FINANCIAL MARKET AND INSTITUTION

What was the key recommendation of the Narasimham Committee (1998) for improving the banking system?

• Privatization of all banks

• Mergers to create stronger banks

• Abolition of priority sector lending

• Restriction on foreign bank entry

Which financial instrument represents a contractual obligation to repay borrowed money with interest?

• Equity share

• Bond

• Forward contract

• Mutual fund

What is the primary purpose of the Basel III framework in banking?

• To reduce interest rates

• To increase liquidity requirements

• To eliminate foreign exchange risks

• To promote financial inclusion

What is the main function of a central bank in an economy?

• To regulate stock markets

• To oversee insurance companies

• To manage the country's currency and monetary policy

• To provide loans to individuals

Which of the following is a common measure of a bank's profitability?

• Return on Assets (ROA)

• Debt to Equity Ratio

• Current Ratio

• Price to Earnings Ratio

What is the primary goal of risk management in financial institutions?

• To minimize potential losses

• To increase market share

• To maximize profits

• To enhance customer satisfaction

Mention the years of Narasimham Committee 1 and 2

(a)  

What is a major feature of financial sector reforms post-1991?

• Focus on social banking
  
  
  

• Deregulation of interest rates

• Establishment of more cooperative banks

• Increased use of informal credit systems

Which financial market classification is primarily used for securities that are issued for the first time?

• Secondary Market

• Tertiary Market

• Primary Market

• Money Market

Which regulatory body is responsible for overseeing the insurance sector in India?

• Insurance Regulatory and Development Authority of India (IRDAI)

• Ministry of Finance

• Reserve Bank of India (RBI)

• Securities and Exchange Board of India (SEBI)