. Hence, the correct answer is 15 billion.
• UPI transactions have been increasing at a rapid rate, with a ten-fold increase in volume over the last four years. In 2023-24, there were 131 billion UPI transactions, compared to 84 billion in 2022-23.
• This growth demonstrates the increasing acceptance and reliance on digital payment methods among Indian consumers.

Additional Information

• Unified Payments Interface (UPI) is a real-time payment system that enables instant money transfer between bank accounts using a mobile device.
• It was developed by the National Payments Corporation of India (NPCI) and is regulated by the Reserve Bank of India (RBI).
• UPI allows users to link multiple bank accounts to a single mobile application, facilitating seamless transactions without the need to enter bank details each time.
• The popularity of UPI has been driven by factors such as ease of use, security features, and the ability to make payments 24/7.
• Various banks and third-party apps like Google Pay, PhonePe, and Paytm have integrated UPI, further boosting its adoption.
• The success of UPI is also attributed to government initiatives promoting digital payments and financial inclusion, such as the Digital India campaign.
• UPI has not only simplified peer-to-peer transactions but has also become a preferred mode of payment for businesses, enhancing the overall digital economy of India.

The correct answer is  Greece.

Key PointsIMF and Stand-By Arrangements (SBA)

• The International Monetary Fund (IMF) provides financial assistance to member countries through various lending instruments.
• One such instrument is the Stand-By Arrangement (SBA), which is designed to address short-term balance of payments problems.
• During the European Debt Crisis that began in 2009, Greece faced severe economic challenges and required international financial assistance.
• The IMF, along with the European Union and the European Central Bank, provided financial aid to Greece through an SBA to help stabilize its economy.

Additional Information

• Stand-By Arrangements (SBA):
  • The SBA is one of the IMF's primary lending instruments, aimed at providing short-term financial assistance to member countries facing balance of payments problems.
  • It is typically used to support economic stabilization programs that include policy measures to restore macroeconomic stability.
• Greece Debt Crisis:
  • The crisis in Greece was part of the broader European Debt Crisis, which affected several Eurozone countries.
  • Greece faced a severe economic downturn, high levels of public debt, and a significant fiscal deficit.
  • In response, the IMF, along with the European Union and the European Central Bank, provided financial assistance through multiple bailout packages, including SBAs.
• IMF's Role:
  • The IMF's role in providing financial assistance includes not only lending money but also offering technical assistance and policy advice.
  • This helps countries implement necessary economic reforms to stabilize their economies and restore growth.

The correct answer is  1 and 2.

Key PointsLiquidity Risk

• Liquidity risk arises when a bank is unable to meet its financial obligations.
  • Liquidity risk is a type of financial risk that occurs when an entity, such as a bank, is unable to meet its short-term financial demands.
  • This can happen due to an inability to convert assets into cash quickly without significant loss in value, leading to a situation where the bank cannot cover its liabilities as they come due.
  • The inability to meet financial obligations can lead to severe financial distress or even insolvency for the bank. Hence, statement 1 is correct.
• Liquidity risk can be mitigated through diversification of funding sources.
  • Diversification of funding sources is a key strategy for mitigating liquidity risk.
  • By having multiple sources of funding, a bank can ensure that it is not overly reliant on any single source, which reduces the risk of liquidity issues if one source becomes unavailable.
  • For instance, a bank can diversify its funding through customer deposits, interbank loans, issuance of bonds, and other means. Hence, statement 2 is correct.
• Liquidity risk is unrelated to non-performing assets (NPAs).
  • This statement is incorrect as liquidity risk is indeed related to non-performing assets (NPAs).
  • NPAs are loans or advances that are in default or in arrears. High levels of NPAs can reduce the liquidity of a bank's assets, making it difficult for the bank to meet its short-term obligations.
  • When a significant portion of a bank's assets becomes non-performing, the bank's liquidity position is adversely affected, increasing the liquidity risk. Hence, statement 3 is incorrect.

Additional Information

• Non-Performing Assets (NPAs)
  • NPAs are loans or advances that are in default or in arrears. In the context of banks, an asset becomes non-performing when it ceases to generate income for the bank.
  • According to the Reserve Bank of India (RBI), a loan or advance is considered NPA if it is overdue for a period of more than 90 days.
  • High levels of NPAs can affect the profitability and liquidity of banks.
• Strategies to Mitigate Liquidity Risk
  • Asset-Liability Management (ALM): This involves managing the maturities and liquidity of assets and liabilities to ensure that the bank can meet its short-term obligations.
  • Maintaining High-Quality Liquid Assets (HQLA): Banks are required to hold a certain amount of high-quality liquid assets that can be easily converted to cash.
  • Stress Testing: Banks conduct stress tests to assess their ability to withstand various liquidity shocks.
  • Contingency Funding Plans (CFP): These are pre-arranged strategies for managing liquidity crises, including access to emergency funding sources.