RBI BULLETIN NOV’2024 QUIZ 001

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1. What is Operation Twist designed to achieve? *

5 points

Manage short-term rates only

Influence the yield curve

Control foreign exchange

Regulate bank lending

2. What is the purpose of Ways and Means Advances (WMA)? *

5 points

Regular bank lending

Temporary government funding

Corporate finance

International trade finance

3. What is the role of Payment Banks? *

5 points

Full-service banking

Basic banking services

Corporate banking

Investment banking

4. What is the Special Drawing Rights (SDR)? *

5 points

National currency

International reserve asset

Corporate bond

Government security

5. What is the purpose of Market Intelligence (MI)? *

5 points

Stock market analysis

Monetary policy information gathering

Banking sector supervision

Foreign exchange monitoring

6. What is Prompt Corrective Action (PCA)? *

5 points

Emergency lending

Banking supervision framework

Market regulation

Monetary policy tool

Case Scenario 1: A mid-sized commercial bank is experiencing increasing NPAs in its retail lending portfolio, particularly in personal loans and credit cards. The bank's CASA ratio has declined from 45% to 35% over the past year, while the cost of funds has increased by 150 basis points.

7. What should be the bank's immediate strategic response? *

5 points

Aggressive retail loan recovery and reduced lending

Focus on increasing CASA deposits through digital initiatives

Implement risk-based pricing and portfolio rebalancing

All of the above in a coordinated approach

Case Scenario 2: Following a recent RBI circular on digital lending, your bank needs to revamp its digital lending infrastructure while ensuring compliance with new regulatory guidelines on data storage, customer consent, and transparency in lending.

8. What should be the priority action items? *

5 points

Only focus on technical compliance with regulations

Implement comprehensive digital transformation with regulatory alignment

Temporarily suspend digital lending operations

Outsource digital lending to third-party providers

Case Scenario 3: Your bank is observing significant volatility in its treasury operations due to changing interest rate scenarios. The duration gap has widened, and mark-to-market losses are increasing.

9. What would be the most appropriate ALM strategy? *

5 points

Immediate liquidation of long-duration securities

Implementation of duration-matching strategy with hedging

Increase investment in short-term securities only

Wait for interest rates to stabilize

Case Scenario 4: In light of recent cybersecurity threats, your bank needs to enhance its digital security infrastructure while maintaining operational efficiency.

10. What should be the comprehensive approach? *

5 points

Focus only on strengthening firewalls and encryption

Implement multi-layered security with AI-based threat detection

Restrict digital services to reduce risk

Outsource all security operations

Case Scenario 5: Your bank has been directed to increase priority sector lending while maintaining asset quality. Current PSL achievement is 35% against the mandate of 40%.

11. What would be the most effective strategy? *

5 points

Purchase PSL certificates to meet targets

Aggressive lending to meet targets quickly

Develop sector-specific lending products with robust risk assessment

Reduce overall lending to increase PSL percentage

Case Scenario 6: Your bank is considering implementing a new credit risk assessment model incorporating alternative data sources for MSME lending.

12. What should be the key considerations? *

5 points

Focus only on traditional credit parameters

Implement comprehensive data analytics with regulatory compliance

Rely solely on alternative data

Outsource entire credit assessment

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